Transforming With Lean

Posted on January 31, 2007  Comments (1)

Dave Gleditsch, Chief Technology Officer, Pelion Systems, makes many excellent points in: Transforming Your Business To Lean: Lessons Learned:

First and foremost, we should always keep the customer at the forefront of the planning and implementation process. A key to success is in being able to find the customer in every single metric you choose to measure your Lean transformation progress by.

So ofter measures become the focus and the reason for improvement is obscured. Improvement should eliminate waste and improve value to the customer. Measures should help determine the success along that path but improving the numbers is not the aim, the numbers are merely proxies for that aim.

In truth, there are a variety of best practices and methods that will drive significant Lean improvements. American Standard had a significant variety of products and manufacturing processes

Successful management improvement is not about mindlessly applying quality/lean tools. The tools and concepts are very helpful but then people must make judgements about what is needed, what to emphasis, where to focus, how to proceed given the current organization…
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Encourage Improvement Action by Everyone

Posted on January 31, 2007  Comments (0)

Centralizing decision making is not an effective way to manage organizations. Organizations need to encourage improvement by everybody in the organization. We need to create a system where that is encouraged and supported.

However, there can be problems with just making improvements individually. We tend to overreact to variation. Therefore we tend to tamper with systems which actually increases variation and reduces performance. Also there can be effects on other parts of the system due to a change that are not obvious at the point of change. We need to remove undue bureaucracy. However, it is good to remember that, such efforts are much more effective and safe when supported by a good system (standardization, PDSA, visibility, communication, lean thinking, well trained workforce…).

Without an understanding of systems and interactions sometimes changes are made without an understanding of the consequences those changes. The beer game is a good example of one way this can cause problems (people don’t always understand all the consequences of their actions). To be clear I agree with setting up systems that allow people to make improvements in the workplace. Just be cautious to avoid tampering.
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5 Million Lives Campaign

Posted on January 30, 2007  Comments (0)

IHI has created the 5 Million Lives Campaign in the wake of the successful saving 100,000 lives campaign.

Despite the extraordinary hard work and best intentions of caregivers, thousands of patients are harmed in US hospitals every day. Hospital-acquired infections, adverse drug events, surgical errors, pressure sores, and other complications are commonplace. Based on data collected over several years from multiple partner institutions, IHI estimates that nearly 15 million instances of medical harm occur in the US each year – a rate of over 40,000 per day. This is a burden larger than most patients and professionals, and even some health care researchers, realize.

It is time to declare this toll unacceptable; time to end it.

IHI understands how to manage improvement: this campaign has great possibilities to improve the health care system. See previous posts about IHI’s work: Going Lean in Health Care – Seven Leadership Leverage Points – Fixing Health Care from the Inside – Deming Institute Conference: Tom Nolan

Toyota’s Nick Dieltiens Discussing Lean Ideas

Posted on January 29, 2007  Comments (0)

Another YouTube video on Toyota Management (produced by a software vendor selling to Toyota Europe): Toyota’s Nick Dieltiens Discussing Lean Techniques. He is responsible for strategic planing for Lexus Europe and was previously for the lean operations office for Toyota and Lexus Europe. He discusses adopting lean thinking in sales and marketing. the consultant’s web site includes another webcast with Nick Dieltiens. In a previous post we comment on a good article reviewing Toyota IT Systems. The videos don’t provide as much insight as that article but have some interesting points.

Toyota Business Webcast

Posted on January 29, 2007  Comments (0)

Interesting, 4 minute, segment on Toyota management practices from a business TV show.

via:Lean Six Sigma Academy Blog

Related: New Toyota CEO’s Views – What drives Toyota? – Toyota – Repect for People – Dell Falls Short – posts on management webcasts

Top 10 Manufacturing Countries

Posted on January 28, 2007  Comments (7)

The newest data from the UN confirms most of the recent trends in manufacturing output – most notably that China continues to grow dramatically. The data also shows a stagnation in USA manufacturing output over the last several years, though the USA remains by far the largest manufacturer. The most significant news from this latest data, I believe, is that that manufacturing output growth in the USA has been slower than global manufacturing output growth from 2002-2005. This was not the case prior to 2002. I will be writing more on this data in the Curious Cat Investing and Economics Blog. UN Data, in billions of current US dollars:

Country 1990 1995 2000 2001 2002 2003 2004 2005
USA 1,040 1,289 1,543 1,460 1,471 1,488 1,545 1,493
Japan 809 1,217 1,033 857 807 886 962 964
China 143 299 484 527 573 664 788 895
Germany 437 517 392 389 407 490 566 594
United Kingdom 207 221 230 218 222 239 283 no data
Italy 240 226 206 205 218 259 295 291
France 200 233 190 185 192 228 256 253
Korea 200 233 190 185 192 228 256 253
Canada 92 100 129 119 120 149 170 196
Brazil 117 149 120 102 95 109 130 171
Spain 108 107 98 100 108 134 153 160
Mexico 50 55 107 110 111 104 111 122
Russia 201 104 73 77 54 64 92 117
India 50 60 67 68 72 84 100 116

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Game Theory Management

Posted on January 26, 2007  Comments (0)

Interesting article on applying game theory to business decisions. Game theory is a tool that is not often used. Though most organizations are probably better off improving how they use the rest of their management tools, it is fun to read about and does have merit in the right situations. 16,777,236 – That’s the number of outcomes that are possible when eight competitors each consider three strategic options.

California Institute of Technology professor R. Preston McAfee, a leading game theorist who helped the U.S. government design auctions for broadband spectrum, says doubters ought to remember that game theory is a tool, not an answer. “Game theory is sometimes criticized because it doesn’t actually completely solve the problem,” McAfee says. “On the other hand, the exercise of applying game theory very often clears up things that you can dispense with—issues that aren’t salient to the decision process. Sometimes just thinking it through identifies strategies that you hadn’t thought available.”

via: Globe and Mail on game theory

Innovative Marketing Podcast

Posted on January 25, 2007  Comments (4)

Lego Mindstorms

This podcast on Lego Mindstorms NXT, Lead Users, and Viral Marketing is interesting. The discussion does a good job of explaining how factors like web 2.0 and “open source” can allow business to operate in a new way and take advantage of new opportunities. Understanding these ideas is much more innovative than most of what I read in the “business press.” And the message is explained clearly, so one does not need to understand these concepts to appreciate the business opportunities. See links below: Lego Mindstorms are also just cool.

via: eContent

Related: Open Source for LEGO Mindstorms – Lego Learning – science and engineering podcast libraries – Gadgets and Gifts – Intellectual Property Rights and Innovation – Better and Different

Toyota’s Real Secret?

Posted on January 24, 2007  Comments (0)

Well actually it isn’t a secret – it is in fact the Toyota Production/Management System. Maybe, if people assume the TPS is about improvement in the factory alone, then they could miss the true importance as the management system that it is. So I quibble a little bit with the title but this is actually a good article by John Teresko, Toyota’s Real Secret: Hint, It’s Not TPS:

Toyota’s time-to-market metrics are one measure of its lean product development accomplishments. For example, only 22 months were required to bring Toyota’s U.S.-developed Tundra pickup truck from styling freeze to start of production, says Yuichiro Obu, executive chief engineer at Toyota’s Technical Center in Ann Arbor, Mich. That contrasts with the 30 to 40 months that were commonplace in the U.S. during the late 1980s. Toyota averages 24 months, regularly reaches 15 months and has had instances as low as 10 months.

One secret behind Toyota’s lean product development success is the same one supporting TPS — the Toyota Management System and its dedication to continuous improvement. Morgan and Liker emphasize Toyota’s commitment to “the importance of appropriately integrating people, processes, tools and technology to add value to the customer and society.”

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It’s Easy Being Lean

Posted on January 23, 2007  Comments (1)

Nice article, nice title too, a bit overoptimistic maybe but still nice :-) – It’s Easy Being Lean:

The program advocates lean manufacturing, whose main tenet is that the processes used to produce things can be made more efficient and therefore more profitable. The steps can be as simple as bringing the machines used to create goods closer together on the plant floor. Since lean manufacturing is a permanent way of doing business, not just a short-term fix, supporters of the concept say it can take years to implement fully.

Loderstedt says NJMEP helped companies develop 338 projects last year. Of these, 160, or 47 percent, focused on applying the principles of lean manufacturing. That was up from about 25 percent in 2003, he says.

NJMEP is part of the national Hollings Manufacturing Extension Partnership, which falls under the U.S. Department of Commerce’s National Institute of Standards and Technology. There are 350 such locations throughout the United States and Puerto Rico, which operate through a mix of state and federal grants and revenue from private companies.

Related: Wisconsin Manufacturing – Global Manufacturing Jobs Data – Applied Quality Engineering Education – lean thinking articles

Focus on Quality and…

Posted on January 23, 2007  Comments (0)

Recipe For Success:

“Recipe for Success: Focus on Quality, Reduce Work-in-Progress, Balance Capacity against Demand, Prioritize” These four statements really boil down all my management teaching in to four actionable directives that will deliver significant improvement.

I have discussed some of his ideas before in, for example, Agile Management (which includes a link to a interesting interview on David Anderson’s work at Microsoft incorporating Deming’s ideas and Theory of Constraints. Others might have their own focus but creating a focus to your efforts is valuable.

I don’t have mine as nicely framed but for me: build capacity (of the organization, which largely means building the capacity of the people) and seek systemic improvement (not how to improve the results today or tomorrow but how to improve the system so results will be better as a consequence). And, for my current position, prioritize (the IT solutions provided and the management improvement aims).

Related: A project is a collection of value scheduled for realization – D.J. Anderson – Microsoft CMMI – Curious Cat Management Improvement portal

Newt on Management History

Posted on January 23, 2007  Comments (1)

The new Newt thing

“I don’t mean to be argumentative,” he says, as he scribbles a chart on the history of management reform, tucking dates alongside names like Motorola and Deming and Ohno, all the while peppering the group with questions. “But I’m dubious about externalized systems. It becomes a cult.”

No one is insulted. On the contrary, everyone is enthralled by Gingrich and his well-informed romp through management history. (“There’s this whole romantic side to him,” Gingrich says enthusiastically about management guru W. Edwards Deming. “He wrote religious songs.”)

I am not really sure what he means by “externalized systems.” He does actually know about Deming’s idea and management history. For those outside the USA he is a former Speaker of the House of Representatives and current Republican Presidential candidate.
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Systems Improvement Example

Posted on January 22, 2007  Comments (1)

New Jamarat Bridge Saudi Arabia

Interesting paper – The Dynamics of Crowd Disasters: An Empirical Study (also see the supplemental materials). Systems thinking allowed the engineers to design a solution that wasn’t about enforcing the existing rules more but changing the system so that the causes of the most serious problems are eliminated.

analysis of unique recordings of the Muslim pilgrimage in Mina/Makkah, Saudi Arabia. It suggests that high-density flows can turn “turbulent” and cause people to fall. The occuring eruptions of pressure release bear analogies with earthquakes and are de facto uncontrollable.
…
entrance of the previous Jamarat Bridge, where upto 3 million Muslims perform the stoning ritual within 24 hours.
On the 12th day of Hajj, about 2/3 of the pilgrims executed lapidation even within 7 hours.

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Knowledge Management – Management is Prediction

Posted on January 21, 2007  Comments (3)

This presentation web video discusses the idea of managing corporate information: Seamless Information Capture and Discovery for Corporate Memory. The video focuses on discussing technical solutions.

The most important factor to me, is the value to improving management. The technology discussed here eventually could help lead to the adoption of Dr. Ackoff’s ideas on capturing corporate decision making. Then that will allow evaluating decisions for systemic weakness and strengths to improve decision making. Ackoff’s ideas in this area tie very closely to Dr. Deming’s ideas on the theory of knowledge and the importance of prediction to management.

There are several reason these ideas have not been adopted but one is that they require some effort to document and then evaluate (and often those are missing). So many see any time spent improving the system as waste (based on their actions not that they would say such a thing) – they are only happy when producing today or fire fighting to enable producing today.
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Reacting to Product Problems

Posted on January 20, 2007  Comments (0)

Previously we posted on recalls at Toyota and Sony. Recently Toyota announced another large recall. Investor’s Business Daily writes on the topic in: The Ups And Downs Of Doing Product Recalls – Japan-Style:

Kitayama also said Akio Toyoda, grandson of Kiichiro Toyoda, Toyota’s founder, played a key role by opening a direct line to suppliers that had supplied defective car parts. He stressed that quality comes before meeting delivery deadlines.

Interesting. The article also discusses a commitment to zero-defects. I agree with Dr. Deming that this is not the right strategy, but Toyota’s actions around that concept seem reasonable. Many other companies actions around a “zero-defect effort” are not effective in my opinion. See our previous post reacting to Norman Bodek’s post on zero defects. Toyota is doing well but as they say themselves, over and over: Toyota still has plenty of room to improve. The key is to not only say so, but act on it (which I believe they are doing, but the recalls give one indication of the continued need to improve).

Related: Quality and Innovation – Ford and Managing the Supplier Relationship – Cease Mass Inspection for Quality – Cease Dependence on Inspection

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Performance Measures and Statistics Course

Posted on January 20, 2007  Comments (0)

Performance Measures and Statistics Course – free course materials from a 2 day training course by Steven Prevette. Topics include: Dr. Deming’s red bead experiment, operational definitions, selecting performance targets, SPC, theory of variation, case studies, control charts, pdsa, pareto charts, histograms…

Related: Quality, SPC and Your Career – articles by Steven Prevette

Think Long Term Act Daily

Posted on January 17, 2007  Comments (1)

Great stuff from the DailyKaizen:

Over the last three months we have been working to incorporate PDCA discipline into our Model Line planning process. We are quite literally building a new management system in the organization and it is fascinating. There are many attributes of this system including developing standard work for managers, redesigning the strategic planning process, developing a strategic deployment process and most important formalizing the checking process at all levels. It will take several years to fully put in place, but by year end I think we will show great progress.

So few organizations can think beyond the current urgent need (often this day or week or month, not even quarter). Thinking long term is not about waiting around. But it is about constancy of purpose. The powerful gains from any management system are not those in the first year. The benefits possible in the 5th year or 10th year… are not possible in first year. The capacity to take advantage of management improvement needs to be developed and it is a multi-year effort (if it is done well – otherwise it will abandoned after the initial hype for the next new fad). The gains should grow and compound over time.

Related: Lexus: Long Term Thinking

Management Improvement Carnival #3

Posted on January 16, 2007  Comments (2)

More links to interesting management improvement blog posts.

UK National Health System Management

Posted on January 15, 2007  Comments (1)

Another article on the UK national health system using lean thinking: In the drive to save the NHS, I’m choosing a Toyota by Simon Caulkin:

So the lessons of Toyota come out rather differently from what you might expect. Large size is no barrier to efficiency – although smaller than the NHS, Toyota’s 264,000 employees make it large by any other standard. You don’t need a market to lower transaction costs, but the opposite: trust and cooperation, which also lifts morale by restoring control to the front line. (Toyota swaps largely anonymous leaders with as little fuss as changing a light bulb.) And far from being dependent on the profit motive, its method – flow – is as applicable to the public as the private sector. What’s not to like?

Related: Lean National Health System – Management Improvement History and Health Care – Epidemic of Diagnoses – Toyota Production System blog posts

Performance Appraisals – Is Good Execution the Solution?

Posted on January 15, 2007  Comments (2)

Performance review proponents say the way it is done matters most (based on reaction to: Performance appraisals get low marks):

Deming, it seems, has many fans. His view of performance reviews? He included them in his catalog of the “seven deadly diseases” afflicting U.S. management in the late 20th Century. Byrne referred to Deming when he wrote: “The ‘report card’ type of yearly review [does] more harm than good. Review the person and their work all through the year and skip the sit-down review. Everybody ‘needs improvement,’ so [provide feedback] daily.”

Good execution of performance appraisal is not the solution. More people are realizing that improving how performance appraisal are done is an attempt to do the wrong thing better. If you insist on doing the wrong thing, I suppose you might as well do it better but how about just not doing the wrong thing at all? What should be done? See: Performance Without Appraisal and read chapter 9 of The Leader’s Handbook.

Related: Problems Caused by Performance Appraisal – Deming on Performance Appraisal – Performance Without Appraisal #2 – Performance Appraisal Problems

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