2007 Shingo Prize for Excellence in Manufacturing

Posted on February 13, 2007  Comments (1)

Since I don’t see a the full press release on the Shingo Prize for Excellence in Manufacturing site, I include it below.

Related: 2006 Shingo Prize – 2006 Deming Prize – The Best Factory in the World

2007 Winners are:

Autoliv Querétaro CMX Facility, Querétaro, Mexico
Baxter Healthcare Corporation, North Cove Plant, Marion, North Carolina
Baxter S.A. de C.V., Cuernavaca Plant, Morelos, Mexico
Cordis de Mexico, Juarez, Mexico
Delphi Packard Electrical/Electronic Architecture’s Chihuahua 1, Chihuahua, Mexico
Delphi Packard Electrical/Electronic Architecture’s Cableados Fresnillo 1, Fresnillo, Mexico
DENSO Manufacturing Tennessee, Inc., Instrument Cluster Division, Maryville, Tennessee Read more

Illusions – Optical and Other

Posted on February 12, 2007  Comments (8)

Checkerbox Graphic If the output for working for the year is a square. And the job is to produce dark squares who do you pay more A or B? Of course it is a trick question, the squares are the same color. But it doesn’t look that way at first does it? Optical illusions provide evidence that you cannot always trust what seems obvious.

Dr. Deming’s red bead experiment provides some additional insight into the idea that our management systems often use “evidence” to support our believes when in fact the “evidence” does not mean what we think it does. Dr. Deming included the theory of knowledge (how do we know what we know) as one of the four areas of his management system. It is the areas of his work that is least appreciated and understood by managers today. Optical illusions provide a simple reminder of how easily we can think we know things that are not so.

Just as Toyota is always dissatisfied and looking for how to improve, it is important to question what you believe. Even when it is as obvious as the A square being darker than the B square. Understanding the ease with which we can reach false conclusions can be a powerful aid in improving management decision making.

Related: The Illusion of Understanding – Change is not Improvement – Performance Appraisal Problems – Dr. Deming on Performance Appraisal: “The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of performance” (from the introduction to the Team Handbook) – It is a mistake to think improving the figures is the goal

Optical illusion by Edward H. Adelson

Lean Six Sigma Efforts

Posted on February 10, 2007  Comments (1)

Lean/Six Sigma: The quest for efficiency in manufacturing:

After years of working with lean and Six Sigma principles, many companies realize that, to continue improving, they need to get suppliers and even customers involved — such as happened with Toyota.

Good idea, but there is no good reason a six sigma effort didn’t do that from the start.

Rather than laying off factory staff as processes have become more efficient, the firm has expanded its product line to include doors. In fact, companies that have adopted the lean approach often find that their market share increases because quality and lead-time improvements give them powerful competitive advantages.

Successful lean efforts reduce waste, improve value creation, improve productivity, expand sales and expand jobs.
Read more

Hospital Reform – IHI on CBS

Posted on February 9, 2007  Comments (0)

via: Safety and Quality In Health Care and Construction – One Doctor’s Crusade For Hospital Reform:

Berwick estimates that for every 100 patients admitted to hospitals, there are 40 to 50 incidents in which patients are harmed — ranging from bruises and bed sores to much more life-threatening situations. “Between 44,000 and 98,000 Americans die in hospitals each year, killed by their care, not by their disease,” Berwick says.
…
Catherine De Santis would once have been at risk for a life-threatening infection because of the tube she needs for feeding. But new procedures, championed by Berwick, have greatly reduced this danger.

“We standardized practices so that the line is placed in a sterile manner,” Koll says. Following the guidelines has saved untold lives, he adds. “I feel — even though I don’t want to be in the hospital — a lot more comfortable bring here,” De Santis says. The campaign does more than save lives — it saves hospitals money. “A lot of people ask ‘how can you afford to improve?’ The answer is, ‘you can’t afford not to,’” Berwick notes.

Related: articles on health care improvement – PBS Documentary: Improving Hospitals – 5 Million Lives Campaign – USA Healthcare Costs Now 16% of GDP – Going Lean in Health Care – Management Improvement Leaders

Ackoff’s New Book: Management f-Laws

Posted on February 9, 2007  Comments (3)

Russell Ackoff is in London promoting his new book: Management f-Laws (see previous post: Ackoff’s F-laws: Common Sins of Management). A BBC article captures some of some of the great ideas from one of his talks (more articles… by Ackoff). How to avoid the fatal F-Laws by Peter Day:

“Companies and organisations get things wrong most of the time,” he said.

“The average life of a US corporation is only 11-and-a-half years, the rate of bankruptcy is increasing very year. There’s a great deal of evidence that we don’t know how to manage organisations very effectively.

“The F-Laws are simply based on observations over the year about regularities which are destructive to organisations.”

As always he is insightful and not afraid to shake up conventional wisdom.
Read more

3M CEO on Six Sigma

Posted on February 8, 2007  Comments (1)

3M in building spree to end capacity constraints

3M should complete the first of an 18-factory build-out in the third quarter, said its chief executive late Tuesday, as it makes up for years of underinvestment on the factory floor – even in its well-known household products. “Our major challenge will be getting all these plants launched,” said 3M CEO George Buckley at a Lehman Brothers conference. Buckley, who joined the St. Paul, Minn. company just over a year ago, has embarked on a global physical expansion program… Buckley said he realized the company was facing manufacturing constraints in several of its product lines.

In the past, a 3M culture that viewed new investment with circumspection and an over-reliance on the Six Sigma management technique made it shy of building some needed capacity, Buckley said. “We got ourselves into a position in which we thought Six Sigma would come to our rescue. We all known that in reality it’s something that runs out of steam,” he said.

Well if you “know” that you are not properly executing a six sigma management system. Previous posts on this topic: Management Advice Failures – Change is not Improvement – Leaving Quality Behind? – Going lean Brings Long-term Payoffs. Often six sigma programs amount to cost cutting programs (which can easily run out of steam),; but that is so far from effective six sigma management that it isn’t really fair to equate a programing calling itself “six sigma” with the actual practice of six sigma management.

Still the CEO still seems to believe in lean six sigma:

“We will continue to drive our growth agenda, which will be funded via aggressive productivity improvement efforts, such as global strategic sourcing and lean six sigma.”

Read more

Don’t ask employees to be passionate about the company!

Posted on February 7, 2007  Comments (0)

Don’t ask employees to be passionate about the company!

People ask me, “How can I get our employees to be passionate about the company?” Wrong question. Passion for our employer, manager, current job? Irrelevant. Passion for our profession and the kind of work we do? Crucial. If I own company FOO, I don’t need employees with a passion for FOO. I want those with a passion for the work they’re doing.

As we discussed in Stop Demotivating Employees Douglas McGregor explained theory X management (managers believe the workers will do only what they are forced, coerced into doing). Theory Y management starts with the premise that people want to do good work, the job of management is to help them do so (create systems, eliminate roadblocks, etc.). The whole post quoted above does a good job of explaining how to create that environment.

Related: Dangers of Extrinsic Motivation – Why Extrinsic Motivation Fails

Compensation at Whole Foods

Posted on February 6, 2007  Comments (1)

Compensation at Whole Foods Market

Most large companies also pay their executives large amounts of stock options in addition to large salaries and cash bonuses. However, this is not the case at Whole Foods Market. As the chart below indicates, the average large corporation in the United States distributes 75% of their total stock options to only 5 top executives with the remaining 25% going to everyone else in the company (actually most of the remaining 25% goes to the next level of executives below the top 5). At Whole Foods, the exact opposite is true: the top 16 executives have received 7% of all the options granted while the other 93% of the options have been distributed throughout the entire company with all Team Members eligible for a grant after 6,000 hours of service to the company.

This is the kind of data you would expect if people are the organization’s most important resource. If instead senior management thinks the company exists to fund their lavish lifestyle and only needs to do other things like provide value to customers, reward investors, provide meaningful work to all employees… as a way of funding lavish living by CEOs you get the behavior discussed in: Graph of Obscene CEO Pay, More on Overpaid CEO’s and Excessive Executive Pay.

via: Whole Foods CEO Pay

Related: Excessive Executive Pay – The Purpose of an Organization – Warren Buffett’s Shareholder Letter – Starbucks: Respect for Workers and Health Care

Short Video on TPS History

Posted on February 5, 2007  Comments (0)

Short video on TPS History from the Art of Lean web site. The video discusses Toyota history and topics including: Jidoka, Just in Time…

Related: Toyota Production System posts – manufacturing posts – management webcasts

Motivating People to Change

Posted on February 4, 2007  Comments (0)

Don’t miss a nice series of posts by Jon Miller: How to Motivate People to Change – part 1, part 2, part 3.

Success may come in the short term when motivation is through a combination of fear and reward centering on financial safety and security, belonging to a group and achievement of status…
There is some question as to whether this type of approach to motivation is sustainable, and at the very least it is not one that can be applied to motivate 100% of the workforce…

Toyota’s Creative Idea Suggestion System is possibly the longest continuing and most successful improvement methodology today. It is a great process for motivating workers and for sustaining improvement. So simple, yet so powerful.

Related: Stop Demotivating Employees – theory x motivation – Incentive Programs are Ineffective – Motivational Posters – theory x or theory y management – posts on managing respect for people

Toyota Management Speech by Gary Convis

Posted on February 2, 2007  Comments (1)

Gary Convis – Management Briefing Seminars

To be a successful automaker or supplier in today’s competitive world, I believe every single person involved in your value chain must fully understand the company’s mission and direction, and execute their roles perfectly to move toward shared goals. As an example, when a potential customer walks into a dealership, they are about to buy the second most expensive product they will ever own.

This is not just a transaction. Everything must be handled with professionalism… to build trust… and ideally establish a relationship with that customer for life. But it goes well beyond dealers. It also extends to suppliers, logistics partners, IT providers, team members in our plants, design engineers, sales and marketing associates, and anyone else responsible for getting our vehicles into the driveways of satisfied customers.

Related: articles by Gary Convis – lean thinking articles – posts on the Toyota Management System

Management Improvement Carnival #4

Posted on February 1, 2007  Comments (0)

Another edition with links to interesting management improvement blog posts.

  • Lean Office Redesign by Marcie MacRae – “We freed up space, improved visibility and flexibility. And the best part is the lack of a “control center” for visual boards is no longer an excuse for not having Hoshin Kanri review sessions.”
  • The Bullwhip Effect by Peter Abilla – Tips “Reduce lead time of material, Reduce variability with effective use of the Heijunka and one-piece flow, Cooperation and good relationships with your supply chain partners.”
  • Lean Trip to Toyota by Elizabeth Seyler – “Let’s just say that i had an “awe-inspiring” moment when we entered the facility. It was big. Very big. There were so many visuals that my sensory system went into overload”
  • If You Don’t Slow Down and Think Now, You’ll Curse Yourself Later – “When people grab for quick, simple, and, above all, quick answers, they lay themselves wide open to the mistakes collectively called attribution error: this process of assuming links and patterns where none exist.”
  • W. Edwards Deming on the Forces of Destruction by Michael Kaufman – “Extrinsic motivation slowly destroys self esteem, dignity, cooperation and a yearning for learning – all of which are innate and high early in life.”
  • What is Kaizen? by Mike Wroblewski – “As soon as they read the clue, they just started running without trying to understand the meaning of the clue. In their excitement to act, they did not think first.”

    • Read more

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