Once again, Honda gets it right.

http://finance.yahoo.com/news/Honda-makes-money-others-hope-apf-969873985.html?x=0&sec=topStories&pos=3&asset=&ccode=

This article posted on Yahoo Finance tells the story of another Honda success story. While all the other auto makers are losing money, Honda made a profit. Honda turned a profit because consumers buy Honda vehicles. Consumers want to buy Honda vehicles because Honda figured out a long time ago that to win, they need to make the products people want to buy.

My first hand experience dealing with Honda began in 1986. I was a new graduate with an electrical engineering degree from Arizona State University. I had just left Motorola and joined a small defense contractor that needed a Japanese-speaking engineer to help with the development of a new product for the auto industry—airbags.

My first responsibility was to learn how to adapt the airbag products the company was making for the US Big 3 to match Honda’s expectations. I was young, excited, and full of passion for the challenge. I was assigned to work closely with a seasoned sales guy who had developed a great relationship with Honda. The first task he assigned to me seemed rather simple. We had received a list of technical questions from the engineers at Honda R&D and it was my job to walk around and talk with the core experts within the company and compile the answers so they could be communicated back to Honda. It all seemed simple enough. After I had worked with the experts and collected all the requested information, I was to go back and review with Sales and then we’d fax (email didn’t exist at the time) the information to Honda.

I went about busily meeting with the experts and collecting all the information I needed to answer Honda’s questions and attempted to learn everything possible about the product. I talked with the engineers who were working with our US domestic automaker customers. I used the same information they had used in their work with those companies and then ran some additional product tests and gathered the results.

Then we faxed the information to Honda R&D. To my amazement, I found that the answers I sent only spawned more questions. Being new and inexperienced, I went back again to my domestic counterparts in search of the additional information requested by Honda – it didn’t exist.

I now had to dig deeper. I found that the only way I would ever get the information I needed to answer Honda’s questions was to work with the designers and to then conduct the testing needed to derive the information myself. Wow! Honda didn’t accept anything that wasn’t backed up with reason and a lot of data. We had to do technical engineering work to understand the physics and principles involved in order to answer their questions. A mere statement of test results was not acceptable to them.

Honda’s company philosophy drives its engineers to understand what the customer wants – and to satisfy it. In everything they do the first question is always “how will it affect the customer?” The results are that while they don’t really understand the underlying detail, consumers have learned that Honda makes great cars that provide long term value.

Life and business have an interesting way of throwing curve balls; you always have to stay flexible to adjust your swing.

Several months ago, I was living in Tokyo and working in the furiously paced auto industry. Then back to the US, now in San Diego jumping new hurdles in the Defense industry. In between, and still, maintaining entrepreneurial activity. Which brought me to a lunch time conversation today at In-n-Out Burger with an 87 year old retired Navy sailor. He was assigned to the USS Lexington, an aircraft carrier that left Pearl Harbor on….Dec 5th, 1941 - a few days later and he would not have been there today to tell me his story.

After a near miss at Pearl Harbor, his carrier before long became the first to be sunk in World War II, hit by 5 torpedoes and a few bombs, the ship was disabled and then sunk. Assigned to another ship, that too was struck, this time by a Kamikaze plane. When I gave him a heartfelt thank you for his service to our country, he shrugged it off saying he was just a stupid young kid who didn’t know any better. He went on to finish a long career in the service. To me he is a great man.

So how is all that related to real life principles for developing products? When I began writing this blog I thought the principles I learned from the Japanese applied to more industries than autos, now I’m confident. In the auto world, companies live and die by the speed they can bring product to market – and actually end up with consumer preference in their favor. The military world is a little different; the customer is … the government. The production volume is on the order a few to a few thousand – over a 10 year time period. But design misses can cost hundreds of millions of dollars and can literally affect human life.

The very same “prove by design” vs. “prove by test” principles are touched upon and missed in both industries. It comes down to this – real principles don’t change because of circumstances or time. They are the same no matter what.

Getting Down To Business...

Here's one of the better blog posts I've seen in a long while.

http://www.tunedinblog.com/blog/2009/01/hide-and-seek.html

As Mark encourages, now is not the time to bury one's head in the sand. More than ever, it's time to go out and dig up the opportunities.

When you discover yours, you may run into obstacles where expert assistance can speed your success and shorten time to market (whether it be engineering development, supplier arrangements, manufacturing readiness, distribution channel set up, etc). If so, don't hesitate to contact us. A few minutes chatting together can determine if mutual win-win circumstances exist.

Go to our website at www.productbuilders.com or send an email to me at demeron@productbuilders.com.

All the Best!

Entrepreneurs and Small Businesses Are the Key.....

Another article highlighting the importance of the entrepreneur and small businesses in leading the US economic stimulus.

http://www.bizjournals.com/tampabay/stories/2009/01/26/daily54.html#

According to Dinah Adkins, president and chief executive officer of the NBIA, "The study stressed the fact that business incubators create more jobs at a lower expense to the federal government. According to the research, the federal government spends $144 to $216 per job to create activity in the incubator sector.

In comparison, roads and transportation projects generally cost more than $1,200 per job, with 4.4 to 7.8 jobs created for every $10,000 invested, the report says."

The question then becomes - "How do we support and enable small business?"

No problem, with firms like the Gibbs Group, www.productbuilders.com, who do all the work for small business owners who have an idea but need assistance getting it to market, small businesses can thrive and generate new jobs faster than ever before.

The Gibbs group basically assists the idea owner to obtain intellectual property protection if necessary, do the engineering work to design and develop the product, then lines up manufacturers and distribution channels so that the business owners receive a turnkey, operational business that they can then pour heart and soul into to make it grow.

With teamwork between companies like the Gibbs Group and small business owners the future of America is in good hands, if the government can just let the process run.

What is the Real Stimulus that Will Turn Around America?

Automaker bailouts, giant Financial firm bailouts, public works expansion, and on and on – what if any of these will have lasting effect in rebuilding the US economy? As large corporations continue to lay off employees by the thousands what will replace the incomes for millions of affected Americans?

US consumers drive the economy but without income they will not return to the marketplace to buy goods and services and the large corporations that depend on them will continue to shrink and eliminate even more people from positions. Is this a viscous circle of depressing activity that will continue to spiral downward – until what?

While the above scenario certainly can appear as doom and gloom for the foreseeable future, I believe there is a bright shining ray of hope in the small businesses of America. They will once again do their part as they have repeatedly done throughout history. These are the entrepreneurs, their kind were the backbone of early American business. They have an unconquerable spirit of determination and courage and are well and alive today.

Those who doubt this would do well to recall that sometime around the 1930’s there were those who called for the US patent office to be closed because all the inventions ever to be invented were already complete. As that notion was false then, so it is today. Those who have been shed from the large institutions have a wealth of knowledge and experience, just needing to be harnessed and applied to new small ventures that will in turn grow and replace the “old” large scale businesses of today. Small businesses are much more nimble and responsive, enabling them to adjust to quickly changing market conditions and so are ideal to compete against the outdated giants.

All that is needed is guidance - as many of these talented displaced people are not accustomed to working in a small business environment they struggle when attempting to function in that environment. Not to worry – there are firms such as the Gibbs Group from Yuba City, CA ( www.productbuilders.com ) that specialize in converting ideas to businesses for the holders of those ideas. The Gibbs Group is a group of consultants that guide inventors and small businesses to turn the idea or concept into a viable, thriving small business, some of which grow to large businesses.Each of these new businesses creates more jobs, replacing those shed from big business.

The Gibbs Group uses sound product development principles, taking a very hands on approach to build the business from the idea stage, through competitive market analysis, prototyping and engineering development, and on through manufacturing readiness and mass production and then into wide scale distribution. Through the work of the valiant and courageous American business pioneers guided by firms such as the Gibbs Group, America will eventually revitalize itself into a healthy business powerhouse that it once was. America will become re-successful.

Will an auto industry bailout help US automakers long term?

http://biz.yahoo.com/ap/081108/autos_what_happened.html

“They” say US automakers won’t survive unless the government steps in with a bailout package for auto makers, just like for financial firms. That may be true, short term. But what about long term effectiveness? The above article says the business decisions of the US Big 3 during the flush times led to their demise. Fine – fix the business decisions by taking on the Unions, etc, etc, to reduce costs. But what of consumer preference? Will a bailout will fix that problem? No chance.

The only fix to consumer preference is producing a high quality product that consumers want to buy. The Japanese have studied this point for years and developed the “know how” that now allows them to provide the excellent quality products US consumers have come to recognize. They call it “monozukuri”, or the science (not art) of making things. The US manufactures have generally ignored the fine details of monozukuri and have instead pushed technology down hill and out the door to suppliers. They themselves have largely become coordinators and program managers. The suppliers in turn were allowed to become sloppy (by Japanese standards) because all the OEM’s care about is whether they can produce test results showing their parts meet the OEM specifications (and more importantly to them, whether they are they the lowest cost supplier). The OEM engineers generally have lost the technical depth to fully understand the technology details of the products assembled into their vehicles (relative to their Japanese counterparts).

Ask any global Tier 1 supplier which customers are more difficult to satisfy. The answer – the Japanese, no question about it. Why? Because they demand to understand in minute detail the technical characteristics of every component they use.

Unless US automakers and their suppliers learn the same principles discovered by their Japanese counterparts over the past thirty years, no bail out package will have the capability to save them from their oncoming demise.

Read more in the book, "Becoming Re-Successful" www.lulu.com/content/4339719

Prove by Test vs. Prove by Design

So you want to develop a new product or service. You thoroughly research the market expectations and they become your requirements (i.e. the specification). You plan your approach, do design work, build samples and run tests to check the results. Maybe the first results weren't so good so you make modifications and the new results show the product meets the specification requirements. You run additional tests to confirm - they're positive. You're elated you achieved success, right? After all, your test results prove the product is capable.

Although a bit oversimplified, the above paragraph describes the product development process generally used in the US and Europe. Will a Japanese customer accept the product as developed? Absolutely not! Why?

The fact that 10, 100, or even 1000 tests were successful does not guarantee the 11th, 101st, or 1001st sample will also be good. Japanese engineers have been conditioned to seek to understand the details, the process that caused a part to be good. Test results themselves do not prove the product design is robust. A detailed explanation of what caused the product to function properly is expected.

Along with an explanation of why the part functions, an analysis of the potential failure points and how the design was carefully thought through to avoid them is required. Only then will the Japanese engineer agree the design is robust, and will view the test results as an indication the design itself is robust. In other words - prove by design.

The concept of Prove by Test vs. Prove by Design is one of the most significant differences in the Japanese and Western product development processes. Learn the method of Prove by Design and you'll see your product performance increase while at the same time significantly reduce warranty and quality issues.