I understand the appeal of sticking to what you know. Really, I do. What I don’t get is how do you measure the loss from sales that never happened?
I understand an entrepreneurial spirit, doing it ourselves, doggedly holding to what we have figured out ourselves.
What I don’t understand is the warlike mentality of so many in business.
We all need good results, of course!
But managing by results, by setting goals, by cutting costs work only for a moment, and then what? You can’t manage results, only their causes. Rather than manage results, why not manage by knowledge?
The Forest for the Trees
When I ask about the loss from sales that never happened I am not kidding.
For many years while the cheese industry followed a commodity model, long after the market had matured, and there were many competitors, and the only way you could compete is by cutting costs ever lower. Cut-throat competition.
Meanwhile the Europeans took over specialty cheese, the highest margin shelf space for dairy in the supermarkets. Even commodity European cheese had a quality and style that let it get more margin.
This was not by accident, it was a plan. They got together and collaborated to ensure they won and kept shelf space. Competitors, yes, but with common interests, collaboration for the good of all to grow their market, rather than fight among each other to win an ever-diminishing profit.
The rest of the world has realized that there are only a handful of places in the world where there is enough land and water to grow pasture to produce pasture fed milk for cheese, but we are looking the other way again.
Cheese is one of very few manufacturing sectors still alive in the US, but it is one of the only in the world that is still manufacturing using methods that are pre-WWII.
Chinese investors as we speak, knowing they don’t have the right mix of water and grass, are looking at investing in regions where we have long abandoned dairy farming on pasture, despite the overwhelming data showing that a pasture based system is by far the lowest cost, highest profit system, and despite a growing world wide demand for grass-based products.
We look at the Kiwis the way Detroit looks at the Japanese. The only reason the grasslands of the US have not been taken over by the Kiwis is because they voted not to allow nuclear materials into their ports and Clinton retailiated by making getting a visa very difficult. We should be begging them to come, and teach us their dairying system, the lowest cost in the world.
Use your un-computer: figure it out. Cheese is one of very few manufacturing sectors still alive in the US, but it is one of the only in the world that is still manufacturing using methods that are pre-WWII. Statistical Process Control works, statistical thinking works, teams rather than command and control works.
But despite the quality revolution that took place 30 years ago in other types of manufacturing, far too many in our industry continue chugging along, doing the same things, expecting better results.
All for One, One for All!
The US is one of only four or five places where enough milk can be produced to feed the world. Foreign markets are growing. While we are fighting shaving a few pennies here and there per pound there is a huge opportunity waiting, one that dwarfs what we now have, where there is room for everyone, but our competitors, including the Europeans are there, working together armed with a plan.
Having the manufacturing and geographic advantage, what are we doing about it?
We would be better off collaborating and learning than continuing to do the same things and expecting better results. As the saying goes, it’s not what you don’t know as much as what you think you know that isn’t true that hurts!
The Voice of the Customer
First and foremost, we should all put our differences aside and agree to work together to craft a 10-year plan. That plan should include real market research, done by top professionals trained in statistical sampling research, another science created by Dr. Deming, and not the usual characters we always use who charge us lots of money to tell us what we want to hear.
Like Apple, we should to try to understand the prospective customers and design products based on their needs, not on our habit or our convenience, or what they tell us. Breakthroughs come not from what consumers say they want, but from finding something they want they have never seen before.
Should we be like Kodak, which invented the digital camera, but thought it a flash in the pan? They really believed we would return from free digital photos to paying 8 bucks a roll of 36 pictures and 15 bucks for developing them.
Are we so different? Are we holding on to old ideas, because they worked for us for so long, or are we ready to really walk in the shoes of those who eat our cheese, or we would like to eat our cheese?
The Voice of the Process
With sound quality management principles behind you, real costs, overall costs, would go down, sales would go up, you would have more and more loyal customers, and a more robust ability to survive the ups and downs of a difficult economy. You would learn to embrace collaborating where it makes sense to grow other markets.
Note: The Deming Collaboration is putting together peer groups to meet monthly to help each other and get help from a waiting list of carefully selected business owners and managers, led by world class experts in process control and quality management.
There is nothing more enjoyable than meeting with your peers from all sorts of industries to share knowledge and experience, under a non-disclosure agreement, with no competitors in the room.
The name is iPeerGroup™, because you don’t have to meet in person, the meetings are face-to-face on line, using collaborative software, and the cost much less than regular consulting. To find out more, Google “iPeerGroup”. DS
Dan Strongin is managing partner and owner of Edible Solutions,
a consulting company focused on helping companies making great food
make a profit. He will be writing a monthly column in Cheese Reporter.
Strongin can be reached via phone at (510) 224-0493, or via e-mail at firstname.lastname@example.org. You can visit and blog with Dan at www.managenaturally.com.
Strongin Articles written for Cheese Reporter
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