Monthly Archives: October 2006

Terex Handlers: Lean Manufacturing

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.
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Simple Cell Phone

Awhile back we posted about the lack of simple phones now Motorola is looking at this market. See: Motorola’s Dumb Phone:

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.

Related: Complicating SimplicityEliminating Complexity from WorkAckoff, Idealized Design and Bell LabsNo More Lean Excuses

Lean Manufacturing Web Video

Continuous Improvement Video from Genie Industries, is an interesting lean manufacturing video (via the great Panta Rei blog):

The video also shows examples of their moving line, andon and pull chord, visual production status boards, point of use tools, pokayoke, lineside delivery of parts by suppliers, etc.

The short video gives a nice quick overview of some lean ideas with visual examples. Recommended.

Related: management webcast postslean thinking – more on pokayoke and other lean terms.

Deming in Japan

Great article by John Dowd, How the Japanese learned to compete:

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.

Related: Management Improvement HistoryDeming on ManagementDeming related blog postsPDSA

Management Improvement Search Engine

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.

Try our Management Improvement search engine

This searches, using Google technology, over 50 management improvement web sites that I have selected. Sites include: (this blog, Curious Cat Management Improvement Connections, Curious Cat Management Library…) and the best management improvement sites (in my opinion), including: The W. Edwards Deming Institute, Lean Blog, Panta Rei, Center for Quality and Productivity Improvement, Superfactory, Got Boondoggle?, In2:InThinking Network, Peter Scholtes, Center for Quality of Management, and many more. I will also be adding more; please share your suggestions.

Add the Management Improvement Search box to your site.

Lessons from Toyota’s IT Strategy

Another interesting post from Panta Rei: Lessons from Toyota’s IT Strategy:

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.

Related: Infromation Technology management improvement related postsToyota IT for KaizenDell, Reddit and Customer FocusIT Management Training Program

Deming Prize 2006

The Union of Japanese Scientists have announced the 2006 Deming Application Prize winners:

Also announced:
The Deming Prize for Individuals: Dr. Yoshinori Iizuka, Professor, Graduate School of Engineering, The University of Tokyo (Japan)

The Japan Quality Medal: GC Dental Products Corp. (Japan)

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.

Related: 2005 Deming Prize2004 Deming PrizeDeming Prize informationDeming management method related blog posts

Management Consulting – Web Site Evidence

In, How Wipro Adapted the Toyota Production System to IT Work, Jon Miller highlights several keys to adopting lean thinking: involve everyone, learn and then do, and learn together.

In Wipro’s case they should also take advantage of what is available on lean IT thinking such as: Lean Software Development.

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).

Related: IT related blog postsToyota IT OverviewIndian Firms Learning From ToyotaIf Tech Companies Made Sudoku
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Deming Institute Conference: Tom Nolan

I attended the annual W. Edwards Deming Institute conference this weekend: it was quite good. Tom Nolan lead off the conference with: Developing and Applying Theory to Get Results.

He discussed the theory of knowledge: how we know what we know. See my attempt to introduce the idea of the theory of knowledge within Deming’s management system. It is probably the least understood of Deming’s four areas of profound knowledge, the others areas are: knowledge of variation, appreciation for a system and psychology.

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.
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Lean Canadian Company

Lean and mean might not be enough

“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.

Related: Global Manufacturing Jobs DataGlobal Manufacturing Data by CountryLean Manufacturing ArticlesToyota Production System posts
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Designing In Errors

TiVo’s “self-destruct button” destructs

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.

Related: Usability FailuresDell, Reddit and Customer FocusComplicating SimplicityManagement Improvement Dictionary

Righter Performance Appraisal

Speaking of “doing the wrong things righter” Microsoft has eliminated forced rankings in performance appraisal: to do performance appraisals righter.

Microsoft exec puts her stamp on human resources:

The forced curve was company policy. And it climbed up a list of employee gripes that grew as Microsoft’s stock, which accounts for much of the company’s compensation, languished.

In May, after barely a year as Microsoft’s human-resources chief, Lisa Brummel swept away “artifacts of the past,” starting with the widely disliked forced curve.

Good (see mini-Microsoft and our previous related post: Performance Without Appraisal), but the rest of the artifacts of the present should also be swept away.

Related: Failed Practice: Forced RankingNew Rules for Management? No!Performance Appraisal ProblemsDeming on Performance AppraisalsProblems Caused by Performance Appraisal
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Doing the Wrong Things Righter

The more we manage, the worse we make things by Simon Caulkin

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.

I agree. There is too little understanding of what is important and too much focus on what amounts to tampering. As regular readers of this blog know I think Ackoff is great. Dr. Ackoff related info: articles by Russ AckoffDoing the wrong things right podcast by AckoffOn Learning and Systems That Facilitate It by Russel Ackoff

Related: Forget TargetsLife Beyond the Short TermManaging with Control ChartsManagement Advice FailuresLearning, Systems and Improvement

Hiring the Right Workers

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.

Seth Godin had a very good post recently, The end of the job interview:
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Google Shifts Focus

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.

Google Puts Lid on New Products

Co-founder Sergey Brin is leading a companywide initiative called “Features, not products.” He said the campaign started this summer…

This change while significant I believe is just an adjustment. Google will continue to march to its own tune: which is a good thing.

Related: Chaos Management (by design) at GoogleGoogle: Experiment Quickly and OftenGoogle: Ten Golden Rules

Not Innovation but Still Interesting

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:

How to Give Good Feedback by Seth Godin
The Accidental Guru (on Malcolm Gladwell) by Danielle Sacks
Built to Flip by Jim Collins
A Design for Living by Linda Tischler
and Join the Circus by Linda Tischler

The last one is about Cirque de Soleil which is an innovator (though even in this case it seems better might be more apt than different but maybe I am being too stingy). Read more blog posts on innovation.

More on Overpaid CEO’s

CEO pay up big – but not performance:

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.

Related: Excessive Executive PayWarren Buffet on ridiculously out of line executive compensationExcessive CEO PayMore on Obscene CEO Compensation

Evidence-based Management

Bob Sutton’s writing includes the excellent article “Management Advice: Which 90% is Crap?” (which we discussed in: Management Advice Failures) and the Knowing Doing Gap. I just discovered his blog today which is quite good: Work Matters. A recent post – Hand Washing and Evidence-based Management, includes some good advice on data and process improvement:

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.”

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The State of Lean Implementation

Interesting survey by the Lean Enterprise Institute notes the following as the major obstacles to transforming to a lean organization.

1 Lack of implementation know-how: 48%
2 Backsliding to the old ways of working: 48%
3 Middle management resistance: 40%
4 Traditional cost accounting system doesn’t recognize the value of lean: 38%

I wonder if asking why several more times would help? It is not as though the difficulty in adopting lean thinking is unique. I don’t know of a management improvement method (TQM, BPR, Six Sigma, ToC…) that easily leads to changing the way a company operates.

via: lean blog

Why Pay Taxes or be Honest

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).
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