The Silent Erosion of Product Wellness

Guest: Jay Carney, Co-Founder and President of My Solution Designs

Host: The Allied Advisors Podcast 

Episode Summary

In this episode, we dive deep into the concept of "Product Wellness" with Jay Carney. While most manufacturers focus on immediate crises, Jay argues that products often suffer from a "slow fade" caused by normalized inefficiencies and hidden operational friction. We explore how traditional "green" metrics—like high aftermarket sales—can actually mask a product that is "getting sick" and how leadership can use AI and direct observation to diagnose these issues before they lead to a "heart attack" for the business.

Key Discussion Points

1. What is Product Wellness?

• The Living Organism Analogy: Products should be viewed as living organisms that don't just "die" suddenly but get sick and fade away over time.
• The Steve Jobs Influence: Most companies fail because they lose focus on the product, treating it as a static entity that will always perform well.
• The "Blind Spot" Check: Much like a diagnostic blood test for a human, product wellness requires looking at what is missing or misaligned in the "blood work" of the organization.

2. The Danger of "Normalized Inefficiency"

• The Schematic Trap: Jay shares a story from his early career where a technical error in a schematic was "rejected" by engineering, forcing technicians to create permanent, unrecorded workarounds.
• Institutionalized Tribal Knowledge: When "Joe and Mike" are the only ones who know the workarounds, the product appears healthy until that knowledge walks out the door.
• The Conformity Study: Over time, teams begin "standing up when the bell rings" (performing workarounds) without knowing why, which adds unseen costs and sucks the life out of the margin.

3. How Good Metrics Mask Bad Products

• The Aftermarket Illusion: High revenue in aftermarket parts can be a red flag. If a specific part is a "repeat offender" for failure, the customer is paying for your design inefficiency.
• The Warranty Ratio: Public standards (like Caterpillar's 3.5% for heavy equipment) are vital benchmarks. If a company aggressively lowers its warranty ratio to save money, it may actually be destroying customer confidence and future sales.

4. Future-Proofing with AI

• Capturing Tribal Knowledge: Organizations can use local AI models to record conversations with senior staff and convert decades of "unwritten" expertise into searchable documentation.
• RAG (Retrieval-Augmented Generation): Jay explains how AI can "listen" to new knowledge and adapt it into a learning mechanism that is unbiased and lacks ego.

Takeaways for Leadership

• Go Beyond the Dashboard: Don't just accept a "green" light on a KPI; ask why it's green and what it might be hiding.
• Watch the "Ballet": Go to the shop floor and observe the flow. Look for hesitations or "stumbles" in the process that indicate a workaround is in place.
• The Maintenance Connection: If quality slips but materials haven't changed, look at the equipment tolerances. No machine is perfect, and poor maintenance is a leading indicator of product sickness.

Transcript

SPEAKER_00 0:04

Welcome back, everybody, to another episode of the Allied Advisors Podcast, the podcast specifically designed for men market manufacturers looking to scale operations and improve that ever-important bottom line. Today's guest is Jay Carney, co-founder and president of My Solution Designs and the Mind Behind Product Wellness, a practical, systems-level way of seeing where products, processes, and performance quietly drift out of alignment. Jay helps organizations uncover hidden problems, operational friction, and normalized inefficiencies that don't show up as crises, but steadily drain time, margin, and focus. With a career-spanning electrical engineering, product leadership, and CLO level operations, he has a rare ability to connect engineering intent to real-world use and real financial outcomes. Jay, really appreciate you carving out the time to come on the show. Thank you so much. Well, thank you for having me.

SPEAKER_01 1:02

You know, that uh that's quite a boost there you gave me. I'm not uh not always comfortable with those kind of greetings. So thank you very much for that and this opportunity.

SPEAKER_00 1:09

No, you know, you and I had the uh had the pre-meeting, obviously, before we we scheduled the podcast. And you know, the one thing I was really um impressed, really interested in your approach to to product wellness. That's not something I mean, I mean it makes sense. It makes sense from an industrial engineering perspective. It's just not not a way that I think most people think about um their their products. Uh so you know, when you talk about product wellness, you talk about treating it like a living organism. You know, where did where did this come from? At what moment in your career did you realize suddenly that, oh, you know, products just don't die. They get sick and slowly kind of fade away. You know, where did this realization come from?

SPEAKER_01 1:52

Um you know, there was there was just a lot of thought. Um, I'm getting uh just generally curious about things and I just reflected and and what is it, you know, and and the one phrase, you know, Steve Jobs said it, you know, most companies fail because they lose focus on their product. And when you kind of generalize the product, it's always been there, it's always been doing this, it's it's it's doing well, right? And you know, and I was like, and that's not the case. And and I think that happens just in life and in ourselves. We we think everything's okay, and then we go and have this diagnostic check, and the blood work has these things missing, right? And so, and those are just blind spots. And and so when I started to to kind of relate it, um, as in that, I started just reflecting back on my career and what I had seen. Um, because it was apparent in in every company, you know, revenue is the critical piece that makes a company exist. And and that's just driven by your products. Yes, you need great people, but at the end of the day, your product's got to be great and it's got to meet the expectation.

SPEAKER_00 2:56

Yeah, no, I I was just gonna ask. So, I mean, you know, when you talk about you, they've got to be great, they've got to meet the expectation. Did you have an experience at one point in your career where you know you had a product that was great, and then you know, maybe two, three, four or five years go by and you're like, you know, margins are slipping, uh, firefighting increasing. Did you have that type of experience? Or just more broadly, do you see that you know, companies go out of business? And did you diagnose that as really you went out of business because you stopped focusing on making your product better?

SPEAKER_01 3:26

Right. And and so, yeah, to get back to where it's actually a very slow process and it's kind of minute. So, yeah, early on on my career, I was a technician and I was I was troubleshooting a machine and it just it didn't work. And then, oh, I found that uh there was an error, and and then I found that the error was actually in the schematic. And so, you know, I just pushed the engineering and said, hey, you know, it's a simple thing, we we make mistakes, and um, and this was a new product launch, so definitely mistakes are going to be there. Well, it went to engineering and and they rejected it, no change needed. And then so, yeah, so I went and said, Well, I went to the engineer and said, Well, help me understand why this change isn't required. And then that's when he saw it. And so, you know, when I reflect back, I'm like, wait, this this is that first little step, you know, and this is where we normalize it. This is where we start to see that, hey, well, just the technician fixes it. Well, you know what? Sometimes that technician might not get a chance to see that. It goes out in the field, field service fix it. Then it's uh now the customer reflects it back and says, you know, I don't quite feel comfortable with this product. So now just think about this over years, and before you know it, that the product's no longer viable, not because it doesn't work like it does, it works well, but those little things add up over time.

SPEAKER_00 4:46

You know, what when I hear you saying that, what I hear from my, you know, based on my background, is organizations or or leadership teams that fail to go to Gimba, right? That fail to break the chain of the desk and actually go to the shop floor and see what's going on. It do you think that's where leaders most often, you know, where that misunderstanding of their product help, do you think that's where it most often comes from? Just they don't get involved, they stay too high level, or is there something else that happens that begins hurting their product without them, you know, becoming aware of it?

SPEAKER_01 5:22

Yeah, I think you're you're you're touching on some good points. And you know, the hard facts is that products have been doing well. You know, like let's look at a legacy product, product's been doing well. And and when it stops doing well, leadership tends to look at, hey, it's the technician, hey, it's the assembler, ah, it's the end user abusing it, right? And so, you know, more to the point, not even, you know, it's important to go to that shop floor, but it's also important to sit there and and actually look at what's actually happening. And let's just take a step back and look where I said, hey, we're constantly patching things we know is an issue, right? That's the workaround. And um and it kind of makes me think of the there was a um a study that was done on conformity. And they basically had a gentleman in a broom with 10 other people, and and every time the bell would ring, he would stand up. Well, over time, everybody started to stand up and then carried through. And the guy that actually was part of the study was removed, and everybody was still doing it. So, so those are those things, and and those are margin eaters, those are unseen costs. You have waste in the guy that does the work to the schematic, even though it's incorrect, the technician that takes time to fix it, the field service. And and so those are just little drains, they're like little leeches on your on your product that are just sucking some of the life out of it. So I think that's sometimes what leadership misses is that you know that your product has done well, but is that only because you had Joe and Mike that knew the workarounds?

SPEAKER_00 7:00

I got you. So you're you're talking about, you know, you've got institutionalized tribal knowledge, right? I mean, I'm just kind of translating what you're saying into my typical lean speak. It sounds like we've got institutionalized tribal knowledge that works up until the point that it doesn't. And if you don't understand that's what you got, if you think you've got systems and processes that then when that tribal knowledge walks out the door in the form of a retirement or a new job offer, or maybe even gets promoted, um, that that leads to a chink in the armor and that leads to a slow decline of product performance, or maybe, maybe output or quality or something along those lines. Is that is that kind of what you're you're getting at there?

SPEAKER_01 7:46

Yeah, you're definitely spot on. And you know, think about each one of these steps as products need to go out the door, and you definitely get this, you know, especially in your logistics side, is it's all movements, right? And you've got time sequences, and once you're out of that sequence, you know, there's delays and then there's costs, there's penalties, and then it it actually rolls into your next thing that you're building. So yeah, you're you're spot on with that as just that you have that tribal nominalized. But you know, the funny part is that you've normalized the workaround as part of the product, and and that's and that becomes deadly because your customer doesn't want to pay for that. That's your own inefficiency, that's not what they're buying.

SPEAKER_00 8:23

Yeah. Yeah, I wonder, what do you think AI, where do you think AI comes into play here? Do you think it can help with some of this in terms of, you know, I've had several conversations with uh with executive teams recently where they've expressed concerns about, hey, you know, we know we've got tribal knowledge at uh a certain level of the organization. Let's just say we know our inside sales team has 20 years of tribal knowledge that they utilize when they're talking to the client. What we're afraid of is they're all getting older and they're gonna retire soon. And that tribal knowledge isn't gonna stay, it's gonna leave with them. You know, what do we do? And one of the solutions that were kicked around was hey, you know what? What if we got those guys in a room talking about your products, just asking general questions and letting them talk, right? And record the conversation, right? Use one of these AI note takers to record what they say and then plug that in to a large language model and have it develop uh documentation that attempts to you know capture some of that tribal knowledge. Do you think that type of tool can work in this scenario? Do you think it's helpful or could be helpful?

SPEAKER_01 9:42

You know, uh a hundred percent. Um honestly, I've been working with uh local AI models because the the real concern everybody has is their security, right? And there's the lot that these guys have that you don't necessarily want it to be broadcasted. And so, you know, it's it's really just a small language model, and and it can be a little bit coarse, right? It doesn't have to speak the language exactly, but um, you know, you can actually go through, record those things, and then you're you do your the the rag part of it where it goes back and listens, um basically goes and listens to that and then adds it in.

SPEAKER_00 10:21

But really, it's it's I don't mean to interrupt you, but when you say the rag part of it, for those of us that don't speak tech, yeah. Can you break that down a little bit, Laura?

SPEAKER_01 10:30

Yeah, it's basically it's it's taking new knowledge and adapting it into the model, right? So it's constantly refreshed off, just like lean manufacturing, right? It's continuous, right? You you just don't stop. So it goes back and it's it's kind of its own learning mechanism. And so, and so what you're doing is like you've got these models that have basic speech and understanding, and these there's very huge models, but when you want to work with something small, like and this is small, right? This technology, so engineering is always has these engineering documents, you know, and and even what's crazy with all the new CRMs, you can put all that information in. So, really, yes, you want to throw everything, just put it in one folder. It's like what I like to say. And you know, I was always the guy that I'm not good at organizing, but I remember what I called something. So uh for me, it's it's like just throw it all in there and it can start making connections. It will see some similarities. So 100% um AI is is part of that. And the best part is is it's not it's not ego-driven and it's only wanting to answer what's being asked. So you get something that's unbiased, something that's that's real, and sometimes might even kind of hurt the manager himself.

SPEAKER_00 11:51

Good deal. So, yeah, I I agree. I think that that's definitely an opportunity, right? To have to create those repositories of knowledge, and they don't have to be in the traditional um format, right? They don't have to be PDFs, PowerPoint presentations, Excel spreadsheets. They can literally just be recorded conversations. I mean, that's what's so powerful about artificial intelligence, is it really can learn from the two of us just having a conversation. Um, and I think that we've only begun to scratch the surface of figuring out how do we use that capability in in industry, right? I think right now we're just seeing artificial intelligence as just a chat bot, but it can do a lot more than that. So it's it's interesting to get your perspective because I I definitely see it uh, you know, I see it as a linchpin. So but you know, one thing that you said during the free meeting that really struck out, really stuck out to me was how strong aftermarket numbers can actually hide deeper product problems. Um, can you walk us through how a good metric uh can actually mask a sick product? I mean, what do you mean by that?

SPEAKER_01 12:57

Well, yeah, you know, um that's a that's a pretty loaded question, right? Because people love their matrix and that green means awesome, right? So uh, you know, for me, I I do challenge a lot of things. And so, and and it's really only because it's not what we expected. So, yeah, for an example, like there's there's a product and you're selling a lot of it. And, you know, you got high revenue numbers, you've got great margins, you know, you're stocking it, everything's going well, but necessarily is your customer happy, right? Like, is it a poor design? Like you've got a piece that's part of a a structure and a movement, and there's there's this piece that just keeps failing. And sometimes it's due to operator error, sometimes it's due to just general use. And I think with um, you know, when it when we write it off as, oh, that's operator error, they shouldn't have done that. Well, they're actually looking for a solution, right? Because they're having to now plan and they have to budget for that. So you could actually see something as selling high, but it's like, wow, this is a repeat offender, right? And that's kind of like what I look at is like this is repeatedly happening. And it's kind of like, you know, you're taking this medicine, so it masks what the real pain is. And I think sometimes seeing that green is masking the real pain that your customer's feeling.

SPEAKER_00 14:22

And so, sorry to interrupt you, but I just want to make sure I'm understanding. I think what you're saying is when you see good sales numbers in your aftermarket division, that can be interpreted as strong aftermarket demand. And and a lot of companies like that because you know, aftermarket parts tend to sell at a higher premium than serious production, especially in high volume industries like the automotive industry. But I think what you're saying is, yeah, but why does that part continue to fail, right? Why do they have to buy replacements? If you're starting to see that, you should take that as a as a sign that you've got a a prop part problem and do a little bit deeper dive on why is it failing, what's causing it to fail, and what improvements can you make to keep it keep it around longer. Is that right? Am I understanding that correctly?

SPEAKER_01 15:14

Yes, that that's correct. And you know, to kind of put it in the in the full analogy, it's just like, you know, you you kind of expect things to be wear items, you kind of expect maintenance items. And, you know, just thinking of the automotive, it's like, hey, we're we're placing a lot of brake pads and we're replacing a lot of rotors. Those are great. And then you realize that, you know what, the brakes are actually undersized for the vehicle or for the application, right? Somebody's got a work truck or they're towing a trailer all the time, right? Well, what at what point does it make it reasonable, right? And and that's and you know, I used to sell uh tires and brakes and all that, and everybody would always ask, well, how long should the tires last? Depends on your driving, right? How long is the brakes last? But there is a medium and expectation, and that's not easy to find. And it's a very delicate balance, you know, for those out there that might feel a little threatened on this. No, it's a delicate balance because yeah, you can make something last forever, but it'd be cost prohibitive, right? So it's a definite, uh, it's a hard balance. The the last piece that I'll add is it's it's questioning it, it's not just accepting it, right? Too many times in dashboards, when it's green, we accept it, right? It's kind of like going through um an intersection, right? And uh the green, the light's green, but you know what, the other guy didn't stop. And now you're blindsided.

SPEAKER_00 16:35

Yeah. So when you do one of these product health assessments, you know, what are the early vital signs that tell you a company is is heading toward firefighting mode? You know, even if leadership thinks things, hey man, things are looking great, things are fine, you know, what do you look at and see? Well, it maybe it's fine today, but it's not going to be fine in another three, six, twelve months.

SPEAKER_01 16:55

You know, and that that's that is rough to kind of see. Um, and in the piece, one of the metrics that I kind of focus on is the sales to warranty ratio. And why it's difficult is it's not quite clear because you're like, well, it's not like I sold it in that month and it failed, right? Think of like think about like heavy equipment, caterpillaring them. They're the the standard for like off-road equipment is three and a half percent. And and so, you know, the company's struggling, they're trying to make money and stuff like that. And then they so they get a little bit more restrictive on that sales to warranty ratio, and that number gets down to one and a half, too. They start celebrating that number because hey, we're saving the company money. I can tell you this you can never save more than you can make. And and what ends up happening is that it again is starting to eat away at your product because now they don't have confidence, they feel like you're being too strict, you're not being reasonable, right? So public companies have to publish the sales to warranty ratio. And and if you're a smaller company and you're out there and you're running that low of a number, they're gonna target you and they're gonna notice it and they're gonna like, I'm not buying another machine. So now, because people forgot it was sales to warranty, their sales start to drop on their product, right? And that cavitates everything. Your aftermarket starts to fail, right? And and it's very slow, and you know, it it kind of reminds me of like Rome. Rome was defeated, but it took like a century to die.

SPEAKER_00 18:29

And longer than that, depending on what you uh when you think the Roman Empire actually ended. And and we know all things tie back to the Roman Empire, right? But right, right.

SPEAKER_01 18:38

So so and and that's it. And so that's what's masked, and that's what's missed, and and it's it's it's it's it's just hard. And you know, for me, I I love manufacturing, I love what it's created and what it's done, and and I really just want to see people, you know, build and get gratified what they do because it works and it meets the expectation. And and I think sometimes, you know, we get to celebrate those numbers, but do we question those numbers? Do we look at that matrix and say it's green? Is is that really green? Does that really mean everything's good? And you know, just to tie it quick back to the the wellness, your numbers can look great and then you have a heart attack, right? So but it was there was all these other signs that you missed, but you only looked at the green ones, right?

SPEAKER_00 19:24

So yeah, no, I mean I I think I think you're I think your criticism is fair, right? You know, it's like the analogy of the the blind man that was tasked with telling somebody describing an elephant. Well, you know, when he went up to it, he he grabbed the trunk. So he said it was you know very long, cylindrical. He's telling the truth. That does describe a part of the elephant, but if you don't, if you're unable to look at the entire thing, right, you you miss the big picture. You don't really get you don't really understand the overall health of the business. So yeah, I mean, I I think I know we focused a lot on aftermarket, but I but I I do get what you're saying. If I'm only looking at aftermarket sales dollars, um, I'm not looking at, you know, how many times are are my customers complaining about number of warranties? And if they do that enough, they're gonna stop buying it. And to your point, right, it's gonna it's gonna be detrimental to the to the overall business, right? Um am I following you there? Am I am I on this am I on the right line? Yes, yes.

SPEAKER_01 20:26

Doing quite well, you know, it's it's sometimes difficult to to articulate the things that you see. Um, you know, and and for me, it's it's a little simpler because of living each position and and watching it and being responsible for it. So, you know, um I I do appreciate your input on that because it it's it's helped clarifying. For for me, it's it's unfortunate a little bit, it stands out like a sore thumb. Yeah. And uh and others miss it, but you know, that's been the part of my own growth was recognizing that not everybody sees it. Yeah.

SPEAKER_00 21:01

Are there other indicators that you see that folks miss other than you know, like aftermarket like we've discussed?

SPEAKER_01 21:07

Um, you know, there's a lot of it. It's kind of like when when I walk the the floor um of a manufacturing facility, and I know you've done this a hundred times, but you know, I kind of look at it as a as a ballet dance, um, you know, where the flow should be effortless. And and you can watch just processes of how something's made and and and just like, wait, that doesn't quite fit. You know, even though you might not be into ballet, it something doesn't sound, you know, or even into music, right? There's a certain sound, a certain look that's that's just not there. And and and so you start to dig into it. And it's almost funny because people have a natural propensity to kind of hesitate and stumble, even though this is a workaround, right? And a lot of times people will use the process as an excuse not to do the right thing. And so So, you know, those are like the things that that you can start to see is is actually for leadership, go down on that floor and and and watch. Don't, don't, you don't need to ask. Um, you don't need to stare, but just watch. Watch and just, hey, how does that actually work? What's going on there, right? I mean, you've already worked with a lot of those spaghetti diagrams, right? And I was like, wait, I didn't see it that way until I drew it out. So I think by doing that, you start tracing that. And and so, you know, those are some subtle signs. And then, you know, there there's there's even the pieces that are auxiliary to that, like, how well have you been maintaining your equipment? And this is the one that that really kind of people miss because all of a sudden the product doesn't meet the same quality that it has been, and everybody's like, but we haven't changed anything. You go and talk to the programmer. I'm cut, I'm cutting it the same way. You look at the material spec, it's all the same. Why am I having this problem? Nobody looks at how well have you maintained that machine, right? They have tolerances, right? I've yet to meet a perfect machine. Even AI is not perfect, right? That's why they always have the disclosure, hey, make mistakes. Right. So so nothing's perfect. So why do we expect things to work perfect? And and and and that's where you've got to look at pieces holistically, you know, there's and you and you gotta challenge, hey, when when you do, and I think this kind of correlates to like the things you do, you know, as the supply chain is, hey, I need to watch that metric pretty tight because that's that's the beginning of my product.

SPEAKER_00 23:44

Yeah, no, I 100% agree. I mean, I think you've got to have leadership on the floor to really kind of see behind the curtain, right? To understand where the gaps are, because it's really difficult to see them sometimes just looking at a bowler diagram in a boardroom, right? You know, it's it's really easy to miss the forest for all the the KPI trees, let's say. So no, I I think you're 100% correct. You know, a lot of mid-market manufacturers say they want continuous improvement, but they still live in in firefighting and reaction mode. You know, from your perspective, what's the difference between companies that build resilience versus those that just survive until the next disruption?

SPEAKER_01 24:24

Yeah, you know, it it seems like that's that's pretty tough, but the one thing that I've that's really been beneficial in my career, where I've been able to grow a lot was an open mind. Um, you know, when you look at metrics all the time and and and you're looking at your schedules and productions, you're not asking questions. You're just absorbing information. And and that's not that's not how we learn, that's not how we understand or to the new term of grokking. Um, which is you know, grokking is the stage of you start out with memory to use to understand things, and then grokk is grokking is that in between um understanding and knowledge. So, so when you look at your at the graphs and KPIs, you kind of start looking with the closed mind mindset, right? What does you're not asking what does it take? You're asking, is it what I expect it to be? And unfortunately, that kind of drives what your employees look for. Well, I met the production number. What did I meet the production quality, right? Like I think you've seen a lot of those, especially in automotive. It's like numbers have got to be there. Like I got to produce this amount. But how much rework does it cost you?

SPEAKER_00 25:49

Yeah, quality does too, because let me tell you, you don't want that customer calling you and saying, hey, I'm from the customer and I'm coming to help, right? That is that is not a pleasant place to find yourself. But but no, I think you're right. You've got to be the goal of a good lean transformation should be to create a learning organization so that everybody from the CEO down to the shop floor is constantly trying to improve the process, learn what's you know, what's holding them back and get better, right? I mean, that that's that's really the goal of a lean conversion is to get everybody on the same page and have everybody working towards getting a little bit smarter and a little bit better each and every day. So yeah, no, I I think you're spot on there. And and Jay, you know, I really want to thank you for for taking the time to come on the show. Um, you know, I think your your product wellness assessment is uh is pretty cool. I definitely think it's it's a way of looking at a company's help that has probably been undervalued to this point. So um yeah, no, I think it's really good, really cool. And again, thanks so much for carving out the time to come and talk with us. Well, thank you very much for your time.

SPEAKER_01 27:01

And I've really enjoyed um, you know, this is this is how we learn together, right? And and just the final note is that this, you know, for what you do and what I do, they still all tie together, right? It all ties back to the product, and the product is what makes the company. So if we dedicate time to product as we put dedicate time to to other things, um you will see dramatic changes in your company.