Saving a House, Losing a Mansion

Patty and The Professor agreed to work with two of the local process engineers to develop a plan of attack to try and find the lost productivity.

Patty spoke first. “It’s tempting to look just at the new solder paste, but this approach wouldn’t be thorough.”

The Professor and the two process engineers, Joe and Ann, agreed. So they went ahead and developed a thorough productivity assessment plan, including uptime and line balancing measurements and evaluating changeover and assist times. Ann pointed out that one of the five lines was still using the old paste. All agreed that this situation was good news as they would have a new paste to old paste comparison. It was already lunch time and everyone was hungry, so off they went to a local Outback. While riding in the car, Patty’s cellphone rang. It was Rob.

“Hey Patty,” Rob cheerfully started. “Guess what I shot last night at the Golf Club of New England — a four under par 68! The pro told me it was the best round this year at the course from the back tees.”

“Rob, that’s great!” Patty cheerfully responded. Truth be told, she was really happy for Rob. He was the No. 2 golfer on the men’s team at Tech a few years ago as a senior. She was a junior then and was the best women golfer in Tech’s history. The few times they played then, she beat him. Ever since her dinner date, after their success at AJAX, they had been a couple. At the time she had been thinking of breaking up with Jason and Rob’s invite to dinner was all the catalyst that she needed. In the past year or so, Jason would just watch sports on TV and drink beer. He didn’t have a fitness program or a real plan for his life. Rob was so much different. He worked out, mostly to improve his golf game and he was getting a master’s degree part time.

After they started dating, Rob and Patty played golf together with some other guy friends from Tech. She usually shot the low score, but the three other guys were longer off the tee than she was. Her superior iron play and short game made the difference.

At lunch this working foursome talked about the audit they were about to perform.

“There is one comical thing we should tell you before we start,” Joe said with a twinkle in his eye. “I’ts about the ‘Saving a House Program.’ ”

At that, Ann started laughing and inadvertently started choking on her “sweet tea.” Patty was about to perform the Heimlich maneuver when Ann revived.

With Ann still red in the face and laughing, The Professor requested, “Yes, please tell us.”

Joe chimed in, “So that Ann doesn’t choke to death, let me take a stab at it. The new cheaper solder paste has not been very popular and has generated many complaints. The new COO, Fred, decided he had to do something. He estimated that the new paste saves $100,000 a year on all five lines; that’s about what a modest house costs locally. So he tells all of the complainers that using the new paste saves enough money in a year to buy a new house. He even found a house for sale on the internet for $100,000 and had posters of it made with the saying: ‘Saving Enough for a House.’ It worked; people stopped complaining.”

“Joe, can you tell us what some of the complaints were about the solder paste?” asked The Professor.

“Well, for one thing, it is stiff coming out of the tubes or jars, we have to knead it or it won’t print,” Joe responded.

“Hmm,” both Patty and The Professor mused.

“Also, if we stop a line for a few minutes the paste stiffens up and we have to perform some dummy prints to kneed it,” chimed in Ann. “Sometimes even after this, the first print has to be discarded due to poor hole fill. It wastes time and solder paste.”

“Don’t forget the smell,” Joe teased.

At that, Ann just about spit up her sweet tea.

“The new paste literally stinks,” Joe added. “Fortunately, the vendor added some perfume recently.”

“What about reliability of the finished product?” The Professor asked evenly.

“That’s what is surprising. It’s as good as the old paste.” Ann replied. “We performed some tests and asked around, the reliability is very good.”

“A pleasant surprise indeed,” The Professor said.

The little group finished lunch and headed back to get to work on the audit. Ann and Patty and Joe and The Professor formed teams and went off to the factory. They performed detailed analysis of changeover times, assist times, line balancing, uptime, etc., on the four lines using the new solder paste and the one line using the old solder paste.

As Patty approached one of the lines she saw a cheerful looking gent about 45 years old replenishing the solder on one of the stencil printers. Ann introduced her to Wilbur and asked if it was OK for Patty to ask him some questions.

“Darlin,” he said to Ann in his backwoods drawl, “Anything you gorgeous gals want to ask me is jus fine.”

“How does replenishing the new paste compare to the old paste?” Patty asked.

“Well, it takes a lot longer, stirring the paste and all, but to “Save a House” I’m willing to put up with it, sighed Wilbur.

After a day-and-a-half of work, the team reassembled. The Professor suggested that Patty lead the discussion. Many calculations and comparisons were performed, finally after several hours they were ready to meet with Fred Perkins and Jane Wilson. Patty agreed to speak.

Patty, addressed the small gathering. She presented the approach they used to collect data, their analysis techniques and the fact that they had reached a consensus. The evidence, she said, is persuasive that:
1. The site productivity is down about 8%, which will reduce profits about 12%.
2. The main culprit appears to be the new solder paste.

At this Fred slammed his fist on the disk. His face a bright crimson, he shouted at Patty, “Liar, you corporate types are all alike! You come here from your Ivory Tower and tell us how to assemble a product. You have never had to meet a payroll and make a profit in your life. I’ve been out on the line. It only takes two or three minutes longer per changeover with the new paste and replenish times are even less.”

At these comments Jane rolled her eyes and glared at Fred. It was clear she wasn’t intimidated by him.
Patty shot back, “Fred you are correct; let’s look at the numbers. We measured your average uptime at about 25%, which is quite good. That means the lines are running two hours in an eight hour shift or 120 minutes. Eight percent of 120 minutes is about ten minutes a day. A typical line has two changeovers a day each requiring 2 extra minutes and 6 solder paste replenishments ,taking an extra 1 minute each with the new paste. This totals 10 minutes, hence cuts production by 8%.”

Fred screamed back, “This is mathematical gobblygook. I saved the company $100,000 a year.” At this he stormed out of the room.

The remaining folks stared at each other. Finally Jane broke the silence, “It never occurred to me how precious a few minutes here and there can affect profit. With the new paste, we will lose about 12% of our total profit of $10 million, or $1.2 million per year. It appears that while Fred was ‘saving a house,’ we were ‘losing a mansion.’ ”

Epilogue: Three weeks later Fred was “promoted” to corporate compliance officer. Jane became the new site CEO/COO. The old solder paste was reinstated a day after Fred left. A few of the old-timers kept some of the “Saving a House” posters for future reminiscing.

‘Paste is Paste’: The Professor Hits the Road

Patty was staring out the window of her new office. She had just been made manager of a new department responsible for corporate wide productivity and advanced processes. At 25 years old, she was the youngest manager at ACME by six years. She was surprised that Pete was one of the folks in the new department and was concerned that Pete might have trouble accepting her as his boss.

When Patty mentioned her concern, Pete replied, “Hey ‘kid,’ are you joking? I’m thrilled to be in your department. Not only is the work the most interesting, but you are one of the few managers that really knows what they’re doing.”

Considering that Pete was Patty’s father’s age, this vote of confidence meant a lot.

The view out of her office window was terrific. She could see some of the local hills in Southern New Hampshire and the fall color change was striking.  A few coworkers claimed that on a clear day you could just see the top of Mount Monadnock. Patty had made some calculations using the position of her office, the distance and height of the local hills and had proven to herself that “the most-climbed mountain in the US” was 100 meters to short to be seen from her window. But the sky was so clear she couldn’t help by strain her eyes to see it she could get a glimpse of that majestic beak. Her pleasant interlude was jarred by the rude, demanding ringing of her office phone.

“Advanced Processes, Patty speaking,” she cheerfully spoke into the phone.

“Patty, it’s Sam. Can you come to my office now?” the voice on the other end spoke to her.

It was Sam Watkins, the site GM, and his call now did not make her nervous. Ever since the first visit of The Professor, Sam had treated her like a valued member of the team. It was his suggestion to launch a corporate center of competence for productivity and advanced processes and name Patty the manager. When he gave her the job, he said that a lot of the work would be corporate troubleshooting. She expected that Sam’s call related to this topic.

When she entered his office, Sam got right to the point. “Patty, there’s a crisis in our plant in Columbia, SC. A new COO took over four months ago and went on a cost-cutting spree. Since then, the plant’s profit is down 8%. We can’t figure out why. Go there and find out what’s going on. And develop a plan to fix it,” he ordered.

Patty excitedly returned to her office. She called Pete in and they discussed plans for their trip. Patty was trying to limit her use of The Professor, but this assignment seemed to beg for his participation.  His uptime improvement recommendations so impressed management, he was now on a permanent consulting retainer.

As Sam said, “Every time The Professor visits one of our facilities, they make several more million dollars a year. I wish he lived here!”

Patty made a call to The Professor and to her surprise he was available. They agreed to meet at the Columbia airport at noon in two days.

The time passed quickly and before she knew it she was in a rental car driving to the ACME facility in Columbia. Their first meeting was with the assembly process engineering team and the new COO. After introductions, the COO, Fred Perkins, spoke.

“I really don’t know why you are here,” he commented brusquely. “Profits are only down 5%; it’s probably just a random fluctuation.  I came here with a mandate to cut costs and dammit I did. I couldn’t believe what we were paying for solder paste, and I found a vendor that would charge 25% less. This was the first cost savings I implemented. Solder paste is solder paste. It’s just like butter. When I was COO of American Foods, they were paying too much for butter, and I found a vendor that would charge 9% less. Butter is butter, solder paste is solder paste,” he concluded.

“How much money will you save on paste this year,” Patty inquired.

“For all of our five lines, $100,000,” Fred proudly answered.

“How much profit do your lines produce per year?” The Professor asked.

“We have five, 20 -2 lines,” replied Jane Wilson, the site CFO.

“What’s a 20-2 line? “ asked Patty.

“Oh, sorry. It’s a term we use to here to describe line financial metrics. The ’20’ stands for $20 million in sales and the ‘2’ stands for $2 million in profit.” Jane responded.

“Thanks,” said Patty.

“Oh, but I guess we would have to call them 18.4 -1.84 lines now that the productivity and profit are down by 8%.” Jane sarcastically said as she glared at Fred.

At this comment, Fred lost his cool, he slammed his fist on the table and shouted at Jane. “It isn’t 8%, its only 5% and I told you it’s just a random fluctuation,” he fumed.

Is the lost profit just a random fluctuation? If not, what is the cause? And how are Patty and Rob doing?

Stayed tuned for the latest.

Patty Gets Her Man

Patty and Rob went to balance the line. They found that this very complex board had 1350 passives, 24 simple ICs (SICs) and nine complex ICs. Currently the chipshooter (CS) is placing all the passives and nine of the SICs.

The flexible placer (FP) is placing the nine complex ICs and 15 SICs. The placement rate for the chip shooter is 60,000/hr. for passives and 3,000/hr. for SICs. The CS cannot place CICs. The FP places complex ICs at 4,000/hr. and passives and SICs at 8,000/hr.

To balance a line, Rob and Patty start by seeing how long it will take the CS to place all of the passives and the FP to place all of the SICs and CICs.

For the CS to place all of the passives

timeCS = 1350 passives/60K passives/hr. = 0.01945 hr. = 81 sec.

The time FP takes to place all of the SICs and CICs is

timeFP = 24 SICs/8K SICs/hr   + 9 CICs/4K CICs/hr = 0.003 hrs + 0.00225 hrs = 18.1 seconds

Since the FP is waiting for the CS, Patty and Rob should move passives to the FP. They will determine the number of passives, x, to move to the FP by equalizing the CS and FP times

tCS = (1350-x) passives/60K passives/hr  = x passives/8K/hr + 18.1 secs/3600 sec/hour

Solving for x:

(1350-x)/60,000 = x/8,000 +18.1/3600

1350 – x = 7.5 x + 301.667

8.5 x = 1048.333

x = 123.33

In other words, 123 passives go to FP (the reason Patty and Rob round down to 123 is due to the much faster placement speed for the CS).

So Patty and Rob moved to 123 passives to the flexible placer.  Each machine’s time should be about the same now.  They performed the following calculation to check their results

tCS = (1350-123)/60,000 = 0.02045 hrs = 73.62 sec.

tFP = 18.1/3600 + 123/8000 = 0.02043 hrs = 73.45 sec.

Patty and Rob then went to the line to physically move the passive feeders to the FP.  They then measured the placement time of the both the CS and FP and found them to be 73.4 and 73.5 sec., respectively, quite close to their calculations.

A meeting was held to discuss the results and the tremendous productivity improvement (81 vs 73.5 second cycle time, an (81-73.5)/81 = 9.26 % improvement.)  Everyone at AJAX was pleased (maybe not Charlie!) and felt the experience was one of great learning.

At the end of the meeting Patty and Rob had a brief chat.

“Patty, I really appreciate all of your help,” said Rob said.

“Don’t forget The Professor. I don’t think I could have handled Charlie without him,” responded Patty.

“Anyway, to show my gratitude, will you allow me to take you to dinner?” asked Rob.

Finding Your ‘Herbie’

“Your chipshooter is “the Herbie” in your process…, ” The Professor continued.

“That’s it!” a confident voice boomed from the back of the room.

“Who’s that?” Patty asked Rob.

“That’s Chris Conrad, our general manger. He’s a pretty sharp guy.”

Chris continued, “I remember “Herbie” from reading The Goal when I was at Tuck in the 1980s. Herbie was a chubby boy scout, during a hike, he held up all of the scout troop because he was loaded down carrying all of the soda. Finally the scouts realized that they had to help Herbie to make good time in the hike.   My professor assigned us problems to find where there is a constraint in a process. He even called it, ‘Finding the Herbie in the process’.”

“You don’t mean to tell me you’re  gonna take work off them chipshooters are ya?” Charlie impatiently inquired?

“No, the chipshooters will be working just as hard,” The Professor calmly replied.

“How can this be?”asked Charlie in disbelief.

“I made some calculations,” responded The Professor.  “In them, I estimate that if you move passives from the chipshooter to the flexible placer, both machines will have a cycle time of about 73 seconds. Your productivity will increase by about 10%. The chipshooter will be working full time, but the flexible placer will not be waiting for it.”

“Wow,” chimed in Chris, “Our CFO, Tom Stevens, will be thrilled … as am I.”

“Your increase in profit may actually be more than 15 percent,” The Professor added.

The Professor went on, “My calculations were only estimates,  Patty knows how to balance a line.  Give her the exact metrics and she can calculate the actual minimum cycle time. Patty, can you do this?”

“Sure thing Professor,” responded Patty.

Patty and the AJAX team, led by Rob, went off to perform some calculations. Stay tuned to see the results and how they got them.


Dr. Ron

The Professor at AJAX

In contemplating the events that transpired in the nine months since The Professor’s last visit, Patty had to chuckle.  John, her boss, received ACME’s company-wide Manager of the Year Award. The citation accompanying the award read, “For Conspicuous Leadership, Creativity and Innovation in Tripling Assembly Line Uptime.”  John received a $25,000 cash award and a trip for two to Belize.  Right!

Well, at least John was grateful to her.  He called her into his office after he received the award and told her that the award should be hers; she thought it should really be The Professor’s.

Anyway, he put her in for a promotion and she got it.  She was five years ahead of her peers; since she had just received a promotion last year.  She was also getting along well with Pete and company morale was high, even in these tough times, as the company was doing very well financially.  Three months ago, she presented a paper at SMTAI on the work they did to triple their line uptime from 10 to 30+%.  It received the “Best Paper” award.  She had wanted the Professor to be a co-author, but he refused.  Pete, however, was pleased to accept a co-author opportunity.   She was told that, at 24, she was the youngest recipient of this award — by eight years.

Several months ago she was asked to give a presentation on this work at a local SMTA meeting.  At this meeting she met Rob, a peer at AJAX.  AJAX was a local company that performed dedicated electronics assembly for its parent company in the automobile industry.  Hence, AJAX wasn’t a competitor to ACME.  She had heard rumors that the senior managers from ACME and AJAX even played golf together and shared ideas on improving their companies.  Rob was really interested in Patty’s talk and seemed to “soak up” everything that she said.  She couldn’t help but sense that he was more than a little interested in her in other ways.  He had been one year ahead of her at Tech and they both remembered each other.  After Tech, Rob had gone to work in aerospace, but had recently been RIFFed.  He has only been at AJAX for a few months and appeared determined to make his mark at the company as soon as possible.

As Patty was daydreaming about all of these good events, she saw a new email arrive on her laptop.  It was from Rob.  Upon opening it, she read that Rob asked her to call.  Patty immediately picked up the phone.

“Hi Rob, it’s Patty. What’s up?”

“Hey, Patty, how about our Red Sox losing six in a row, after leading the league?” said Rob.

“I’m devastated,” replied Patty.  “However, I’m cautiously optimistic, because when The Professor was discussing statistics in a workshop I took, he mentioned that even if a team is winning 60% of it games, there is more than a 50% chance that the team will lose six in a row in a season … it is just the nature of statistics.”

“Well, I hope he’s right,” replied Rob.

“Patty, your talk at the local SMTA meeting was really great.  I went back to AJAX and measured our uptime, and it was only 15%.  By following the things your team at ACME has done, we are up to 32% uptime.  But, I still sense we are missing something.”

“How so?” Patty responded.

“Well,” Rob started, “I’ve read some of The Professor’s papers and books, and performed a few calculations. These calculations suggest that AJAX should be able to produce at least 20% more product than we do.”

Hmmm, Patty murmured. “It sounds like your assembly lines may not be line balanced. Have you checked to see it they are?”

“How do we do that?” Rob queried.

“Well, I did it for ACME after attending The Professor’s workshop at last year’s SMTAI,” replied Patty.

“Could you help me do it at AJAX?” pleaded Rob.

“Gee, Rob, I don’t want to goof anything up at AJAX,” Patty said thoughtfully. “Why don’t I call and see if The Professor can help? You can check with your manager and see if involving The Professor is OK on AJAX’s end.”

Patty got The Professor on her first call.  Unfortunately, he couldn’t come, but suggested he could teleconference with her and Rob and develop a plan to audit AJAX’s line balancing. At Patty’s insistence, The Professor agreed to teleconference in to the meeting that Rob and she planned to kick off the audit. Patty felt it was important to have The Professor’s credibility to legitimize the audit.

Later, Patty had received a summons to the general manager’s office.  She was very nervous, but the GM put her at ease.  He told her that he and the AJAX GM were golfing buddies and he had heard that she was asked to help Rob.  He then went on to say that it was great that she was helping Rob as he always wanted the AJAX GM to “owe him one.”  The GM then congratulated her on her recent promotion and finished by saying: “Patty, the future of ACME is in the hands of young, bright, curious and hardworking folks like you. I sleep a little better at night knowing you are on my team!”

Will AJAX’s lines be balanced?  What will the characters at AJAX be like?  Will there be a Pete there?  Will Rob make a move on Patty? Stay tuned for the latest in the adventures of The Professor and his protégés.

The Professor, Part IV: The Price of Changeovers

So far the meeting with The Professor had proven very valuable John thought. He was anxious to hear the other suggestions The Professor had.

The Professor began to speak. “Changeovers are what really hurts ACME’s uptime and hence productivity.”

Pete was surprised. “Even you were impressed with our system of having a white board to document logistics status for each future job.”

“You are correct,” responded The Professor. “However, a changeover takes you about 2-3 hours and you have one or two changeovers per line per day.”

“We have a high product mix business; it’s what we do,” said John.

“The good news is, you can cut your changeover time to 30 minutes,” shared The Professor.

“How?” asked John.

“By using feeder racks,” explained The Professor. “These racks allow you to set up component reels for the next job while the current job is running. Admittedly they cost about $30,000, but they will pay for themselves in weeks. Right now you lose more than two hours per changeover loading feeders onto component placement machines. With the feeder racks, you just roll them and lock them in place.”

Pete moaned, “We already have feeder racks. We only used them once, because they stick on the carpet when we move them.”

This comment caused The Professor to groan internally, but he hid it well. He had noticed the frayed carpet near the component placement machines.

John was beside himself. “It’s a good thing we are not The Professor’s students … I don’t think we would be headed for an ‘A,’ “ he thought. “Pete, let’s get facilities to remove that rug and start using the feeder racks ASAP.”

Patty listened to all of this with comical fascination. She had harassed Pete about using the feeder racks several times. While the meeting was going on she drew a sketch of The Professor, who is notoriously camera shy. Oh, and she decided on the restaurant, Olives in nearby Boston. Maybe they can pick up a Red Sox game while they’re there.

Epilogue: Six months later ACME’s uptime was a respectable 30.4%. John never had to buy another line. The improved productivity enabled ACME to increase its market share. Patty’s dinner and ballgame were a complete success. She handled her victory modestly and she and Pete became best friends. Pete also joined the ranks of The Professor’s admirers.

Dr. Ron’s note: I know that a story like this seems too comical to be true. However, every point and the associated uptime numbers, lost time, etc., is based on a real situation with no exaggeration. The names have been changed to protect the innocent (guilty?) What is your uptime?

The Professor’s 2d Visit, Continued

“Well, what should we do Professor?” John said weakly.

“Clearly, not shut the line down over the lunch hour,” The Professor responded quickly.

“We can’t,” said John. “The operators are all friends and they count on having lunch together.”

“How much are they paid per hour?” asked The Professor.

“Ten dollars,” replied John.

“You can pay them $15 per hour and still make more profit if they keep the line running over the lunch hour,” The Professor opined.

“Fifteen dollars per hour for the lunch time or the 40 hour week?” John asked nervously.

“For the whole week,” was The Professor’s reply.

“I find that hard to believe,” John shot back.

“Consider this,” said The Professor.” Your line is up only 9.7% of an eight-hour shift; that’s only 47 minutes. Today you lost 95 minutes over the lunch hour. You may be able to increase your uptime to greater than 15% by keeping the line running over lunch. I modeled your business with ProfitPro3.0 cost estimating software, and your company will make millions more per year if you keep the lines running over lunch. I have worked with other companies to make this change, and it is really easy with a 30-minute lunch hour. If five people normally run the line, you have just one stay back over lunch hour; that way, each person only misses the lunch hour once a week.”

John thought optimistically, “There is such a thing as a free lunch.”

“Now let’s talk about what we can do to double the uptime from the 15% we will get by running the lines over lunch,” said the Professor.

Patty listened to all of this in amazement. The Professor was helping ACME more than she thought possible. Yes, John will keep his job. What is The Professor’s plan to get uptime to 30% or more? Where Patty will go to dinner?

Stay tuned for the latest.

Cheers, Dr. Ron

Dr. Ron note: As surprising as this may seem, this story is based on real events. The uptime numbers and improvements are from real examples. A company that can acheive 35% or more uptime can compete with anyone in the world, even in low labor rate countries. Sadly, few companies know their uptime — or have the urgency to improve it.

Understanding Uptime

Two weeks passed quickly and The Professor returned to ACME. Patty met him at the door.

“Professor, it’s great to see you,” Patty said with enthusiasm. “We collected the uptime data in real time on a laptop; no one has seen that results yet. We wanted it to be a surprise,” said Patty.

The Professor suggested that he go out on the shop floor to observe the manufacturing activities until shortly after lunch. He commented that his observations may help to understand the uptime results.

The morning seemed to drag for Patty, as she was anxious to see the resets of the uptime data. She bet Pete that the uptime would not be more than 50%. If she wins, Pete and his wife will treat her and her boyfriend Jason to dinner.

Around 1:30 pm The Professor suggested that he was ready for the meeting. Patty had written a simple Excel macro to perform the calculations for the uptime. She only had to push a button and he whole room would see the result in a moment, as Patty had connected her laptop to a projector. There was tension in the air, friendly wagers had been made, but the entire process team realized that their reputation was on the line.

When the number emerged on the screen, John, the manager’s face became ashen. Pete’s visage was redder than two weeks ago. John thought, “I should be fired. How could I manage this team for 5 years and not know that our uptime was only 9.7%.” Patty was thinking about her choice of restaurants.

John asked The Professor, “How can we be so bad?”

The Professor responded, “The good news is that there are tremendous opportunities for improvement. After observing the operations out on the floor this morning, I think we can get the uptime to greater than 40%.”

Pete shot back, “You’re kidding, only 40%?”

“I’ve only seen two facilities that have greater than 45% uptime, and I’ve been to over 150 facilities worldwide,” answered The Professor.

“Where do we start?” asked John.

“How about lunch?” beamed The Professor.

“We just had lunch!” Pete groaned.

“No, no Pete,” The Professor chuckled, “I mean how lunch is handled out on the line. Lunch costs the company more than 1.5 hours of production in an eight-hour shift. That’s nearly 20% of the entire shift.”

Now John was a little agitated. “Professor, lunch is only 30 minutes. We purposely have a short lunch period to avoid the line being down for a long time,” John said with a note of annoyance.

“John, this is true, but I watched what the operators did. Lunch is supposed to start at 12 noon, but the operators turn the line off at 11:40 am. They don’t get back to the line until 12: 40 and it takes them more than 30 minutes to get the line running again. Today the line was not running until 1:15 pm. It was down for 1 hour and 35 minutes,” stated The Professor.

John thought again, “Yes, I should really be fired.”

Will John keep his job? What restaurant will Patty choose for dinner? What should be done about lunch? Where are all of the other hours lost? Stay tuned for the answers to these and other questions.

iSuppli ‘Green’ Survey Sheds No Light

Don’t be fooled by iSuppli’s latest report saying that consumers are going green. The data actually say the opposite.

The research firm issued a press release today stating more than half of US LCD-TV buyers say that environmental issues “influenced their decision when selecting a set to purchase.”

A look at the rest of the picture tells a different story.

According to the April survey, 27.5% of LCD-TV buyers “listed green factors as important influences” in their purchasing decisions. Another 23.1% responded that they looked for green features when buying an LCD-TV, but those features were not an important consideration [bolds mine] in the overall purchasing decision.

From this, iSuppli somehow concludes that “more than half of US LCD-TV buyers are paying attention to environmental features, making ‘green’ a key selling point that needs to be highlighted wherever possible in branding and marketing efforts.”

Here’s the rub: Fewer than 16% of respondents highlighted recyclability as a feature on their purchase.

Say it with me: Electronics aren’t green. They require lots of mining and other nasty actions to produce, consume billions of tons of plastic, and hog energy. And if you can’t recycle it, it’s even less environmentally friendly.

Not long ago, I spent 30 minutes or so standing in the electronics department of the Seabrook, NH, Wal-Mart, asking customers why they chose their TV. (I’d say I did this just for fun, but have you ever tried randomly starting a conversation at a Wal-Mart? It’s not easy.) The most common answers? Price and “it looked good.” Not one customer mentioned environmental reasons. Not one.

Granted, there’s nothing scientific about my poll. And customers don’t shop at Wal-Mart because they like the pretty store décor.

But consider this: What’s the simplest move a consumer can make to save energy? Change the light bulbs to compact fluorescents, right? Yet those bulbs are used in only 11% of the available sockets in the US today.

Why? Maybe because the list price is several times higher than that of an incandescent.

It all comes down to price.

There’s a color for what iSuppli is pitching, but it’s not green. It’s brown.

The Obvious and Not So Obvious About Yields

It was Charles Talbert’s first major assignment after graduating from Tech top in his Industrial Engineering class. He was excited and didn’t want to blow it, but how hard could it be? All he had to do was select the contract manufacturer with the best yields. His company, Excalibur, has rapidly become a leader in designing premier laptops and mobile phones. Excalibur’s exciting and highly functional designs have made it the envy of the industry and a great place to work. So Charles wanted to add value by helping Excalibur find the best EMS firm. To make his job even easier, senior management performed preliminary screening, limiting the candidates to two: ACME and AJAX. Charles visited both and found they both had excellent quality systems in place including an effective continuous improvement program founded on statistical process control. It looks like it would come down to the yield numbers.

ACME argued that it was clearly the best choice as it had superior yield in both laptop and mobile phone manufacturing. AJAX argued that, while that was true, AJAX’s overall yield beat ACME’s 96.6 to 95.4% (table). How is this possible? And which vendor would you choose?

No. Built Yield (%)
ACME 90,000 95
AJAX 10,000 93

Mobile Phones

No. Built Yield (%)
ACME 10,000 99
AJAX 90,000 97

Overall Yield (%)

ACME 95.4