Process COMPOUNDERS
- Marty Schad
- Jan 9, 2020
- 2 min read
“Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t pays it.”
– Albert Einstein Warren Buffett calls compounding the Snowball Effect. Buffett’s biography is (non-coincidentally) called “The Snowball”. Why such enthusiasm for compounding? (Positive) compounding has several extremely attractive features:
Once it is created, no discipline or intervention is required to maintain momentum.
Consistent compounding creates exponential (huge) returns over time.
Compounding can be a key part of a system designed to create robust and reliable long-term gains.
Let’s think about some practical and achievable compounders from The Process Perspective, for different stage projects… RESEARCH Compounders
Conduct a Pre-Mortem on possible process problems.
Conduct a process review by the process receivers.
Conduct a systematic design analysis of the process using Axiomatic Analysis.
Develop and implement an IP (Intellectual Property) protection plan.
Do an IFR (Ideal Final Result) analysis to define the benchmark “perfect process”.
Run the lab-scale process in “production mode” to surface issues.
Understand life-cycle tradeoffs and develop actionable framework.
Why does the process work/not work? Generate real data and theories and share findings.
DEVELOPMENT Compounders
Conduct ruthless pilot-scale mock manufacturing trial: this is a CRITICAL and VITAL STEP.
Develop physics and engineering based process simulation tools: quantify fidelity with real world.
Identify and engage receiver who will own production process.
Iterate on the process, just like equipment iterations.
Simulate plant operation using capacity simulation software tools.
Start testing for 2nd application, in case first application fizzles.
Test the impact of raw material changes (meaningful and bold changes).
Understand competitive position and verify differential advantages.
PRODUCTION Compounders
Capability metrics such as Cp, Cpk,and Defects per Unit (DPU).
Define error-proofing and automated inspection strategy and methods.
Define, via real and fresh data, the size of the “process window”.
Negotiate spec relief/tradeoffs with customer(s) to increase process margin.
Plan for the next product and the product after that.
Process tracking software and measurements.
Understand and incorporate operator’s concerns and suggestions.
Visual management system development and deployment.
My main learning from this line of thinking is how “non-accidental” building Great Processes can be, if we are serious and focused and don’t shirk the hard work necessary. Profit maximization, risk minimization, and trustworthy processes are “there for the taking”. Motivated process builders understand, and act with urgency, on this knowledge.
CHALLENGE TO READERS
24 “Process Compounders” are listed above…
Review the list appropriate to the stage of your most important process building project. Does anything practical and actionable surface from that review? What’s the next step?
Can the above “Compounders” be used in a systematic and repeatable fashion, by incorporation into a best practices or project review document?
I’m very interested in your thought about the idea of Process “Compounders”. What are your relevant experiences and learnings? If you email us, we will get back to you promptly. Thanks!
All the Best,
Marty
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