Here is a short article about a company implementing lean: Terex Handlers implementing lean manufacturing. The article doesn’t really shed any new insight but it is another good example of success (which are nice) and I like the truth behind this statement:
Increased efficiency hasn’t led to layoffs at the company. In fact, the company has gone from 65 to 118 employees since 2004.
Lean thinking is about eliminating waste not employees. Yes, a company may be able to improve so the same production requires fewer workers but the goal should be to grow the business to redeploy those people. If the company fails to make that happen, it might be necessary to layoff workers. But that is a sign of failing not successful lean thinking. Continue reading →
Looking for more customers, the company did extensive market research in poor countries. The result: the company’s slimmest phone yet, boasting cutting-edge technology that–rather than adding complexity–extends battery life and makes the phone simpler to use.
I don’t think these features are only desired in poor countries, but I am not basing that on any market research just my opinion. Complex devices with many points of failure (both technical failure and user inability to figure it out) should not be the only option. Simple, easy to use, reliable devices would have a big market. Creativity is not just about more complex devices.
This is a key lesson because with attention to quality, the company begins a journey on a “virtuous circle” of simultaneously improving quality and lowering costs. As quality improves, there are less rework, scrap and waste of all kinds. As products become more attuned to customers’ needs, there is less effort spent producing items people don’t want. Costs go down. Quality improves. Thus paying attention to quality becomes the primary competitive strategy. Understanding this is vitally important.
Google has launched a nice new feature that allows users to create customized search results. I have talked about this idea before: Improve Google. Last year I posted about Rollyo, which allowed what Google now does (using Yahoo for the underlying search). I liked Rollyo but the new Google offering is better, so I have switched to using Google.
In order to use IT effectively as a tool, we think that it is important for the top management to not see IT as something that can be applied superficially. First they must see the facts of the business, the facts of the gemba, and on top of this foundation further consider the feelings of people and how to motivate them. Then rules must be written and standardization must be done properly on the basis of the global business framework, before IT is implemented.
The words hardly seem revolutionary. The importance, I believe is understanding how differently Toyota acts upon what it says. For more on Toyota IT see: Toyota IT Overview.
Recently Thailand and India had been dominating the awards: 3 of 4 in 2005, 6 of 6 in 2004, 6 of 7 in 2003, 2 of 2 in 2002 and 3 of 4 in 2001. Prior to that trend, nearly all awardees were based in Japan. Sanden International is the third USA based organization to win: Florida Power & Light Company (1989), AT&T Power Systems (1993).
Companies are eligible for the Japan Quality Medal only after they have received a Deming Prize. An official award ceremony will take place November, 7th.
As I have mentioned before a look at Wipro’s web site does not provide me much confidence in their commitment. Read their overview of IT services offered – just the standard language, nothing that provides details on their lean thinking. The web site of management consulting firms provides a great way to judge what they actually value. Maybe you shouldn’t judge a consulting firm by its web site but it seems like a pretty good indicator to me (even small firms can posts thoughts on a blog or a couple articles).
Theory of knowledge is also something people have difficulty relating to what they do every day. The most obvious connection, I believe, is the understanding that much of what is “known” is not so. People manage with faulty beliefs. With an understanding of the theory of knowledge decision making can be guided to avoid the pitfalls of basing decisions on faulty beliefs. This is, of course, just one aspect of how the theory of knowledge impacts Deming’s management system.
Tom Nolan also discussed some interesting work that Paul Carlie and Clayton Christensen are doing based on descriptive “theory” and normative theory. My simple explanation is that descriptive theory reports on what is seen. This can be interesting, but has problems when people assign causation based on just observation (without experimentation). Normative theory involves testing theories (such as is done with the scientific method). Good article on this by Carlie and Christensen: The Cycles of Theory Building in Management Research. Continue reading →
“I wanted all the machines working all the time,” Afeyan said as he watched a worker moving a stack of veneers into position for “cooking” in one of the pressing machines.
That was before a “lean manufacturing” exercise changed Afeyan’s mind about how his factory should be organized.
The article discusses that while great strides have been made the threat to success still exist from foreign (China) competition. And discusses that the company is trying to focus on production that is more difficult for foreign competition (short runs, small lead times). It is also one of the few articles to acknowledge that manufacturing production is up while manufacturing employment is down.
In so doing, they’ve created a bunch of potential failures in which the user is locked out of her own equipment.
It’s like those movies where an accident or a bad guy triggers the “self-destruct button” on a spaceship. Often the self-destruct button is locked away behind plexiglas and padlocks for safety, but wouldn’t it be safer not to include a single command that blows up the whole space-ship?
You know that is a pretty good explanation of the reasoning behind mistake proofing: eliminate as many possibilities for errors as possible. When you design products that create more possibilities for more errors you create products that will in fact fail more often.
The distinguished systems theorist Russ Ackoff describes the trap as ‘doing the wrong thing righter’. ‘The righter we do the wrong thing,’ he explains, ‘the wronger we become. When we make a mistake doing the wrong thing and correct it, we become wronger. When we make a mistake doing the right thing and correct it, we become righter. Therefore, it is better to do the right thing wrong than the wrong thing right.’ Most of our current problems are, he says, the result of policymakers and managers busting a gut to do the wrong thing right.
The job market is an inefficient market. There are many reasons for this including relying on specification (this job requires a BS in Computer Science – no Bill Gates you don’t meet the spec) instead of understanding the system. Insisting on managing by the numbers even when the most important figures are unknown and maybe unknowable. Using HR to find the right person to work in a process they don’t understand (which reinforces the desire to focus on specifications instead of a more nuanced approach). The inflexibility of companies: so if a great person wants to work 32 hours a week – too bad we can’t hire them. And on and on.
At first I titled this post the Hiring Process but that creates a analytic view of the hiring process separated from the important part which is workers actually working. The hiring process just provides resources that are needed. But in many places it is the reverse, the hiring process provides resources and then the rest of the process deals with that output as best it can.
It appears Google has decided it is time to put more resources into improving their many existing products (Gmail, News, Video, Maps, Picassa, Spreadsheets, Checkout, GoogleTalk, AdSense for Radio, GoogleReader, BlogSearch, GoogleGroups,…). That makes sense to me.
When Google had few other products I think it was likely wise to push a bunch of stuff out the door quickly. Now that they have a bunch of decent, but not really great products, adjusting and taking the opportunity to improve those product makes sense. In my opinion they have always been very focused on search and AdWords (The 70 Percent Solution) though even that could be improved some as Google has acknowledged.
10 years of the most innovative ideas in business in not packed with ideas on innovation: it was obviously titled by someone hoping to catch the interest of those following the innovation fad. Still it has interesting stories originally published in Fast Company, including:
The Corporate Library analyzed the compensation of nearly 1,400 chiefs for its annual report on CEO pay. The group’s median total compensation rose 16 percent between 2004 and 2005. A year earlier, CEOs got a bump of 30 percent in total compensation, which includes salary, bonus, perks, exercised stock options and other long-term incentive pay.
This is more bad news. As Drucker, Buffet and many others have said CEO overpayment is bad for companies, workers and shareholders. Even when they are fired they often take away tens of millions of dollars. Absolutely ridiculous. I sure hope the bubble of CEO pay bursts soon – the only suitable comparison this century is the internet stock bubble. But every year it just gets worse. I would add Overpaying CEO’s to Deming’s seven deadly diseases of western management.
I’ve written before about how handwashing by medical care workers is one of the most well-documented preventable causes of death and disease in health care settings.
Self-report data can be worse than useless. They describe an Australian study where 73% of doctors reported washing their hands, but when the docs were observed by a researcher only 9% were seen washing their hands.
The way they finally got compliance up to nearly 100% was to have a group of the hospitals more influential doctors each press their palms on plates that were cultured and photographed, which resulted in images that “were disgusting and and striking, with gobs of colonies of bacteria.”
This kind of stuff makes me mad. I was taught about robber barons in school (or actually I think by my uncle but…). And what I was taught was that business used to be seen as an amoral area. But then society agreed (or rather it no longer was an accepted excuse to claim business was an amoral area) that morality applied to whatever you did, whether you were at work, or not.
But we keep getting these continuing examples that are so distressing: Enron, Worldom, Tyco, Accenture, HP… It is so disappointing that such behavior is mainly excused (until finally the evidence presented is so damning that most stop defending the specific case in question). Continue reading →