Air Products Strips Out Inefficiencies

Posted on October 2, 2005 by John Hunter

Air Products Strips Out Inefficiencies [the broken link was removed] by Rick Whiting, Information Week:

Air Products standardized on continuous-improvement methodologies based on Six Sigma and lean manufacturing five years ago to boost its operating return on net assets, a metric to measure shareholder return on Air Products’ asset base. The IT operation began using about 40 continuous-improvement tools and practices 18 months ago, says Alan Jeffery, manager of continuous improvement for global IT. The methodologies are used for root-cause analysis, where IT processes are scrutinized to identify wasted time and resources.

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Supplier Partnering

Posted on October 2, 2005 by John Hunter

Supplier Partnering: It’s better, it’s longer and it’s not what you think [the broken link was removed], Rey Elbo (Philippines):

This is to teach suppliers who could only continue supplying based on their long-term commitment and involvement to the implementation of basic 5S good housekeeping and process flow or layout.

Under this type of partnering, the suppliers are constantly educated, monitored and measured by their clients a.k.a. big companies. If there is ever any confrontation between client and supplier in this relationship, it must take place in the factory where it matters the most.

There is an inescapable logic to this. Education is best learned in the factory, not in the air-conditioned boardroom. It is the best way to survival. Not only teaching their own workers, but their suppliers as well.

Supplier partnering is the key to quality and productivity, and eventually towards competitiveness.

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Innovation and Creative Commons

Posted on October 2, 2005 by John Hunter

Creative Commons is a license that lets the creators of intellectual property clearly define how that property may be used by others. Partially this license is a reaction to the poor way copyright law is being viewed today (see links below).

Partially it is tool that gives creators a way to provide for more interaction with their ideas. And this interaction is a great way to market, in the right circumstances. More managers should be thinking about how their organizations can use this tool to improve performance.

A great example is found in this Wired article, Open Source Opens Doors to SNL [the broken link was removed]:

Live from New York, it’s — three comic talents who first made a name for themselves on the internet.

Andy Samberg will become a performing member of Saturday Night Live’s 31st season cast debuting Oct. 1, while Jorma Taccone and Akiva Schaffer have joined the show as writers. But all three got their first big break online, thanks in part to the viral popularity of video shorts they released on the net. In a move that may have helped fuel rapid grass-roots distribution, the comics released their work under Creative Commons licenses, which essentially let anyone copy a given work for free provided that person doesn’t try to profit from it.

This was an effective strategy to get their work into the public eye and market themselves.

Copyright background links:

Update: Learn more on the new deadly disease (systemic impediments to innovation through systemic copyright and patents failures).

Posted in Creativity, Economics, Innovation | Tagged , , , | 4 Comments

Ford and Managing the Supplier Relationship

Posted on October 1, 2005 by John Hunter

There have a been a number of articles (Ford to slash vendors of key parts [the broken link was removed] – Ford Rethinks Supply Strategy and posts (A “Kinder and Gentler” Lean Supply Base? – Ford Adopts Toyota-style Supplier Strategy [the broken link was removed]) about supplier management, many springing from Ford’s announcement [the broken link was removed].

My first thought on reading the stories about the press release was, didn’t Ford already say they were going to do this in the 1980’s or 1990’s?

John Weiser, Spring 1997 Executive-in-Residence, Graduate School of Management:

When Ford Motor Company embraced the Deming initiative, Ford’s president told his suppliers:

“We are in the process of making a major change when it comes to dealing with our supplying companies. My goal is that this will become a truly partnership effort, rather than the type of arm’s length relationship that has all too often been the way we have worked in the past.”

Continue reading →

Posted in Deming, Management, Manufacturing, Systems thinking | Tagged , , , , , , | 9 Comments

Performance Without Appraisal

Posted on October 1, 2005 by John Hunter

In response to the Alternatives to Stack Ranking? post on the popular Mini-Microsoft blog.

I’m also taking some time to contemplate on Deming’s points and assess how Microsoft is doing against them.
…
What I would deeply appreciate is real-world experience from people living with stack ranking alternatives.

I strongly suggest chapter 9 (Performance Without Appraisal) of The Leader’s Handbooks, by Peter Scholtes. You mentioned Deming. When asked “If we eliminate performance appraisals, as you suggest, what do we do instead?” Dr. Deming’s reply: Whatever Peter Scholtes says.” (page 296).

Abolishing Performance Appraisals by Tom Coens and Mary Jenkins also provides great practical examples.

——————

Actually, I just noticed the previous post to the mini-microsoft blog pointed to us.

I keep looking at the books about how to grow beyond using industrial-era performance reviews (yes, anti-stack ranking books are out there). I don’t think I’ll be able to fit the books in so they’ll have to wait until I get back. But I am printing out for reading later some various anti-stank ranking articles I found, especially this one over at Curious Cat:

* Total Quality or Performance Appraisal: Choose One by Peter Scholtes.

The comments on the mini-microsoft blog shows performance appraisal continues to be an emotional topic. People on opposite sides of the debate are very passionate.

I admit it took me longer to accept Dr. Deming’s thoughts on performance appraisal than other ideas (and that is even with Peter Scholtes being a friend which gave me the opportunity to discuss the idea with him). So I understand it is not an easy concept to accept. Management Craft has also been focusing considerable energy on this topic recently.

This is the 100th post to the Curious Cat Management Improvement blog.

Previous Performance Without Appraisal post.

Posted in Deming, Management, Performance Appraisal, Psychology, Respect | Tagged , , , , , , | 7 Comments

Business Improvement with Six Sigma

Posted on September 29, 2005 by John Hunter

Business Improvement with Six Sigma [the broken link was removed] by Dr Anirban Basu (Express Computer, India IT weekly):

The organisation, a CMMI-level 5 company found that although the SLA (Service Level Agreement) with its US client specified that the support time for most critical (level one) complaints should not exceed 6 hours, on the average, it was taking 8 hours with variation from 2 to 14 hours. Further, its US client told them that the support time needed to be reduced to 4 hours because of strong demand from end-users for better service.

Related Posts:

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Spreading the Lean Gospel

Posted on September 29, 2005 by John Hunter

Spreading the Lean Gospel [the broken link was removed] by Rebecca Reid:

Bested said lean manufacturing at the Air Fuel Modules Division was a two-fold philosophy. The first aspect was to resolve current manufacturing inefficiencies and to implement lean principles for all new programs coming in, and the second was changing the business processes involved.

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The Lion of Lean

Posted on September 25, 2005 by John Hunter

Great article – The Lion of Lean: An Interview with James Womack [broken link was removed] by Francis J. Quinn, Supply Chain Management Review:

Let’s just take one example in the purchasing area. People say, “Yes, we’re going to have a lean purchasing organization. And we’ll start by having target pricing.” You say, “Great, but how are you going to do target pricing?” “Well, we’ll set the prices 5 percent below what they are now and that will be our target pricing.” “Fine, guys, but you haven’t done any analysis. With true target pricing, you actually have to look at every step and figure out what it costs – including what’s happening out in the world right now with regard to materials. The costs are really going up, and this reality has to be factored into your pricing approach; otherwise, all you’re doing is squeezing your suppliers.”

As Deming said page 31 of the New Economics: “A numerical goal accomplishes nothing. Only the method is important not the goal.”

Lean people are always technology skeptics. They’re not Luddites, mind you, they’re just technology skeptics. They spend their time on creating a process that requires as little information as possible, while the rest of us try to figure out how can we get more and more and more information.

Perhaps the most interesting example is 7-Eleven in Japan. It’s probably the leanest grocery company on the planet, doing demand-driven replenishment multiple times during the day. Solectron is doing a good job of going lean in contract manufacturing. You find some examples in unexpected places, too. One of my favorites is the post office in Canada. Postage rates in the United States keep going up, and the USPS [United States Postal Service] is losing a fortune. On the other hand, Canada Post is keeping rates steady and pays hundreds of millions of dollars in profits to the Canadian government. What’s the difference? Canada Post went lean.

More lean thinking articles – Womack articles.

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How Toyota Turns Workers Into Problem Solvers

Posted on September 25, 2005 by John Hunter

How Toyota Turns Workers Into Problem Solvers [the broken link was removed], Sarah Jane Johnston interview of Steven Spear.

It is our conclusion that Toyota has developed a set of principles, Rules-in-Use we’ve called them, that allow organizations to engage in this (self-reflective) design, testing, and improvement so that (nearly) everyone can contribute at or near his or her potential, and when the parts come together the whole is much, much greater than the sum of the parts.

The main difficulty is not a knowledge gap, but a performance gap. Most of what Toyota does has been published in numerous books (The Toyota Way, The Machine That Changed the World…) and articles (see see Curious Cat links to books and articles on Toyota’s management ideas). Reading that information is wise, but that is the easy part. The difficult part is actually managing more effectively. Some of the concepts can be difficult to accept but they really are not too difficult to understand.

Continue reading →

Posted in Creativity, Deming, Management, Process improvement, Toyota Production System (TPS) | Tagged , , , , , , , | 3 Comments

SPC: History and Understanding

Posted on September 23, 2005 by John Hunter

SPC: From Chaos To Wiping the Floor [broken link removed 🙁 it will be nice when sites start to realize breaking links is not acceptable] by Lynne Hare (who also was the 1997 Hunter Award winner)

Shewhart based control chart limits more on the economics of change than on underlying probabilities. Ever the empiricist, Shewhart seems not to have trusted probability limits alone.

Setting control limits at 3 standard deviations is a decision based on experience. Shewhart, Deming and others determined it was sensible to take resources to look for a special cause was most effective for results more than 3 standard deviations from the mean – it is not a mathematical conclusion but a empirical conclusion.

It is disappointing to see some users place specification limits on control charts. Processes don’t know or even care about specifications. The presence of specification limits on control charts encourages users to adjust on the basis of them instead of the calculated limits. The resulting miscued adjustments are likely to result in increased process variation, which is the opposite of the intent.

Continue reading →

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