I recently stumbled upon “The Iceberg Problem”

It is well-known to software developers, but it isn’t unique to just them.

Manufacturers have an iceberg problem too.

This idea originates from the process of building custom products or services for customers. With any custom project, there is a chance for misaligned discourse between what the customer thinks they want and what the contractor perceives the customer’s needs are. This can be frustrating and even painstakingly miserable for both parties.

The common cause – most times customers don’t understand the complete process.

Like an iceberg – 90% of manufacturing happens beneath the surface. The other 10% is what the customer perceives to be the result of the work being done.

When you present the work to the customer:

• They care about the looks – does it match their vision?
• They care about the performance – does it works as intended?
• They care about how much it costs them – did the budget align with their expectations?
• They care when they will receive their order – does it match their timeline?

And that’s it. That’s the 10%.

How can that be? From what I have gathered, there are a couple of hang-ups that drive a wedge between the customer and the contractor.

1. Sending in a sample that is less than ideal visual quality

When manufacturers validate a process, they just want to prove that the process is capable of making the product according to the outlined requirements. Sometimes, this sample doesn’t look visually perfect. And when the customer receives their product they are taken back.

The problem isn’t in the quality. In this case, the expectations were not set properly for your customer. You have opened the window for the customer to question the quality of your work. When you go to explain that it will take some time to get a sellable product, then a bit of dissatisfaction creeps in. Is this partnership going to work out? Can this company deliver on its promises?

That of course is for you to answer. But it helps when you establish the expectations upfront.

2.  Showing off a finished product does not mean the work is done

Let’s say that the new project has gone through the initial inspection and the resulting parts look great. The first article samples are shipped to the customer, and they are ecstatic. They are ready to place a purchase order for their first production run. Oh, by the way, they need thousands of pieces by the end of the month. HOLD THE BUS! There is still some work to be done to ensure that the process is repeatable and that the equipment is production-ready. They may say “what do you mean, you already sent us good parts!?”.

This is where the iceberg analogy and the idea of above/ below the surface shows its teeth. Above the surface, we have stellar results. The product looks and works great. In the customer’s mind, the majority of the work is complete. But beneath the surface, the process that goes into making that product has to be refined. This often involves training, experimentation, oversight, data capturing and analysis, capital investment, and a whole lot more. Here’s the point – just presenting the results means leaving out everything it takes to get there.

3. The infamous design change midway through the project

There’s nothing that screams “we don’t know what we want!” like a down the value-chain design change.

Now, prototyping is part of the game, we get that. But the amount of work that goes into diverting from the original plan, especially when there are huge capital investments involved, is daunting. While the customer just wants what they think works best for them. But these changes are not subtle, cheap, or quick. These are the types of changes that can make a project stop in its tracks, or at least slow it down.

4. Costs that are hiding in plain sight

Quoting a new project isn’t a straightforward matter. What makes it complicated is when the project budget rises as more labor, equipment, overhead, and time is introduced. Focusing solely on the end price for the product highlights the 10% and completely ignores the work done underneath the surface – the “body” of the iceberg. Below the surface, there are other costs that appear as the work matures. But manufacturers don’t want to spin customers around by scavenging every nook and cranny for pennies. Instead, they often spread these costs across different areas to present a more digestible bill. Some of which are not even passed down to the customer, even if it’s at the contactor’s loss. By the way – we must make some money too.

5. Waiting at the shipping dock wondering when parts will show up

From the time the purchase order is processed until the product is on the truck – manufacturers are diligently working. But sometimes there is a bottleneck in the process that puts us in a holding pattern. It would be a Shakespearian world if this was something we can control but ultimately it is not. Because of supply chain interruptions, labor availability, vendor-driven pauses, and other things that cause unplanned downtime, there is always a chance we miss the deadline.

Here’s the thing – we can’t control everything but we can at least communicate. More times than not, the customer would rather know that a machine had to be sent out for repair and the lead time will have to be adjusted than to be left out in the dark.

 Addressing the problem going forward

So how do we address these key points? The answer isn’t simple, but it can be done through a roadmap for continuous improvement. Start with a detailed schedule to set expectations from the start. This will help keep your team and customers on the same page. Next, bring your customers in on the process and educate them. Show them the work that goes into creating the product and they will be more understanding when you want to solidify your processes. Another thing you can do is be a more effective communicator. Communication is always a challenge, but by improving this aspect of your business your customers will be better informed. Not only that, but they will appreciate your willingness to be transparent. And finally, deliver value anytime you talk about costs. When you focus only on price and don’t show everything they get in return, then customers will fight you on costs.