Monthly Archives: January 2007

Transforming With Lean

Dave Gleditsch, Chief Technology Officer, Pelion Systems, makes many excellent points in: Transforming Your Business To Lean: Lessons Learned [the broken link was removed]:

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.

Often 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

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

IHI has created the 5 Million Lives Campaign [the broken link was removed] 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

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 [the broken link was removed] 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

[The video was removed from YouTube]

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

via: Lean Six Sigma Academy Blog [the broken link was removed]

Top 10 Manufacturing Countries

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

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 [the broken link was removed] – 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

This podcast on Lego Mindstorms NXT, Lead Users, and Viral Marketing [the broken link was removed] 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

Toyota’s Real Secret?

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 [the broken link was removed]:

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

Nice article, nice title too, a bit overoptimistic maybe but still nice 🙂 – It’s Easy Being Lean [the broken link was removed]:

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.