I have been enjoying Ron Pereira’s great blog at lssacademy.com. He recently posted the following question to readers: Is Little Caesar’s Lean?
Is Little Caesars Lean? I’d like to offer my view. A basic feature of the ideal Lean system is pull initiated one piece flow. Pull initiated means that the factory does not make the product until the customer places an order. One piece flow means that the factory is able to accommodate order sizes as low as one piece as well as high piece-to-piece feature variation with no finished goods inventory.
Pull initiated one piece flow is not how Little Caesars does things. Their key competitive advantage is cheap, instantaneous pizza service. I love those Hot-N-Ready pizzas. Any time of day, I can drive up to a Little Caesars, hop out, and pick up a couple of Cheese or Pepperoni pizzas without a second of waiting. The paradox is that Little Caesars has to make pizzas ahead of time and keep a small inventory in order to provide the instantaneous service. The other non-lean feature is that they only offer Pepperoni or Cheese. No infinite topping variation on a Hot-N-Ready pizza. You would think that Papa Johns has a better business model. At Papa Johns, the customer must place an order before the pizza is built and cooked using pre-staged dough and toppings. Their business model is pull initiated one pizza flow. In fact, that is the business model of most pizza restaurants, except Little Caesars. The typical pizza house carries no finished goods inventory, but the pull initiated one pizza flow introduces a 10-15 minute wait that prevents regular pizza houses from capitalizing on the unanticipated and emergent pizza needs of potential customers.
Although pull initiated one piece flow is supposed to be the gold standard of Lean manufacturing, it really is not. The gold standard is whatever system delivers the most value to the customer. Since a made to order pizza cannot be made in microseconds, I would rather forsake extra toppings in order to get my pizza cheap and fast. The value from my perspective is speed over variety, so Little Caesars ends up being more lean than Papa Johns because they deliver value to me like no other pizza place. Toyota recognizes this, too. As we all know, Americans like their cars delivered at the time of purchase. In order to service the great majority of American consumers, Toyota has to build and maintain thousands of cars in finished goods inventories on dealer lots. This is waste in the process that must be tolerated, because the customer requires instantaneous delivery.
Q: How can I get a patent?
A: Individuals and companies obtain patents to protect new inventions. A patent allows the holder to control the use of the technology for a set period of time. After the patent expires, anyone is free to copy and use the same technology without paying the original patent holder. Patents are used to reward the inventor for inventing something new and useful. The patent holder can exclusively manufacture and sell the patented product or the patent holder can license the technology to another company in exchange for
payment. Individuals with little interest in creating a factory and sales company will often try to find a licensee for their patented technology.
If you have created a new invention, you can patent it, but beware. Patents are expensive for two reasons. First, it costs money to obtain a patent. Most people pay thousands and thousands of dollars to legal firms to navigate patent law and appropriately format their patents for submission. Some people can avoid legal firms, but they have to research patent law and carefully understand the government regulations for patent filing. For those who try to file a patent themselves, the U.S. Patent and Trademark Office collects fees that can range from the hundreds to over a thousand dollars. The fees can be investigated at http://www.uspto.gov. Once your patent is awarded, you now have to maintain and defend it. This is where the real expense of a patent comes into play. Although you may control the patent of a key technology, if another company infringes your patent, you may have to pay incredible sums to defend it in court. The upside is that if you win, then you will see a huge payday. If you do not win or if you run out of money, the loss could ruin your financial life.
To read more about patents, check out the resources at the U.S. Patent and Trademark Office, http://www.uspto.gov. Alternatively, http://www.wikipedia.org has a lot of information about patents.
Q: What should I put on my resume?
A: As a recruiter in science and engineering, my advice is put three things on your resume.
Relevant information. By relevant, I mean that you should list education and jobs where you learned skills that will make you an attractive employee. If the job seems out of context, be sure to highlight the relevant experiences and skills you learned on the job. A chemical engineer who served as an assistant manager at a restaurant might not think to include the experience on his resume. She should because she probably learned basic business accounting and how to lead teams while on the job. These are critical skills for almost any position.
Eligibility for clearance. If you are looking for a federal or government contractor job that may require a security clearance, you will help your chances by listing any security clearances you have held in the past. If you have not held one, state whether or not you are eligible.
Your personal philosophy. I’ve got a list of things I look for in potential candidates. Most recruiters do. While I will tell students what they should be studying in hopes that they naturally build themselves into the perfect employee, I don’t tell resume writers how to write a resume that artificially builds a nice, but false, picture. What you write must be true to you. Your resume should communicate what you can do to make your potential employer successful. If your potential employer doesn’t think what you can do will help them, the job is a bad fit. Keep looking. When you meet with an employer that resonates with your abilities, you have a good match. Remember that you are a customer, too. No job is worth sacrificing your own values, so don’t take one that will.
Q. I’m getting a BS in engineering and would like to continue on to graduate school. I am not sure if I should pursue a Masters in Engineering or a Masters in Business Administration?
A. It depends on what you want to do with your education. If you want to do engineering, go for the Masters in Engineering. If you want to be a manager with a technical background, get the MBA. The fact that you are weighing the pros and cons of both options suggests that you may be looking to make significant technical contributions while managing people or projects. If that is the case, you might want to get both a MS in Engineering and MBA. Do yourself a favor and go for the Masters in Engineering first. Engineering is hard and the longer you are away from the advanced math and rigorous courses, the harder it will be to get back in the swing of things. If you are presently an engineering student, consider continuing on as a full time student until your Masters is complete. Once complete, you should be able to get a job that pays better than those available to BS college graduates. Begin making your technical contributions and start preparing for your MBA course of study.
Q. I’m about to graduate and I have a choice of two jobs. Job 1 is my dream job, but it is located out of state. Job 2 is a decent job located in town. I also have a girlfriend. She has a year left in school and I think there is a future for us. If I take Job 1, I know it won’t be good for our relationship. If I take Job 2, it won’t be good for my career. I really like this girl. What should I do?
A. I think this is the first time I will ever give relationship advice. You are facing a common dilemma. Many people consider sacrificing their careers for a relationship. Before I entered to graduate school, I considered postponing my education to move near a girl I had fancied. I wanted to see if there was a future for us. In the end, I entered graduate school as planned and broke up with the girl. I have no regrets. Two years later, my girlfriend of a few months took an awesome out of state job with one of the best companies in the United States. For a couple years, we took turns driving 3 hours every weekend to see each other. When we got engaged, she sacrificed her career, moving back to our college town, where we were married and had our first child. Now on child number three, we’re still married and she has no regrets. I have two pieces of advice for you:
- Don’t think either/or. Taking Job 1 may not be good for your relationship, but who says you have to sacrifice your career for it? How can you maintain your relationship and still pursue a rewarding career?
- Choose what is right for you and don’t look back. Many people like to dwell on the past. Do yourself a favor and move on. There is no point to regretting past decisions. Maybe they were dumb, but they are over. Don’t do the same dumb thing twice. That’s about all you have to remember. Whatever you choose, go for it with all you’ve got.
This morning, I experienced my annual visit to the optometrist. The wait was 30 minutes, but that is not what I wanted to address. At the optometrist, they have a fancy machine that takes a picture of your eye. I’ll call it the eyephoto. This is an expensive machine and insurance does not cover it. If you want to have the eyephoto, you have to pay $35 out of your pocket.
In order to see if you want the eyephoto, they give you a piece of paper when you walk in that has a paragraph description of the eyephoto and a place to check a box and sign if you want it done. I decided to keep my $35.
In the exam room, while waiting for the doctor, there was not much for me to do, so I was watching the screensaver on the office computer. What was it showing? It was a commercial showcasing the benefits of the eyephoto. As I watched the commercial, it occurred to me that paying the $35 might not be such a bad deal. The commercial changed my mind.
Here is an example of a badly sequenced process that does not get the customer information when the customer can use it to make a purchasing decision in your favor. It is putting the cart before the horse. I wonder what the rate of use is for the eyephoto at the optometrist. I bet it is pretty low. Wouldn’t it be higher if they reversed the sequence? If I had walked into a lobby with a giant flat screen TV showing non-stop eyephoto commercials and THEN been presented with the election form, I bet I would have signed up.
Most Lean we see addresses the movement of product before or after purchase, but in this example, an appreciation of Flow creates the potential for increased revenues. There is a huge amount of value to be gained by using Lean to ensure the purchase of product.
I saw this story about United Airlines charging customers to check a SECOND bag. Not the fifth or sixth bag, but NUMBER TWO!
This reminded me of a training slide that we have in our Lean education program. There are three ways to cut costs. You can cut costs across the board by reducing all budgets a fixed percentage. This is the lazy path. You can cut costs by cutting services. This is the stupid path. Finally, you can cut waste. The smart path.
This extra fee strikes me as part of the stupid path because it cuts a core service and makes customers pay extra for something they get “free” from other airlines. According to the article, United expects it to generate $100 million in revenue and cost savings a year. Does this mean that United’s tickets will be consistently cheaper than companies that do not charge a per bag tax? I highly doubt it as the article shares that this is but one small part of a larger plan to charge more for less, a clear violation of the Profit=Price-Cost rule:
Airlines want to charge more for not only checked baggage but assigned seats and other services. Investors have urged airlines to pass on the higher costs of fuel to passengers through ticket-price increases or similar surcharges.
If United is planning to save money by flying fewer people, they might be able to claim savings because I don’t think their scheme will end up with them making any more revenue. We’re likely to see United lose revenue to the benefit of airlines that are more responsive to real flying customers, not day traders.
It appears that US Air is going to charge $25 for a second bag.