Going lean Brings Long-term Payoffs

Posted on September 10, 2006  Comments (0)

Going lean brings long-term payoffs by John Torinus:

The growing number of Wisconsin manufacturers, and the few service companies, taking the lean journey are learning that it is not a sprint.
…
The immediate paybacks come in the form of saved space, less distance traveled, fewer handoffs, faster throughput, lower inventories and man-hours saved.

I would state the authors next point differently. The early paybacks provide resources to invest in making large more fundamental changes to the organization. Those successes also help convince people these lean ideas have merit. Dilbert does a good job of illustrating how many workers feel about the latest words spoken by their management. Without visible success expecting employees to believe the new management practices is unwise.
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New Lean Blog: Lean Insider

Posted on September 7, 2006  Comments (0)

A new lean blog, from Productivity Press, starts off with: The Low Rates of Lean Implementation:

In presenting the results during a recent Industry Week Webinar, Jane Biddle, VP of Global Manufacturing Research at Aberdeen also set forth a familiar list of characteristics of the best in class: Mastered the basic tenants of lean, dedicated to continuous improvement, top management is committed and embracing a ‘culture of lean.’ So what else is new? We’ve heard it all before, but the majority of companies still aren’t hearing it.

Don’t get me wrong; I believe that support for lean is spreading in the business world, and not just in manufacturing. But there’s still a lot of work to be done.

The most important point there is “the majority of companies still aren’t hearing it.” The difficulty is not in getting top management to say they are committed to continuous improvement and the tenants of lean (though even that might be a challenge). The real difficulty is companies actually committing to lean thinking (or six sigma or Deming or TQM…).

Via: Lean Insider, a New Lean Blog
Directory of management improvement blogs

Thoughts on Hospital Management by Deming

Posted on September 6, 2006  Comments (0)

Dr. W. Edwards Deming, 1951

The latest newsletter from the W. Edwards Deming Institute includes the photo of Dr. Deming from 1951 and: Some notes on management in a hospital by W. Edwards Deming, Ph.D.:

Fifteen hours elapse between dinner and breakfast. I was hungry in the middle of the night, first night. Fortunately had candy bars on hand. I have learned how to acquire and store up food like a squirrel if I get hungry during the night.

Dr. Deming had a sense of humor (the smile in the picture is quite different from the photos I normally see).

A physician cannot change the system. A head nurse cannot change the system. Meanwhile, who would know? To work harder will not solve the problem. The nurses couldn’t work any harder.

I will attend the W. Edwards Deming Institute Fall Conference in Washington DC, October 14th and 15th – send me a note if you plan on attending.

Related: Management Improvement conferences and seminar calendar – PBS Documentary: How Hospitals Heal Themselves – Destroyed by Best Efforts – blog posts on Deming’s management ideas

Toyota IT Overview

Posted on September 5, 2006  Comments (9)

What’s Driving Toyota? by Mel Duvall is an interesting, long article discussing Toyota overall and focusing on Toyota’s Information Technology systems.

Technology does not drive business processes at Toyota. The Toyota Production System does. However, technology plays a critical role by supporting, enabling and bringing to life on a mass scale the processes derived by adhering to TPS.

“What strikes me about Toyota is, if you were to ask them if they have a technology strategy, they would probably say no, we have a business strategy,” says Philip Evans, a senior vice president at the Boston Consulting Group who has studied Toyota. “They have a very clear understanding of the role technology plays in supporting the business.”

This is such a simple point but so hard for many to truly adopt. IT is a support function. IT is a means to an end.

As with almost all of its technology implementations, Toyota started small, carefully rolling out the portal to its Lexus dealers as a test. While it worked out the bugs, it continually expanded the offering, eventually making it available to all 1,200 of its U.S. Lexus and Toyota dealers.

Great way to deploy software: nice use of PDSA methodology.

Related posts: Toyota IT for Kaizen – Planet Kaizen – Toyota Robots – management blog posts on information technology
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Housing and the Economy

Posted on September 4, 2006  Comments (2)

Graph of home prices

Chart of home values from 1890 through 2006 (the chart is a misleading because it crops the lower end at 60 (not 0). The values go from 60-200 (it is an index showing the cost of the standard house in thousands of 2006 $s. House prices have ranged from $66,000-200,000 for the standard house from 1890 to 2006, and never above $130,000 until 2001. Larger view of the graph (via the New York Times) and the data set from Robert Shiller. Graph source: Irrational Exuberance, 2nd Edition, 2006.

Home prices certainly seem like a bubble there doesn’t it? Many news stories now talk about the bursting housing market bubble: The housing collapse heard round the world, Fighting Inflation and Housing Bubbles, Pop Goes the Real Estate Bubble, Bubble Blog, Once bubble bursts, cities feel the pain, Housing bubble has burst, Housing bubble is finally at bursting point…

I wrote about the housing bubble in April of 2005:

I doubt we are at the end of the bubble. However, financial bubbles are very difficult to time. My guess is the bubble will continue for over a year for most, if not all locations in the USA. And unless the bubble continues and prices reach levels much higher than they are now, the end of the bubble will not be a dramatic decline of prices (say an drop in prices of over 25%) in most locations.

I am not convinced that we are seeing a bursting bubble. Certain location are at a risk to experience such declines (most of those areas went up more than 100% in the last 5 years so they still would have large gains over the last few years). The market certainly has moved to the point where a transition to a bursting bubble is much closer than it was a year ago. Even several years ago many proclaimed the bubble was ready to burst, in the face of continuing rapid increases in prices. Today we are essentially at a flat market but the momentum is all toward a decline in prices. So it is certainly possible this post will look foolish in 6 months or a year but I’ll take that chance.
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Quality Technology and Innovation

Posted on September 2, 2006  Comments (1)

The Future of Quality Technology: From a Manufacturing to a Knowledge Economy and From Defects to Innovations (pdf) by Soren Bisgaard:

we need to be good at both breakthrough and incremental innovation. Not either/or, but both! And this is where the quality profession comes in. Much of what quality technology is applied to can broadly be
characterized as incremental innovation.

This article does a good job of explaining why “quality/lean…” should not be viewed as just process improvement, and innovation as something separate. I agree, as discussed in: Quality and Innovation. Many quality and lean tools are focused on process improvement. But those tools are part of a system that requires customer focused innovation (including breakthrough innovation).

Also in this issue of the ASQ statistics division newsletter, is the acceptance speech by the most recent Hunter Award (named for my father) winner: Douglas M. Hawkins.

Related: Curious Cat Management Improvement Library – Soren Bisgaard 2002 Hunter Award speech – more articles by Soren Bisgaard – Deming on Innovation – Better and Different – Innovation at Toyota – Six Keys to Building New Markets by Unleashing Disruptive Innovation – Global Manufacturing Data by Country – Manufacturing Jobs Data: USA and China

More Lean Manufacturing Podcasts

Posted on September 2, 2006  Comments (0)

Another resource is providing worthwhile lean manufacturing podcasts. The first of an eight video podcast series by Gary Conner is available now. He is author of Lean Manufacturing for the Small Shop (Shingo Prize – winner) is a good introduction to lean manufacturing ideas.

I had some trouble getting the podcast to play properly (it is mp4 format, not mp3): what worked for me was downloading the free: VLC Media Player.

Related: blog posts on management improvement webcasts – Google Videocasts on Customer Focus – Lean Podcast: Bodek
– Lean Blog: Liker

Gary Conner also wrote Six Sigma and Other Continuous Improvement Tools for the Small Shop

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