Kaizen Online

Kaizen, That Continuous Improvement Strategy, Finds Its Ideal Environment by Hal R. Varian

Kaizen doesn’t just mean a business should keep trying new things. Rather, it refers to a disciplined process of systematic exploration, controlled experimentation and then painstaking adoption of the new procedures. In the original formulation, kaizen was applied to manufacturing, where experimentation could determine whether a new process resulted in quality improvements or cost savings in a matter of months.

The most successful online businesses are built on kaizen, though few of those who carry out the testing would recognize the term, since many of those who created these online businesses were in grade school in the 1980s.

Old media just do not understand online kaizen. Their perceptions are tied to the print world, where design changes are costly. The Wall Street Journal spent years planning its recent redesign of the print edition and millions of dollars rolling it out. Yet it will be months before it becomes clear how successful these changes were.

The advantages to experimentation on web applications are huge. I am also reminded of my paper from 1999: Using Quality to Develop an Internet Resource.

Via: Kaizen for Web Pages

Related: Be Thankful for Lean ThinkingManagement Consulting web sites (like the old media he mentions)Our Policy is to Stick Our Heads in the SandPatent Review InnovationPlanet Kaizenkaizen definition

Posted in IT, Management, Management Articles, Software Development | 1 Comment

Scientific Thinking – the Modern Way

“Scientific thinking” the modern way [the broken link was removed] by Bill Harris:

What does this all mean? It simply means that Fisher’s designed experiments give us better and faster means to extract insight from tests on system dynamics models than the old one-factor-at-a-time approach.

I thank Deb Schenk, then (and perhaps now) statistician at Hewlett-Packard Company, for teaching me and others about the design of experiments using Statistics for Experimenters: An Introduction to Design, Data Analysis, and Model Building back in 1981-82.

I admit to a bit of bias, in seeing my father’s book (Statistics for Experimenters 2nd edition was published last year by the way), referenced but Bill Harris is exactly right in the power of design of experiments. The most recent post [the broken link was removed] discusses Ackoff’s excellent f-Laws and a previous post discusses Deming (titled, It’s the process [the broken link was removed]) so I couldn’t resist adding a post myself.

Related: design of experiments postsAckoff’s New Book: Management f-Laws

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Danaher – Lean Thinking

A Dynamo Called Danaher [the broken link was removed]

DBS, as it’s called, is a set of management tools borrowed liberally from the famed Toyota Production System. In essence, it requires every employee, from the janitor to the president, to find ways every day to improve the way work gets done. Such quality-improvement programs and lean manufacturing methods have been de rigueur for manufacturers for years. The difference at Danaher: The company started lean in 1987, one of the earliest U.S. companies to do so, and it has maintained a cultish devotion to making it pay off.

Short term lean thinking payoffs are nice, but the long term benefits are much more powerful.

Over 20 years, it has returned a remarkable 25% to shareholders annually, far better than GE (16%), Berkshire Hathaway (21%), or the Standard & Poor’s 500-stock index (12%).Over 20 years, it has returned a remarkable 25% to shareholders annually, far better than GE (16%), Berkshire Hathaway (21%), or the Standard & Poor’s 500-stock index (12%).

Related: Danaher’s Low Profile Lean ExcellenceLean Bloglean manufacturing articles10 Stocks for 10 years update (Danaher was in serious consideration)

Posted in Investing, Lean thinking, Management Articles, Manufacturing, Toyota Production System (TPS) | Tagged , | 1 Comment

Sustaining Lean Momentum

Sustaining Lean [the broken link was removed]:

“It is an unfortunate fact that most companies are unable to sustain the gains made during their lean journeys,” said Andy Carlino, Lean Learning Center partner. “In fact, less than 37 percent of lean improvements and training actually produce meaningful and measurable results unless there has been a complete corporate culture change to lean thinking.”

Smith added, “Sustaining lean is very difficult. And, let’s clarify what sustaining means – it is NOT maintaining what you have, but sustaining continuous change. People need to understand that lean is a way of thinking, it’s a life changing event. It’s not the tools, the rules or the principles. It’s all of that added together.”

Related: Long Term Lean PayoffsHolding Improvement GainsLexus: Long Term ThinkingHow to Improvemanagement improvement articles

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2007 Shingo Prize for Excellence in Manufacturing

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 Prize2006 Deming PrizeThe 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
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Posted in Manufacturing | 1 Comment

Illusions – Optical and Other

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.

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.

Never be satisfied that your current viewpoint is complete and accurate, instead create a climate of never ending continual improvement. By continually questioning and seeking improvement we can avoid traps our brains lay for us.

Related: The Illusion of UnderstandingChange is not ImprovementPerformance Appraisal ProblemsDr. 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

Posted in Data, Deming, Management, Popular, quote | Tagged , , , , , | 10 Comments

Lean Six Sigma Efforts

Lean/Six Sigma: The quest for efficiency in manufacturing [the broken link was removed]:

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.
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Hospital Reform – IHI on CBS

via: Safety and Quality In Health Care and Construction [the broken link was removed], 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 improvementPBS Documentary: Improving Hospitals5 Million Lives CampaignUSA Healthcare Costs Now 16% of GDPGoing Lean in Health CareManagement Improvement Leaders

Posted in Health care, Management | Comments Off on Hospital Reform – IHI on CBS

Ackoff’s New Book: Management f-Laws

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.
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Posted in Books, Deming, Management, Systems thinking | Tagged , , , | 4 Comments

3M CEO on Six Sigma

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 FailuresChange is not ImprovementLeaving 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. It isn’t fair to equate a programing calling itself “six sigma” but not using six sigma methods with the actual practice of six sigma management.

Still the CEO still seems to believe in lean six sigma [the broken link was removed]:

“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.”

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Posted in Management, Manufacturing, quote, Six sigma, Systems thinking | Tagged | 1 Comment