Louisville Slugger – Deming Practices

Posted on May 24, 2007 by John Hunter

photo of Louisville Slugger plant

In 2004 I was part of a group to put together a 2 1/2 Day seminar for the Deming Institute (recent seminar in Michigan). We held that meeting at the Louisville Slugger plant (see photo). It was a great experience. If you find yourself in the area they offer tours of the plant [the broken link was removed]. This article discusses the efforts at Louisville Slugger: The sweet spot [the broken link was removed]:

“You would have thought that in 123 years of making baseball bats we would have figured it all out,” says plant general manager Frank Stewart. “But as you well know, in the business of improvement, you are never there. It’s always, what can I do better? What can I improve today?”

Continual improvement is a critical practice to adopt as a standard practices (more of Deming’s 14 obligations of management). They moved production from a plant in New York to their headquarters in Louisville, Kentucky.

“Over the past six months, we have doubled our workforce,” says Stewart. “Half of our workforce averages 35 years on the job; the other half has six months.” In many respects, the new employees are starting at square one.

“Most of these people have never worked in a manufacturing facility before,” says Bob Hillerich. “We’ve had to provide a great deal of education about our business and processes. We’re also teaching them 5-S cleanliness techniques at the same time that we are teaching them the TPM system. It’s a lot to digest.”
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In maintenance, Bob Hillerich has been focused on trying to retain the wealth of knowledge in his crew. “I’m terrified about Rouns leaving,” he says. “We know what his 44 years of experience brings to this plant. We are going to spend the next six months really picking his brain and documenting what he does.”
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But on the other hand… “Having zero turnover is just as challenging,” says Bob Hillerich. “You have great people, but they have done it the same way for so long that it’s hard to convince them to really shake things up and push the envelope. In our case, we have had to embrace technology to a much greater extent. That’s been difficult for some.”

Related: Kentucky trip photos – Change to Survive: A Brand New Ball Game [the broken link was removed] (video by the producers of the Deming Library) – Deming’s Ideas at Markey’s Audio Visual – Free, Perfect and Now (on Applying Deming’s ideas at Marshall Industries – Improvement at UTC – Transformation and Redesign at the White House Communications Agency

Posted in Deming, Management, Manufacturing | Tagged , | 1 Comment

Reduce Computer Waste

Posted on May 24, 2007 by John Hunter

High-efficiency power supplies for home computers and servers [the broken link was removed] (pdf) by Urs Hoelzle and Bill Weihl – Google:

Most likely, the computer you’re using wastes 30-40% of the electrical power it consumes because it is using an inefficient power supply. It’s difficult to believe that something as basic as a power supply could be responsible for that amount of waste, but it’s true.
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The opportunity for savings is immense — we estimate that if deployed in 100 million PCs running for an average of eight hours per day, this new standard would save 40 billion kilowatt-hours over three years, or more than $5 billion at California’s energy rates.
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The net result of these changes is a dramatic improvement in efficiency (including the power supply and the regulators) to about 85%, at virtually no cost. In other words, you won’t have to pay more for a higher-efficiency PC, because the power supply is actually getting simpler, not more complicated. By spending another $20 or so extra, it is possible to use higher-quality components and achieve efficiencies well over 90%.

Google has adopted the technology for their servers. And they are working to have the technology adopted by manufacturers; so when we buy computers they will use this technology to reduce waste. This is good since not many of us cannot eliminate this muda ourselves (since we don’t build our own computers – as Google does). It is also an example of a company with a higher purpose that makes a good deal of money. Google definitely understands the concept of eliminating waste.

Related: Cost of Powering Your PC – How Google Works – Engineers Save Energy – Innovate or Avoid Risk

Posted in Google, Innovation, IT, Lean thinking | Tagged , | 6 Comments

Moving Jobs to Silicon Valley from India

Posted on May 23, 2007 by John Hunter

India grows up [the broken link was removed]:

The costs of having two offices, which are twelve time zones apart, is significant. People in both offices frequently had conference calls at 10pm and midnight every night (as a result the office in the US didn’t get started until noon sometimes or people rolled in tired). We were all traveling constantly. Development and communication moved slower due to the distance and teams. However, all of this was worth it so long as the ROI was there.
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Bangalore wages have just been growing like crazy. To give you an example, there is an employee of ours who took the first 5 years of his career to get from 1% to 10% of his equivalent US counterpart. He then jumped from 10% to 20% of his US counterpart in the next 1 year. During his time with us (less than 2 years) he jumped to 55% of the US wage. In the next few months we would have had to move him to 75% just to “keep him at market.”

A good post on some of the difficulties of outsourcing. Also a good illustration of how economics is suppose to work. If labor is underpriced in India and the market is opened labor rates should rise to a level where they are equivalent (given productivity… differences). Don’t be lead to believe all labor prices in India have experienced anything like this. Those areas where the value to cost difference was largest is where rates increased a great deal in a short period of time.

Related: IT Outsourcing Slowing – Google India not Finding Enough Engineers – The Power of Silicon Valley

Posted in Economics, India, IT, Software Development | 3 Comments

Kaizen

Posted on May 21, 2007 by John Hunter

Great post – Do Kaizen Like Toyota [the broken link was removed]:

Standardize how you solve problems… This is where following a standardized approach to problem solving based on the scientific method can help keep your kaizen efforts on track. Not to be prescriptive, but the PDCA wheel is hard to beat.

Very true.

Posted in Lean thinking, Management, Quality tools

Rethinking the Social Responsibility of Business

Posted on May 17, 2007 by John Hunter

Rethinking the Social Responsibility of Business, a debate on the correct focus of business:

Not that we’re only concerned with customers. At Whole Foods, we measure our success by how much value we can create for all six of our most important stakeholders: customers, team members (employees), investors, vendors, communities, and the environment.

Great – my previous post on the purpose of a business. John Mackey, the founder and CEO of Whole Foods, closes the debate with:

Someday businesses like Whole Foods, which adhere to a stakeholder model of deeper business purpose, will dominate the economic landscape. Wait and see.

I agree. In the debate, he stresses that he believes in the marketplace and that this focus on providing value to all stakeholders is in the best long term interest of the enterprise (as apposed to the sole focus on profit presented by Milton Friedman). I agree with John Mackey.

Related: Compensation at Whole Foods

via: John Mackey of Whole Foods

Posted in Deming, Economics, Management, Systems thinking | 1 Comment

Comparative Performance of American Health Care

Posted on May 16, 2007 by John Hunter

Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care

The U.S. health system is the most expensive in the world, but comparative analyses consistently show the United States underperforms relative to other countries on most dimensions of performance.

This study compared only 6 countries and focused more on survey results than I think is best for comparing country health care systems but it is another study pointing to the systemic failure of the USA health system (high costs and poor systemic results). These high health care costs must be born by companies doing business in the USA (given the setup in the USA where health care is tied to employment) burdening them in competition against companies producing (good or services) outside the USA. The poor performance creates huge problems for those living in the USA: not just limited to health outcomes but significantly negatively impacting economic well being as well.

Related: USA Healthcare Costs Now 16% of GDP – Health Care Crisis – Fixing Healthcare from the Inside – Health Care Spending in the United States and OECD Countries

Posted in Economics, Health care

Craigslist’s Ongoing Success Story

Posted on May 16, 2007 by John Hunter

Craigslist is a great web site focused largely on local connections and local ads (jobs, housing, classifieds…). It is in top 10 sites for the amount of traffic and a total staff of 24 people. eBay bought 25% of the company a few years ago but Craiglist retains a very pure customer focus. Craigslist’s Ongoing Success Story [the broken link was removed]:

We don’t even look at what other companies are doing. We’re not setting out to conquer the world or achieve any particular market share. We’re just following up on what our users want us to do. We’ve got plenty of things to occupy our thoughts about how to do better by our users. That crowds out thoughts of fighting competition.
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If we’re so inept that we couldn’t provide a value proposition that users found important, yeah, I’d probably encourage them to go away.

Pretty radical idea that you would encourage customers to go if they find a better value proposition but I good one in my opinion. Your mission should be something about providing value to customers. If you can’t do so, don’t expect customers to stay customers. Maybe if your customers have been delighted you can count on a bit of time to regain your value to them (out of loyalty) but that is the most you can ask for.

Posted in Creativity, Customer focus, Innovation, IT, Management | Tagged

Management Improvement Carnival #11

Posted on May 15, 2007 by John Hunter

Please submit your favorite management posts to the carnival.

Posted in Carnival, Management

Google Customer Service

Posted on May 14, 2007 by John Hunter

Google and Ice: A service story:

“Ice.com has been very vocal with its criticism. It’s a classic case of a dissatisfied customer. So from a PR dimension this was a problem for Google.”
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“We got a call from Google in February asking us what they could do to help us,” Gniwisch said. He said Google put together a team of people who flew to Ice.com’s headquarters in Montreal. “We were also on the phone with them two to three times a week for the first three weeks,” he said. “These folks put a lot of time into fully rebuilding our philosophy about AdWords from the ground up.”

Good reaction. Better to have avoided the problem in the first place, but still good to react at some point. The question I have is if they have improved the system to avoid the problems the customer experienced. And have they put in place measures which might indicate a problem (say a significant decline in customer spending) so they could intervene more quickly in the future. The last couple of paragraphs are not a great sign – but it is no surprise, Google (and any other organization) would have plenty to improve.
Continue reading →

Posted in Customer focus, Google, Management | 1 Comment

Keeping Track of Improvement Opportunities

Posted on May 14, 2007 by John Hunter

The Priority Trap [the broken link was removed – long term reliability of the web page links isn’t a priority I guess] by Dan Markovitz makes some good points:

But if it’s not important enough to make the short list, then give yourself license to dump it. Maybe it’s something you would do if you had more time, or more energy, or if your mother would notice — but since you don’t have that time, and since you don’t have to tell your mother everything, be realistic and drop it.

I agree. It inspired me to write some of my thoughts on this area. I find prioritization important. Often deciding you will not do something (and not waste time and energy on things you won’t ever do) is the biggest step toward focusing on the most important items. Focusing on important, whether urgent or not, tasks often requires avoid seemingly urgent – but in comparison unimportant tasks.

However, I like the idea of keeping a list of items that are pretty low on the priority list for several reasons. Sometimes they can be incorporated in another project without much effort (they are not worth doing on their own but while doing something else it can make sense. With a visible list (wiki technology is good for this) everyone can know what has been thought of and given low priority – they might be sparked by an idea either to give reasons why that should be a higher priority or as in brainstorming to propose another idea… You can look at the list when thinking about a redesign and incorporate whatever might make sense.

When staff have little blocks of time items can be assigned for them to work on (often serving double duty – getting the job done and serving to provide a task that provides some employee development…) – these tasks often may not be picked because of priority but a combination of priority, educational lessons and available time, skills…
Continue reading →

Posted in IT, Management, Systems thinking | Tagged | 2 Comments