A Lean Guy Reads Inc.: Lean Handbags and Micro Failures

I enjoy reading the magazine Inc. for my interests in startups and entrepreneurship. There are often examples and case studies that directly reference Lean thinking or just sound like Lean and Kaizen with another label.

There were two articles in the most recent issue that caught my eye – one about a handbag maker, Cinda b, and the other about a chain of organic farm-to-table restaurants, Tender Greens.

In the first article, Cinda b Handbags: American Made, Locally Sourced, they not only talk about the American sourcing and production, but some other Lean thinking principles.

They start their designs from the customer backward:

To make a “cell phone wristlet,” which could hold a cell phone, credit cards and cash, they looked at similar bags on the market to determine a competitive price, then sketched out their ideal version and reworked it for the fastest, most efficient sewing possible.

This is very much in keeping with Lean / Toyota notion that says:

1. Prices are set by the market
2. We have to then design products that meet customer needs at that market price

Lean thinking companies don't set prices by looking at their own costs and then adding the desired profit margin (Price = Cost + Margin). They instead realize that Margin = Price – Cost. No business is entitled to a given profit margin. If our material costs go up, we need to figure out how to keep other costs down to maintain our margin rather than just jacking up our price.

One way Cinda b reduces costs is by reducing unnecessary features or process steps – reducing the waste of “overprocessing,” you might say.

For instance, instead of the three pieces of fabric in the initial design, cinda b simplified it by using a single piece of fabric that would wrap around the bag, eliminating unnecessary seams and sewing time. And that lowers labor costs. On another bag, a decorative piping around the outside was replaced with ribbonlike bias tape to cut sewing time. “We design it so we can manufacture it for the price we want,” says Boomershine.

And I think by “the price we want,” she means the “price customers and the market will pay.” Brilliant.

The article does mention that Cinda b directly uses Lean manufacturing principles. It's not just a coincidence that there are Lean ideas there.

Being Lean allows them to:

• Visually plan and manage their work (it sounds like they use the “kanban” planning method)
• Produce and experiment with smaller batches of products and products
• Lower their costs
• Stay competitive

See the whole article here.

I also really enjoyed this article: How Tender Greens Turns Top Chefs Into Fast-Food Cooks.

The owner focuses on chefs thinking like entrepreneurs and being able to take risks.

2. Let chefs make (small) mistakes. Chefs are held to high standards for the restaurants' financial performance, quality, and service. But Oberholtzer encourages them to take risks on new ideas, whether their own signature dishes or adding new items like organic sodas. A flop is considered a “micro-failure,” because it may run only a day, week, or month at a single location. The right idea, however, could have a big impact across the company. “The key here is not success or failure; the key is that we continue to evolve individually and as a company,” he says.

Micro-failures. What a great term. It's sometimes said that Toyota is very very successful because they make many many (small) mistakes.

This is a guiding principle in the Lean Startup movement – if you're going to fail, fail fast and fail small.

This is why we do small “tests of change” in our Kaizen or PDSA work. We do small tests of a new process in a single department or a single hospital where we can… that way we can fail and learn quickly and on a small scale (minimizing risk) rather than having a big huge failure with a hospital-wide or organization-wide program.

Lean thinking isn't quite mainstream, but we see more and more of it… or at least thinking that reminds of good solid Lean principles.

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