Wednesday, August 8, 2012

Lost in Translation

"Are you sure this will work?" the customer asked. "We've had trouble moving operations across the street." Our customer was concerned because we had just outlined how we were going to transfer manufacturing to an off-shore site. We had years of experience doing this. The initial years were somewhat painful while that site's capabilities, productivity and quality increased--exceeding the US site's. Now, transfer projects were relatively smooth and painless.

Many companies want to ignore the learning curve for these kinds of projects. They look at successful transitions at other companies or with other products. They assume they will avoid the same mistakes and learn from the successes. However, every company still goes through it's own low rates of acceleration to top performance.

One company with which I was familiar wanted to move production to China. They assumed a smooth transition. I had asked questions to determine their understanding of the difficulties and their contingency planning. They had none. They also hadn't developed a market that would justify import quantities that contribute to high inventory, etc. Within a year, they're out of cash and out of business.

A good example for all of us, another company didn't push too fast. They ran parallel production and didn't count on the offshore site before it was ready. Any good production was a bonus with regard to meeting demand. A third off-shore company will not promise becoming a new supplier within a year. They advise that the customer should not anticipate any savings from their supply source for a good 12 months or more. If their customers wants quick savings, they suggest they go someplace else and wish them good luck. They don't want to be party to the tyranny of the urgent crisis, tempting the leaders to ship shoddy product before the production staff is fully trained and the processes are fully qualified.

Some products are not complex and might transition easily. However, maybe you don't want to make that assumption either. I know military intelligence officers who could whip together PowerPoint (tm) presentations with video clips and more advanced graphics in minutes because they have 1,000 hours of experience. Me? I still take an hour to put together 20 slides with no video. As this simple example shows, what you say is easy might translate into something difficult for someone else.

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