Posted on April 28, 2010  Comments (0)

This very brief introduction to control charts by PQ Systems provides a very watchable non-technical overview. Getting people to understand variation is important, and not easy. This video is one more quick reminder for those still trying to incorporate an understanding of variation into their view of the world.

The idea is simple. But actually thinking with an understanding of variation people find difficult, it seems to me. It is very easy to continue to revert to special cause thinking (who did it? is often a sign of special cause thinking) – thinking that results are due to a special (unique) cause, instead of as the result of a system (which includes lots of common causes).

The value I see in this video is as a reminder for all those trying to operate with an understanding of variation. It is also a decent introduction, but much, much more would be needed to get people to understand why this matters and what is needed.

Related: Control Charts in Health Care – How to Create a Control Chart for Seasonal or Trending Data – Measurement and Data Collection – Six Sigma and Common Sense – European Blackout, not Human Error

Posted on April 20, 2010  Comments (1)

Bryan Lund is hosting Management Improvement Carnival #95 on the Training Within Industry blog, highlights include:

• Kathleen Fasenella talks about “How to Sew Faster” at Fashion Incubator… Leansters will appreciate the industrial engineer that resides in Kathleen’s work – Part 4 of her “How to Sew Faster” series talks about the 4Ms: Man, Machine, Material and Machines. Kathleen’s posts often remind me of Taichii Ohno’s writings
• Bryan Zeigler at Lean is Good dredges up an old Deming experiment to illustrate a common management malpractice: Chasing Rabbits and Process Unimprovements. I like this post because the experiment helps people realize the chaos that can result in their reactive behavior as managers.
• Mark Rosenthal at The Lean Thinker makes a distinction between The Expert vs. The Master in his post Knowing vs. Knowing How to Learn. The big deal here is that Mark argues some experts will try to fit their circumstances to a specific tool, but masters distinguish themselves by learning how to go beyond the tool and apply the concept in circumstances with which they are unfamiliar.

Related: 2010 year in review – Management Improvement Carnival #61

Posted on April 15, 2010  Comments (7)

Toyota is receiving plenty of criticism now, much of it for good reason. There is also a large amount of psychology involved. From what I have seen, the insurance companies still see better claims history (fewer and lower cost claims) against Toyota than other manufacturers. And there is another strain that seems to enjoy criticizing what has been praised. Toyota does need to improve. But that is improvement of the existing management system, not a need to radically change the management of the company.

I think Toyota, even with the problems, is a fantastic example of a very well managed company. Yet even with all the study of lean manufacturing even basic ideas are overlooked. For example, the two main pillars of the Toyota way are “continuous improvement” and “respect for people.” For all of us, it is valuable to refocusing on core principles. We are too often looking for the next new idea.

This is one way of looking at the pillars of the Toyota Production System, from the Toyota Technical Center – Austrailia

Back to Basics for Toyota by Akio Toyoda

While recent events show Toyota obviously needs to improve, that has been true all along (it is just more obvious lately). Some may see this as an indication that these lean manufacturing ideas based on Toyota’s practices are no better than other management practices. I don’t believe this. I feel just as strongly about the value of lean management as ever. I think that the recent events show you that no matter how well an organization in managed there is plenty of room to improve. Toyota never was close to perfection. They have much to improve, but they are still one of the best managed companies in the world.

My comments in 2005:

Related: Toyota Stops Lines – Lots of Lines – Akio Toyoda’s Message Shows Real Leadership – Deming Companies – Respect for People Does Not Mean No Criticism

And my comments in 2007:

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Posted on April 13, 2010  Comments (3)

I believe net neutrality should be championed to prevent decay of the usability of the internet. It seems to me internet connectivity is a natural monopoly that economic theory says should be a regulated monopoly. Smart countries have invested in providing much better internet connectivity that the USA has at much lower prices. Now in the USA we have companies that seek to control internet connectivity and then use that monopolistic control to favor higher margin efforts. So force those that have resources available on the internet to pay or the ISP threatens to degrade the connectivity to their resources.

The investment in equipment and fiber that allows internet connectivity has to be paid for. If those regulated ISPs wanted to set bandwidth use pricing that is fine with me. If we decided it is best to have one low price say $30 a month for access at a similar perforance of 10 other countries (Japan, Germany, South Korea, Canada, United Kingdom…) and then charge extra for individuals those that use more than some amount fine. But I think it should not be tied to whether you use service that haven’t paid the ISP money to be favored. The USA is currently 18th and slowed down, while others continue to speed up.

The 2008 ITIF Broadband Rankings show the USA in 15th place, out of 30 OECD countries, for broadband adoption, speed and price. In 2001 the USA was in 4th place.

If ISPs don’t want to be in the business they should be in – providing internet connectivity. Fine, get out of that business and go into the business they want to be in. But don’t try to take control of a natural monopoly and then use that control to extort money from those that rely on the natural monopoly.

Google accused of YouTube ‘free ride’

I can understand why they would think that way. But isn’t it equally valid to say hey those that pay you for internet connectivity really want to use YouTube. If you need to make more investments in your infrastructure to support your customers use, then do so and raise the prices. I completely disagree with the ISP negotiating what content users can see. But if that were to happen why couldn’t Google instead of paying say, hey your customers really want YouTube – if you don’t pay us we won’t let you deliver it to your customers?

Net Neutrality: This is serious by Tim Berners-Lee

Google’s Traffic Is Giant, Which Is Why It Should be Your ISP
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Posted on April 10, 2010  Comments (1)

The Curious Cat Management blog carnival highlights management blog posts 3 times each month. I have also collected hundreds of online management improvement articles in the Curious Cat Management Library.

• Why You Should Never Listen to Your Customers by Mark Cuban – “Your customers can tell you the things that are broken and how they want to be made happen. Listen to them. Make them happy. But they won’t create the future roadmap for your product or service. That’s your job.”
• Pure Genius: Southwest Airlines Baggage Strategy by Eric Joiner – “Consistently sized aircraft, carefully selected destinations and a desire to compete with the big guys only where they can win, has made Southwest profitable where the big guys have failed.”
• Evolutionary operation by Mark J. Anderson – “a manufacturing improvement method called evolutionary operation (EVOP), which calls for an ongoing series of two-level factorial designs that illuminate a path to more desirable conditions.”
• Why do we use Kanban? by David Anderson – “(1) Evolutionary, incremental change with minimal resistance (2) Achieve sustainable pace by balance throughput against demand (3) Quantitative Management and emergence of high maturity behavior in alignment with senior management desire to have a highly predictable business (4) Better risk management (the emerging theme in the Kanban community)”
• MBWA is Not a Gemba Walk by Kevin Meyer – “What if the top executive led groups of people in spontaneous kaizen activities. Teaching, creating, changing. Not just sneaking around and watching.”
• W.L. Gore: Lessons from a Management Revolutionary by Gary Hamel – Terri Kelly: “Our leaders have positions of authority because they have followers. Rather than relying on a top-down appointment process, where you often get promoted because you have seniority, or are the best friend of a senior executive, we allow the voice of the organization to determine who’s really qualified to be a leader, based on the willingness of others to follow.”
• How a Simple Office Kanban System Works by Mark Graban – “In setting up a system like this, you just have to be careful that the 2nd bin has enough inventory to last you until the new stock arrives. If you order weekly and the material arrives the day after, the re-order quantity really needs to be six days worth of supply.”

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Posted on April 7, 2010  Comments (0)

I think that the idea that data lies is false, and that such a notion is commonly held a sign of lazy intellect. You can present data in different ways to focus on different aspects of a system. And you can make faulty assumptions based on data you look at.

It is true someone can just provide false data, that is an issue you have to consider when drawing conclusions from data. But often people just don’t think about what the data is really saying. Most often when people say data lies they just were misled because they didn’t think about what the data actually showed. When you examine data provided by someone else you need to make sure you understand what it is actually saying and if they are trying to support their position you may be wise to be clear they are not misleading you with their presentation of the data.

Here is some data from Greg Mankiw’s Blog. He wants to make his point that the USA is taxed more on par with Europe than some believe because he want to reduce current taxes. So he shows that while taxes as a percent of economic activity is low in the USA taxes per person is comparable to Europe.

Taxes/GDP x GDP/Person = Taxes/Person

France .461 x 33,744 = $15,556

Germany .406 x 34,219 = $13,893

UK .390 x 35,165 = $13,714

US .282 x 46,443 = $13,097

Canada .334 x 38,290 = $12,789

Italy .426 x 29,290 = $12,478

Spain .373 x 29,527 = $11,014

Japan .274 x 32,817 = $8,992

The USA is the 2nd lowest for percent of GDP taxes 28.2% v 27.4% for Japan. But in taxes per person toward the middle of the pack. France which has 46% taxes/GDP totals $15,556 in tax per person compared to $13,097 for the USA. Both measures of taxes are useful to know, in my opinion. Neither lies. Both have merit in providing a understanding of the system (the economies of countries).

Related: Fooled by Randomness – Simpson’s Paradox – Mistakes in Experimental Design and Interpretation – Government Debt as Percentage of GDP 1990-2008 by Country – Communicating with the Visual Display of Data – Illusion of Explanatory Depth

Posted on April 5, 2010  Comments (0)

Here are some of the blog posts from the Curious Cat Management Improvement made in April 2006:

• PBS Documentary: Improving Hospitals – “Systems thinking allows leaders and staff to see the complex, modern workplace with ‘new eyes’ and turn problems into improvements. It has saved up to 50 percent in costs, thousands of lives, and avoided hundreds of thousands of medical errors.”
• Manufacturing Jobs Data: USA and China – “So 10-20% of manufacturing jobs disappeared worldwide from 1995 to 2002. China lost between 17% and 34% of their manufacturing jobs; the US lost 11.4%.”
• People: Team Members or Costs – Both Toyota and GM seek to use technology to improve but Toyota sees the technology as useful to help people to be more efficient, eliminate menial repetitive tasks, eliminate tasks that cause injury… and it seems to me GM sees technology as a way to eliminate people.
• Why are you afraid of process? – “Process management is necessary for management improvement. That is true in manufacturing, service, government, research and any other environment. The way process management will be done must be modified to be effective.”
• Most Meetings are Muda – “Given how many people know that many meetings are a waste of time, taking steps to improve meeting effectiveness is a good way to gain some credibility for management improvement activities. Doing so is very visible.”
• China’s Manufacturing Economy – “The constant mention of the erroding manufacturing sector on the USA I believe leads many to think it is shrinking and small. Yet output continues to increase and the share of worldwide manufacturing output is holding steady.”

Photo by John Hunter in Shenandoah National Park, Virginia, which lies in the Blue Ridge Mountains, a few hours from Washington DC. My travel photo blog includes more pictures.

Posted on April 3, 2010  Comments (1)

Tony, a Kiva entrepreneur in Pennsylvania, USA looking to manufacturing specialty cars.

I really like Kiva. Kiva lets you lend small amounts of money to entrepreneurs around the world. My latest loan is to a manufacturing entrepreneur in the USA.

I must admit I wouldn’t take this as an investment. It seems a very risky and doesn’t seem that likely to pan out, to me. But I see my loans through Kiva as a way to give people a chance to pursue their dreams. This loans is probably the one I find less compelling from a business point of view (to me), but I like to provide some loans in the USA so I decided to give Tony a chance.

I do try to select loans that look promising and seem to provide the entrepreneur an opportunity that will help them. By which I mean I love finding loans where, for example, they will buy equipment that will improve their productivity or take on new business. Very often loans are to buy raw materials or supplies, which is also fine but the potential gains are often less than something that improves the efficiency (it seems to me). Often this allows the entrepreneur to buy more and grow their business.

I have made nearly 200 loans now. The top country has been Togo (at 12%). I don’t target Togo but I do pay attention to the loan costs to the entrepreneurs (part of my assessment of the good business case for the loan) and some of the micro finance organizations offer good terms to entrepreneurs. Some of the microfinance organizations are more charitable (they may use donations to fund significant parts of the operating expenses, instead of profits from interest on the loans). Read more details on how Kiva works. It also used to be a bit difficult to find loans I really thought were great. It is getting easier to find more options so my guess is that the top few countries now will see declines in their percentages.

So far I have lent to 37 countries. Cambodia is 2nd at 7.7% of my loans, Viet Nam 3rd at 6.7%, Tanzania 4th at 5.1%, Nicaragua 6th at 5.1% along with Kenya, and Ghana and Boliva are 8th at 4.6%. The United States now makes up 2.6% and Mexico 1.5%. The sectors the loans are categorized in are: Services 25%, Food 18%, Manufacturing 17%, Retail 14%, Agriculture 12% and various others. Though the sector categorizations are pretty weak in my opinion (they seem to be fairly inaccurate – so it gives you an idea but it isn’t exact).

The default rate on my loan portfolio is 2.1% (3 defaults). One was in Kenya where $71.50 out of $75 was paid back and then huge civil unrest took place and it defaulted. The other 2 are from the same microfinance bank in Ecuador that was closed down due to mismanagement. In that instance I lost $87.50 out of $100 lent. 94 loans have been fully paid back and 94 are being paid back now.

I would love it if more Curious Cat readers joined Kiva and helped other entrepreneurs. If you do let me know your Kiva page and I will add you to the Curious Cat Kivans page. Also join the Curious Cats Kiva Lending Team.

Related: 100th Entrepreneur Loan – Thanksgiving: Micro-financing Entrepreneurs – Using Capitalism to Make the World Better – Kiva Opens to USA Entrepreneur Loans – MicroFinance Currency Risk

Posted on April 1, 2010  Comments (0)

Kevin Meyer is hosting Management Improvement Carnival #93 on the Evolving Excellence blog, highlights include:

• Seven Virtues of the 21st Century Organization (Weekly Leader): Purpose-driven organic adaptability, values that are operational.
• Value in Lean (Thinking for a Change): How do you define “value” – there are many ways.
• Listen to the Naysayers (Evolving Excellence): “Be careful not to discount the opinions of dissenters – you may end up with everyone on the same bus… driving off a cliff!”
• Solid at the Core (Unfolding Leadership): The advantages – and disadvantages -of inner strength and confidence.

Related: Management Improvement Carnival #44 – Management Improvement Carnival #60 – Management Improvement Carnival #76

Not related: @nicoleradziwill – Alex: “Is the Easter Bunny a boy?” Me: “No clue.” Alex: “Well let’s look it up on Google.”