Father Sez

A 5S poster hanging in our goat farm. (We have 6 of these all over the farm). We got the posters from the Malaysian National Productivity Corporation, a Malaysian Government body first set up with the help of the UN and which lists amongst its objectives ”the promotion and dissemination of productivity related information and issues”.

Note that the poster is in Bahasa Malaysia, and the MPC has also used suitable words to maintain the 5S acronym.  

Continuing our series on 5 “S”….. as consistent practice and application of the Japanese “5 S” Methodology helps to form a strong foundation for our journey into continuous incremental improvements in our workplace, homes and lives.   Seiri – the first “S” 

Seiton – the second “S” 

Seiso – the third “S” and the fourth “S”, i.e. Seiketsu. 

The fifth and final “S” in the chain is:

Shitsuke        

“Shitsuke, means ‘Discipline.’ It denotes commitment to maintain orderliness and to practice the first 4 S as a way of life.  The emphasis of shitsuke is elimination of bad habits and constant practice of good ones.  Once true shitsuke is achieved, personnel voluntarily observe cleanliness and orderliness at all times, without having to be reminded by management.”

Once the 4 S are ingrained in us, the 5^th “S” calls for us to make a commitment, implement the rules and make the practice of 5 S an ingrained habit.

Probably many of us are actually practicing the tenets of 5 S, based on what we have seen elsewhere, without actually realising. Some simple examples of 5 S in daily life are given by Dr. Chao-Hsien Chu of  Pennsylvania State University, USA. 

We have instituted the practice of 5 S in our goat farm. I am confident that consistent application and practice of these simple words of wisdom can only be of benefit to us.

A place for every broom and a broom for every place. 

Photo Credits: Zai, my partner at the goat farm

Continuing our series on 5 S….. as consistent practice and application of the Japanese “5 S” Methodology helps to form a strong foundation for our journey into continuous incremental improvements in our workplace, homes and lives.  We have already covered:-

- SEIRI 

- SEITON  and

- SEISO

The fourth of the “5 S” is SEIKETSU or STANDARDIZE.

The word “standardize” has many meanings. I follow the version that refers to having standards for every process that we do in the office, home or for ourselves.

Examples may be that all supplier files are red. All keys are in duplicated in 3 sets, one for use by the person, 1 set with Administration Department, and the last set as a final back up with someone else. Uniforms are another form of standards. All dangerous liquids being marked with a standard logo that does not allow for any mistaking it for Sprite.   Color coding, etc.

Whilst this step does not allow for much improvisation or so called individualism, it allows for very easy understanding of work functions if people have to be shifted around or if people leave.

(Improvisation and improvement is more than adequately allowed for in other parts of Kaizen. Still for Kaizen to truly grow and flourish, all players should have their 5 S well mastered.)

Imagine an organization, much like the colonies of bees or ants. Each member knows exactly what to do, when and how. All according to the standards that exist for the colonies. And many are the praises of efficiency these colonies get.

In the home, this standardization can be extended to storage of items, (including filing of documentation), buying and storing of food stuff. Having standards will help us track down abnormalities in food packaging (stuff that the marketing guys do to “fool us”. Get Rich Slowly wrote an excellent post on this.) 

Perhaps some of the preachers of better living may say that variety is the spice of life. Thus looking down at process like SEIKETSU.  Take a different route to work everyday, try a different type of food, etc.  

I think there is a place in life for both of these kinds of thinking. Some processes which are repetitive in nature may flourish based on 5 S, whiles others may be better looked at from the variety point of view. 

We just have to make our individual choices.      

Continuing our series on 5 S….. as consistent practice and application of the 5 S Methodology helps to form a strong foundation for our journey into continuous incremental improvements in our workplace, homes and lives.  

We have already covered SEIRI and SEITON.

Let’s now look at the 3^rd S, SEISO, as quoted from SiliconFarEast.com

SEISO, the third step in “5S”, says that ‘everyone is a janitor.’  SEISO consists of cleaning up the workplace and giving it a ’shine’.  Cleaning must be done by everyone in the organization, from operators to managers. It would be a good idea to have every area of the workplace assigned to a person or group of persons for cleaning. No area should be left uncleaned. Everyone should see the ‘workplace’ through the eyes of a visitor - always thinking if it is clean enough to make a good impression.

This is so self explanatory, don’t you think?.

We should look at everything and everyplace from the view point of a visitor. Is the place clean enough? Can the place be cleaner?

I think no one can possibly dispute the benefits of having a clean environment. Be it workplace, the home or the community. Rather than letting the place go all year around, and then having one massive clean up every once in a while, SEISO calls for continuous cleanliness.

A little cleaning a day, made even littler since it is done by everyone, would make even the fabled Aegean stables as clean as a whistle.

Malaysians are notorious for not maintaining their environments. We do have some redeeming features though. The famous Gotong Royong, where everyone pitches in to participate in a community activity, which is understandably more often than not a community clean up.            

A community clean up operation in progress…Indonesia. (Image credit: Google) 

Cleanliness is next to Godliness….it has been said…..very wisely I think.

Let us practice SEISO everyday, and do our part in keeping our homes, workplaces, ourselves and our environments clean.

What do you want your life to look like…organized or diorganized?

Picture Credits: Google Images 

Last week we talked about “SEIRI”, the 1^st “S” of the 5S methodology that forms the cornerstone of Japanese manufacturing practices. 

Consistent practice and application of the 5 S Methodology helps to form a strong foundation for our journey into continuous incremental improvements in our workplace, homes and lives.  

Today let’s look at the 2^nd “S”. 

As quoted from SiliconFarEast.com

Seiton

Seiton, or orderliness, is all about efficiency.  This step consists of putting everything in an assigned place so that it can be accessed or retrieved quickly, as well as returned to that same place after use.  If everyone has quick access to an item or materials, work flow becomes efficient, and the worker becomes productive. 

The correct place, position, or holder for every tool, item, or material must be chosen carefully in relation to how the work will be performed and who will use them.  Every single item must be allocated its own place for safekeeping, and each location must be labeled for easy identification of what it’s for.  

All of us must have at one time another seen some workshop, where more time is spent in looking for tools or parts than actually doing the service.  Examples may be motor workshops with wrenches, pliers and screwdrivers strewn all over the workshop floor. The mechanic will be spending time looking for spanners and pliers amongst a disorganized pile of tools. 

Other examples may be we ourselves spending time looking for car keys, remote controls, the fever medicine that we are sure we have, etc. 

Time wasting and unproductive activities done only because we did not store or keep them in their assigned places.                        

It is clear SEITON has its place in our daily lives, in our workplaces and our homes. 

The more established blogs have written about the usefulness of organization in our lives. I don’t think I can do better, so I am providing the links. 

a) Clever Dude’s guest post on Five Cent Nickel on organizing one aspect, i.e. tax records, 

b) Get Rich Slowly talks about how keeping everything in its place helps in organizing our finances, 

c) Dumb Little Man’s excellent write up on the 7 secrets of the super organized and

d) The Simple Dollar’s take on the value of getting organized. 

Make an attempt to be organized.  

Keeping everything back in its rightful place after use is a step that we should practice as a matter of course.  

This is SEITON at its best.

An organaized work place - A Teppanyaki chef at work

Jeff at the Supercharged Life said it best….A better life requires continual commitment.  A commitment to relentless series of small and incremental improvements in all facets of our life. Occasionally we may hit a dramatic leap forward, but the cornerstone has to be our ability and commitment to improve slowly and steadily. 

Jeff also mentioned Kaizen, the Japanese art of continuous improvement. The Japanese, in their wisdom, have created a methodology which if learned and applied will help us achieve this continual improvement. The whole concept of Kaizen may be a little complicated, but there is one aspect of Japanese manufacturing methods which can be quite easily understood and applied.  

The 5 S Methodologies. This will help form a strong foundation for our journey into continuous incremental improvements in our workplace, homes and lives.  

SiliconFarEast.com, a comprehensive online resource for semiconductor manufacturing has this to say about 5 S. As their write up is simple and easily understood, I’ll quote them here. 

Quote 

The 5S Process, or simply “5S”, is a structured program to systematically achieve total organization, cleanliness, and standardization in the workplace.  

A well-organized workplace results in a safer, more efficient, and more productive operation.  It boosts the morale of the workers, promoting a sense of pride in their work and ownership of their responsibilities.      

“5S” stands for five (5) Japanese words that start with the letter ‘S’: Seiri, Seiton, Seiso, Seiketsu, and Shitsuke.   

Seiri

The first step of the “5S” process, Seiri, refers to the act of throwing away all unwanted, unnecessary, and unrelated materials in the workplace.  People involved in Seiri must not feel sorry about having to throw away things. The idea is to ensure that everything left in the workplace is related to work. Even the number of necessary items in the workplace must be kept to its absolute minimum.

Because of Seiri, simplification of tasks, effective use of space, and careful purchase of items follow.                                                                                                                                                                                                          Unquote  

This is the process of no mercy decluttering. Anything that is not needed is kept or thrown away. This frees the worker from having to spend time on unnecessary actions or steps in sieving through tools etc. to find the one needed.  

Can this workplace be more organized. Perhaps, perhaps not. 

This process can be done for the home or on ourselves. Much has been written about the advantages of decluttering our homes. Blog posts with tips on decluttering as well as the joys of a decluttered environment are many. You can have a look at:- 

- The Closet Entrepreneur’s 4 part series on this. (Some of the parts are still on the way.) 

- Tipnut’s 10 tips on mastering a messy home. 

- Blunt Money’s one in – three out theory that works for him. 

- Clutter is alleged to breed negativity and low self esteem. 

On a personal level, we can also practice SEIRI. 

 I am sure; we have seen people or even personally experienced looking for something or another by checking each of the 20 or so pockets all over our pants and shirts. Not only is this time wasting but irritates the people who are all standing in line behind us. For example at immigration or ticketing counters. It’s all a function of having too many pockets.  

I cringe when I see people carrying 2 cell phones and answering the wrong one. Or too many credit cards, or too many store cards or handbags full of all kind of things including forks and spoons. Or two handbags!  

There are also many blog posts on how decluttering can help us at the personal level.  

- Read how decluttering even helps in promoting our career. 

In following posts, we shall look at the remaining four of the five “S”.

Though I have yet to sit down and formally talk about 5 S to my children, I have yelled 5 S, 5 S often enough while they are looking for something or another. My kids already know that 5 S is some system or method. I now have to take steps to make this a formal internal system in our household.    

Images Credit: From Google

Last week, I wrote about my present position vis-a vis my aims for retirement.  

Today, I shall show my idea of where I want to be when I retire and my intended action plan to get to where I want to go.

And the map above is the position I want to find myself in when I retire.    

With this, I sat down to think about where should I focus? The important areas are:- 

a)    The elder children’s personal finance education. My wife and I want to try and make sure that the elder two girls are financially literate and that they would not be a financial pain in anybody’s necks. They should be able to take care of themselves and be a sterling example to their younger siblings. As the formal education sector does little to prepare children for life, my wife and I have to do our part.

Thankfully, I have tons and tons of resources from the pf blogs on this.  

b)    The younger children’s education should be the biggest costs that we expect to face in the future. Their studies should be nurtured so that their grades are good enough to qualify for good scholarships.  

Not withstanding the support given by many commentators to Mighty Bargain Hunter’s “Worried about paying for college, then don’t”, my wife and I rate our kid’s education as our duty. 

We shall do what we can, in fact all we can, to ensure that the children get a better chance in life than we got.  

I also hear Flexo’s comments whilst debunking yet other retirement myth. That children cannot be 100% depended upon to support the parents in retirement. 

My wife and I just want to pay it forward. We are not expecting anything from the kids, anyway.  

c)     Health. This is an item that is “so, so important, but not urgent”. So it is usually left somewhere at the bottom of the pile. Exercise is one item that is left out when other so called more urgent things crop up. We shall focus on exercising and learning Chi Qong. This is an ancient Chinese art, geared towards guiding its users to gain tranquility, better health, fitness and also some self defense. 

d)    Take the businesses from the incubator level, nurture them and organize them such that my time involvement will be minimal. This has to be something like a 2 – 5 year plan, but should be started now.  The goat farm is in progress. The planned launch is in July 08, the critical outstanding issue being the bringing in of our farm workers.  

Another business is in the field of the leasing of telecommunication towers in Indonesia. This plan suffered a setback when the Indonesian Government issued a decree deeming this business to be closed to foreigners. However, we have come up with a workable alternative and are actively pursuing this now. 

e)    Clear my liabilities, leaving only the mortgage. Tackle the mortgage last. My family can achieve this by selling off one of our assets. This plan is currently in progress. 

f)     Nurture and grow this blog. I am not making any money from this blog. However blogging has made me really focus on the important areas of my life.

g)    Generating some passive income. I may have missed the boat in socking away some good dividend paying stocks in earlier years. It’s my loss that I did not run into people like Dividends 4 Life when I was much younger. 

I have to use all the skills I have acquired in my corporate life and put them into effect to systemize the operations of the businesses I am incubating. Much like what Michael Gerber has written in his book, E-Myth. The operations should be “engineered” in such a way that my time involvement would be minimal.  

Then I came back to the other rule of thumb that I read from Plonkee’s comment to Flexo’s post that started off all this thinking. The need for us to have about 25 years of spending money during retirement. 

The options are quite clear. Either  

-    Increase my income and get the 25 years nest egg, or 

-    Decrease my expenses. 

I shall keep working on these two very sensible things to do.  Nevertheless, the focus would be on the second option.  

Now I have a nest egg of $X. This should grow to say, $Y, by the time I retire. This should have to last me say, 25 years. So per year I can spend $Y/25. 

Where can I have a life that I want with this amount? Aha! More options fall on the table.  

I can move to the country side in my own country. We already live well away from the Federal Capital. I can still go further rural. Or I can check out other countries.

Countries, where culture, food, transportation, housing, health facilities, education for the younger children and other normal barometers of living are acceptable to my family and me. This I can do now, the checking out I mean. India (where I have worked for 3 years and still have family there), Vietnam, Cambodia and the Philippines are countries that come to mind. 

Suddenly the prospect of retiring as a semi derelict is no more seen as a possibility. 

Life seems to be so much rosier, the sun so much brighter, the birds singing so much sweeter and I do feel a bouncier step as I walk. 

Why not try a mind map yourself?

A while ago, Flexo wrote in his blog a story titled, “Retirement Income Rule of Thumb Debunked.” In it, he quoted a mysterious Mole of Money Magazine, who came up with the assertion that we should estimate our full current expenses now and add 10% to that. Then we have to come up with that amount for each of our retirement years. 

This effectively debunked the previously held wisdom of needing 80% of our pre-retirement income per year of retirement.

This post was actively debated in the comments. And in her comment, Plonkee added in another rule of thumb that she was aware of. We should have about 25 times our estimated yearly expenses. (This rule was not debunked by anyone, not in the thread anyway).  

Man, is this depressing or what? 

We have rules of thumb that say, the maximum house we should go for is 1.5 - 5 times our yearly income, and another rule of thumb that says the biggest purchase of our lives would usually be the house. 

How on earth do we get 25 times of our yearly income, sorry, 25 times of 110% of our yearly income as our retirement nest egg? This is 5 – 17 times our biggest purchase.

I can hear people telling me…..Yeah! That’s why we asked you to start saving early and let the power of compunding work for you. 

Well, unfortunately, I did not hear clearly enough these wise words earlier.  

I sat back and asked myself exactly where would I stand, given all these rules of thumb. I have the fear that I may not achieve this retirement rule of thumb.

So what would be my downside, and if I were to plan to do my best and start now, where should I direct most of my energies.  

A post I read in Problogger gave me an idea of how to do this evaluation. Giving ideas on how to excite the minds of new bloggers to come up with ideas on posts, he suggested the using of mind maps.

So I drew a simple mind map of my current position.   

So, this is where I stand now.  For the next post, I shall look at where I want to be and how and what are my thoughts on what should I do to best bridge the gaps.

Cameron wrote an excellent article on the American industrial system being “unfriendly” to continuous improvement and hence losing their leadership role. He mentioned Kaizen, the Japanese science of continuous improvement as one of the main keys that allowed the Japanese to take leadership.   

I am no expert at Kaizen, but I absolutely love the concept and the clear and simple process by which continuous improvement can and is being achieved. 

Kaizen is not a system where someone puts an idea in a suggestion in a box and the box is opened after 6 months. It’s more of a continuously ongoing carnival within the organisation. A massive living and breathing machine that comes out of ‘000’s of improvements every year, year in and year out. 

The book, Kaizen: The key to Japan’s Competitive Success gives some of the art and science of Kaizen as it is applied and practiced in the very biggest of Japanese firms.

You have to read the book to appreciate the number, type and quality of the suggestions thrown out by the system. We are talking in millions here! The prize money given is sufficient to help workers fully furnish their homes! It’s incremental improvement, little by little, step by step.

Kaizen is part of Total Quality Management (TQM), a concept, ironically, first mooted by an American, W. Edwards Deming who is also considered the father of modern quality management.  Reading Cameron’s article, something sparked in my mind.

Why can’t we apply the principles of TQM in our lives? And in our personal finances? Or are we already applying it sub consciously? 

The five pillars of TQM are:-

• Management Commitment

Yep, my wife and I are fully committed to improving our lives. For us, our children and our extended families.

• Employee Empowerment

If we take the family members, including all our children, as “employees of the family organisation”…..I have to say that we are empowered.

• Fact Based Decision Making

This can be simplified at the family level. We don’t need statistical stuff. But things like the Pareto Principle and Cause and Effect Diagrams have to understood by all the family members, aka employees.

• Continuous Improvement
• Customer Focus

Some of the issues to be improved upon may have to be an adult issue, though children sometimes can shock us with their insight.

 This page from Mind Tools shows how to use Pareto Analysis to select the biggest issue that we should try to solve or the biggest expense that we should try to reduce.

And this page shows how we can use Cause and Effect Diagrams to help us to think through causes of a problem thoroughly. The C & E diagrams guide us to consider all possible causes of the problem.

See how Pinyo demonstrates the use of the Pareto Principle to improve personal finance.

Can we use these methods to try to reduce our commute costs, our grocery costs, our mortgage bills, increase our online income……….….or whatever?

I have not applied these rules in a formal manner at home. I have just used my own analyses and ran them with my wife before implementing some of those “frugalizing” steps that we have taken.

Now with rising costs of food that affects every single family member, maybe TQM Family Style’s time has come.

I humbly thank Shaefer’s Blog for the inspiration for this post. 

Picture Credit: Google Images

Much has been written about the power or usefulness  of just asking for something. After all, the worst that can happen is we get a “no” for an answer.

Sound financial reasons  for asking can be for a raise, better terms, reduction in interest rates, reduction in prices and even asking for the love of our live’s hand in marriage. 

Mrs. Micah has written about this here and Navin’s take is here. Savings.com has also something to say about this.

What about “just asking” from the point of perseverance?

We all know that “perseverance” is a solid asset, as Abundance and Happiness has so eloquently explained. However it is not an easy trait to develop, much less follow.

The best way I have had the manner of developing perserverance explained was by my friend Bala when we were in the Thai island of Koh Samui many years ago.

We were much younger and still single then.  The island was a favourite of backpackers  and we met a number of young people from all over the world, ladies as well as guys. During one of our “philosophizing” about saving the world and all that, the talk somehow turned to asking girls for a date.

Bala laid forth his theory. He said, all we had to do was to count down the “no’s”. Ask this girl, she says no, move on to another lady, she says no, move on and on, until someone says yes. Though the law of probability says that our chances should be 50%, in reality it is a lot less. But it will eventually happen, if only we keep asking enough times.

I have remembered Bala’s theory ever since.

Frank Bettger wrote about this in his “How I raised myself from failure to success in selling”. He noted each and every sales call he made, even though no sales were done. When, say, his 21st call resulted in some sales, he would divide the 21st call’s sales by 21 and get a figure, say $10. His self motivation to continue making sales calls was that for every call, he was making $10, irrespective of whether the call resulted in a sale or not. 

He then found that as he continued and time passed, his $ per call became higher and higher.

(Though the book may be written some time ago, I have serious respect for this book.) 

The need for us to have perserverance and determination is important. It is so easy to feel demotivated once we hit our first wall. The difference between success and failure often lies in our getting up and continuing.

I hope my children understand Bala’s theory of counting down the “no’s”, remind themselves of this theory whenever they feel demotivated and then continue their struggle.

In  seeking betterment in our careers, in generating more sales and in getting better deals for ourselves.

“Consider the postage stamp, my son. It secures success through its ability to stick to one thing till it gets there.” Billings, Josh American humorist (1818–1885)

Recently Madison at the Dollar Plan and some of her blogging friends got together and came out with an excellent series of articles chronicling the financial strategies that should be put into place as we fall into various age bands.

This has made me review my own plans for helping my children lay a better foundation in their own personal finances and lives.

The two eldest girls are now in their final year of undergraduate studies, both of them on Pa & Ma scholarships. Sadly I was seldom around when they were growing up as I was working overseas. Thankfully some foundations have been laid by my wife and I want to see how it can be taken to the next level. Right now, the girls are on course for forming / mixing around with a peer group that takes pf seriously.

I have read and digested Mrs. Micah’s College Money Matters, Cash Money Life’s  Money Tips for the Twenty Something Crowd and Remodeling this Life’s Financial Advice for Your Twenties.

Having these resources have been a great advantage, thanks guys!

What should I focus on now?

a) Further studies

Along wants to do her Masters in Educational or Child Psychology, whilst Azah wants to do her CFP in Islamic Finance.

Should they do these part-time, or should they seek study loans, scholarships or employer paid tuition to pursue these?I have to give some thought to this.

b) Career Plan

This is an area where I have personally failed badly. So I have no intention of not guiding my children. I have to discuss with them and explore their preferred careers, identifying the companies or organisations where they want to work, preparing their killer resume, going the extra mile to secure the interview, preparing for it and then doing well at the interview are all matters that have to be addressed.Then there would be the matter of discussing how to manage their colleagues and bosses.

c) Finance

The first would be budgeting with the paying yourself first element firmly entrenched.  This may be based on the envelope system to start with. I would also like to suggest the “James Plan” of savings with a virtual employer.Then a major discussion on the power of compounding and how it can be made to work for us or if we are not careful, against us.   They also have to be introduced to checking accounts and how to balance their books. 

Then on creating the emergency fund, basic investing knowledge like mutual funds, index funds and ETF’s.  Some background on insurance, mortgages and loans should round it up.

Emily made a telling statement.

To quote her, 

This is the best age to be frugal because living frugally early on is the foundation for the rest of your life and will give you the opportunity to live well while also living below your means.

Unquote

And Trent over at the Simple Dollar reminds us that the age between late childhood to settling down with a family is the best age for entrepreneurship.

This is in line with what my wife and I would prefer. Still it’s the girls’ lives, so they would have to make the final calls. So far they have not indicated any signs of the Donald in them yet.

I have to now think carefully about crafting a series of lessons or posts (as my daughters and their friends read my blog) on how best to achieve this. Lessons that they find acceptable.

After all, the most memorable quote on advising children I have read is (I am sorry, I can’t remember the source now, but it must be from a blog), that the best way to advice children is “To find out what they want to do, then advice them to do it.”