New Rules for Management? No!

Fortune recently published an article talking about the “new rules” for management using Jack Welch (GE six sigma) as the focus of the old rules. It seems to me there is nothing new here (once again).

“New” rule: “Agile is best, being big can bite you”
Yeah. Does anyone think this is new. Do they really believe Jack Welch thought agile was not a good thing? Yes, Jack Welch wanted to be number 1 or number 2 in the field or get out of that business line. I still don’t think that he thought being a big un-agile organization couldn’t hurt you.

“New” rule: “Find a niche, create something new.”
Yeah, good idea. I seriously doubt GE was against creating new things. Finding niches in fact is basically what being number 1 or 2 is about. Find those niches you excel in and focus there. I think saying you have to be number 1 or 2 is a silly arbitrary target. But that was just as true 10 years ago as today. Lets look at who the article for these new ideas quotes (with big photos on the main page): Starbucks – number 1 coffee shops, Xerox (I don’t know), Cisco – number 1 switches/routers, Coke number 1 sugar water sellers. Boy this old idea of number 1 or 2 is sure old thinking. Why are those highlighted as experts all perfectly suited to the old rule?
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Posted in Deming, Management, Management Articles, Popular, Six sigma | 8 Comments

Customer Focus at the Ritz

How to Turn Customer Satisfaction into Profits and Growth [the broken link was removed] by Vincent Grimaldi:

Against all odds, the company has broken the old vicious circle of low salary and high turnover by wrapping all its processes – including recruiting and training (250 hours for first-year front-line associates) – around its customers, by offering opportunities for professional development, and by encouraging personnel to advance within the organization.

Curious Cat Management Improvement Career Center – job opening: Manager – Quality at Ritz Charlton Cancun [the broken link was removed]

Posted in Customer focus, Management, Management Articles | Tagged | 1 Comment

The Exciting Life of Industrial Statisticians

Never a Dull Day: The Life of an Industrial Statistician by Gerry Hahn.

Gerry Hahn was one of the great applied statisticians of the last 50 years, working at GE for over 45 years. Six sigma has many variants, he is one of those that understood how to apply six sigma well.

All of this provides great new opportunities for industrial statisticians to serve as statistical leaders-a term popularized by the late and great Ed Deming (see Hahn and Hoerl, 1998). Statistical leaders engage principally in leveraging statistical concepts and thinking (see Hoerl, Hooper, Jacobs and Lucas , 1993), and focus their activities on mentoring and supporting the most business-vital and technically challenging problems dealing with getting the right data, and converting such data into actionable information.

In 1991 Dr. Hahn received the Hunter Award from the ASQ Statistics Division (the award is named for my father – John).

Posted in Career, Data, Management, Statistics | Tagged , | 1 Comment

The Long Tail

The Long Tail: Why the Future of Business Is Selling Less of More by Chris Anderson is now available. This books explores the huge market for goods outside of the mass market. The few popular items that dominate the media coverage in any market are not the majority of the market. In total the huge number of “unknown” items exceed the volume of the most popular items.

The internet provides great opportunities to reach the long tail. In The Long Tail blog Anderson discusses the impact of the long tail. Thinking of the long tail can help focus an organization on the huge market outside the blockbusters.

Read the article, the blog, listen to this Long Tail podcast via IT conversations and then buy the book.

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Reducing Waste

Toyota Motor Manufacturing (UK) Ltd – achieving zero waste to landfill [the broken link was removed]

Toyota developed its Environmental Management System to stay on top of its environmental objectives and ensure that all processes are dealt with in an environmentally friendly way and are implemented across all the plants. There are full key performance indicator reporting systems, visual controls and displays throughout the plant.

A great improvement strategy. Determine what you are trying to do. Understand the system. Set up process measures that measure that system. Improve the system and track the results. Repeat. Maintain focus over the long term. Result: success.

Three keys highlighted in the article:

1. Suggestion of continuous improvement ideas by all employees – Kaizen
2. Attendance of the managing director to “see for himself” – Genchi Genbutsu
3. Adoption of the best ideas in our standard processes – Yokoten

The reduction of waste met Toyota’s environmental goals – what it sees as its obligation to society – and the elimination of waste financially benefits Toyota.

Posted in Data, Innovation, Management, Management Articles, Process improvement, Systems thinking, Toyota Production System (TPS) | Tagged , , , | 1 Comment

Supplier Development Article

Supplier development in a lean age [the broken link was removed] by Rich Weissman

“We need to keep in mind why we are doing supplier development and relationship management, and profit needs to be the focus of our efforts. Profitable suppliers will tend to be happier suppliers, and happier suppliers will ultimately perform better.”

I get the impression from this and many other articles that people are scared to talk about any other aims than profit. Deming didn’t have such a problem. Toyota doesn’t have such a problem. Google doesn’t have such a problem [the broken link was removed].

Others need to learn that there are multiple aims for organizations not just profits but providing good jobs, serving customers, aiding community… Learn from the leaders – talking as though the only purpose of the organization is to make profit is counterproductive.

Supplier development is one of those areas that really seems to cause problems for those that try to adopt some management improvement ideas without understanding the system within which those ideas function. Without an deep understanding of long term thinking it is very difficult to truly partner with suppliers.

Posted in Deming, Lean thinking, Management, Management Articles, Toyota Production System (TPS) | Tagged , , , | 2 Comments

Origins of the Toyota Production System

Brief Investigation into the Origins of the Toyota Production System [the broken link was removed] by Art Smalley. Another excellent article by Art Smalley. Loaded with great historical information. I find these articles interesting on at least two levels. First there is great management information. Learning more about how the ideas we use now developed adds to my understanding. Second it is interesting historical information – I am not sure if it actually makes any difference in how I would manage but I just find it interesting.

There is some excitement over different views of how much credit Shingo should get versus Ohno (and such questions). I find the discussion interesting, but I don’t worry much about how much credit each deserves. I suppose that is partially my personality and particularly that I am not that connected with either of them. The debates about how much value Deming provided I get a bit more emotional.

With Deming I find when people don’t recognized his contributions they often missed much of what he talked about (so their understanding of for example innovation in Deming’s ideas were flawed which lead to less effective management by them). So I can see a justification for trying to argue that for example, Ohno’s contributions were more significant than is generally accepted. Based on that believe, looking more closely at Ohno’s ideas would make more sense.

Certainly our focus should be on improving our understanding of management. It seems to me the discussion has been beneficial thus far. I would also admit that this is probably of interest to a small sub set of those interested in lean manufacturing. That is fine. I do believe there is no benefit for discussions to degrade into negative attacks but when the discussion is mainly sharing views, information and ways of looking at the historical record I find it can be very interesting.

Via: Much Ado About Shingo and Ohno

Related:

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How Google Works

How Google Works [the broken link was removed] by David F. Carr

An interesting look at the technology system behind Google.

“But this is the start of the story,” he adds, part of an approach that says “don’t necessarily do it the way everyone else did. Just find some way of doing it cheap and effectively—so we can learn.”

Google was driven from the beginning by engineers that sought to do what was best. Since those engineers were the founders of the company and still run the company Google has been able to keep the focus not on what is accepted as conventional wisdom but what actually works best. Google understands when you experiment things might not work out. Google’s solution is to experiment quickly and fail early (turn the pdsa cycle quickly). That is something every organization can apply.
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Posted in Google, Innovation, IT, Management, Systems thinking | Tagged | 4 Comments

More on Non-Auto Toyota

Toyota: Way, Way Off-Road [the broken link was removed] by Ian Rowley. Business Week has an article exploring the non-automotive Toyota, as we have mentioned previously: Toyota RobotsToyota as HomebuilderToyota Engineers a New Plant: the Living Kind.

Toyota controls dozens of businesses that have virtually nothing to do with automaking, ranging in size from resort developer Nagasaki Sunset Marina (77% owned by Toyota), with just five employees, to Toyota Financial Services Corp., a wholly owned subsidiary with 8,000 workers and $1.7 billion in operating profits in fiscal 2005. All told, revenues for Toyota’s nonauto businesses jumped 15.5%, to $10.3 billion, in the year through March, and are up 50% since 2003. While last year’s total still represented less than 6% of Toyota’s overall sales of $180 billion, if broken out the company’s sideline businesses would rank No. 192 among companies in the Standard & Poor’s 500-stock index.

Pretty impressive.

Following that tradition of corporate exploration, since 1986 Toyota has had a New Business Project Committee to look into concepts in five areas, including factory automation, electronics, and biotechnology.

And this this long term thinking is an important part of Toyota’s management system.

Posted in Innovation, Toyota Production System (TPS) | Tagged | 2 Comments

North American Manufacturing

Can North American manufacturers thrive again? [the broken link was removed] by David Hogg

I once again feel compelled to point out that the USA is still manufacturing more than ever and its share of Global manufacturing is either not declining or declining very slightly.

The sad part is that employees seem to understand what managers do not. Why do you think that nearly 63,000 people applied for only 2,000 production line jobs at a new Toyota plant in Texas in just two weeks? Workers realize that Toyota offers the right environment for them to grow. They have grown tired of the lack of respect offered by most North American companies.

Well said. Also note, Toyota the most lean of all automobile companies is in the news announcing hiring new employees in North America. The others are announcing job cuts. Lean manufacturing is not about job cuts.

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Posted in Economics, Manufacturing | Tagged | 1 Comment