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Lean Retailing
Lean Manufacturing Needs Lean Retailers by Bill Waddell: Stuck in their outdated business model, with a simple minded economic model, they all scour the globe looking for a supplier they can wring a few cents out of on the purchase price, then send the product in staggering quantities through the most bloated and wasteful supply chains.
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The hope for lean in retailing comes from the building products sector, where Home Depot and Lowes are doing battle. You don't read much about whiz bang technology driving Home Depot distribution centers because they didn't waste their money on such things. They have a few DC's for imported stuff, but the rule for doing business with Home Depot is that manufacturers generally ship directly to stores in box and skid quantities. Most of the purchasing is done regionally, rather than from headquarters. A Home Depot store manager has an 800 number for each supplier that he feels quite free to use any time, any day, to replenish whatever is needed in any quantity needed. Related Posts:
Selecting Six Sigma Black Belts
A Question of Balance by Jim Bossert and Larry Krynski, Quality Digest. The articles explores attributes needed by black belts: personal, technical ability, training, experience, aptitude and culture. This article examines "each attribute to see how it contributes to selecting the right candidate. Organizations can use the information when interviewing candidates, knowing that whomever they select will contribute to the success of their Six Sigma projects."
Inside Google
A View Into Google's Inner Workings by Dan Farber: Merrill listed the following attributes of Google’s development culture:
Hire smart people who are nice to work with
Flat management structure
No silos, open communications
Ideas mailing list
20 percent (time spent on personal projects)
Small projects
Iterative design, constant improvement
Server-based deployment (AJAX)
Test, don’t guess
“Innovation doesn’t happen ‘on the way by,’ it must be design into everything we do,”
Six Sigma Government for Liberia?
Lean Health Care: ThedaCare
Via Lean Manufacturing blog, ThedaCare Shares Lean Secrets: ThedaCare adapted the lean business practice technique commonly referred to as Toyota Production System two years ago after a visit to the Ariens Co. in Brillion. There, ThedaCare officials saw firsthand how the process was implemented.
"We were there and within 15 minutes, I knew this was the improvement system for us," said Roger Gerard, ThedaCare's chief learning officer.
Each week, ThedaCare has several rapid improvement events or RIEs. During that process, people from both in and out of the area affected look at an issue - for example the daily step pattern of medical surgical technician - and find ways to cut out the waste. Team members then develop a process, put it into action and see the results. Related Posts:
TPS v. Lean Manufacturing
Great article from Superfactory, TPS vs. Lean and the Law of Unintended Consequences by Art Smalley: Real TPS is not just about "flow" or "pull production" or "cellular manufacturing" or any of the other catchy phrases or tools you may frequently hear. For over fifty years TPS in Toyota has been primarily concerned with making a profit, and satisfying the customer with the highest possible quality at the lowest cost in the shortest lead-time, while developing the talents and skills of its workforce through rigorous improvement routines and problem solving disciplines. In every piece of TPS literature from Toyota, this stated aim is mixed in with the twin production principles of Just in Time (make and deliver the right part, in the right amount, at the right time), and Jidoka (build in quality at the process), as well as the notion of continuous improvement by standardization and elimination of waste in all operations to improve quality, cost, productivity, lead-time, safety, morale and other metrics as needed. This clear objective has not substantially changed since the first internal TPS training manual was drafted over thirty years ago. This is a great article, I strongly recommend reading it.
Nonprofit Baldrige Award
Nonprofits Can Apply for Baldrige Quality Award in 2007: Starting in 2007, nonprofit organizations—including charities, trade and professional associations, and government agencies—will be eligible to apply for the Malcolm Baldrige National Quality Award, the nation’s highest Presidential honor for quality and organizational performance excellence.
Bad Visual Controls - Software
Bad Visual Controls Example: Software via Lean Manufacturing Blog. Funny example. If I had to use it I might use a different adjective. In the example, the software uses icons that are not obvious. The user has pasted labels on their monitor with text description of each icon. The labels are smaller than the icons. Some resources for web usability and software usability "A user interface is well-designed when the program behaves exactly how the user thought it would." (that is pretty hard [impossible actually] to accomplish when the user doesn't have a clue what will happen).
Visual Work Instructions
Via Got Boondoggle? Shorter Text for Visual Work Instructions by Steven Blackwell: The line worker may not even read text that seems excessive. We have spent the last eight years observing line workers using visual work instructions and asking them if they read the text. If the text is a short sentence, the answer is usually "yes." If the text is more than one sentence long, the answer is usually "no." Another recent post, Poka-Yoke Assembly (also prompted by Got Boondoggle?), also discusses the importance of well written (short) instructions. In writing minimal text, we recommend the sentence structure, "Verb NOUN with NOUN using NOUN." An example is given in the following illustration, "Cut CABLE to LENGTH as shown using SCISSORS." That includes 8 words, as opposed to 82 in the original example, only 10% of the original length.
Hopeful About India's Manufacturing Sector
Why Am I Hopeful About India's Manufacturing Sector by Indra: As World Economic Forum Founder and Chairman Professor Klaus Schwab said in recently held India Economic Summit, 2005, "It is indeed important for India to excel globally not only in the services sector but also in the manufacturing sector. Manufacturing in India has become much more sophisticated with the introduction of high technology in many of its production processes. A key priority for India is to provide jobs for its large population and in this regard, the resurgence of Indian manufacturing would generate millions of jobs throughout the country." Since India's manufacturing economy is so small now they would actually see increases in manufacturing jobs. China has lost many more manufacturing jobs than the USA ( 15 million to 2 million from 1995 to 2002) as previously China's factories were staffed with millions of workers with no actual work to do. From my previous post, Go Lean to Remain Competitive: I think it will be interesting to see if this is a sign of a broader adoption of such management principles in India. If so, I think that would compliment the software industry in promoting continued economic development in India quite well. And, if so, in 10 years I think we will be hearing much more about manufacturing in India than we do today. Related links:
The 70 Percent Solution
The 70 Percent Solution by John Battelle, an interview with Google CEO Eric Schmidt: We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative. Google is also well know for the 20% rule for techincal staff ("Google engineers all have “20 percent time” in which they’re free to pursue projects they’re passionate about. This freedom has already produced Google News, Google Suggest, AdSense for Content, and Orkut – products which might otherwise have taken an entire start-up to launch."). Both models attempt to assure significant time is devoted to new ideas. Related posts:
Drucker Opinion Essays from the WSJ
The Wall Street Journal has posted selected opinion essays by Peter Drucker along with several tributes to Drucker. The Five Deadly Business Sins, 1993:
- the worship of high profit margins and of "premium pricing"
- mispricing a new product by charging "what the market will bear
- cost-driven pricing
- slaughtering tomorrow's opportunity on the altar of yesterday
- feeding problems and starving opportunities
Is Executive Pay Excessive?, 1977. In 1977, his answer was, no. As pay did become excessive, Drucker became a prominent voice against the unjust pay of CEO's. Economically, [the] few very large executive salaries are quite unimportant. Socially, they do enormous damage. They are highly visible and highly publicized. And they are therefore taken as typical, rather than as the extreme exceptions they are. In 1977, he was mainly worried about "the public" rising against excessive executive pay when there was no systemic problem. He didn't seem to foresee the problem of other CEO's believing they were entitled to such unjust pay and creating the crisis of leadership this caused later in his career. Of course the entitlement culture was not a widely held view at that point. Related Links:
Six Sigma Hospitality
The Six Sigma Syndrome by Saurabh Jaggi Starwood has run over 3000 projects worldwide to date in areas such as productivity, menu re-design, resort concierge, email marketing and launching a worldwide sales initiative. Another of its chain of hotels, The Westin Turnberry resort in Scotland won the IQPC's 5th Annual European Six-Sigma summit in London in April 2004. It won the European award in the category 'Design for Six Sigma' for a reservation project.
Project Kaizen Co-Blogging Week
The Project Kaizen Co-Blogging Week has started. The posts in the first day have been interesting. Including, Improving Workgroups: The result is individuals doing individual work. People create their own training materials because the corporate materials “are proprietary” and there’s too much risk in sharing them (a ridiculous concept since the company in question hardly invented lean, the slides were all borrowed from outside lean knowledge, yet now this company doesn’t want to follow Toyota’s model by sharing).
There’s an enormous amount of waste that’s created because the company doesn’t use available technology (web-based or otherwise) to create a true TEAM of lean consultants. The consultants should be posting case studies, helping each other with problems, and coaching each other, all in the name of continuous improvement and kaizen. I completely agree. Related posts:
Google: Ten Golden Rules
Google: Ten Golden Rules by Eric Schmidt and Hal Varian: At google, we think business guru Peter Drucker well understood how to manage the new breed of "knowledge workers." After all, Drucker invented the term in 1959. He says knowledge workers believe they are paid to be effective, not to work 9 to 5, and that smart businesses will "strip away everything that gets in their knowledge workers' way." Those that succeed will attract the best performers, securing "the single biggest factor for competitive advantage in the next 25 years." Google really is doing things differently. One way you see it is that some of those used to being the most powerful players complain that they don't get respect at Google, at Google the engineers rule. Um, maybe they shouldn't complain too loud, maybe the reason Google is doing better is they focus on the Gemba (where value is added to the customer). Googling For Gold: The suits inside Google don't fare much better than the outside pros. Several current and former insiders say there's a caste system, in which business types are second-class citizens to Google's valued code jockeys. They argue that it could prove to be a big challenge in the future as Google seeks to maintain its growth. They deem the corporate development team as underpowered in the company, with engineers and product managers tending to carry more clout than salesmen and dealmakers. Truthfully Google is a special case. Still managers should learn from Google's success. Google isn't afraid to take risks and try things that others are won't. It seems to be working pretty well.
Ford's Wrong Turn
Mr. Ford's Wrong Turn, Why U.S. Automakers Can't Blame Japan by James P. Womack: What makes this claim so extraordinary is that Japanese companies, led by Toyota Motor Corp., are thrashing Ford by building vehicles in North American factories with North American-made parts and North American workers, who receive American-style wages and health benefits. And increasingly, these Japanese brand vehicles are engineered in America by Americans.
Consider a few facts about Toyota. About 65 percent of the vehicles the firm sells in North America it assembles in North America, and it would assemble a much higher proportion here if it could only keep up with its rapid sales growth. Toyota will open its seventh North American assembly line in Texas next summer... By the end of the decade, Toyota will be able to assemble about as many cars as Chrysler does in North America, and it is closing in on the capacity Ford will have after plant closings that are widely expected to be announced in January.
In fact, thanks to hiring by Japanese, Korean and German auto makers, total employment in the U.S. motor vehicle industry over the past decade has held steady at about 1.1 million. The problem for American car companies is pretty clearly poor management. Toyota, and others, builds cars in America profitably. Paying for health care, as Womack mentions, is a significant problem. The high cost of the existing health care system has been known to be a burden on the American economy for decades but politically it has been preferable to delay taking action. At some point that will change and the systemic problems will be addressed. Knowing this, the US auto companies still overpromised in the last few decades and now must cope with the decisions they made. In addition, they have been more eager to lobby for short term profit boosts than for reform of the health care system. They could have used their power to encourage health care reform. That they failed to do so effectively is partially responsible for the fix they find themselves in. They seem to be much more effective at lobbying to greatly reduce environmental regulation. The global competition in manufacturing is intense. But America is still the largest manufacturer in the world and managers should not be allowed escape responsibility for their failure to manage effectively with claims that manufacturing in the USA cannot compete. The biggest change needed is an improvement in management. Other things would also help greatly, such as improving the health care system. When Toyota talks about a future in manufactured housing and bio-engineering it seems reasonable they will move into those fields effectively. If Ford or GM did I would not have such confidence. It is a matter of the confidence in management to make good decisions and execute well on those decisions. Related links
Lanscaping Firm Following Deming
Building a landscaping firm Brickman by Brickman by Steve Berberich Each Brickman branch operates with a standard production model that the company developed in the late 1970s with consultant and renowned statistician W. Edwards Deming, who is best known for helping Japanese manufacturing recover from World War II and improving U.S. productivity during the war. Scott Brickman said the model emphasizes continuous improvements in communication with its nearly 10,000 commercial customers and education and cultivation of its employees to learn and advance within the company. The article doesn't talk much directly about the management practice at the company but might be of some interest.
IQ and Muda: Information Quality Eliminates Waste
IQ and Muda: Information Quality Eliminates Waste by Larry English The article provides an explanation of each of these 9 types of muda and relates them to information quality: There are nine types of muda in information quality: - Muda of overproduction
- Muda of inventory
- Muda of repair/rejects
- Muda of motion
- Muda of processing
- Muda of transport
- Muda of waiting
- Muda of process failure caused by defective information
- Muda of wrong or suboptimized decisions caused by defective information
The first seven types are described by Masaaki Imai in his book Gemba Kaizen. We will examine each type of muda, why it is muda and how it wastes the other resources of the enterprise. The real problem with poor quality information is not the poor quality information itself. It is about the costs of the waste caused by poor quality and about customer alienation and lost customer lifetime value. The real business case for information is to be found in measuring the costs of poor quality information and improving processes to prevent the defective information and the muda and costs associated with it. Does your information quality function address muda elimination for the muda caused by defective information processes and defective information? If not, should it?
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