Lean at NUMMI

Posted on January 11, 2006 by John Hunter

Lean at NUMMI (site broke the link so I removed it) by Patrick Waurzyniak , Manufacturing Engineering. An article well worth reading.

NUMMI’s production system is patterned closely after TPS, which is constantly changing and being updated, notes Gonzalez-Beltran. The pillars of TPS are the waste-reduction techniques of Just-in-Time production, bringing inventory to where it is needed and at the right time, and also jidoka, which provides machines and operators the ability to detect abnormal conditions and immediately stop work if such conditions occur. Other major lean manufacturing elements being emphasized at NUMMI include standardized work, kaizen events, jishuken (an in-depth week-long workshop similar to a kaizen event), and value-stream mapping, which NUMMI has pushed down into its supplier companies.

Related posts:

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Leading Lean: Right Tool, Right Problem, Right Thinking

Posted on January 11, 2006 by John Hunter

Leading Lean: Right Tool, Right Problem, Right Thinking [the broken link was removed]

One look at the kanban card in light of lean thinking helps those using it understand how and why it works, because they see it and understand it as a request, not a card. It is a method to connect a customer to a supplier. But most companies implementing kanban systems are not successful at getting the users to understand how and why the tool works. The most common excuse – it is too hard for our people to understand – —stands in stark contrast to the simple concept.

You can read about the tools and techniques of lean in any book. You can delegate the application and implementation to just about anyone. But you cannot succeed without internalizing the principles of lean throughout all of management, and using that thinking to guide the implementation, daily decision making, problem solving, managing and coaching.

More lean thinking articles

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Customer Service is Important

Posted on January 10, 2006 by John Hunter

Double Trouble, Don Oldenburg, Washington Post:

Digging into the details, Stevenson, a mechanical engineer, did a double take at what looked to him like a double charge. Verizon was billing his sweetie for the local plan, for the new regional plan and also for a la carte services that are included in the regional plan. Sorry, wrong numbers!

He called Verizon to complain. “The customer service representative said that they knew they’ve been having an issue with their system double-billing,” Stevenson said. “When I asked if they were taking any steps to remedy this by notifying their customers . . . or refunding money, they simply said ‘no,’ that most people call when they notice that they’re being overcharged.”

What do I find most surprising about this? That the customer service representative actually said they were doing nothing. The idea that they would choose to do nothing is not that surprising to many, I would guess.
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How Not to Convert Equity

Posted on January 10, 2006 by John Hunter

CNNMoney is not exactly intellectual discussion of economic and investing issues but normally it offers fairly good material for the large number of people. Especially those who really don’t want to read Warren Buffett or Brad Setser [the broken link was removed]. Still the following quote in their article, Cashing in on hot real estate is just wrong:

They also have one extremely valuable asset: a house in the now trendy Silverlake neighborhood of Los Angeles that’s worth $1 million, nearly four times what they paid in 1995. The equity, Handel says, is “lovely,” but it’s not doing them much good right now.
…
San Diego-based certified financial planners Christopher Van Slyke and Terry Green recommend an unconventional plan: taking out a new $500,000 ARM.

Handel and Laport can pay off their existing mortgage before the rate rises and retire their other debts. They can put the remaining $200,000 into stock and bond funds.

To be sure, borrowing against a house to put the proceeds into the market rarely makes sense. But in Handel and Laport’s case it does because so much of their net worth is tied up in their home, and the super-hot L.A. real estate market looks primed for a fall…

They can convert equity that might melt away.

They can what? In no way does increasing their leverage convert equity that might melt away. Any amount of “melting away” will still happen after this increase in leverage – no conversion has happened. They still have a full ownership interest in the real estate. If the value of their house fell $300,000 before or after this supposed “conversion” they would “lose” (on paper) the same amount: $300,000. The investment risk for the house has not changed (for the whole portfolio you could argue it has but that gets complicated and subject to debate).
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10 Stocks for 10 Years Update

Posted on January 9, 2006 by John Hunter

In April of last year I posted on 10 stocks for 10 years. At that time I also setup an fund through Marketocracy, which allows for 3rd party tracking of investing results. See the results so far on Marketocracy’s site [the broken link was removed]. Thusfar the portfolio is up 20%, in under 9 months (versus 13% for the S&P 500 for the same period of time.

The 10 stocks didn’t meet the diversification requirements for marketocracy, at the time, so I modified the portion of the portfolio for each stock when I setup the fund. The portfolio as of Jan 2006 (17% cash):
Stock % of fund Current Return
Google – GOOG 16 114%
Templeton Dragon Fund – TDF 12 25%
Toyota – TM 10 48%
Dell – DELL 8 -13%
Petro China – PTR 5 36%
Cisco – CSCO 5 8%
Amazon – AMZN 4 39%
Pfizer – PFE 4 -9%
First Data – FDC 4 11%
Yahoo – YHOO 4 25%
Intel – INTC 3 13%
BP – BP 3 5%
Walmart – WMT 3 -5%
Templeton Emerging Markets Fund – EMF 2 43%
Microsoft 1 6%

Obviously Google is doing quite well, up 114%. The second largest gain is for Toyota, which is up 48%, I’m sure a surprising result to many.

I also manage a more aggressive fund (more volatile stocks and much more active trading) through marketocracy – see more on the Darvamore Fund The largest holdings in the Darvamore Fund are: DEPO, ATPG, CRDN, GOOG, SFCC and EEFT. More on the Sleep Well Fund.

Read more:

Posted in Google, Investing | 3 Comments

Agility vs. Six Sigma

Posted on January 8, 2006 by John Hunter

My response to the agilemanagement list:

I agree with David Anderson [the broken link was removed], in this thread [this broken link was also removed], as well as pretty much everything else actually. If I understand his writing correctly I am probably a bit more critical of how Six Sigma is actual practiced, but that is fairly minor difference of opinion.

I have posted a couple item on managing innovation

You manage processes, such as thinking up a new way to use computer technology, differently than you a process to manufacture tires. But the idea that you don’t manage and improve the process just because the process seems discontinuous is a mistake.

I think David is right to point to Clayton Christen’s work – people talking about managing innovation should read it. Others to read: Edward deBono (he especially has very defined processes to encourage innovative thinking) and Gary Hamel articles.

Previous post on Innovation in Organizations. Google also has good examples, on this topic:

Douglas Merrill, senior director, information technology at Google “Innovation doesn’t happen ‘on the way by,’ it must be design into everything we do,”

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Posted in Innovation, Management, Process improvement, Six sigma | Tagged , , | 1 Comment

The Public Sector and Deming

Posted on January 7, 2006 by John Hunter

In, Public Management-The Bush Administration, Paul Soglin, former Mayor of Madison Wisconsin, quotes one of Deming’s 14 obligations of management:

W. Edwards Deming’s point number ten is, “Eliminate slogans, exhortations, and targets for the workplace.”

In looking for online background on Deming thinking in Madison I came across this explanation of Madison’s start [the broken link was removed], on the US Department of Labor site:

Madison’s quality improvement efforts began after then-Mayor James F. Sensenbrenner and his staff were exposed to the teaching of W. Edwards Deming in 1983. A pilot project at the motor equipment division made substantial improvements in prioritizing repairs, improving communications with customers, reducing steps in the inventory purchasing process and, ultimately, reducing vehicle down time, all of which saved money and improved service at the same time. Based on the success of the pilot, it was decided to expand the philosophy throughout city government. A range of quality improvement projects, with active involvement by union members, saved the city between $1.1 million to $1.4 million over a four-year period, agency heads estimated.

My father, Bill Hunter, was very involved (responsible for it, if you want my version of events) with the effort so I am interested in the results. He wrote up the experience for Deming’s Out of the Crisis (pages 245-247).

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Lean and Six Sigma in India BPO

Posted on January 7, 2006 by John Hunter

Via Panta Rei, Business Process Outsourcing, Meet Value Engineering [the broken link was removed], Measure for Measure [the broken link was removed]

Dedicated Six Sigma, Lean and Reengineering teams continuously spot and improve processes for Genpact as well as its customers. Supported by 500-plus Six Sigma Black Belts and Master Black Belts, 150 Lean Coaches, these teams have implemented 400-plus breakthrough improvements, 3,000-plus Kaizen improvements that enhanced productivity by 6-8 per cent year-on-year. Genpact shares these benefits with customers,” says Bhasin.

For one of its customers consolidating operations from multiple centres to one, offshoring the processes and Six Sigma initiatives delivered a productivity benefit of $300 million, he says.

According to S. Nagarajan, Founder and Chief Operating Officer of 24/7Customer, value engineering is a means of value creation more than cost reduction.

Another interesting quote:

Continued cost inflation, higher wages and a talent crunch threaten India’s global sourcing competitiveness. This will allow lower-cost countries to grab market share from India.

Related Posts:

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Improve Google

Posted on January 7, 2006 by John Hunter

In response to a post by Matt Cutts:

Is there a new product or feature that you wish Google offered? Is there anything on the web that annoys you because there’s not a useful product that does exactly what you need? Is there an extra feature of Gmail, AdWords, Google Maps, AdSense, Google News, or another product that you wish we offered?

I can think of a lot of new features or products that I’d like to have, but I don’t want to skew the opinions. This thread is completely open-ended: I’m looking for any feature or product that a regular user might want.

I have suggested all of these for years and I still want them:

1) Let me chose the type of files searched (exclude pdfs, word, power point..). Then if I can’t find what I want I can expand to include them. At the very least give me some way of making the type much more visible (I realize it is there now but I often click before my mind notices…).

2) Let me remove web sites from my default searches. I would imagine this could even be used to help Google’s normal search results by getting a sense of sites huge numbers of people “block” The same spam sites show up for searches and I would rather block them if Google can’t figure out how to do so.

3) Let me create site search lists, where I create lists of sties I want searched – then I can target my searches how I want. Actually now that Rollyo does this [the broken link was removed] I don’t care that much but since they use Yahoo to do so, I would figure maybe Google will finally make this available. It would be nice if you suggested sites others with similar site lists included.

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W. Edwards Deming Outstanding Training Award

Posted on January 4, 2006 by John Hunter

W. Edwards Deming

W. Edwards Deming Outstanding Training Award [the broken link was removed] from the United States Department of Agriculture (USDA) Graduate School. The award honors W. Edwards Deming for his 22-year association with the Graduate School, USDA as a mathematics and statistics faculty member and curriculum chair.

Award Eligibility:

The W. Edwards Deming Outstanding Training Award is presented annually by the Graduate School, USDA to a federal government unit or department that has successfully completed an innovative and impressive employee development and training initiative that has achieved measurable results. Individuals are not eligible for this award.

Request a 2006 Deming Nomination Packet [the broken link was removed].

The Graduate School, USDA names the Naval Surface Warfare Center the winner of the W. Edwards Deming Award for 2005.

The Graduate School, USDA has named the Naval Surface Warfare Center, Port Hueneme Division: Naval Systems Command the 2005 winner of the W. Edwards Deming Award. Faced with the prospect of substantial attrition of senior managers due to retirement, in 2001 the Center developed a Management Succession Program. An established training institution delivered two sessions, which honed management skills through improved competencies and action learning. Participants were mostly first-level supervisors, and the courses focused on problem solving, conflict management, leadership and communication skills and the ability to build coalitions and affect organizational change. The first class has achieved concrete results. In just three years these trainees hold more than 20 percent of department head or equivalent positions. The Center anticipates further organizational gain.

Runners-up for the Deming Award are three offices in the Social Security Administration – the Office of Systems Electronic Disability (eDib) Training for the IT Professional, the Office of Training in the Office of Human Resources and the Allegation Management Division in the Office of the Inspector General – and the Fundamentals Training Staff at the National Park Service.

The Graduate School presents the W. Edwards Deming Award to a federal government organization or civilian branch of the military that has completed an innovative employee training initiative with measurable results.

Deming Management Method
Deming Prize
2005 Deming Prize Awardees
2004 Deming Prize Awardees
How to Create Unethical, Ineffective Organizations That Go Out of Business [the broken link was removed], W. Edwards Deming Institute, I will be co-presenting this seminar – John Hunter.

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