New Look American Manufacturing

Posted on June 30, 2006  Comments (2)

The New Look American Manufacturing by Dale Buss:

The evidence shows that American manufacturers that revise their processes and integrate technology in ways that allow them to stay close to customers can survive the onslaught from China. Adaptability is key above all other factors.

I agree by applying lean manufacturing and other management improvement ideas manufacturers can (and are) prospering in the USA. I don’t think one factor is the key. Many factors determine whether the USA will continue to lead the world in manufacturing. The USA has to continue to support a dynamic economic system, maintain a transportation system, improve the health care system, improve the educational system, maintain the rule of law, reduce excessive legal costs, improve the management of manufacturers etc.. Each country has to work on these and other systems to stay competitive globally.
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Trust: Respect for People

Posted on June 30, 2006  Comments (2)

Respect for People, Toyota.co.jp

Respect for People has always been important to Toyota, and nowhere is this more evident than in the relationship among Toyota associates.
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There has been only one exception to this rule throughout Toyota’s entire history. In June 1950, during a postwar period of great hardship in Japan, the company was forced to choose between corporate restructuring or risking complete collapse. Then-President Kiichiro Toyoda battled for months for the sake of his employees, but ever-worsening conditions showed the company to be unsustainable without significant change.
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Management then vowed that this would be the first and last time such an event would come to pass at Toyota, and, in a gesture of respect to former employees, Kiichiro resigned from his position as president of the company.

A bit different than laying off tens of thousands of workers and then taking huge bonuses. And in case you don’t know, I think Toyota’s approach is more honorable and what should be aimed for (I wouldn’t say the president always should resign but it should be a significant admission of failure).

Does this mean no workers ever come into conflict with Toyota management? No. But Toyota’s respect for workers is qualitatively different than that of most companies.

American Manufacturing Successes

Posted on June 29, 2006  Comments (0)

Lean and Unseen, The Economist:

But someone forgot to tell American manufacturers the bad news. Most of them have enjoyed roaring success of late. Net profits have risen by nearly 9% a year since the recession in 2001 and productivity has been growing even more rapidly than is usual during economic expansions

Yes, as I have been saying the demise of manufacturing in the USA has been exaggerated in the popular press (Global Manufacturing Data by Country – US Manufacturing Plant Construction – Manufacturing and the Economy). Manufacturing jobs have decreased dramatically, both in the USA and the entire world. This decrease of manufacturing jobs worldwide is the most significant change. Read more

Innovation Needed to Keep USA Manufacturing?

Posted on June 29, 2006  Comments (2)

ICAR touted as example of innovation needed in U.S.

“Our ace in the hole is innovation, and that’s why intellectual property is so important to develop,” Graham said. “How do we protect that advantage within the rule of the law?”

Lindsey Graham and Hillary Clinton are co-chairs of the United States Senate Manufacturing Caucus. Is innovation our ace in the hole? I don’t think so.

There is no ace in the hole. If countries want to keep manufacturing jobs they are going to have to do lots of things right. No country has such an advantage they can expect to rely on their country being more innovative (of offering cheaper labor or their citizens working harder or…) than all the other countries in the world.

Innovation has been an advatage for the USA. It should continue to be an advantage for the USA but many other countries will innovate very well (Japan, Germany, China, Korea, Singapore, England…). Read more

Gas Tax

Posted on June 29, 2006  Comments (1)

An Increase in the Gas Tax Would Hurt Consumers and Slow the Economy

Gross Domestic Product would decline by $6.5 billion per year, in real terms, from 2005 to 2014. In other words, this $131 billion in government revenues would shrink the economy by $65.5 billion.

There would be, on average, 37,000 fewer job opportunities each year. That works out to one lost job for every $351,000 in new taxes, which is equal to 11 years of work at average yearly wages.

Sure sounds bad. This was written in 2004 opposing a 5.45 cent increase in the gas tax. Of course gas price have gone up more than 10 times that amount. However those increased prices (which have the same negative impact of a tax increase go to foreign producers and the oil companies instead of the taxpayers. We would have been better off increasing the gas tax 50 cents a gallon and cutting the huge deficit instead of accepting such arguments.
Read more

Lean Furniture Manufacturing

Posted on June 28, 2006  Comments (0)

Pulaski’s passion for lean plumps up dealer service by Jeff Linville

Pulaski Furniture says it has cut inventories, improved delivery times and reduced waste as part of a new emphasis on lean manufacturing.
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This led to cutting out about 100 feet of conveyor line to reduce inefficiency, and moving machinery and other equipment around in the plant; a few new pieces were added too. Reducing waste didn’t mean cutting any jobs, Oakley said. Instead, some workers were reallocated to other areas as needed.

A driving influence in the decision to remake the company was to reduce inventory both for Pulaski and its retailers, said Oakley.

Reducing waste without cutting jobs it one sign of success in my book. In some instances it might not be possible, and job cuts are required but I would look at that as bad sign. Possibly necessary to save the remaining jobs but certainly something to be upset with not brag about. If a lean effort brags about job cuts I think that is a very bad sign.

Our Policy is to Stick Our Heads in the Sand

Posted on June 28, 2006  Comments (2)

Conversation with Boston Volkswagen by Paul Graham

I recently looked into getting a new car. The Kafkaesque conversation that resulted would have been funny if it were happening to someone else. If only Volkswagen could redesign the sales process to be as good as their cars….

For me it did happen to someone else so it is funny :-) However, I run across similar thinking and “customer service” and then I don’t find it as funny. The failure to failure to adapt to a changing world (the internet is here to stay folks) is amazing. Most companies would benefit from just adapting to the changing world without elaborate innovation plans. Innovation is great, but challenging. Don’t ignore the possible improvements short of innovation.
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Innovation Example

Posted on June 27, 2006  Comments (3)

graphic of airline ticket prices over time

Farecast is a cool internet application, and one that might actual save you money to buy, say a digital camera.

Farecast provides data and analysis to those looking to purchase airplane tickets. The graph above shows ticket prices for tickets between Boston and Washington DC over the last 60 days. I have thought for quite some time I need better data to make the best purchase decisions. Farecast seems like a great fit.
Read more

Employee Ownership

Posted on June 26, 2006  Comments (1)

H.C. Miller workers to earn ownership by Richard Ryman.

I have always liked the idea of employee ownership. To me this can be a great help in creating a system where employees, owners, customers, suppliers work together. Alone an ESOP does little. But as part of a system of management it is something I think can be beneficial.

Employees of H.C. Miller Co. have learned to look at their company differently. And because they did, on July 31 they will become its owners.

The 120 or so employees of the 118-year-old company will implement an Employee Stock Ownership Plan. An ESOP is a retirement plan in which employees are assigned shares in the company annually. Those shares accumulate in a retirement account.

Employees shouldn’t allow too much of their savings to be tied to the company (see Enron). Of course those ignoring this advice that worked for Microsoft, Walmart… in their early days did quite well. Read more

Universal Health Care in San Francisco

Posted on June 25, 2006  Comments (0)

San Francisco’s Latest Innovation: Universal Health Care by Laura Locke:

Starting in early 2007, every uninsured San Franciscan can seek comprehensive primary care at the city’s public and private clinics and hospitals, including top research facilities like the University of California at San Francisco. Coverage includes lab work, prescriptions, X rays, hospitalization and surgery. Annual funding for the $203 million program will come from re-routed city funds (including $104 million that now goes toward uninsured care via emergency rooms and clinics), business contributions and individual enrollment fees, which will be income-adjusted.

This needs to be approved by the city council to go into effect. It is far from perfect but the health care system is broken and we need actual innovation to find workable solutions. The effects of the health care system on the economy are huge. Health care costs are a huge part of both losing jobs to other countries and eroding pay rates.

We need to experiment with ways to improve the health care system.

Toyota IT for Kaizen

Posted on June 22, 2006  Comments (1)

How Toyota Uses Information Technology (IT) for Kaizen by Jon Miller. He quotes Toyota’s CIO from the Japanese article:

Part of my job as CIO is to take on these company-wide issues and use this data to make improvement suggestions when I have an opportunity to meet with the managing executives.

Of course, it requires more than me making suggestions for Toyota to make good use of IT. The departments who are the users of information technology must be motivated for IT use to spread. Fortunately, the departments who are users of information technology frequently contact me to ask “Can we use IT for this?”

Working in Information Technology myself I see many great uses for IT. I also see all sorts of poor attempts to try creating IT tool for quality (including lean) tools that work much better in there original state. Read more

Hospitals, Heal Thyselves

Posted on June 22, 2006  Comments (0)

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

Posted on June 22, 2006  Comments (12)

graph of excessive CEO pay

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:
Read more

Edward Tufte’s new book: Beautiful Evidence

Posted on June 21, 2006  Comments (3)

Cover image of Beautiful Evidence

Beautiful Evidence by Edward Tufte is now available. Beautiful is the right word. Tufte’s books are an example of what can be created when someone truly loves what they do and takes pride in every detail of their work. His books are excellent.

In Beautiful Evidence, Tufte explores how to best display evidence looking at: mapped pictures; sparklines; links and causal arrows; words, numbers and pictures together; the fundamental principles of analytical design; corruption of evidence; and more. Read more

Dr. Shigeo Shingo

Posted on June 20, 2006  Comments (1)

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.

Curious Cat Science and Engineering Blog

Posted on June 17, 2006  Comments (0)

We have updated the design of the Curious Cat Science and Engineering Blog. Please share your comments on the design: we plan on moving this blog to a similar design. Read more

Health Care Crisis

Posted on June 16, 2006  Comments (2)

Probe finds nation’s emergency care system at ‘breaking point’ (the San Jose Mercury News broke the link so I removed it – poor usabilty on their part) by Lauran Neegaard:

It’s a sobering symptom of how the nation’s emergency-care system is overcrowded and overwhelmed, “at its breaking point,” concludes an investigation by the Institute of Medicine.

The spate of similar articles reminded me of the recent post by Mark Graban: Stop calling it “ER Congestion”. He states: “It’s not an ER problem, it’s a systemic hospital problem.” I agree. The health care system is broken and has been for a long time. Symptoms like the huge cost of health care, medical errors, ER problems etc. are all related. Read more

Thinking About the Future

Posted on June 15, 2006  Comments (0)

In Thinking About the Future Russ Ackoff does his usual great job of providing insightful ideas while not being afraid to be controversial. In this speech Dr. Ackoff discusses his thoughts on the issue of global development at the occasion of his receipt of the Tallberg Foundation / Swedbank Leadership Award:

So much time is currently spent in worrying about the future that the present is allowed to go to hell. Unless we correct some of the world’s current systemic deficiencies now, the future is condemned to be as disappointing as the present.My preoccupation is with where we would ideally like to be right now. Knowing this, we can act now so as constantly to reduce the gap between where we are and where we want to be. Then, to a large extent, the future is created by what we do now. Now is the only time in which we can act.

via: Thinking about the Future and Globalization

Lean National Health System

Posted on June 14, 2006  Comments (1)

A presentation today, Lean Thinking For the NHS, by Dan Jones is getting press coverage in England.NHS should embrace lean times:

The improvements came through examining the patient’s whole experience, and removing the sometimes-fatal delays in getting them into the operating theatre, such as creating a faster process for radiology and removing unnecessary paperwork.These changes also lessen staff frustrations by allowing them to spend more time helping patients. Also, by cutting length of stay and complications, costs should also start to fall, although Mr Fillingham – former director of the NHS Modernisation Agency – said it will take several years for the savings to become substantial.

Read more

Brainstorming Under Attack

Posted on June 14, 2006  Comments (0)

Brainstorming under attack: 8 errors in the WSJ. The WSJ has their 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.

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