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lean manufacturing
What is happening in lean manufacturing in the world
Curated by Michel Baudin
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'Gods' Make Comeback at Toyota as Humans Steal Jobs From Robots | Bloomberg

'Gods' Make Comeback at Toyota as Humans Steal Jobs From Robots | Bloomberg | lean manufacturing | Scoop.it
Inside Toyota Motor Corp.’s oldest plant, there’s a corner where humans have taken over from robots in thwacking glowing lumps of metal into crankshafts. This is Mitsuru Kawai’s vision of the future.
Michel Baudin's insight:

According to the article, Toyota's management feels that maintaining the know-how to make parts manually is essential to be able to improve automated processes. 

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The Day I Thought I’d Get Fired from “The Old GM” – Putting Quality over Quantity | Mark Graban

The Day I Thought I’d Get Fired from “The Old GM” – Putting Quality over Quantity | Mark Graban | lean manufacturing | Scoop.it

Blog post at Lean Blog :"[...]I’ve been in healthcare for 8.5 years now, but at the start of my career, I was an entry-level industrial engineer at the GM Powertrain Livonia Engine plant from June 1995 to May 1997. This plant was in my hometown, Livonia, Michigan and was located exactly 1.3 miles from the house where I grew up. The factory opened in 1971, two years before I was born. The factory closed in 2010 due to the GM bankruptcy and sits empty today as part of the 'rust belt' ..]"

Michel Baudin's insight:

About a decade before Mark, I spent time implementing scheduling systems in GM plants, and my memories, while not great, are less gloomy than Mark's. My main project was at the GM aluminum foundry in Bedford, IN (http://bit.ly/1fRFTcF) which is still open today, unlike the Livonia plant where Mark worked. 

 

I remember being impressed by the depth of automotive and manufacturing knowledge of the GM engineers and managers; I also remember them as unable to implement any of their ideas, because it was dangerous to be perceived as someone who makes waves. They had no need for the scheduling system, but it was a corporate decision to deploy it in 150 plants, and they just had to get along. 

 

The company culture was dysfunctional -- particularly in quality, safety, and improvement --  but the plant was in a small town where the employees all knew each other and worked to make a go of it as best they could. And, they are still around. 

 

I have since experienced a radically different quality culture in another car company. The quality manager in a parts plant once noticed that defectives had been shipped to final assembly. The parts had been machined so well that they didn't leak at final test even though they were missing a gasket. 

 

The quality manager --  who told me the story -- felt that he had to do whatever it took to prevent the cars being shipped with the defective parts. What it did take was driving two hours to the assembly plant at night, locating the finished cars with the defective parts in the shipping yard, and removing their keys. 

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Steve Jobs on Juran | Curious Cat | John Hunter

Steve Jobs on Juran | Curious Cat | John Hunter | lean manufacturing | Scoop.it

"This webcast shows an interesting interview with Steve Jobs when he was with NeXT computer. He discusses quality, business and the experience of working with Dr. Juran at NeXT computer. The video is likely from around 1991."

Michel Baudin's insight:

The interview starts slowly, with Jobs collecting his thoughts before speaking, and it was not supposed to be about Juran. Jobs is the one who brings up Juran in response to a question about quality.

 

At first, he reverently calls him "Dr. Juran" -- Juran was not a PhD -- and then, affectionately, "Joe Juran." Steve Jobs as the respectful disciple is something I had not seen before. What was he so impressed with? Here are a few I picked up in  the video:

 

1. While focused on quality, Juran did not see it as more than it was. It is about making good products and services; it is not a philosophy of life. 

 

2. For all his accomplishments, Juran remained simple. He treated everybody alike, and  answered every question put to him as if it were the most important in the world. 

 

3. Juran was "driven by his heart" to share what he had learned and found out in decades of work. 

 

Towards the end of the video, the 30-year old Jobs sounds more and more as if he setting a role model for himself. But Juran lived to be 103; Jobs died at 56, only three years after Juran, and did not get the chance. 

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The Discovery of Lean | Narrated Prezi by Mark Warren

Brief description on the origins of lean. Lean is an outcome of implementing Flow Principles + the TWI program
Michel Baudin's insight:

This is a short version of a one-hour presentation I heard live a few months ago. Mark's take is the result of more than 30 years of practical experience in all sorts of plants around the world and more than a decade of intensive research of original documents in numerous archives in several countries. 


To understand where concepts and techniques are useful in manufacturing today, we need to know who invented them and for what purpose. The historical perspective is not a luxury, and the explanations of this history must be accurate if it is to enlighten us. 


At historical research, Mark is a pro; I am an amateur. John Hunter (http://management.curiouscatblog.net) thinks I have a "library full of dusty tomes." In truth, I only have a few old books on manufacturing, half of them recommended by Mark. 

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Philip Marris's curator insight, March 31, 7:13 AM

A great 10 minute Prezi narrated presentation of Lean.  It concludes with a warning about trying to copy a mature system (Toyota Production System). It emphasizes the steps : Learning to see, learning to think and learning to improve. Maybe a little too American in its point of view but apart from that excellent.

 

Mark Warren is a very experienced Lean practitioner. Thanks to Michel Baudin for pointing out this presentation.

Martin (Marty) Smith's curator insight, April 1, 1:17 AM

Going to have to steal the narrated Prezi idea. Marty

dumontis's curator insight, April 1, 3:41 PM

Nice!

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Renault: An international school of Lean Manufacturing opens at Flins | Automotive World

Renault: An international school of Lean Manufacturing opens at Flins | Automotive World | lean manufacturing | Scoop.it

"Jose-Vicente de Los Mozos, Executive Vice President, Manufacturing and Supply Chain, of the Renault Group, inaugurated the International School of Lean Manufacturing yesterday." 

Michel Baudin's insight:

When I visited this plant in 1994, I never imagined that it would be the site of an international school of Lean 20 years later.

We were working at the time on Lean implementation with CIADEA, the Renault licensee in Argentina. It had originally been a subsidiary, was sold to local entrepreneur Manuel Antelo in 1992, and was repurchased by Renault in 1997. 

At the time, my hosts in Flins thought that Lean was just a way to cut heads and that implementing 5S would cause production to drop.

Times change. 

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A DEFINITION OF LEAN

Maybe it's time for a better definition of "Lean." Here's one for you to consider and build on.
Michel Baudin's insight:

The proposal is "Lean is the permanent struggle to flow value to one customer." 

 

"Permanent struggle" is fine, but I prefer "pursuit." It means the same thing but it is shorter and "pursuit of happiness" sounds better than "permanent struggle for happiness."

 

On the other hand, I have a problem with "flow value," which I see as the sort of vague abstraction that would prompt Mike Harrison to ask whether it come in bottles. It is exactly what Dan Heath is warning against in the video included in the slideshare. 

 

I also have a problem with the exclusive focus on customers, which I see as Business 101 rather than Lean. Lean includes many features like heijunka, that are intended to make life easier for suppliers and are transparent to customers. Going Lean means looking after all the stakeholders of the business, not just its customers.

 

This is why I define it instead as the pursuit of concurrent improvement in all dimensions of manufacturing performance through projects that affect both the production shop floor and support activities. 

 

Yes, I know, it is specific to manufacturing, but that is not my problem. 

 

 

 

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Philippe Doyon's curator insight, March 31, 5:34 PM

Voici la définition du LEAN de Mike Rother.

Il est, à mon avis, l'auteur du meilleur livre sur le Lean Management: Toyota Kata, Managing People for Improvement, Adaptiveness, and Superior Results.

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Is OEE a Useful Key Performance Indicator? | Jeffrey Liker

Is OEE a Useful Key Performance Indicator? | Jeffrey Liker | lean manufacturing | Scoop.it

"For manufacturing that is equipment-intensive, how the equipment works is often the main factor in productivity. Total Productive Maintenance (TPM) has become a buzzword in lean and a generally accepted metric is Overall Equipment Effectiveness (OEE). This is measured as the product of three factors:

OEE = Availability x Performance x Quality

Availability = run time/total time

Performance = Total count of parts/target count (based on a standard)Quality = Good count/Total count

Ignacio S. Gatell,  questions whether companies using OEE really understand it, can explain it clearly to their customers, and understand what it means to compare OEE as a KPI across plants. He questions whether even plant managers understand how it is calculated and what it means.

The only good argument for OEE is that at a macro-level in a plant it provides a high level picture of how your equipment is functioning."

Michel Baudin's insight:

About 15 years ago, a summer intern came to work at a client plant in aerospace machining. I thought a great project for him would have been to identify a common tooling package for machining centers that were grouped in a "Flexible Manufacturing System" (FMS). It was challenging, but it would have actually given the FMS the flexibility it was supposed to have. It was a real engineering project that would have improved performance.

 

Management, however, decided that a better use of his time was to collect data and calculate OEEs for another set of machines. It did keep the student busy all summer, but resulted in no change, and no improvement bragging rights for the student. 


I have had a problem with OEE ever since. It is an overly aggregated and commonly gamed metric that you can only use by breaking it down into its constituent factors; you might as well bypass this step and go straight to the factors. 


Among these factors, I find Availability to be most often confused with Uptime. The availability of a device is the probability that it works when you need it, and the total time in the denominator has to be the time you need it for. For example, if you work two shifts a day, the availability of a machine is not affected by your taking it down for maintenance on third shift. There have been cases of managers overproducing to increase run time and thereby boost the OEE of their machines...




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One on one with John Shook | Lean Management Journal

One on one with John Shook | Lean Management Journal | lean manufacturing | Scoop.it
LMJ Editorial Director, Jon Tudor, meets chairman and CEO of the Lean Enterprise Institute, John Shook, for the second in our One on one series. Jon asks some tough questions posed by a select few of the lean community's ...
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When Toyota met e-commerce: Lean at Amazon | Marc Onetto

When Toyota met e-commerce: Lean at Amazon | Marc Onetto | lean manufacturing | Scoop.it

"The spirit of lean management was already at Amazon when I arrived in 2007. Since the day he created Amazon, Jeff Bezos has been totally customer-centric. He knew that customers would not pay for waste—and that focus on waste prevention is a fundamental concept of lean. The company’s information technology was always very good at understanding what the customer wanted and passing the right signal down. "

 

 

Michel Baudin's insight:

Read this article for a personal account from Amazon's vice president of worldwide operations and customer service through 2013. 

 

The title is misleading, in that the article is not about any assessment of Amazon by Toyota, and the connection between the Amazon practices Onetto describes and TPS or Lean are tenuous.

 

For example, a service agent taking a product off the website based on repetitive customer complaints on quality is described as "pulling the Andon cord," which is a far-fetched metaphor.

 

An Andon cord, or stop rope, is supposed to be pulled whenever an operator notices anything wrong during the production process. It is not a response to repeated customer complaints and it does not result in pulling the product off the line. 

 

Linking Amazon's approach to Toyota is unnecessary. Amazon has been doing a great job; it is leading the world in e-commerce, an activity that is outside Toyota's expertise. It is Amazon's own approach, and they might as well call it the "Amazon Production System."

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Working for Anonymous Funds | Bill Waddell

Working for Anonymous Funds | Bill Waddell | lean manufacturing | Scoop.it

"There is a company I know well that will remain nameless that has about 300 employees, and they manufacture stuff on Vancouver Island – Just outside of Victoria, British Columbia.  The major markets for their products are gradually shifting from the Northwestern USA and western Canada to the Southeastern USA.  That puts them about 2,400 miles as the crow flies from more and more of their customers, but since crows can’t take their products to market it is actually a lot farther than that.

 

Closing their plant has never been an option.  They simply accept the fact that manufacturing on an island is never good, and being that far from their customers is a huge disadvantage, so they have no choice (at least no choice they are willing to consider) but to tighten their chinstraps and do that much better to overcome their geographic problems...."

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880 Saskatchewan health care leaders study Lean at Virginia Mason | The StarPhoenix

880 Saskatchewan health care leaders study Lean at Virginia Mason | The StarPhoenix | lean manufacturing | Scoop.it

"Close to 900 health workers will make the pilgrimage to Seattle in search of factory efficiency for hospitals. Take a look inside at the origins of the world's biggest health quality experiment."

Michel Baudin's insight:

This Canadian newspaper article is the most detailed account I have seen of the "Virginia Mason Production System." Virginia Mason Medical Center is a Seattle hospital that has been converting to Lean since 2001and now has a business unit teaching others what it has done. 

 

100 years ago, industrial engineer Frank Gilbreth developed the operating room procedures that are standard today, so it's not the first time hospitals learn from manufacturing.

 

What this article gives is examples of the changes that were made at Virginia Mason, in particular the application of 3P ("Production Preparation Process"), involving patients in the design of new care units, and simulating with full scale mockups. 

 

Other specifics include building design features to support maintenance and upgrades without disrupting care, the use of the two-bin system to manage medication supplies, and visual management. 

 

And the article also touts the results that Virginia Mason achieved through this effort, in terms of both improved care and economic performance. 

 

The StartPhoenix is a Saskatchewan newspaper, and the article also tells readers about the cost to taxpayers of the effort to emulate Virginia Mason in the entire health system of the province.

 

Most striking is the $39M contract over four years given to the Seattle consulting firm that helped Virginia Mason. As this translates to tens of people working full time on the project, it looks more like engineering than consulting. 

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What a Coffee Cup Taught Me About Poka Yoke and Human Errors | Peter Abilla

What a Coffee Cup Taught Me About Poka Yoke and Human Errors | Peter Abilla | lean manufacturing | Scoop.it

"Human Errors, Poka Yoke are concepts brought to life from my experience with coffee cup. One can learn a lot about Poka Yoke and Human Errors. This is a story about what a coffee cup taught me about how poor design in our products and systems invite human error.

Many years ago, I had to travel to Dublin every few months for work. [...]

One very early morning while waiting for the taxi to pick me up at my hotel to take us to the airport, my colleague with whom I was traveling with at the time had ordered coffee while I ordered a Coke since I’m not a coffee drinker. They brought him his coffee in this cup."

Michel Baudin's insight:

With its unsightly bumps and nooks, the “fancy cup” you show is not even pretty, which makes you wonder what the designer had in mind. The issues you bring up, however, are more about usability engineering in Don Norman’s sense, than Poka-Yoke.

 

A properly designed handle is self-explanatory in that any user who has never seen a cup will immediately understand what it is for. But it doesn’t make the cup mistake-proof: there is nothing physically preventing you from pouring coffee onto it while it is upside down.

 

Usability engineering, including is about controls that look and feel distinctive to the touch — as opposed to rows of identical buttons — that give you feedback when you have activated them, that have shapes that naturally lead you to use them properly, that respect cultural constraints in the meaning of shapes and colors, etc. A

 

Applying these principles in designing human interfaces reduces training costs and the risk of errors. It is valuable, but it does not prevent errors.

 

Incidentally, why do so many cultures, including Japan and China, use cups with no handles? An alternative to handles to avoid burning your fingers is the double-walled cup, and I have seen some from China. Otherwise, I have resorted to the Arab way of holding a handleless tea cup: between my thumb on the bottom and my index finger on the rim.

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And around and around it goes | Bill Waddell

And around and around it goes | Bill Waddell | lean manufacturing | Scoop.it

Not long ago I conducted an exercise with a client in which two teams of three people assembled a Lego product.  One team of three folks from accounting was given the 500 or so pieces the way Lego presents them – kitted in bags of parts that align with the largely graphic instructions.  Basically, all of the parts needed to make sub-assembly #3, for instance, are in a bag marked ‘3’, and the instructions for 3 show pictures of exactly how all of the parts are to be assembled...

Michel Baudin's insight:

You can do many things with Legos, and this article shows an example where a team of accountants who were given parts in kits and assembly instructions from Lego performed 40% faster than a team of engineers who were given the parts in single-item bags and only pictures of the finished assemblies. 

 

In drawing far-reaching conclusions from this example, however, Bill is comparing apples and oranges. It was faster to assemble from kits because somebody at Lego had kitted the parts, and the kits were complete and accurate. A fair comparison would require including the time needed for this. Kitting may still win, but not by a 40% landslide.

 

In a real manufacturing situation, you buy components and materials from specialized suppliers and, if you want kits, you have to put them together before assembly. Whether it is justified or not depends on what you are producing and on the parts you use. 

 

Let us assume you are making custom-configured products on a mixed-flow line, but there is one screw that is used in all configurations. You are better off presenting this screw on the line side in bins than distributing it across kits. 

 

On the other hand, it often makes sense to kit configuration-specific parts off line. It requires less labor overall but, most importantly, the work of kitting is done in parallel with assembly rather than in the final assembly sequence, which can cut in half the start-to-finish assembly time on the line. 

 

Even then, however, you have issues with kitting errors by operators who don't know the product, kits rendered unusable by a single defective part, and part stealing from kits, which is often done as an immediate remedy to the above. 

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Lean Systems Program Turns 20 This Year | UKNow

Lean Systems Program Turns 20 This Year | UKNow | lean manufacturing | Scoop.it

"It has been 20 years since the University of Kentucky took its first big step on the road to becoming a world-leading center for lean systems research and training.

 

The journey began in 1993, when representatives from the UK College of Engineering embarked on a series of discussions with Toyota leaders, regarding the possibility of collaboration in lean knowledge development and manufacturing research and development.[...]"

Michel Baudin's insight:

Congratulations! 

 

This story is about a Lean certification program at the University of Kentucky (UK),  not in the United Kingdom. 

 

I have some reservations about Lean Certification in general (http://bit.ly/1q4kVw0) and the following comments about the University of Kentucky program in particular (http://bit.ly/1hN04wp), based on the online syllabus:

 

The University of Kentucky's program includes Core Courses -- a train-the-trainer program -- and Specialty Courses -- for professionals outside of production operations. Some but not all the specialty courses are targeted at functions within the organization but others are about tools. Just the core courses add up to three one-week training sessions, while each specialty course is typically a one- or two-day workshop.

From the University's web site, however, I cannot tell when, or if, participants ever learn how to design a machining cell, or an assembly line, or how to reduce setup times. In the core courses, it's great to talk about mindsets, culture, and transformational leadership, but where is the engineering red meat?

The specialty courses address planning, improvement methods, logistics, supplier development, and other unquestionably important topics, but offer nothing about manufacturing or industrial engineering.

 

 

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Saskatchewan Health Care Data Not Showing Improvements from Lean?

Saskatchewan Health Care Data Not Showing Improvements from Lean? | lean manufacturing | Scoop.it

"The government has stated that its kaizan promotion offices do not measure or evaluate lean, and that no reports have been written. At the same time, however, it has stated that lean has already demonstrated benefits. To test this, I reviewed the HQC website - Quality Insight - that has a significant amount of provincial data. For each indicator I will report the first and last month or year where data were collected."

Michel Baudin's insight:

The article's author, Mark Lemstra, from The StarPhoenix, claims that Lean yielded no improvement in the financial or medical performance of Saskatchewan's health care system,  based on data from the Health Quality Council (HQC), available at http://bit.ly/1dQmihS.

 

The article's title is only about "Savings," but most of the body is about health outcomes and perceptions, and presented through numbers buried in text. 

 

Before taking this article at face value, I recommend checking out the HQC website directly. As in the featured image above, some metrics have clearly improved. Other indicators are flat, like  the willingness of patients to recommend their hospital, or the rate of medical error reports. And some have moved in the wrong direction, such as those related to pain management. 

 

It is perhaps not the rosy pictures that the Lean boosters would like, but neither is it the disaster Lemstra is painting. 

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Working outside in rather than inside out | Bill Waddell

"Perhaps one of the most inane – but very typical – aspects of the business process in manufacturers is the construction of the supply chain from the inside out.  Three times in the last week – count ‘em – three for three – I visited a manufacturing company with (1) problems delivering in the time frame customers want; (2) lots of inventory but rarely the right inventory; and (3) a supply chain constructed by their supply chain people based on some idea of how to construct a supply chain but not one constructed based on a delivery objective.

In other words, some factory guys got together at some point – probably with an accountant or two breathing down their necks and decided this is how we purchase and this is how we schedule production and that is the resulting lead time, so sales …. Go out and try to shove those lead times down customers’ throats, regardless of what customers want or need...."

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Is it a Bad Idea to Pay a Lean Consultant Based on a Percentage of Cost Savings? | Mark Graban

Is it a Bad Idea to Pay a Lean Consultant Based on a Percentage of Cost Savings? | Mark Graban | lean manufacturing | Scoop.it

Blog post at Lean Blog : The price paid for most management consulting work is based on either a daily rate or some variation of a flat-rate fee based on what is being delivered. Enterprise software pricing is also often fixed. In both cases, the client pays this with some expectation of benefits and even an “ROI” for the customer[..]

Michel Baudin's insight:

I agree with Mark, and I am happy when clients report that they get ten times in benefits what our services cost. A daily fee for work done on site and a fixed fee for deliverables for offsite work are simple arrangements; paying a percentage of benefits, whether cost savings or revenue increases, is a complicated arrangement, conducive to misunderstandings and disagreements. 

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Laurent MAIMI's curator insight, March 28, 5:54 AM

Lean is much more than only a short term cost-saving technique. The Lean consultant also would like to build a long term partnership with the client. My doctor is not payed more if i earn more money because i am in good health, but he is my doctor for years ...

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Is it Lean’s Fault or the Old Management System’s? | Mark Graban

Is it Lean’s Fault or the Old Management System’s? | Mark Graban | lean manufacturing | Scoop.it

Blog post at Lean Blog :

"The problem is the culture doesn’t change overnight. Leaders have years or decades of old habits (bad habits) that run counter to Lean thinking. They might be (might!) be trying to change, but people will still fall back into old habits, especially when under pressure.

I hear complaints (in recent cases) coming from different provinces in Canada that say things like:

Lean is causing hospitals to be “de-skilled” by replacing nurses with aidesLean drives a focus on cost and cost cutting, including layoffs or being understaffedLean is stressing out managers by asking them to do more and taking nothing off their plateNurses hate Lean because they aren’t being involved in changes[...]"
Michel Baudin's insight:

In this post, Mark Graban explains how the leadership in Canadian hospitals is slapping the "Lean" label on ancient and counterproductive "cost-cutting" methods, and how the victims of these practices unfairly blame Lean. 

 

This is definitely L.A.M.E., Mark's apt term for "Lean As Misguidedly Executed," and is found in Manufacturing as well as Health Care. Much of the article -- and of the discussion that follows -- is about what I call yoyo staffing: you hire more than you should in boom times, and lay off in recessions. 

 

Of course, it isn't what Toyota did, and churning your work force in this fashion not only disrupts people's lives but is bad business. Hiring, training and firing repeatedly prevents your organization from accumulating the knowledge and skills it needs. 

 

Mark makes the case that Lean should not be blamed for mistakes that have nothing to do with it. Other than raising consciousness, however, the post does not propose solutions to keep this from happening.

 

While there have been studies published on Toyota's approach to Human Resources (HR), I don't recall seeing much in the American Lean literature on topics like career planning for production operators. 

 

In his comments, Bob Emiliani paints the current generation of leaders as "a lost cause," and places his hopes on the next. He seems to suggest that the solution is to wait out or fire the current, baby-boomer leadership and replace it with millenials. I don't buy it and, deep down, neither does Bob, because he ends by saying "While one always hopes the “next generation will do better”, it could turn out to be a false hope."


Like everything in HR, generational change has to be planned carefully. The people who rose to leadership positions presumably did so not just because of bad habits but because they also had something of value to offer. And the way the baton is passed is also a message to the incoming leaders: it tells them what to expect when their turn comes. 

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Lean Handbags and Micro Failures | Mark Graban

Lean Handbags and Micro Failures | Mark Graban | lean manufacturing | Scoop.it
Blog post at Lean Blog :

I enjoy reading the magazine Inc. for my interests in startups and entrepreneurship. There are often examples and case studies that dire[..]
Michel Baudin's insight:

Well run businesses are always good reading, even if their stories are usually embellished. Starting the design of fashion accessories from a market price or organizing to allow chefs in a restaurant chain to experiment with new dishes, however, just sounds like good management, not examples of "Lean Thinking." 

 

I have never found much depth in the contrasting of "Margin = Price – Cost" with "Price = Cost + Margin," maybe  because I have never worked in a cost-plus business. Commercial manufacturers usually do not have the power to set prices this way. Perhaps, the Big Three US automakers did have that power in the 1950s, and Toyota didn't. 


In Tracy Kidder's 1985 documentary book "House" (http://bit.ly/1ivu7Hn),  a Boston lawyer hires a local contractor named to build a house in the suburbs. The contractor rigorously calculated the costs of the materials and labor, tacked on a 10% profit, and presented a bid with no wiggle room. It was not intended for negotiation, but the lawyer just had to wrangle some concession out of the contractor.  The culture clash between the two makes great reading, but also throws light on how "cost-plus" works in practice. 


The equation "Margin = Price - Cost" is based on the assumption that Price and Cost are characteristics of the same nature, both attached to each unit of product. It is true of Price: whenever a unit is sold -- in whatever form and however it is financed -- it has a unit price, and it is not ambiguous. 


Unit cost, on the other hand, is the result of allocations among products and over time done in a myriad different ways, with different results. By shifting overhead around, managers make the products they like appear cheap, and the ones they want to kill appear expensive. Once the "expensive" products are terminated, the same overhead is spread among fewer survivors, thus making new ones unprofitable, and the death spiral ends only with closure of the factory. 


Instead of the simplistic  "Margin = Price - Cost" for each unit, a sound economic analysis of manufacturing considers the flows of revenues and expenses associated with making a product in given volumes over its life cycle, and sometimes a product family rather than an individual products with, for example, some products given away as free samples to promote the sale of other products. 

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A brief rant about the ABC’s | Bill Waddell

"Apparently the folks writing about stratifying inventory into A, B and C items and building calculations of such into ERP packages didn’t get the lean memo.

Wikipedia is typical of such thinkers when they describe the ABC thought process as:

‘A’ items – 20% of the items accounts for 70% of the annual consumption value of the items.

‘B’ items – 30% of the items accounts for 25% of the annual consumption value of the items.

‘C’ items – 50% of the items accounts for 5% of the annual consumption value of the items.

The idea of micromanaging some items and slacking off on others based on purchase price is the very same theory they taught me at the University of Cincinnati back in the days  when … "

Michel Baudin's insight:

I agree with Bill that, from the point of view of manufacturing operations, the purchase price of materials is not the most important parameter. because the lack of a nail can prevent the completion of a product as effectively as the lack of a pump costing 1,000 times more. 

 

It doesn't mean, however, that classifying items to treat them differently is wrong, but it must be done by frequency of use rather than price, and I prefer to call the categories "Runners," "Repeaters," and "Strangers" rather than A, B, and C. 

 

As a function of rank, I then look for the percentage of units actually built that can be fully assembled with only the items of this rank and higher. It starts at 0%, and, as long as it stays at 0%, I consider the items to be Runners, essentially items you can't build any product without. At the other end of the spectrum, I call Strangers all the items without which you can make 95% of the units. And everything in-between is a Repeater. 

 

Then you may decide, for example, to dedicate an easily accessible storage location to each Runner, and make special arrangements with suppliers. For Repeaters, you may use the Kanban system, with smaller dedicated locations.  And you don't keep any stock of Strangers, but order them as needed and store them, if at all, in dynamically allocated slots. 

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Chrysler Group's WCM Academy Hosts First-Ever Awards Ceremony -- WARREN, Mich., Dec. 13, 2013 /PRNewswire/ --

WARREN, Mich., Dec. 13, 2013 /PRNewswire/ -- Lights! Glamour! Assembly lines? Chrysler Group's WCM Academy Hosts First-Ever Awards Ceremony.
Michel Baudin's insight:

Awards, and the rituals of presenting them to winners, are a tool of management communication. To give the desired message, you need to think through what you give the awards for, who you give them to, and the mix of tangible and symbolic rewards attached. 

 

Chrysler awards categories are not all self-explanatory, and there some that I just don't understand. The name of the awards, ETTEE, stands for "Excellence, Talent, Togetherness, Energy, Etc."

 

There are no awards under the "Etc." heading. All the "Talent" awards are given to individuals for "Highest Level of Project Savings." In other words, the only form of talent recognized is that of individuals to reduce costs. 


Under "Excellence," you have more individual awards for "Trainer of the Year," "Facilitator of the Year," and "Most Projects Tracked by an Individual." 


Under "Togetherness," you have awards for plants and teams: "HHH Best in Class," "Highest Percentage of People Involved," and "Excellence in Joint Leadership," 


Under "Energy," you have plant awards for  ""Highest Percentage of Projects Tracked by Plant, " and "Most Hosted Plant." and and individual awards for "Most Training Hours Completed." 


For the "person of the year" type of awards, the name gives no indication of the evaluation criteria, and perceptions of fairness may be as difficult to achieve as in Olympic figure skating. 


On the other hand, awards given based on metrics --  like cost savings, percentage of people involved, or number of hours of training taken -- have objective criteria that individuals can understand and pursue. The key issue here is whether you really want your employees to do that. 

 

 

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(Still) learning from Toyota | Deryl Sturdevant

(Still) learning from Toyota | Deryl Sturdevant | lean manufacturing | Scoop.it

"A retired Toyota executive describes how to overcome common management challenges associated with applying lean, and reflects on the ways that Toyota continues to push the boundaries of lean thinking."

Michel Baudin's insight:

You just can't pass up an article with the perspectives on Lean of a recently retired Toyota executive, even if it is in the McKinsey Quarterly. Most interesting are his stories about plants outside of Toyota that he visited recently, where he criticizes his hosts for complacency.


Because of the author's background, when he says "Lean," he means TPS or the Toyota Way. He also uses Toyota's own "respect for people." mistranslation of its "respect for humanity" (人間性尊重) principle.  Again, it's not about saying "please" and "thank you" but about taking full advantage of the unique capabilities people have when compared to other resources. 

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The Limits of Imitating Toyota | Bill Waddell

The Limits of Imitating Toyota | Bill Waddell | lean manufacturing | Scoop.it

"I recently received an email from a guy challenging the legitimacy of organizing into value streams and lean accounting.  The linchpin of his argument:  'I can’t find anything saying Toyota has done any of that.'

[...]

Seems to me if we want to get all Toyota-y about things we have to take Shingo’s words to heart when he wrote, 'We have to grasp not only the Know-How but also Know-Why.'

[...]

Using Toyota as the acid test for whether something is lean or not is rather naive and intellectually lazy. In most companies and most plants, asking ‘what would Toyota do?’ is the appropriate question – not ‘what did Toyota do?’"


Michel Baudin's insight:
Learning by imitationImitation is effective for learning. We condemn outright plagiarism, despise imitation, and value creativity. Yet even an original and unique artist like Pablo Picasso learned as a child by copying paintings. In Karate, you learn a new kata by following others. As you memorize the sequence of moves, you learn to perform them with speed and power. Then you learn the underlying self-defense principles embedded in the kata.  Until the 1970s, many Americans and Europeans dismissed "the Japanese" as imitators who copied what they saw and then competed with the original creators through low wages. But I have not heard this in decades. A principle behind the way Japanese traditional arts are taught is that know-how precedes and leads to know-why. Once you have assimilated techniques to the point that they are second-nature to you, your mind suddenly understands how they fit together as a whole and why they are necessary.  While this approach works not just for Karate, but also for sumi-e (ink wash painting), sushi, flower arrangement, and even machining, it can be abused. I would not recommend it, for example, to teach math. Sometimes, what you ultimately achieve as a result of going through motions is only an illusion of understanding that rationalizes the years you have invested in getting to that point.  For Lean or TPS, there is no alternative to learning by doing. There is no way to gain an understanding of cells or the Kanban system without living through implementation on an actual shop floor. As a consequence, the first time you do it, you are following along and imitating. Once you understand what you are doing, however, it behooves you to add your own twist and adapt the concepts to your needs. 
When brute force imitation worksOn the scale of an entire company, we should also not forget that brute-force imitation sometimes works. Once I had in one of my Lean classes a student who was a former plant manager in a large, European auto parts company known for its successful implementation of Lean. "Everything you taught," he told me,"I used in the plant, but I never knew why, until today." As he explained to me, the company's top management  issued "guidelines" to plant managers that were specific on which tools to use, regularly audited the plants,  and routinely fired the managers who did not comply, regardless of results. 
It sounds wrong, but how do you argue with success? In retrospect, it worked for that company because it was in the industry for which TPS had been developed and, at least initially, creativity was not necessary to improve on the existing system. Where brute force imitation fails is in new and different industries. 
How do you know "what Toyota would do"?Either you are steeped in Toyota's ways as a result of being an employee of the company for 10 years, and you have an idea of what its management might do outside of its core business --  including the ways it might misunderstand it -- or you have studied Toyota's system from the outside, and you don't really know what it would do. On the other hand, you may have a deeper understanding of the challenge at hand than any Toyota manager. Rather than trying to figure out what Toyota would do, I would rather follow Soichiro Honda's advice to his engineers: "Solve your own problems." Learn everything relevant that you can, then use your own judgement. You will be responsible for the outcome anyway.  Divergence and accurate representationThe whole Lean movement started from people learning about the Toyota Production System (TPS). That Lean should diverge from TPS was inevitable, but the Toyota connection remains the key reason business professionals pay any attention to Lean.  Given that the vocabulary itself has changed, making the connection on specifics is not always obvious. "Value Stream" or "Lean Accounting," for example, are not Toyota  terms, which does not make it easy to gauge the extent to which Toyota uses the concepts. 
There is nothing wrong with Lean professionals inventing approaches beyond TPS, but it must be clear and the tools must stand on their own merits. Business executives assume that what they are being sold as "Lean" is what Toyota does. Where it is not the case, they must be told upfront. 
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The NUMMI Story (Minus the Ending) | Matthew May

The NUMMI Story (Minus the Ending) | Matthew May | lean manufacturing | Scoop.it

"At the risk of being repetitive, allow me to retell one of my favorite stories. First, imagine the worst place you've ever worked. The darkest, most depressing, soul-sucking work environment you've ever had the misfortune to inhabit.

Got it in your mind's eye? Now, multiply it by oh, say, 100. That's how bad the place I'm about to describe was. I know, because I spoke to people who were there.

The year was 1982. It was the year of Jordaache Jeans. The year of Wendy's "Where The Beef?" commercial. And the It was 1982, the first full year of Reaganomics.

The place was the General Motors Fremont, California plant..."

Michel Baudin's insight:

The NUMMI joint venture between GM and Toyota is a great story of thorough transformation. It is how a car plant from worst to best. Unfortunately, it ended in 2010, when GM when bankrupt and Toyota declined to take over the entire venture. 

 

Now Toyota is part owner of Tesla,  the facility is the Tesla plant, and it has been getting renewed attention as such. This is a new lease on life but Tesla's 10,000 cars/year do not compare with the 250,000 NUMMI used to make. 

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2013 IW Best Plants Winners: Peak Performers | Operations content from IndustryWeek

2013 IW Best Plants Winners: Peak Performers | Operations content from IndustryWeek | lean manufacturing | Scoop.it
The 2013 IndustryWeek Best Plants winners meet the challenge of operational excellence -- and keep pushing for more.
Michel Baudin's insight:

It's an annual ritual, like the Academy Awards.

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