Quality – Cost – Delivery: The Basics

Look it up, it is a basic teaching of Lean Techniques. I am inspired by Grant’s article which was inspired by my article on made in the USA . My premise was to buy American if you want to save American jobs. Grant added a caveat to buy American when it is a quality American product. I say for the most part he is right but my factory training says otherwise.

What is Quality – Cost – Delivery? Well let’s break down each component. Quality is typically how well a product is made and how long a product will last. In my few years in industry the person that best defined quality to me said quality is simply making a product to the customer’s specifications. That is the best definition that I have ever heard. Cost is well how much a product cost or actually how much a consumer is will to pay for something. Sometime ‘Cost’ is replaced with Quantity or Value. Quantity being the cheaper something is the more you can make. Value being how much something is worth verse the quality of the product. Both are really just other ways of interpreting ‘Cost’. Last is delivery, which is either the period of time to make the product or the period of time it takes a product to reach a consumer or both.

A basic Lean ideal is the relationship of Quality, Cost, and Delivery. In an ideal world we would only make and purchase items that perform equally on all three topics, but in the real world we will typically end up with only two. I will try to portray a few examples. Let’s take Ferrari for example. Ferrari’s tend to be of high perceived quality and therefore costs ridiculously high and tend to deliver when the car is done not when you want the car done. How about nuts and bolts at the hardware store? They tend to be cheap, they’re there when you want them, and most (not all) people could care less how nice they are as long as they hold stuff together. How about ordering gifts online? You want something to get to someone on time, and may be willing to give a little on cost and quality just to make sure it get there.

There are truly not lots of items that truly hold the benefits of all three. The closest that I can see would be Craftsman hand tools, which are sold at a decent price (more than Walmart, less than Snap-On), backed with a lifetime guarantee (read as quality), and typically in the store when you need it.

So what does America do? Well I have covered this before (the re-use post), but it needs to be said again. Somewhere America went for price above all else. So much so that our super stores, shopping centers, and landfills are littered with the fruit of that thinking. Not to mention our society borrows (or maybe now it is borrowed) irresponsibly in order to get more crap to better fill their lives.

So think about the things you purchase. Do you need that iPhone or will a LG do just fine? Do you need cheap milk or are you willing to support a local dairy? Do you need a new car or will a used car suffice? Will a Bowflex make your life better or did you just purchase a nice towel rack? I am not saying that buying cheap crap is always that bad, we all have done it (maybe bologna over roast beef), but think about what you can afford, what you are using it for, and how long it will last. Think of how it will impact the world around you, how it will impact your very own world and your neighbor’s.

What happened to American manufacturing (in addition to the whole dollar versus yen or pound or euro or whatever) was that somewhere the American Dream became I need all this crap and lots of money so I can get more crap instead of I need to live well and comfortable. Quality, select products at a fair cost was given up for everything at the cheapest cost possible. My hope is that this economic correction (that is my p.c. way of saying disaster) will teach us all a lesson of what we really need and really are willing to pay for. I hope I am right or history is bound to repeat itself.

Cat and Girl and my feelings of dread...

I tried to come up with a catchy title to this one but it didn't work out. From time to time I link to various comics on my blog and tell you to check them out (Kate Beacon History Comics come to mind - still awesome). Well Cat and Girl is another of my all time favorites and the past weak has had cartoons that actually pict-i-fy (yeah I just made that up) how I feel about things.

Specifically this week, a terrible feeling of dread over the economy rubbed over me. Harley-Davidson reported that it would eliminate 1,100 jobs (out of 9,000 in the company), which surprised me, and Microsoft basically announced similar measures. Then the kicker was the unemployment numbers for November, 554,000 people, whoa. Needless to say, Cat and Girl put things into perspective, or at least how I interpreted it (Click the link to go see the original). I think this correction is forcing the public to stop living this credit lifestyle we all have lived since the '80's and move us all back to the mentality of the '50's and before. Where you bought things you had the money for and the only items you borrowed money for was homes and cars (if that).

The Cat and Girl comic that followed the one above was pretty interesting as well. To me it represented the mentality, at least in the first four panels, of the common American. The end has a good punchline as well. I love good inner dialogue and contradictive thoughts, considering that is what I suffer from continuously. I mean I am the Honda loving blog writer saying please save Detroit after all.

Anyway, click through Cat and Girl sometime when you get the chance. It is truly terrific writing and thoughtful perspectives on what we call life. Also, I love whenever the Cat is dressed for sports.

Putting your money where your mouth is: Made in the USA

(To all those that may be visiting from The Corner Office Blog, thanks for stopping by, I hope that I don’t disappoint)

So fresh after inaugural day, you are now ready to do what you can to help America . Specifically you are ready to help do something about that economy you hear so much about on the TV, but Obama hasn’t told the public just how to do that yet. Well MJ is here to save the day, I am suggesting an oldie but a goodie which is to BUY AMERICAN.

Yes buy American. You remember that place, purple mountain majesties, golden plains, NASCAR, NFL, and the like. It’s still there and those people still need those jobs, and what better way to help than to help your fellow countrymen (or countrywoman for that matter) than to purchase their stuff.

So now energized with the thought of supporting the good old USA , you are ready to head down to Walmart and thoughtfully purchase anything with a big eagle on it, you fly out the door, pocketbook in hand. Well hold on there partner, besides shampoo and dog food you may not see a whole lot of goods that are American made there. What follows is just a starting list of items I have found over the years that I know are made here in the US (not Usa , Japan ).

Clothing: Melanzana (http://www.melanzana.com/)

Like fleece, like high quality clothing, like mountain-style hippies but not sure how they make their money? Try the clothes made by the fine folks at Melanzana All sorts of thoughtful cuts, sizes, and materials (as long as those materials are Polarfleece) pack there online store. Made in Leadville , Colorado , the highest elevation town in the US , by people who want to stay warm and exercise all year round. I have actually seen the store, met the people, and seen how they produce the clothes. I can honestly tell you that fabric comes in sheets, cut by human hands, and sown by regular machines. Prices are reasonable, the clothing holds up beautifully, and everything fits warm and comfortably.

Appliances: Whirlpool, Maytag, Jenn-Air, KitchenAid, Amana

One company that hasn’t left the US quite yet for cheaper shores is Whirlpool, maker of all the brands above and more (most of Sears Kenmore stuff as well). A few years ago Maytag / Amana was for sale and Whirlpool bought them up to help protect the American territory from foreign (read as Chinese) suppliers flooding the market with cheap branded products. Smart plan, unfortunately Whirlpool has had to reduce the workforce somewhat in past year. However, most of their product is made here in the US, so you can wash your clothes, wash your dishes, and mix your cakes knowing full well that you bought something made by a neighbor and helped with what you could to keep their jobs. Not to mention that the products are well made, durable, and parts are available cheaply at your local parts distributor (Sears Outlet anyone).

Hand Tools: Craftsman

Some people prefer Snap-On or MAC, which is fine, but most of the public doesn’t have access to those brands. However one brand that we all have access to is Craftsman. Sears and now Kmart have access to the best value hand tools out there. Yes Craftsman, the same tools your grand-pappy repaired the tractor with, is still available and the hand tools are still proudly made in the USA (by the Williams Tool company owned by Danaher and also makes Matco tools). Yes some of the electric tools are made overseas (most are unfortunately), but the hand tools are still made here. The best part is the lifetime warranty on everything. If you wake up and decide your ½ combination wrench just doesn’t look like it’s good enough anymore, you can skip on in to Sears, not even make up a good lie, and exchange it for a bright shiny new one. Eat that Stanley .

Lawn equipment: John Deere

Nothing runs like a Deere, and no company was a bigger pain in my @$$ than those of the green and yellow. They have ridiculously high production standards that they hold their suppliers to from tires to paint. So while they may cost more than average lawn companies, I know for a fact that they are giving you a long lasting, well made, high quality product that should last for a long time, and is well supported all across the US . They care about their product and it shows.

Drinks: Celestial Seasonings

I have actually toured the plant outside of Boulder , Colorado and seen how a business started by a local mountain biker is now a international brand with a large variety of pretty delicious teas. Pretty neat place, that does there part for the environment, commission independent artists (how do you think they get those neat labels), and package tasty drinks. I think it is the place where all the nice people in the world work (better there than annoying me at Whole Foods).

More:

Sure there is more: Purolator, Harley-Davidson, and Dexter-Russell com to mind. But I wanted to see if anyone else out there had some good suggestions for the common American public that wanted to share. If you have a company you know of or a product to pimp that is clearly US made drop a line in the comment box or drop me an email, we can only help each other out if we know what is available.

Take care and God Bless America .
(Waving Nixon peace gestures)

To all the people looking for real Dyslexic Research...

From time to time, I get emails (not a lot mind you) from people with various dyslexic causes or research or books. I don’t know what to tell these people, I am a dyslexic, but I found out late in life. So for those looking for real dyslexic research, I am sorry but continue on looking. I talk about my experiences and what has helped me in my life, but I wouldn’t know the right way to guide those who are seeking hard research about dyslexia. I will push people towards the one book that makes the most sense for me. It is called, “The Gift of Dyslexia” by Davis and Braun, and I can say the methods in there helped my tendencies. Beyond that I can only share my story.

I have had issues my whole life with concentration on school work. I often would spend 4 hours on homework that others spent an hour on. I always had difficulties on tests. I spent many hours over many years spinning my wheels studying and studying. Yet I would do extremely well in some subjects and quite horribly in others. I had teachers that truly helped my development and others that gave no breaks. The latter didn’t help things. The worst semester of school I ever had was the one that I took Calculus I. I had a tutor, worked in a study group, went to the TA’s office hours, and studied on my own everyday. The TA never gave me a break and told me I wasn’t mature enough for the material (The class was taught by the TA and needless to say I hope this person burns in Heck). I kept at things because I wanted to be an engineer.

It wasn’t until I was a senior in college that I took enough engineering classes at the same time that I hit the proverbial wall. I studied round the clock yet it didn’t help a single grade. I dropped three classes and had a knock out, drag out fight with my mother who was convinced that I was just what my teachers had said for years, “smart but needs to work harder.” I won finally, and got tested for learning disabilities, something I believed that I had a problem with my whole life.

Let me say that if you are worried about putting yourself or your child through the testing, don’t be. It may be the most revealing and appreciated experience of your own or your child’s life. When I took the tests, I was ready for someone to tell me I was stupid or that I couldn’t handle the material or let me know that I had ADHD or whatever. I just wanted an explanation.

I tried to go into the testing without any expectations of the outcome. I thought somewhat that I may have ADHD, but other than that I didn’t know. The process is quite interesting; I took an intelligence test and three learning disability evaluation tests. The combinations of all three along with observations and a proper history evaluation were the foundation for the diagnosis. When the expert sat myself (at age 22) and my parents down, we all were taken by surprise. I had almost a perfectly matched chart to that of what they consider an ideal dyslexic. My mom cried and my dad was flabbergasted by the description of a typical dyslexic. He soon realized that he was dyslexic too. The best part was my intelligence test returned that I had an extremely high IQ, and that is what had probably compensated for a lot of the difficulties I had growing up. Who’d a thunk. (Don’t worry mom and I worked everything out after, she now is amazed that I made it so long without knowing the truth.)

That being said, other than the book I talked about, there is only some mild changes that I have been able to make to help things in my life. I am too old and have already compensated for a lot of tendencies at this point. Just realizing my disability and knowing why I do things that I do, it helped. My advice on dyslexia has to be taken with a grain of salt, I found out late, way too late to really work on my study habits. To this day, some things take me a while, I have to make time for it. I have little concept of time, so I keep a lot of clocks around. I misread words, but I typically check over things twice to just make sure. I am good at seeing the big picture, conceptually laying out things, and finding true breakthrough improvements in work. So it all balances out.

So if you stop by here looking for dyslexia research, you probably won’t get it. You will get a dyslexic’s opinion of a lot of stuff, maybe some out-there thoughts, and you will get some tips of what helps me cope. Mostly you are going to get my thoughts on the economy, industry, and the markets so relax, read some archives. You may find out something actually useful to your life.

Finally, I will leave with the harsh but true words someone close to me has always said when I want to use dyslexia as a crutch, that is, “No one cares that you have a learning disability, they want you to do your job.”

New Year's Resolutions for 2009

First let's visit last years:

1. Buy a house for the misses and me. (Check, March 2008)
2. Setup a truly easier lifestyle at said home. (Check-ish, I wish my house was more organized)
3. Max out Roth IRA for 2007 (til April). (Check, March 2008)
4. Begin a true side business. (Uh not unless you count all of the stuff we sold on Ebay or in our 3 garage sells, I think this will become a 2010 goal)
5. Go on an extended vacation. (Check, August-September 2008 to the Philippines)

So 4-ish out of 5 ain't bad.

Bring on '09:

1. Pay off Honda Loan.
2. Max out Roth IRA for 2008 (til April).
3. Renogotiate mortgage for better rate, hopefully.
4. Concentrate on new job.
5. Create a better blog page.
6. Get one car IN the garage.
7. Lose 20lbs.
8. (World Peace)

Wish me luck...

Dear 8lb 6oz newborn infant Obama...

"I like to think of Obama with giant eagle's wings and singing lead vocals for Lynard Skynard with like an angle band and I'm in the front row and I'm hammered drunk..."


Have you noticed that over the election period, and even more so as we get to inaguration, everyone is making Obama out to some sort of super hero or super villian for their cause? Environmentalists thought that he was Captian Planet, minorities see him as a great exclamation point, Democrats as JFK, cigarette companies as the great new Marlboro Man, techogeeks as a Crackberry addict, and today I heard book readers believe he is the 'Greatest Reader' and he t-o-t-a-l-l-y gets them because he reads a lot and wrote two best selling books (nevermind that Bush reads a lot, must be some of those cool maze books). I am not making this stuff up. It seems that Obama is just like the Jesus that Ricky Bobby prays to.


Likewise, I have heard from conservatives that Obama is the next Stalin or Lenin. They think that the Greatest Reader is going to rip chapters out of the Marxist hand book. Rush, between oxy-cotton induced hallucinations, thinks socialism is going to break out at any minute.

Well before we begin idolizing and sacrificing the man, I am suggesting we all do what college kid's tend to learn their senior year, moderation. He is just a man, a man at an important seat, but just a man. He is going to make mistakes, but he will, just like we all do, make the best decision possible with the information he has. So stop all the lovey dovey BS and the hatemongering and give the man a chance.


(Oh and am I the only one noticing that he is the 'change' guy, well he seems to have a lot of Clinton's old pals in his cabinet. Just a thought. Oh and I guess a vote for him was just like a vote for Hillary then.)

Investing (sounds like) Gambling

With all the down activity in the market the average investor and really all investor needs to realize that investing in the market is like gambling. Spreading out the portfolio in different markets, ETF's, stocks, and bonds is the best way to hedge those bets, but like sitting out a few good hands in blackjack, you will eventually lose some money. Especially if you are not watching your stocks or at least the market. So all that being said I am trying to form my own strategy to protect and grow my own portfolio.

Invest in the long term.

Wanting to not worry about the markets everyday, I am investing in what I see as the best of long term opportunities. In stocks this means perrinial favorites KR and WMT, international smoking company PM, and my only US manufacturer (that is slowly growing in the world market) BEZ. Some of these may be what people consider odd bets but I am looking to solidify things for long term and historically these are good companies and I through my own research I feel as I will be proven right in the long run.

More importantly is my chunk of investment in the Vanguard Total Market ETF (VTI). With it's fair dividend payout (currently 3.5%) and low expense costs, it has some serious potential to make money when the market turns around.

ETF's will be my anchor.

When this year's Roth investment ($5k for 2008) gets put in a majority will be in Vanguard ETF's with decent dividends and low expense fees. I want to get to a 70-30 rule with the 70 being in market ETF's. I will define the others later, but for now I am VTI all the way.

A stock strategy???

I sometimes have written about I have believe I have a knack for finding good stocks but as far as finding a good strategy for keeping, selling, and growing stocks, I lack a strategy. In the past I have hit 20%-30% growth on certain stocks and just let it ride. Let it ride all the way back down (okay not always). My goal is on speculative stocks, not the long term ones listed above, (assuming they go up) that somewhere above 15% growth I may sell off my original investment money wise. Meaning if stock X cost me $1k and is now at $1.5K, I will sell of that $1K of the stock and let the rest ride so to speak. For now that is what I am looking to do, we'll see if it works. I may iron out a few more details before the big Roth investment for 2008, we'll see though.

What else is out there?

I think the current downturn in the economy points to the importance of variety in your own personal portfolio, for me that means stocks, bonds, and interest may not be the only place to store cash. I am probably a year away from having the money for a side venture, but it is my goal to either own some rental property or *a laundromat*. The laundromat is my dream for some day. This year will be a year of ironing out some finances like paying off the car and attempting to get a better mortgage rate.

Should be an interesting year...hedge your bets.

The problem with bitching out the Big 3 and Detroit...

Through the financial crisis I have seen one and only one article that seems to fairly represent what is reality in Detroit. Unfortunately I have no idea where it went, all I know was that it was a Yahoo opinion piece.

The bulk of the argument was that Congress and the public has been slamming the big three for their lack of viable, profitable small cars, yet Detroit has never ever had a small car anchor their company profits. The cars they sell are cheap and costs less than there Japanese counterparts but that is because they have never had a highly profitable small car. Honda and Toyota not only do well with small cars but typically are making $2k-$3k more in profit per small car than the GM, Ford, or Chrysler counterpart.

That being said all three could produce such a car, but it is an uphill battle. Think of an alternate universe where the Japanese government chastises Honda and Toyota for not building vehicles that compete with Suburban XL's and Expeditions (okay Toyota has one, but the idea is the same). It would be difficult for an auto company to turn that niche in the market their direction. First, they would have to build an vehicle that truly convinced the public that their vehicle is the best. Oh and it would need to be at a price point to convince the population to purchase said car. Think about that for a second. This requires a great investment of engineering, production, and advertising on a vehicle that may not really turn a profit in its first 4 years. Meanwhile you will have to change the perception of the auto media and the car buyer that a company known for making questionable quality small cars now makes great small cars. Don't forget your competitors which already are good at making its auto equivalent can release a new, better vehicle a year after which can wipe your products advantages off the map and is known as a quality vehicle (good example is the Chevy Colorado/GM Canyon and then Toyota's release of a new Tacoma a year later). It is a difficult hill to climb.

That hill can be so great that it leads to companies having an easier time creating new niche vehicles than over fighting in a saturated market. These CEO's are not dummies, they are doing what makes sense. What makes the most sense is continuing the success the niche markets that they are strong in (see trucks and large cars), draw a line in the sand on markets they can compete in (see midsized sedans) and create new vehicles when they have been kicked out of a market (see minivans to crossover vehicles). It is really like telling JA Henckel's (the knife maker) to make hand tools. It can be done, it might turn a profit at some point, but it will take a lot of money to make it happen.

To me it was funny, they ripped the CEO's, which rightfully so when they all show up asking for money in posh jets, but beyond that it was nothing more than impressive political sound bites. Believe it or not, automotive production is one of the two last great manufacturing industries that remain in the US (the other being airplane), congress should do everything they can to protect the industry. It is fragile, it did need a scolding, but after that do what is right and save the companies. At least they make a product, a real product.

My own private market update

Well after I lost roughly 46% of what I had put away in my Roth IRA I have been slowly climbing instead of digging with a portfolio shuffle that I think will work for both the short term and long term. I am now firmly only at a 26% lost. That means I have raised my funds roughly 20% from there worst point in the past 2.5 months. How did I do it, mostly buying two stocks that are a couple of the only companies that will do well in this economy Kroger (KR) and Walmart (WMT). Not to mention timely purchases of Baldor (BEZ), Philips Morris International (PM) and Vanguard Total Market Etf (VTI). I am buy no means a savvy investor again (was I ever) but I resolved late last year to make conservative long term purchases in the market. Also, I am going to go forward with an investing strategy which I will explain someday in a later post but the biggest impact is going to be anchoring ETF's like VTI and smaller investments for long term stocks using principals that I have laid out over the past year in this blog.

I haven't even begun adding to my 2008 Roth yet, so a big plop of money is going to get infused soon into my future funds and a close scrutiny of the market will litter my posts once again.

Que "Welcome Back, Kotter" Soundtrack...

After a hearty Christmas plunder, okay not really, I have immersed myself into one my favorite of pastimes. Music has triumphantly returned to my life with not one but two mp3 players that were given to me as gifts. All I can say is thank you thank you thank you.

Music has and hopefully will always be a big part of my life. From alternative to blues to classical to folk, I have always enjoyed a eclectic mix of sounds. However, I am saddened slightly that I didn't jumping into this whole portable mp3 player sooner or maybe I entered at the right time. After three years of relatively little music submersion due to, well, growing up, I received both an Ipod Nano and a Creative Zen. I can honestly say that I am blown away at what a quality product both of these players are. I imagine most players now are like this. After a few good listens with real song, I felt simultaneously irritated that I had waited so long and gratified technology can still really be such a great thing.

With a click of a button I am transferred to another dimension of melodical, sensory overload, one that I haven't visited since my long nights of studying in college. Now as I knock on the door of age 30, I take solice that I can still get carried away in a song, not caring for a thing in the world. It is not unlike what my girlfriend does nightly as she feverishly pages through books, ignoring all around her. For me, the music helps me escape my new everyday cubicle job life and sometimes actually gets me excited to go to work. Unlike a lot of the population, I work more efficiently with a toe-tapping beat, so my production has gone up significantly since the holiday break.

If anyone cares the two albums I am enjoying the most right now is Emotionalism by the Avett Brothers and Vampire Weekend by Vampire Weekend. Content that I do not have a lot of quality rocking banjo folk music in my life the Avett Brothers have blown me away we just how solid there entire album is from cover to cover. The pop rock Vampire Weekend has excellent sounds the reminiscent of Paul Simon, late 90's alt rock, and well circus organs (how's that for a review). Go find them and listen, you won't be disappointed.

Welcome back music, don't ever eff-ing leave again! Also, to every plugged out, hipster, huge-headphoned nerd out there, I t-o-t-a-l-l-y get you.