Curious Cat Management Articles

Reminder: To Get New Post See our Current Blog

2010-10-28T10:30:00.001-07:00

This is a reminder that posts are not made to this blog anymore. See the Curious Cat Management blog for current posts. Posts to the new blog include:

Build an Environment Where Intrinsic Motivation Flourishes

Dr. Deming Webcast on the 5 Deadly Diseases

Habits are a Powerful Force

Understanding Psychology: Slogans are Risky Tools

Peter Scholtes

Delighting Customers

The Problem is Not the Person Pointing Out The Problem

How We Know What We Know

Curious Cat Management Improvement blog

2008-08-30T08:59:00.000-07:00

This is just a reminder that posts are not made to this blog anymore. See the Curious Cat Management Improvement blog for current posts. Recent posts include:

Better Meetings

Paying New Employees to Quit

Well Managed Companies

Fed Funds Rate Changes Not Strongly Correlated to Mortgage Rate Changes

How Downsizing is Handled When Management Respects People

Customers Get Dissed and Tell

Reminder: New Address for This Blog

2007-02-17T05:43:00.000-08:00

Just a reminder that new posts on this topic are made to the Curious Cat Management Improvement blog. Recent posts include:

New Blog Site

2006-06-27T08:34:00.000-07:00

New posts will be made to our new: Curious Cat Management Improvement Blog. We hope you will find the new site valuable.

Hospitals, Heal Thyselves

2006-06-22T06:40:00.000-07:00

Hospitals, Heal Thyselves by Cal Thomas:

This proven system does not require more staff or expensive consultants and it certainly does not need another bureaucratic, costly and inefficient government agency, which can only make things worse. Improvements can be made, says Mr. Dobyns, starting today and in every hospital in the country. Costs will decline. "So the question now becomes, can we afford not to heal our hospitals? We can, if we want, not do anything. But if we decide not to do anything, we have to accept that every day -- every day -- 500 people will die in hospitals in the United States who did not have to. You and I might be among them."

via Great Exposure for the "Good News" DVD

More on Obscene CEO Pay

2006-06-22T01:11:00.000-07:00

Study site: CEO-worker pay imbalance grows includes the graph above.

Unfortunately this reverse robin hood (steal from the workers, stock holder, customers...) and give to the CEO tale continues. Hopefully someday soon we can at least turn the momentum in the right direction (stopping these incredibly excessive "pay" packages). Even then it will take quite a deal of reducing these ridiculous "pay" packages to reach some sense of decency. CNN article based on the report: CEO Paycheck: $42,000 a day by Jeanne Sahadi:

Put another way, the average worker -- who earned $41,861 in 2005 -- made about $400 less last year than what the average large-company CEO made in one day. That assumes 260 days of pay (52 weeks x 5 days a week).

The CEO-to-worker pay differential in 2005 was the second highest on record. The highest was 2000, when the average CEO earned 300 times what the average worker made.

In 2002, the differential fell to 143 as the bear market took its toll on stock-related compensation. Nevertheless, between 2000 and 2005, median CEO pay rose 84 percent to $6.05 million on an inflation-adjusted basis, according to EPI.

Missing link: CEO pay and results

Home Depot CEO stifles debate about pay

Excessive Executive Pay - link to a study with even more obscene data than that in the graph above.

CEO Pay: Obscene from Apr 2005

Dr. Shigeo Shingo

2006-06-20T05:07:00.000-07:00

Norman Bodek responds to, Shigeo Shingo's Influence on TPS by Art Smalley, with: Dr. Shigeo Shingo - The Greatest Manufacturing Consultant. As the title shows this article focuses on the contributions of Dr. Shingo. I still find the original article interesting and valuable. I don't think the original article denigrates Dr. Shingo. It is true the emphasis is different in the two articles however it seems to me the difference is not that large in truth. The largest difference is to what extent Dr. Shingo's contributions (which it seems to me are stated pretty similarly) are admired, it seems to me.

Both support the idea that Dr. Shingo offered valuable contributions. Norman Bodek obviously believes Dr. Shingo deserves more credit than the original article. At least to me though the differences between the articles is much less than the agreements.

New Lessons on Competition from Mother Nature

2006-06-15T20:10:00.000-07:00

Surviving the Fittest: New Lessons on Competition from Mother Nature by Joel A. Barker

As a result of this emerging body of research, we now must reexamine our competitive paradigm and factor in the new information. It is now clear that 'the fittest' not only don't win all the time, but are only a piece of the more complex system. This information can lead to new strategies for small companies and new insights for the big companies that presently dominate their industries.

An interesting short article with some ideas to think about.

Paradigms: The Business of Discovering the Future by Joel A. Barker, 1993.
Joel Barker - his web site
No Contest The Case Against Competition by Alfie Kohn, 1992.

Brainstorming Under Attack

2006-06-14T17:07:00.000-07:00

Brainstorming under attack: 8 errors in the WSJ. The WSJ has there content behind a wall so their content is not part of the web and so I have not seen their article.

The blog post makes good points about mistaken impressions of brainstorming:

People do better on their own than they do in brainstorming sessions. This is really daft. I like to think of myself as a pretty creative guy, but I am never more creative than when I am a small piece loosely joined with other small pieces in the generative circumstances of a brain storming group.

I think both have their place. You pretty much can come up with your own ideas all day long (though it is true we often are too busy doing something to take any time to think but that is a time management choice). Brainstorming is about creating an opportunity to bring new ideas the forefront.

There are other useful tools such as the affinity diagram which can serve as another option (or can serve as a tool to work with the results of brainstorming).

And Edward DeBono has excellent creativity tools, like his 6 thinking hats. Brainstorming is a useful tool when applied properly but it is only one tool and other tools should be used.

Lean Library

2006-06-12T09:50:00.000-07:00

Library becomes a lean machine by Morgan Jarema:

"I spent parts of three days looking for that book," Hoyles recalled. "On the fourth day, I found it. I called the patron and he told me he'd gone out and bought it."
...
In November, library employees, who are responsible for checking in from 4,000 to 10,000 returned materials at a time, were asked to help reduce the reshelving time, which could be as long as two weeks.

The average time now is 36 hours, though most materials can be found on rolling carts in the section where they belong the same day they are returned.

Related lean thinking idea: 5s. More lean manufacturing/thinking articles.

Companies in Need of Customer Focus

2006-06-07T17:33:00.000-07:00

You should pay ME - 9 Companies That Don't Get It:

I have been having a hell of a time canceling my old web hosting with Burstband. It's been a few months now and I've called, emailed, filled out online forms, and I have never reached a live person or received confirmation that my account was shut down, and I still get charged. I finally had to file a dispute through my credit card company. It's $8.99/month, so they owe me at least $26.97. I got to thinking about it, and I realized they really should pay me for the two hours of my life I have wasted trying to cancel the damn thing. I usually charge $80/hr for consulting so the total comes to $186.97."

My brother has suggested several times I should arrange for companies to pay me to point out their weaknesses (and suggest improvements). I wish I could get them to do so.

Another opportunity for improvement: Why Doesn't Google Invest More in Blogger? - Google is great (in my opinion, of course) but still has plenty of room to improve. And Blogger is one great example of something in need of improvement. In fact in trying to post this I received:

Down for Maintenance
Blogger is temporarily unavailable due to an unexpected problem.
We will be back up as soon as possible.

Update (2:20 pm PDT): We are fixing a database issue. We hope to be back up in a couple of hours.

Planning 5s? First Know Why!

2006-06-04T13:28:00.000-07:00

Planning 5s? First Know Why! by Jamie Flinchbaugh

he basic principle is that you must know why you want to implement 5S before being concerned about learning how to do it. Most people, when they are asked the purpose of 5S, cite safety, discipline, employee morale, reduced waste of motion and-perhaps the worst reason of all-being tour ready.

All of this is wrong. The true purpose of 5S is to spot problems quickly.

Very clear point. The purpose is to help spot problems and correct them. Making it easy to spot problems, and to correct them, will lead to improved safety and efficiency.

5s definition

TRIZ - Managing Creativity

2006-05-31T07:25:00.000-07:00

The World According to TRIZ by Reena Jana:

TRIZ is the brainchild of late Russian inventor Genrich Altshuller (1926-98), who worked as a patent inspector. In the process of observing invention after invention, Altshuller sought to identify a consistent formula for innovation. In 1946, he published an article laying out his theory of structured innovation, which he titled "Teoriya Resheniya Izobretatelskikh Zadatch." That translates roughly into "Theory of Inventive Problem Solving," or TRIZ, for short.

Creativity related:

Six Sigma Spells Success in India

2006-05-28T06:46:00.000-07:00

Six Sigma spells success for BPOs by Pradeep Kapur:

However, while Six SigmaÂs pedigree can indeed be traced to TQM, it is differentiated from these earlier approaches by the bottom-line focus and intensity of its application. Experience has shown that Six Sigma works and if applied appropriately, it can be the key to enhance customer experience by adding to the bottom line. This can provide you a winning edge.

Lessons From Visit to Toyota's Kentucky Plant

2006-05-27T15:59:00.000-07:00

Construction Executive Lessons from the Toyota Visit by Hal Macomber including:

Stopping to fix the problem - jidoka - could lead to far fewer quality problems.
...
Establish standard work - the currently understood best way - for key project operations.
...
As leaders, involve yourself to ease the work of the project team members rather than operating in the illusion that you can control.

via: Constrution Executives Visit Toyota, Learn Kaizen

Lean Transformation Tips

2006-05-24T11:26:00.000-07:00

The 12 ½ Truths of a Lean Transformation by Charles Hagood. A one page article reinforcing what adopting lean methods will require.

The process of improving never ends. A Lean transformation has no end date! The process is ongoing and is never a closed out action item. There is no such thing as the perfect company or process, therefore the closest to perfect you can become is to recognize that it is a continuous process of improvment.

Forget Targets

2006-05-22T18:07:00.000-07:00

Forget about targets - and decide what really matters by Simon Caulkin:

The attraction of targets is their simplicity. But it's a fatal one. As part of the misguided managerial obsession with quantification, they misapply partial, linear measures to a complex, shifting world.

While targets and goals can distract from improvement some guidance is useful. Systems thinking is important when using targets. As is an understanding of psychology (given the tendency to manage to what is measured the system can often be distorted to achieve a target). See more in: dangers of forgetting proxy nature of data.

Related:

UK Lean Electronics Manufacturing

2006-05-18T00:11:00.000-07:00

CEO viewpoint: Lean and keen manufacturing by Eamonn Walsh, chairman and technical director of Brainboxes:

At Brainboxes we have been manufacturing for 22 years so far and we believe that the way we work will keep us there. If we adopt the best practice of lean manufacturing methods and apply them to all manufacturing in the UK, electronics or otherwise, then the industry will be transformed for the good. Unreformed manufacturing will fall by the wayside.

Lean Construction

2006-05-17T19:11:00.000-07:00

Lean Manufacturing in the Construction Industry by Eric Sander:

In a radical departure from construction on site, Bensonwood Homes of Walpole, New Hampshire, has begun assembling major wall and floor components of their custom homes in their shop. These sections are delivered and assembled on site to reduce the construction time and improve quality. This approach is common in Japan. Toyota Homes and Misawa Home prefabricate custom homes in their factory for onsite assembly. Tedd Benson has recognized the advantage of this approach and is attempting a new approach for custom homes in the US.

Hospital Poka Yoke

2006-05-15T17:21:00.000-07:00

Hospital Lean: Error Proofing by Mark Graban

Some hospitals are making a systemic process change that they hope will prevent this error. They are banning the typical abbreviation for micrograms. They want everyone to use "mcg" for micrograms and "mg" for milligrams.

Much better than telling everyone to "be careful."

Nice poka yoke example.

Airlines Try Smarter Boarding

2006-05-09T18:28:00.000-07:00

Airlines Try Smarter Boarding by Dave Demerjian

An airplane that spends an hour on the ground between flights might fly five trips a day," he explains. "Cut the turnaround time to 40 minutes, and maybe that same plane can complete six or seven flights a day." More flights mean more paying passengers, and ultimately, more revenue.

Good lean thinking and faster boarding is a customer service improvement as well.

Convinced that there was a statistical solution to the problem, Lindemann approached Arizona State University's industrial engineering department.
...
Professor Rene Villalobos and graduate student Menkes van den Briel began reviewing boarding systems used by other airlines. "The conventional wisdom was that boarding from back to front was most effective," says van den Briel. The engineers looked at an inside-out strategy that boards planes from window to aisle, and also examined a 2002 simulation study that claimed calling passengers individually by seat number was the fastest way to load an aircraft.

The two then developed a mathematical formula that measured the number of times passengers were likely to get in each other's way during boarding. "We knew that boarding time was negatively impacted by passengers interfering with one another," explains van den Briel. "So we built a model to calculate these incidents."

Another recent airline post: Airline Quality

Six Sigma and Process Drift

2006-05-08T16:42:00.000-07:00

Quality Quandaries: Six Sigma, Process Drift, Capability Indices, and Feedback Adjustment by George Box and Alberto Luceno. This article is for the more statistically inclined.

The Six Sigma specification makes an allowance of 1.5 standard deviations for process drift. Simple ways in which a major part of such drift can be removed are given. These employ feedback adjustment methods specifically designed for SPC applications.

Feedback adjustment can be dangerous: tampering. In fact, I would say attempting it is likely to be tampering, unless those doing so are careful and knowledgeable. It might be wise to read Box and Luceno's book on the topic - Statistical Control: By Monitoring and Feedback Adjustment if you are tempted to try.

Innovation at Google

2006-05-07T06:56:00.000-07:00

Turning Limitations into Innovation by Marissa Ann Mayer:

people working on it have spent so much time and are so personally invested that it's too painful to walk away. They often know the project is misguided, yet they see the effort through to the painful, unsuccessful end. That's why it's important to discover failure fast and abandon it quickly. A limited investment makes it easier to walk away and move on to something else that has a better chance of success.

Production Preparation Process

2006-05-03T08:04:00.000-07:00

The Top 5 Reasons for Using Production Preparation Process (3P) by Jon Miller:

Production Preparation Process (3P) is one part of an overall Lean design approach that includes QFD, design reviews, and post-start up monitoring by a cross functional team to kaizen any bugs in the new system. The benefits of Production Preparation Process are a cross-functional team approach, rapid testing of ideas and the embedding of Lean manufacturing principles into process and product design.

Quality Conversation with Gary Convis

2006-04-29T14:30:00.000-07:00

Quality Conversation with Gary Convis by Norman Bodek:

There are two pillars; one is continuous improvement. You might not call this a human issue exactly, but Toyota's success rests on the need for all employees, all management, to be looking for and striving for continuous improvement and never being satisfied.
...
We believe very strongly in what the Japanese call "genchi genbutsu," the foundation of Toyota's engineering strategy, which means "Go, see, confirm and be aware with your own eyes."
...
The other pillar of the Toyota way is respect for people and honesty. If you don't have respect for people who work for the company, you'’re in the wrong business.

More lean thinking articles

Previous posts on Toyota and TPS (lean)

Creativity Overflowing

2006-04-28T06:48:00.000-07:00

Creativity Overflowing:

It was clear that Whirlpool needed to reinvent its corporate culture. To do so, it had to figure out the answers to basic questions that managers everywhere struggle with: How do you define innovation? How do you measure success? How do you teach people to be creative?

How Whirlpool Defines Innovation

Using Design of Experiments as a Process Road Map

2006-04-23T15:23:00.000-07:00

Using Design of Experiments as a Process Road Map by Davis Balestracci:

The current design of experiments (DOE) renaissance seems to favor factorial designs and/or orthogonal arrays as a panacea. In my 25 years as a statistician, my clients have always found much more value in obtaining a process "road map" by generating the inherent response surface in a situation. It's hardly an advanced technique, but it leads to much more effective optimization and process control.

DOE is a tool that is very useful. And while the situations in which DOE is the best tool to use is limited the limited use of DOE is used less than it could be. See more articles on the use of design of Experiments (DOE).

Toyota in the US Economy

2006-04-17T14:09:00.000-07:00

Some figures on Toyota's economic impact in the USA. Toyota North American vehicle manufacturing totals:

From Toyota's web site: Toyota Manufacturing in the USA: by 2008, Toyota will have the annual capacity to build 1.81 million cars and trucks, 1.44 million engines, and 600,000 automatic transmissions in North America.

The company's direct employment in North America is more than 38,000 and direct investment is nearly $16.8 billion with annual purchasing of parts, materials, goods and services from North American suppliers totaling an additional $26 billion.

Toyota Touts Impact on U.S. in Billboards:

The messages highlight numbers, such as 13 -- "Donuts in a baker's dozen; Toyota's U.S. investment, in billions," and 386,000 -- "Kilometers to the moon; U.S. jobs created by Toyota." The billboards are in some two dozen U.S. markets where Toyota has factories or supplier operations, from Fremont, Calif., where Toyota partners with GM at an automaking plant, to Huntsville, Ala., where Toyota makes engines.

The World's Most Innovative Companies

2006-04-14T06:24:00.000-07:00

The World's Most Innovative Companies:

Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs. Most important, as the Internet and globalization widen the pool of new ideas, it's about selecting and executing the right ideas and bringing them to market in record time.
...
Consumers increasingly are doing the innovation themselves. Consider Google Inc. (GOOG ), our No. 2 innovator, and its mapping technology, which it opened to the public. This produced a myriad of "mash-ups" in which programmers combine Google's maps with anything from real estate listings to local poker game sites.

Google's mash-ups are just one example of the escalating phenomenon of open innovation. These days the world is your R&D lab. Customers are co-opting technology and morphing products into their own inventions.

Leading Lean: Missed Opportunity

2006-04-10T17:14:00.000-07:00

Leading Lean: Missed Opportunity by Jamie Flinchbaugh:

Three elements are needed to gain the benefits from using pull production to drive problems out into the open. First, you need strong problem-solving skills. Bringing a problem to the surface is only half of the battle-you still have to correct the problem. Second, you need an infrastructure capable of solving problems. This means persuading employees at all levels to respond to problems in real time. This does not happen overnight. Third, and perhaps most important, you need a culture that values solving problems as prevention, not crisis management, and is willing to step up even if the problems seem small at the moment.

Great points. One of the counter intuitive things with lean is to make problems visible. So often people try to hide problems (which inventory can do - making it difficult to see emerging problems and to diagnois problems once they are finaly discoverd).

The idea that you then must improve the system as these problems are made visible is fairly obvious but is also worth emphasising since without it the problems increase.

I think the typical perfromance appraisal process adds to the desire to hide problems. As does excess mobility of management (just hide it until you move on). These show my Deming view of management leanings.

Via the lean blog.

More articles by Jamie Flinchbaugh
The Hitchhiker's Guide to Lean: Lessons from the Road by Jamie Flinchbaugh, 2005.

The Art of Customer Service

2006-04-10T09:52:00.000-07:00

The Art of Customer Service by Guy Kawasaki:

4. Don't point the finger.
This is the flip side of taking responsibility. As computer owners we all know that when a program doesn't work, vendors often resort to finger pointing: "It's Apple's system software." "It's Microsoft's 'special' way of doing things." "It's the way Adobe created PDF." A great customer service company doesn't point the finger--it figures out what the solution is regardless of whose fault the problem is and makes the customer happy. As my mother used to say, "You're either part of the problem or part of the solution." (By the way, as a rule of thumb, the company with the largest market capitalization is the one at fault.)

Toyota Again Get Positive Press

2006-04-07T15:42:00.000-07:00

Toyota Eyes Chance to Pass by Anthony Faiola, Washington Post:

The mainstream press continues to note the success of Toyota.

Toyota has been toying with hybrid engines for the past 20 years. But the company began to seriously pursue a mass-producible hybrid in 1993. Ogiso, 45 years old and now the chief engineer on the third-generation Prius still under development, said the edict came from Eiji Toyoda, the patriarch of the Toyota family who headed the company until 1994.

Ogiso said Toyoda had grown increasingly concerned that gas-engine auto manufacturing would eventually become a sunset industry given the limits of global oil supplies and increasing pressure to curb emissions. Focused more on a long-term advantage than the short-term gains that U.S. automakers are under pressure from Wall Street to produce, Toyota put hundreds of engineers to work on creating a new engine that would double average gas mileage and cut emissions by 80 percent. Conventional engines were quickly ruled out. "We found that the only way to achieve that goal was building a whole new type of car," Ogiso said.

This shows several of Deming's ideas which are part of the Toyota Production System (lean manufacturing) most importantly: constancy of purpose. Several of the seven deadly diseases are also seen in the collapse of GM, such as: emphasis on short term profits, mobility of top management and excessive medical costs.

The relentless push for efficiency often takes shape in small ways. Two years ago, the company came up with a new process in which parts for specific models were presorted into blue boxes that travel down the line as each car is assembled. Though low-tech and inexpensive to put into effect, it significantly sped up the product line and saved space by doing away with the need for workers to seek out different auto parts from storage bins. It was one of roughly 600,000 small improvements Toyota makes annually.

Toyota continue to execute on many fronts continual improvement, innovation and strategic planning.

Related posts:

Seduce Them With Six Sigma Success

2006-04-06T19:39:00.000-07:00

Seduce Them With Success by Jay Arthur:

Instead the change agents are going around talking to operational managers, learning their problems and offering to help solve them. Then, using the tools of Six Sigma, they find remarkable, unexpected solutions that reduce costs and increase speed and profitability.

Oddly enough, the people on those improvement teams seem to know how to continue solving problems. And they tell their co-workers. And the operational manager's success makes his or her colleagues curious. Then the Six Sigma change agent gets a call to help another manager solve a problem. And so it goes until the Six Sigma system is operating well in the mission-critical elements of the business.

This is the way to get management improvement to take hold. Use successes to create a desire to improve. It is always nice if the leaders are on board, it helps in many ways. But whether they are or not, those seeking to promote management improvement need to pay close attention to how much desire exists to improve (using six sigma or lean or process improvement or quality management tools).

If most people think the efforts are just the latest fad it is very difficult to have any lasting success.

More six sigma articles.

Lean Thinking Needed

2006-04-06T09:23:00.000-07:00

Bank Wire Transfers vs. FedEx Delivery

My goal was to give them all the paperwork, ensure I had sufficient funds, and schedule the transfer such that the money arrives in the sellers' account on a particular date next week.

But they can't do that. They cannot hold the paperwork for any amount of time. They'll process it the same day I turn it in. I guess I can understand that. They're a bank, not a scheduling service.

However, they can't tell me which day to drop of the paperwork to ensure that the funds arrive on my target date. The teller informed me that "it usually takes 48 hours, but that doesn't mean the funds will be available on the other end."
...
I can get a FedEx envelope, stuff it with $100 bills (or a certified bank check), and send it overnight with a signature required for less than $30 (without insurance). In this scenario, I get to track the progress of my package remotely and am fairly certain that it will arrive on the right day.

It seems to me that FedEx is better at what ought to be a core competency of an organization like Bank of America.

It seems to me a bank that can't do better than this should be embarrassed. They need read management improvement articles or Lean Solutions and start delivering decent service or let someone else manage the company.

Lean Manufacturing Success

2006-04-04T15:47:00.000-07:00

Oshkosh Truck Driven to Succeed by Arlen Boardman:

Wuest said this reduced the order-to-delivery time from 12 to 16 weeks to seven days. It made better use of manufacturing space and reduced inventory-holding costs. He said it does many more things, like create an orderly work area, so tools are where they're supposed to be, and parts are made when needed, one at a time.

"The goal is to turn an order into cash as quickly as you can," he said.

Specialists in lean manufacturing systems were hired to help at Oshkosh Truck, including ones from General Motors and Ford Motor, among other big-name companies. This specialized team instills a belief in the changes and then conducts the training for the workers.

Not only is this a nice story but it is one small example of the good people working at GM and Ford. The problem is not the individual workers it is management. It is too bad that those companies, that did take great strides in the 1980 and early 1990s to improve (starting with Deming's Management ideas) let those efforts fade away.

I followed the link from, Some Positive Lean Tales, wrote the above and then went back to continue reading Mark Graban's post, which stated:

I guess this proves there are no shortage of good lean people at GM and Ford (I learned from some great lean people back at GM), but they're constrained by the system that they're a part of.

We seem to be thinking the same way on this one.

Another link from his post, Going Lean by Paul Marks:

"It's imperative for those companies that can implement lean manufacturing to do it," Johnson said. "The only way companies in Connecticut can compete, with the high cost of doing business here, is through productivity gains. The objective is to put more pieces out the door than you did last year, and do it with the same number of employees."

Because "set-up" time when a machine takes on a new task halts the entire production line, Whitcraft has found ways to ease the transition.

Making all dies used on a punch press the same height eliminated the need to recalibrate and then test the machine before resuming work, Paul said. A transition that once took 45 minutes to an hour now requires about three minutes, he said. Workers are trained to think in those terms.

US Manufacturing Plant Construction

2006-04-02T05:23:00.000-07:00

Topic: economics, manufacturing

Breaking Ground by Jeff Moad:

Last year, according to figures from the U.S. Department of Commerce, investment in new manufacturing plant construction increased 25%. That compares to a decline of 6.5% in 2003 and an increase in 2004 of 9.7%

As we have noted earlier, the United States is by far the leading manufacturer in the world: Global Manufacturing Data by Country and Manufacturing and the Economy (Japan is second and China third and growing rapidly).

The mini-revival in new-plant development has been enough to slow what until recently had been a prolonged decline in the number of manufacturing plants operating in the U.S. Between 1997 and 2004, according to the U.S. Department of Labor (DOL), the number of plants operating in the U.S. dropped by 10%. In 2005, however, according to DOL figures, the number of plants stabilized at around 336,000.

Even though the US manufacturing output has continued to increase those gains have come largely from improved efficiency as fewer workers (and fewer plants) are producing the increased output. The decrease in employment is a worldwide phenomonon: Manufacturing Job Losses: USA 2 million, China 15 million.

Lean, Mean Business Machine

2006-03-29T15:51:00.000-08:00

Lean, mean business machine, from New Zealand:

But it is wasted effort that is the main focus, Mr Shook says. The lean philosophy is about first making waste visible, then acting on every level in a company, from large to small, to eliminate it.

This point is often overlooked - making waste visible is critical.

via Lean in New Zealand

What Innovation Means to Tesco

2006-03-29T06:46:00.000-08:00

What innovation means to Tesco by Sir Terry Leahy (Chief Executive of Tesco):

Innovators are all around us; innovation is after all just another word for an idea and we can all have those. Businesses must learn to harness the creativity of their workforce and encourage staff to come forward with ideas. It's not always easy as some good ideas will fail but companies have to be comfortable with that if they are to avoid stifling innovation.

Indian Deming Prize Winner Expanding

2006-03-27T07:59:00.000-08:00

Lucas TVS on Global and Local Expansion Mode

A delegation of top officials from leading Japanese industries — mostly comprising Toyota group and its suppliers — had also visited the Lucas TVS' Chennai plant. The delegation is part of the central Japan Quality Control Association, an organisation promoting quality control in cooperation of the Union of Japanese Scientists and Engineers (JUSE).

The purpose of the visit was to introduce the delegation to the best practices amongst the member companies and also outside Japan. In 2004, Lucas TVS had won the prestigious Deming medal...

According to Balaji the Japanese delegation led by Tadashi Onishi, JTEKT Corporation, said that quality is not a magic solution but a systematic practice, and quality should not be measured by the absence of defect. A company should reach a condition where it innovates in quality. Further, all the stakeholders-employees, suppliers and others- should be involved in quality control. "The delegation also told us that quality systems should be at all levels of management and not only at the shop floor level," Balaji said.

No More Lean Excuses

2006-03-26T15:15:00.000-08:00

No More Lean Excuses by Dan Jones

I have recently been getting a striking reaction from many senior management audiences. They all agree that products have got vastly better over recent years, but they equally agree that the process of ordering and buying them and getting them serviced has got worse!

This is a theme in Jones and Womack's recent book: Lean Solutions.

Recently I bought a new digital camera, Canon A700. Part of the reason I bought it was I had heard they actually provided customer service - you could call them and they answered and helped (plus they have long practiced good management improvement concepts, in general).

Well I received my camera and I could not open the battery compartment: which was quite frustrating. I tried following the instructions but I couldn't get it to open. So I tried calling Canon and I got a person on the phone within 30 seconds (there was system to direct me to the right person but it was as speaking the answer to a couple questions).

Within a couple minutes the service person (based in Virginia and a Canon employee as I understand it) had picked up a Canon A700 and explained how to open the door. I happen to think the instructions, and design, could be much better but maybe I just couldn't see it.

Anyway I know of two companies that provide this level of phone support: Canon and Crutchfield. I am sure there are others. I am much more likely to buy from them if I have a choice.

I also very much like dealing with Amazon but they provide no after purchase service (which is why I had to call Canon - which worked very well). But for finding products and getting them shipped to me, I have been a satisfied customer for years.

Fear Remains a Toyota Motivator

2006-03-23T07:56:00.000-08:00

Fear Remains a Toyota Motivator by Harry Stoffer, Automotive News.

First the don't let the title fool you, this is not an indication Toyota is going against Deming's obligation of management to "Drive out fear and build trust so that everyone can work effectively". Deming was talking about driving out the fear management creates for employees intentionally (forced ranking...) and un-intentionally (creating a climate where people are more fearful of pointing out problems than just ignoring them...). See: Deming and Toyota.

This article is talking about Toyota's never ending quest to do better. At least in North America we seem biased toward putting that quest for doing better negatively. Rather than being drawn to improve it is most often stated as being scared that if we don't we will have to pay for failing to improve. Thus the reference to fear.

The article is worth reading:

"We are kind of paranoid," says Dennis Cuneo, senior vice president of Toyota Motor North America Inc. "You're going along, and things are going quite well, and you're always thinking: 'What could go wrong?'"
...
He calculates that Toyota spends about 1.3 percent of revenue on warranty claims. That's less than half the rate of General Motors and Ford Motor Co., he says.

Barkai cites Toyota's ability to use data to identify and fix problems quickly. That feature is rooted in the Toyota Production System.

"Once they make a decision, the entire organization realigns itself around the decision," Barkai says.

Jeffrey Liker, an engineering professor at the University of Michigan, has studied Toyota for 20 years. He says the discipline Toyota imposes on its growing number of suppliers helps the company maintain its quality record.

Liker says there was evidence four or five years ago that Toyota quality was starting to slip. The company made a priority of finding and eliminating those problems, he says.

via Toyota and Quality Trends

Flow

2006-03-22T11:06:00.000-08:00

"Flow" and Mihaly Csikszentmihalyi by David Farmer:

How does it feel to be in "the flow"?

1. Completely involved, focused, concentrating - with this either due to innate curiosity or as the result of training
2. Sense of ecstasy - of being outside everyday reality
3. Great inner clarity - knowing what needs to be done and how well it is going
4. Knowing the activity is doable - that the skills are adequate, and neither anxious or bored
5. Sense of serenity - no worries about self, feeling of growing beyond the boundaries of ego - afterwards feeling of transcending ego in ways not thought possible
6. Timeliness - thoroughly focused on present, don't notice time passing
7. Intrinsic motivation - whatever produces "flow" becomes its own reward

Books by Mihaly Csikszentmihalyi:

Good Business Leadership, Flow, and the Making of Meaning, 2004.
Flow: The Psychology of Optimal Experience,1991. People enter a flow state when they are fully absorbed in activity during which they lose their sense of time and have feelings of great satisfaction. The author, a pioneer in this astonishing field of study, clearly explains the principles of "flow" and shows how it can be introduced into every level of life. (audio tape)
Creativity: Flow and the Psychology of Discovery and Invention, 1997. Drawing on hundreds of interviews with exceptional people, from biologists and physicists to politicians and business leaders to poets and artists, the author uses his famous "flow" theory to explain the creative process. Csikszentmihalyi's objective is to offer readers an understanding of what leads to creative moments so that they can use that knowledge to enrich their own lives.

Cells and High Volumes

2006-03-20T19:02:00.000-08:00

Cells and High Volumes: Forget What You Think You Know by Gary S. Vasilash:

True cellular manufacturing depends on the cooperation and orchestration of all employees. The reason for this is simple: The objective to get rid of waste means that all of the people involved in the process must work in a synchronized manner. One-piece flow doesn't allow for build-ups of inventory between processes, so people must do each step in the required manner (a manner, it should be noted, that isn't static, but open to improvement).

Organizational Learning

2006-03-18T10:00:00.000-08:00

Why Your Organization Isn't Learning All It Should by Anita Tucker, Amy Edmondson, and Steven Spear

Our analysis of qualitative data suggests that the problem-solving behavior of front-line workers may reduce an organization's ability to detect underlying causes of recurring problems and thus take corrective action.

While problems must be solved to reduce the impact on the current customer the organization must also prevent future customers from the poor result.

The data suggested that these small front-line problems collectively frustrate both the customer and the worker, and hinder the worker's ability to perform effectively, but when taken out of context and viewed individually, appear trivial. Thus, system aberrations that are often dismissed in the literature as being "simple to solve" often persist because of a cycle of inactivity.

Kaizen Priorities

2006-03-16T15:05:00.000-08:00

Kaizen Priorities by Mike Wroblewski:

Priority 1: Kaizen your bottleneck station first - If you don't know what is your bottleneck station, find it. There are many ways to find your bottleneck: all the inventory is piled in front of it, people downstream are waiting on it, it has the most overtime, it's a top maintenance priority, etc.

Another excellent post from Got Boondoggle.

Getting Lean Right

2006-03-13T15:27:00.000-08:00

Getting Lean "Right": 10 Factors to Understand Before Embarking on Your Lean Transformation by Jamie Flinchbaugh:

So how is it that such a low percentage of companies that know about lean can turn it into a success? It's not because they haven't heard about continuous flow, or they don't know how to do the 5S's, or they've never seen a kaizen workshop. It is because the leadership, cultural, organizational and implementation challenges are bigger than most people anticipate.

Toyota in China: Full Speed Ahead

2006-03-10T05:41:00.000-08:00

Toyota in China: Full Speed Ahead, Business Week. Yoshimi Inaba, who's driving the Japanese auto maker's expansion in the Middle Kingdom, discusses the Chinese market and his goals there. Toyota's market share is just 3.5% in China, compared to 13% in the U.S. and more than 40% at home in Japan.

We're a minor player in the China market, with a 3.5% share, but we're one of the few manufacturers where demand exceeds supply. Even though we see big potential for growth, we will make sure we're not in a position of overcapacity. That will be a very key element. And as long as you retain the quality, treat dealers as partners, and avoid oversupply, the results will come. The race for the Chinese market is just around the first corner.

Consumer Idealized Design

2006-03-08T14:21:00.000-08:00

Consumer Idealized Design: Involving Consumers in The Product Development Process

Interactive Design vs. Reactive "Focus"

A consumer design session is characterized by at least three features which
distinguish it from a focus group.

(1) It requires innovation and interaction from participants.

(2) It is task-oriented, competitive and consensus-generating.

(3) It requires the articulation and design of the group's notion of the ideal
in a designated product or service category.

This concept is based on the idea of Russell Ackoff - articles by Russell Ackoff.

NUMMI Plant Model

2006-03-08T05:09:00.000-08:00

via lean blog, NUMMI plant a model for ailing car industry by Tim Simmers:

The historic NUMMI joint venture - the first of its kind on U.S. soil between a Japanese and an American carmaker - is something of an industry gem. Its secret to success, besides the common sense of building small cars and trucks that are in demand, has been its good labor relations and adoption of Toyota's "lean manufacturing" techniques. Referred to as the "Toyota Production System (TPS)," it is steeped in Japanese business lore and terms that stress and lay out a road map for quality, efficiency and production advances.

NUMMI tour information. NUMMI - Production System:

A key factor in the production system is treating team members with trust and respect. They are expected to help solve problems and make decisions that affect them or their group. They are also held accountable for their work.

The Skinny on Lean

2006-03-02T16:50:00.000-08:00

The Skinny on Lean by Peter Bradley

The pursuit of perfection and obsessive attention to detail that characterize Toyota's lean model are reflected in Menlo Worldwide's 278,000-square-foot Brownstown facility, known as the Great Lakes Lean Logistics Center (GLLLC). Look around, and you'll notice process maps on the wall of a room off the main warehouse. You'll see taped outlines on the floor and walls to indicate the precise location of every cart, every tool, every barrel—often with photos showing what goes where. While leading a tour of the facility, Meaghan Diem, a Menlo Worldwide logistics manager, nudges a barrel back between its taped lines. "Some people think this is organization overkill," she says, "but it makes it almost impossible not to make it right."

Though it encourages employees to offer ideas on an impromptu basis, Menlo Worldwide also solicits suggestions through a more formal process: its continuous improvement program. On a regular basis, the company assembles kaizen teams—teams formed to root out waste and inefficiency. Rivera reports that employees at every level participate in these teams, which may also include an engineer and a customer. The teams spend three to five days collecting data, identifying targets—called SMART targets—and preparing an implementation plan. Consistent with the Toyota protocol, their plan must fit on a single sheet of A3 paper. (That's an international standard for paper about 11.7 by 16.5 inches, or more precisely, 297 by 420 millimeters.)
...
The lean program's results speak for themselves. Menlo Worldwide reports that warehouse productivity improved 32 percent between January and November last year, measured by gains in lines per hour. Defects, measured as the error rate, dropped by a whopping 44 percent. The on-time percentage for shipments was north of 99 percent in every one of those months, hitting 100 percent in eight of 11 months.

What is Lean Six Sigma?

2006-03-01T16:46:00.000-08:00

What is Lean Six Sigma? slides from a presentation (adobe acrobat format) at MAQIN (Madison Area Quality Improvement Network). FYI, I manage MAQIN's web site and author blog - John Hunter.

I rarely link to slide presentations, but when the slides seem interesting enough I do link to them occasionally, as in this case. Still since slides are designed to act as supporting material to a presentation they leave much out. The following links provide articles with much more detail on this topic, via the Curious Cat Management Improvement Library:

Executives Participating in Kaizen Events

2006-03-01T05:26:00.000-08:00

The Masco Mapmakers by Bill Waddell

Guys from Brasscraft or Morgantown Plastics might go to a Delta faucet plant for the event - and note that these are executives, not factory level folks - that spend the week working on the kaizens. Of course, the Grand Kaizens are not the only ones. Individual plants hold their own kaizens by the hundreds. The primary purpose of the Grand Kaizen is to spread the lean message throughout the company. They learned that having the top people work hands-on in a kaizen was a lot more effective than sitting them down in a big room and subjecting them to a Power Point description of lean.

Getting executives to participate is a great way to have them learn a new way of thinking.

Masco Companies Learn Lean Manufacturing and Improvement Methods

Lean thinking articles

Theory in Practice

2006-02-28T00:12:00.000-08:00

Theory Meets Reality In The Heartland by Bill Waddell:

An old boss of mine was fond of saying, "There are few things in life more tragic than to see your beautiful theories murdered by a gang of brutal facts," usually when I approached him with a hare brained idea about turning one of our manufacturing systems inside out.

Those who only think about theories don't accomplish much. And those that don't have theories don't either. To achive success, theories need to be put to the test and modified as evidence shows flaws in the theory.

"Knowledge is built upon theory... Rational prediction requires theory and builds knowledge through systematic revision and extention of theory based on comparison of prediction with observation." (Page 102, The New Economics by W. Edwards Deming).

Lean Manufacturing Success

2006-02-27T18:59:00.000-08:00

K&S makes first shipment to China by Buzz Ball

The award was given for K&S Wire's continuous improvement in manufacturing excellence and its implementation of "lean" enterprise principles into its everyday operations.

It is because of these principles that Schwartz was able to make the announcement about the shipment to China.

"We took the order to construct 111,000 wire frames that will hold flip-flops," said Schwartz. "Because of our 'lean' principles, our price was better than could be found in China. This is a first for us and I hope we will have many more in the future."

K&S Wire manufactures a variety of steel CNC wire forms, grills, grates, guards, display units and custom products for various other manufacturers and for consumer use.

Executive Vice President Dave Padgett said the employees manufactures 20 to 25 different items every day.

The company recently completed a 30,000 square foot addition, which is the sixth expansion in the company's history. The work force has grown from three in 1995 to between 90-110 this past year.

It is great to see such success stories in the press.

via Using Lean to Ship to China

More lean thinking articles

Deming's 14 Obligations of Management

2006-02-25T12:18:00.000-08:00

Deming and his 14 Points with comments from the Random Thoughts from a CTO blog.

Curious Cat's Deming on Management
Deming's 14 Points on the Curious Cat site
2 minute webcast of Deming (and Robert Reich) on constancy of purpose
Constancy of Purpose definition

La-Z-Boy Lean

2006-02-25T12:00:00.000-08:00

La-Z-Boy changing production lines to compete with China:

But in an attempt to better compete with the overseas market, the Neosho plant, along with six others in its division, is transitioning to the Lean Cellular Manufacturing method. In the new concept, the chair or sofa is manufactured by a team within a cell, thus eliminating separate departments. No jobs will be lost in the transition from batch-and-queue to lean cellular.

"Basically, we will have teams building the chairs from start to finish," said La-Z-Boy Midwest Human Relations Manager Billy Meyer. "Right now, we have three cells up and running, but by the end of the transition, we will have 37 cells."

Great news. It is good when companies take the improvement strategy to cope with changes in the marketplace.

The primary purpose of the new concept is to increase product numbers. The cells have become so efficient that it has cut the manufacturing time of a chair down from two and one-half days to just three hours.

"This is now a three-hour process from start to finish in the cell, "said La-Z-Boy Midwest production manager Bill Snow. "The process ends with a 12-point inspection. The cell members will not get paid for the piece until it is taken to where it will boxed. But eventually, boxing will take place in the cell as well."

I agree with Mark Graban that a piece rate pay system is a bad idea.

Via Lean Manufacturing Blog

Six Sigma and the Mobile Workforce

2006-02-20T11:56:00.000-08:00

Six Sigma and the Mobile Workforce by Lynda Finn and Sue Reynard:

This type of data collection also helps process owners or managers spot systemic problems that appear across processes. For example, a process
owner reviewing all field agent reports may detect problems appearing in more than one location. Now, a fix made in one location can be incorporated into MTA based systems so all agents will benefit immediately. This type of systemic leveraging of learning and improvement is what generates the biggest payoffs from Six Sigma investments.

The Art of Work

2006-02-20T11:39:00.000-08:00

The Art of Work by Ann Marsh:

These companies are now using Csikszentmihalyi's ideas to learn how they can get the best out of their workers or create more compelling connections with their customers. Without flow, there's no creativity, says Csikszentmihalyi, and in today's innovation-centric world, creativity is a requirement, not a frill.

Excellent books by Mihaly Csikszentmihalyi:
Flow: The Psychology of Optimal Experience by Mihaly Csikszentmihalyi, 1991. People enter a flow state when they are fully absorbed in activity during which they lose their sense of time and have feelings of great satisfaction.

Creativity : Flow and the Psychology of Discovery and Invention by Mihaly Csikszentmihalyi, 1997. Drawing on hundreds of interviews with exceptional people, from biologists and physicists to politicians and business leaders to poets and artists, the author uses his famous "flow" theory to explain the creative process.

Funding Invention Vs. Managing Innovation

2006-02-19T07:20:00.000-08:00

Funding Invention Vs. Managing Innovation by John Hagel and John Seely Brown

But if we shift our attention from invention to innovation, we begin to see a much broader horizon. Innovation -- the ability to create and capture economic value from invention -- is what really drives both the economic prosperity of nations and the shareholder value of corporations.

Innovation isn't just confined to commercialization of new products. It can also build upon creative new practices, processes, relationships, or business models, and even institutional innovations such as open-source computing -- invention occurs in all these domains. And while breakthrough innovations can generate significant economic value, sustaining that value requires a capacity for continual incremental innovations.

Lean Continuous Improvement

2006-02-14T18:37:00.000-08:00

Continuous Improvement -- Taking A Big-Picture Approach To Lean by Jonathan Katz, Industry Week:

Northrop Grumman Newport News geared its lean value stream toward meeting customer commitments rather than strictly using it as a means to improve production. The company is constantly measuring its progress on customer contracts by using scorecards that help managers determine how close or how far they are to meeting customer agreements. Through this process, the company has saved on materials, stock time and labor. This includes a 58% materials savings in the torch repair cell, a 61% reduction of touch time in the shipyard and a 5.8-day reduction in dock-to-stock time.

Army - Lean Six Sigma

2006-02-13T00:06:00.000-08:00

Army Adopting Lean Six Sigma

"We've already identified well over 20 processes that are Army-wide processes that we want to take on using Lean Six Sigma. . . We're on the very beginning of making Lean Six Sigma, and the disciplined approach that comes with that, a major part of the way the Army does business," said Maj. Gen. Ross Thompson III, Army G-8.

The Army Materials Command has long practiced Quality Management methods.

Red River Army Depot web site Feb 2006:

Red River Army Depot's (RRAD) management philosophy has been Total Army Quality (TAQ) since the late 1980s. RRAD used other concepts of quality management during the early 1980s and before. However, in June 1991, the Department of Defense implemented a competition program among all the services. The premise of the competition program was to achieve cost savings through efficiencies generated by competing workload among the services and private industry. This change by external forces influenced and redirected our view of the depot's future and intensified our transformation to Total Quality Management.

List of Previous President's Quality Award winners (used to be Baldrige based until the award criteria were changed in 2002).

Lean Thinking in Scotland

2006-02-12T15:54:00.000-08:00

The man who would save Scottish industry by Terry Murden

Ross says: "Lean thinking can be applied to almost any process, but the key is the involvement of those who actually do the work. I passionately believe that companies, councils and the NHS can make major improvements across all their key measures once they learn how to involve their staff in the elimination of wasted time."

The article offers few details but is another example of "lean" ideas being voiced in the popular media.

Warwick Business School is due to publish the results of a survey in early summer into the effects of employing kaizen and lean principles into the public sector. It will include an analysis of the work at Aberdeenshire Council.

This report might provide some details on lean government.

Single Piece Flow

2006-02-09T06:07:00.000-08:00

Single Piece Flow by Rich Weissman:

The transition from batch and queue to lean manufacturing involves converting to single piece flow...

In traditional manufacturing, specific operations were done in batches by departments that specialized in individual manufacturing tasks like machining, welding, assembly, and test. Through the integration of lean induced cellular manufacturing processes, cross-trained employees produce just the amount of completed products that are required by other internal operations or the end customer. By eliminating complex set-ups, buffer stock, and large batches, lean companies are able to reduce lead times, increase flexibility, reduce inventories, and improve product quality.

More lean manufacturing and lean thinking articles

Management Glossary, lean terms: Takt Time - Kanban -

Leading Six Sigma

2006-02-08T19:12:00.000-08:00

Leading Six Sigma: Launching the Initiative by Roger W. Hoerl and Ronald D. Snee. An excerpt, of a chapter of their book, Leading Six Sigma: A Step-by-Step Guide Based on Experience with GE and Other Six Sigma Companies discussing the deployment process for Six Sigma.

The project must be tied to the bottom line in some way. The project scope should be for improvements that are attainable in the four to six month time frame. An unrealistic scope (often referred to as a "boiling the ocean" project) is probably the most commonly encountered cause of project failure. Projects that are not connected to business priorities or that have too many objectives also need further refinement. Projects with an "identified solution" should be handled by a project manager instead of Six Sigma, or as mentioned earlier, be redefined to omit the specified solution in favor of allowing the Six Sigma methodology to identify the best solution.

Lean Accounting article from SME

2006-02-08T15:35:00.000-08:00

Keeping score with lean accounting cost management by Jerry Solomon:

We changed the format of our income statements. We made them simple. For each value stream, all of the payroll expense is in one bucket called processing costs. There is another bucket for all of our variable costs. We exclude elements outside the value stream, like property taxes or insurance.

Now the income statements allow the folks to clearly see and understand what was spent on labor, how many units were produced, and the labor cost per unit. It's pretty easy.

ThedaCare: Lean Healthcare

2006-01-30T16:55:00.000-08:00

Area health systems put customer service first by MaryBeth Matzek

In 2005, ThedaCare was able to save $10 million thanks to its lean programs and officials hope to save another $12 million this year, Toussaint said.

ThedaCare's march toward lean began when Toussaint started looking for a way to improve quality and service while cutting costs. He found what he was looking for in an unlikely place - a factory that produces lawnmowers and snow blowers.

The model Ariens used was adapted from a system put in place by Toyota, the Japanese automotive manufacturer. As part of the system, teams are formed to look at processes and find ways to improve them - whether it's cutting out an unnecessary step or finding a better way to serve the customer.

via Lean Manufacturing Blog

Related:

Deming Seminar and Conference

2006-01-29T15:38:00.000-08:00

Audio CDs of the 2005 W. Edwards Deming Deming Institute Conference presentations ($100).

I attended the conference and posted: "Mike Beck gave an excellent presentation at the Deming Institute conference about the United Technology Corporation management improvement system. I plan on posting more about the session." I have not posted an update :-0 but now you can hear it yourself. I also thought the "Back to the Future" presentation by Larry Smith was excellent. You can also read this article, on the same topic (manufacturing at Ford in the 1970s to today) by him.

The Deming Institute is also presenting a seminar, How to Create Unethical, Ineffective Organizations That Go Out of Business, 24-26 April, 2006 in Boston. I will be co-presenting the seminar. Let me know if you sign up.

The Deming Institute also offers Dr. Deming presenting his Four Day Seminar in 1992 (Eight Video Tape set for $275 - Tape or DVD).

TPS - Take 2

2006-01-25T19:24:00.000-08:00

The cover story in latest issue of Industry Week focuses on what people have missed when applying ideas from the Toyota Production System.

Learning From Toyota -- Again by John Teresko:

"Why is it that the TPS tools of lean, agile, TQM, TPM, re-engineering, just-in-time, cellular/continuous workflow and so on -- never seem to really pay off big [aside from Toyota]?" asks Michael Paris, president of Hinsdale, Ill.-based Paris:Consulting. His response: "Unless TPS is everywhere in an organization, it is nowhere. Too often managers pushing for performance improvements have a limited vision and scope. They fail to approach the executive team that has responsibility for the entire enterprise and authority over it."

Continuous Improvement In The Executive Suite by Patricia Panchak:

We've watched as Toyota's strength and market share steadily grew for two decades. We've adopted the Toyota Production System (TPS), which we correctly determined is the source of Toyota's success. But we missed something that is now becoming ever more clear: Continuous improvement is as integral to corporate strategy as it is to production strategy. Executives looking for a long-term competitive edge should take note.

The tools of TQM, lean manufacturing, TPS, six sigma... are useful. But the extraordinary gains are made when the entire system is geared toward improvement.

Related Posts:

Lean Software Development

2006-01-22T18:42:00.000-08:00

Lean Software Development: A Field Guide - the first 3 chapters of this new book are available online. Excellent, recommended for anyone interested in lean thinking ideas.

Lean Software Development: An Agile Toolkit for Software Development Managers by Mary Poppendieck and Tom Poppendieck, 2003.

Articles on lean programming by the Poppendieck's

Toyota's Early History

2006-01-22T18:34:00.000-08:00

via Got Boondogle:

A book that I recently finished is "Quest for the Dawn" by Shoji Kimoto. "Quest for the Dawn" is a fascinating true story set from about 1930 to the mid 1950s of a bold business quest to build an automobile from the ground up. The relentless inventors were Sakichi and Kiichiro Toyoda and, of course, the car manufacturer was the Toyota Motor Company.

Look interesting, so I went on amazon.com and Quest for the Dawn by Shoji Kimoto was available for $1, through a 3rd party, plus $3.49 shipping. I really like many of the things the internet makes easy.

And relating to the zero defects post earlier today. I never thought of it as a defect when I couldn't order an obscure book, in a minute or two, from home and have it delivered to me. Deming was right that: "Absence of defects does not necessarily build business... Something more is required."

Zero Defects

2006-01-22T16:56:00.000-08:00

Zero Defects by Norman Bodek:

Do you believe it is possible to have Zero Defects? I am not talking about six sigma at all.

I believe it is possible to have zero defects (in a sense). But I do not believe it is a good management strategy to practice what those I have heard in the past preaching zero defects.

A Dichotomy by Norman Bodek. Wow, you really have to look to find this article after you follow the link. I think the site could really benefit from improving the usability of the site (similar to lean ideas on making things visible and easy to find):

In truth, you should be making lots of mistakes. We do want you to learn, but for the sake of your customers you should not allow mistakes to become defects. That is the dichotomy! Make mistakes but donÂ't allow them to become defects.

I know many people talk about this conflict (those that agree aiming for zero mistakes missing the most important ideas). However, I have never really understood it as a conflict. You want to take risks to try new things to experiment to learn. Doing those things can be done in a manner that doesn't provide your customers a defect. I suppose there are times when you take a risk your customers may be disappointed, but I don't see why this need be the case with most experiments.

Aiming to limit defects for the customer is a good idea. I agree continually improving your products and service is a good idea. I think applying poka yoke concepts is a great idea to eliminating mistakes internally (in your organization) and in the design of your products and service so your customers avoid potential problems.

I agree that eliminating defects that get to customers (and even those that don't) is wise. But I think that doing so is the result of continually improving your processes. I do not believe you succeed by declaring your goal to be zero defects. You succeed by creating a culture of never ending improvement, of customer focus, of fact based decision making, of learning, of "empowerment"...

Part of that improvement is reducing variation, reducing defects, implementing smart new mistake proofing but innovation is too. Effectively zero defects is not really achievable in most cases. Defects are largely a matter of definition. As performance improves expectations will often rise. When you eliminate anything you would have called a defect years ago, standards are higher and things that would not have been called defects are no longer acceptable. At some point the system process advances to such a level where zero defects is possible in some cases but in many (say medical care, air transportation, education, computer software, restaurants, government, management consulting, civil engineering, legal services...) I really think it is basically impossible.

W. Edwards Deming, New Economics, page 10: "No defects, no jobs. Absence of defects does not necessarily build business... Something more is required."

Engines of Democracy

2006-01-21T06:08:00.000-08:00

Engines of Democracy by Charles Fishman, Fast Company:

The 170-plus people who work at this plant try to make perfect jet engines. And they come close. On average, one-quarter of the engines that GE/Durham sends to Boeing have just a single defect -- something cosmetic, such as a cable not lined up right, or a scratch on a fan case. The other three-quarters are, in fact, perfect.
...
GE/Durham's continuous-feedback culture -- "We call this the feedback capital of the world," says Paula Sims -- means that while in one sense it's true that no one here has a boss, the opposite is also true: "I have 15 bosses," says Keith McKee. "All of my teammates are my bosses." No one is exempt. "Not long after I started here," says Sims, "an employee came to me and said, 'Paula, you realize that you don't need to follow up with us to make sure we're doing what we agreed to do. If we say we'll do something, we'll do it. You don't need to micromanage us.' I sat back and thought, 'Wow. That's so simple. I'm sending the message that I don't trust people, because I always follow up.' I took that to heart. This was a technician, and I had been at the plant less than 30 days. I appreciated that he felt comfortable enough to tell me this. And I thought, 'This really is a different place.'"

Improving Communication

2006-01-18T19:10:00.000-08:00

How to Communicate with Me by David Anderson. A nice post, with practical advice on improving communication.

He understood that service goes downward in management and he encouraged us to communicate to him, how he could be of service to us. I've used the template I developed for communicating with John as a way to train my staff to better up-manage. It's important not to expect people to do this intuitively. Generally, their only up-management training came when as a child they learned how to manipulate parents to get what they wanted. Manipulation isn't the result we're after. Understanding the correct level to make decisions and how to ask for senior intervention, is what we are looking for. Here is the template...

Effective Innovation

2006-01-17T20:07:00.000-08:00

Overcoming the barriers to effective innovation (pdf format) by Pierre Loewe and Jennifer Dominiquini

The top six obstacles to innovation identified by respondents were consistent across industries:

Short-term focus.
Lack of time, resources or staff.
Leadership expects payoff sooner than is realistic.
Management incentives are not structured to reward innovation.
Lack of a systematic innovation process.
Belief that innovation is inherently risky.

What Should GM Do?

2006-01-16T12:32:00.000-08:00

GM must take back concepts that Toyota has capitalized on by W. Harrison Goodenow:

It still doesn’t have to be this way. The solution lies in better manufacturing engineering and not in Machiavellian marketing. Concurrent engineering, hard prototyping, management by planning, real process control and Deming’s analytic-studies approach to design of experiments are proven approaches to designing and building a quality car competitively. Just ask Toyota.

Lean Accounting

2006-01-15T08:58:00.000-08:00

Lean Accounting (Lean Beans) by Sue Sondergelt

We must get rid of Standard Cost and Absorption Accounting for managing the business. This is 1930's thinking, when business was all labor, little material, and very little overhead. Today business is all material, very little labor, and moderate overhead.

A nice short article introducing accounting issues which influence organizational behavior in the counter-productive ways.

Accountants today need to change the way they think! We need to lose old paradigms! We need to think in terms of processes, not transactions. We need to think Cost Management, not Cost Accounting. We need to be leading Teams, not reporting history.

More lean thinking articles
Profit Beyond Measure: Extraordinary Results Through Attention to Work and People by H. Thomas Johnson and Anders Broms. This book details how two extremely profitable manufacturers, Toyota and the Swedish truck maker Scania, have rejected the traditional mechanistic mindset of managing by results.
Lean Accounting Summit

Lean Consumption

2006-01-12T16:41:00.000-08:00

Lean Consumption by James P. Womack and Daniel T. Jones, Harvard Business Review. An excellent article on the topic of their book: Lean Consumption.

The Principles of Lean Consumption

The concepts underlying lean consumption boil down to six simple principles that correspond closely with those of lean production. (For more on these principles, see our book Lean Thinking.)

Solve the customer’s problem completely by insuring that all the goods and services work, and work together.
Don’t waste the customer’s time.
Provide exactly what the customer wants.
Provide what’s wanted exactly where it’s wanted.
Provide what’s wanted where it’s wanted exactly when it’s wanted.
Continually aggregate solutions to reduce the customer’s time and hassle. This approach has been pursued brilliantly

A very good article. Read it and then get the book.

Lean at NUMMI

2006-01-11T16:35:00.000-08:00

via Lean Manufacturing Blog, Lean at NUMMI by Patrick Waurzyniak , Manufacturing Engineering. An article well worth reading.

NUMMI's production system is patterned closely after TPS, which is constantly changing and being updated, notes Gonzalez-Beltran. The pillars of TPS are the waste-reduction techniques of Just-in-Time production, bringing inventory to where it is needed and at the right time, and also jidoka, which provides machines and operators the ability to detect abnormal conditions and immediately stop work if such conditions occur. Other major lean manufacturing elements being emphasized at NUMMI include standardized work, kaizen events, jishuken (an in-depth week-long workshop similar to a kaizen event), and value-stream mapping, which NUMMI has pushed down into its supplier companies.

Leading Lean: Right Tool, Right Problem, Right Thinking

2006-01-11T16:26:00.000-08:00

via Lean Manufacturing Blog - Leading Lean: Right Tool, Right Problem, Right Thinking

One look at the kanban card in light of lean thinking helps those using it understand how and why it works, because they see it and understand it as a request, not a card. It is a method to connect a customer to a supplier. But most companies implementing kanban systems are not successful at getting the users to understand how and why the tool works. The most common excuse - it is too hard for our people to understand - stands in stark contrast to the simple concept.

You can read about the tools and techniques of lean in any book. You can delegate the application and implementation to just about anyone. But you cannot succeed without internalizing the principles of lean throughout all of management, and using that thinking to guide the implementation, daily decision making, problem solving, managing and coaching.

Carnival of Lean Leadership

2006-01-10T20:15:00.000-08:00

The latest edition of the Carnival of Lean Leadership, includes:

Are Employees Really Your Most Important Asset?
apply kaizen to toy design
one piece flow vs batch when churning out the annual Christmas cards
polyphasic sleep - how can you ignore such a link?

and much much more.

Lean and Six Sigma in India BPO

2006-01-07T11:10:00.000-08:00

Via Panta Rei, Business Process Outsourcing, Meet Value Engineering, Measure for Measure

Dedicated Six Sigma, Lean and Reengineering teams continuously spot and improve processes for Genpact as well as its customers. Supported by 500-plus Six Sigma Black Belts and Master Black Belts, 150 Lean Coaches, these teams have implemented 400-plus breakthrough improvements, 3,000-plus Kaizen improvements that enhanced productivity by 6-8 per cent year-on-year. Genpact shares these benefits with customers," says Bhasin.

For one of its customers consolidating operations from multiple centres to one, offshoring the processes and Six Sigma initiatives delivered a productivity benefit of $300 million, he says.

According to S. Nagarajan, Founder and Chief Operating Officer of 24/7Customer, value engineering is a means of value creation more than cost reduction.

Another interesting quote:

Continued cost inflation, higher wages and a talent crunch threaten India's global sourcing competitiveness. This will allow lower-cost countries to grab market share from India.

Management Lessons from Terry Ryan

2006-01-04T16:34:00.000-08:00

Management Lessons from Terry Ryan: Humility, Stability & Personality from Management by Baseball:

competitors in any endeavor figure anything easy must not be a very important differentiator (bass-ackwards of course, but the erroneous mental algebra is that if it was important and easy both, everyone could/would do it and since they're not doing it and it's easy it, therefore, must not be important. Goofy but widespread thinking. As long as Ryan and his team make this seem like luck or just simple stuff, others won't feel like they're being outfoxed (which is not an incentive to deal with the fox again).

This seems true to me. I can't really understand why people seem unwilling to do the simple known things to improve performance. But there does seem to be the attitude that we need to find secret or fantastic new ideas in order to learn.

"I can just read some idea in a book published 30 years ago and improve that can't be worth doing. That can't be true, if it was everyone would be doing it." Well it isn't quite that easy but it is close. Just do the obvious things that have been well publicized for decades and you will do much better than most.

Ryan says the whole operation has had this 10- to 12 year run of stable key folk. This lowers overhead, as anyone who has ever worked in a healthy small business. Operational overhead shrivels becaus[e] people learn what others' strengths are, learn to trust and leave people alone to do their jobs. Once it becomes apparent that chronic office politics and effort invested in other overhead activities gets no organizational reward, people look for alternatives (like real work) with which to win brownie points.

Avoiding Deming's deadly disease: mobility of top management.

Toyota Manufacturing Powerhouse, Relentless, Detroit News:

Unusual among automakers, "they don't hide a lot," Coventry said. "It's like going to the Super Bowl and having the opposite side throw their playbook on the table. It's as if they feel they can still beat you on the field."

Here is one simple way to get results. Use the Leader's Handbook by Peter Scholtes. Some more great management books.

Lean Manufacturing in the Middle East

2006-01-02T08:12:00.000-08:00

Lean Manufacturing Interview of Mohammed Ajlouni, Managing Director of Jordan Specialized Vehicle:

How should you work with your suppliers in a truly lean environment?

In a truly lean environment, suppliers are partners. They will be expected to supply the required material, the right quality, the right quantity, at the right time, every time. To be able to do this, suppliers have to learn how to take the waste out of their processes. Indeed, many companies have to teach their suppliers how to become lean too.

Lean Retailing

2005-12-28T15:52:00.000-08:00

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.
...
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.

Rebirth of American Industry
Lean Consumption: the Customer's Perspective
The Lion of Lean Womack: "Perhaps the most interesting example is 7-Eleven in Japan. It's probably the leanest grocery company on the planet, doing demand-driven replenishment multiple times during the day."

Selecting Six Sigma Black Belts

2005-12-27T18:03:00.000-08:00

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

2005-12-26T18:16:00.000-08:00

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?

2005-12-22T09:42:00.000-08:00

Using Six Sigma to Reinvigorate Public Corporations by Andre Pope

There must be a national policy that spells out the performance metrics for public corporations. The NPCC will then be charged to evaluate the performance of each public corporation on a quarterly basis. These evaluations will then become benchmarks for judging progress and improvement.

Unfortunately often in government even once good measures are set, see Millennium Development Goals, things still fail. Still this is a good goal. Oregon has done a good deal of work in this area (here are some slides from Washington state.

Lean Health Care: ThedaCare

2005-12-21T14:21:00.000-08:00

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.

TPS v. Lean Manufacturing

2005-12-19T10:29:00.000-08:00

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

2005-12-18T19:01:00.000-08:00

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

2005-12-18T08:01:00.000-08:00

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

2005-12-17T07:40:00.000-08:00

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

2005-12-11T08:02:00.000-08:00

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.

The 70 Percent Solution

2005-12-10T08:17:00.000-08:00

The 70 Percent Solution byJohn 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

2005-12-10T06:03:00.000-08:00

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

2005-12-10T05:31:00.000-08:00

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

2005-12-06T20:07:00.000-08:00

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:

Open Source Management Terms

Google: Ten Golden Rules

2005-12-05T19:40:00.000-08:00

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

2005-12-05T08:50:00.000-08:00

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

2005-12-02T10:04:00.000-08:00

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.