Home Depot's CEO and Gemba Walks

Bob Nardelli is Watching

Update Jan 4 2007 --- I really had it wrong on Nardelli, see the latest news and post.

They don't call it a "gemba walk", but in the new Fast Company magazine, there is a profile on CEO Bob Nardelli, who came from General Electric under Jack Welch. Ignore the ominious Big Brother sounding headline and check it out.

...He also spends at least one week a quarter as a "mystery shopper," popping in unannounced to as many as 10 stores a day. "There was a perception that I was going out to catch people," he says. "Over time they understand that I just want to see it like a customer. I can do my job better if I have firsthand exposure to the good, the bad, and the ugly."

That seems like a perfect illustration of the concepts "Genchi Genbutsu" (go and see) and "Gemba" (actual place). Rather than relying on reports to run a plant or company, put on some walking shoes and "go and see" at the "actual place", whether its a factory or a store. I'm sure Nardelli is a much more effective leader because he sees what it's like as a customer (assuming the employees don't know what he looks like and they haven't been tipped off that they're coming).

When I used to work at Dell Computer, Michael Dell was known for popping in, unannounced and without an entourage, at the factories in Austin. He would just walk around, look, and listen to people. I had a great plant manager at GM (trained at NUMMI with Toyota) who did the exact same thing. He spent at least 1/3 of his day walking around the plant, coaching, and listening to people. He knew what was going on, more so than the monthly accounting reports would tell him.

Go read the wonderful article "The Gemba Walk" by our good colleague Norman Bodek.

Some Things Never Change, and GM Is One of Them: Doron Levin

Bloomberg.com: Bloomberg Columnists

The writers continue to pile on GM. I know Doron Levin has been covering the auto industry in Detroit for a long time.

Some highlights:

The pre-holiday bombshell dropped Nov. 21 by Rick Wagoner, General Motors Corp. chief executive, has an all-too-familiar ring to longtime GM watchers.

Like earlier pronouncements by GM CEOs of massive cutbacks and firings, tempered with vows to make U.S. automaking operations efficient once and for all, the latest one probably won't do the trick.

``Napoleon is still retreating from Moscow,'' said Jim Womack, president of the Lean Enterprise Institute, a non-profit research organization based in Brookline, Massachusetts. ``Where will he hold the line?''

....

If all this seems like a recurring nightmare, it is: GM has traveled this road before.

Cutback Deja Vu

On Dec. 18, 1991, GM Chief Executives Bob Stempel said he would cut 74,000 GM jobs and shut 21 plants in North America. Scarcely five years earlier, his predecessor, Roger Smith, did roughly the same, also in response to flagging sales and excess plant capacity.

What's the old line about "insanity" being defined as doing the same things and expecting different results? I'll repeat it again, as Tom Peters says, you can't shrink your way to greatness!

Encounters with Peter Drucker

From Mark Edmondson:

Peter F. Drucker passed away on November 11, eight days before his 96th birthday. Since he was a professor at Claremont Graduate University while I attended neighboring Claremont McKenna College in the late 1970s, I had the opportunity to meet Professor Drucker after a couple of his on-campus seminars. After over 25 years, I still remember two lessons from those seminars which later influenced my professional path as a manager and change agent:

• Management's vital role to anticipate the future and be a change leader.

• The importance of continuously eliminating waste in an organization. (He called it “organized abandonment” at the time.)

Professor Drucker was truly one of the early “lean thinkers” who I believe complements the works of Ford, Deming, and Shingo. His brilliance is not only how he addressed modern thinking on management from organizational change to process improvement, but also how he anticipated them by decades.

If you're just starting your Drucker library, a good first addition is The Essential Drucker, a compilation of his greatest writings. But my favorite Drucker book is The Effective Executive, first published in 1966 and still in print today. If you're a new manager and want straight, sound advice about how and where to focus your efforts, read it. If you're a seasoned executive and want a practical handbook for improving as a leader, read it.

The current issue of "The LEAN Executive" eNewsletter is a special tribute to Peter Drucker that lean thinkers may find of interest.

Professor Drucker, thank you for your contributions and inspiration. You made a real difference for me, countless others, and society.

Interview with Lean Guru Norman Bodek, Part 2

Recently, I had the wonderful opportunity to have a telephone chat and discussion with Norman Bodek, a man who needs little introduction to this lean audience. Norman is, most recently, the author of books such as All You Gotta Do Is Ask and Kaikaku: The Power and Magic of Lean.

Here is Part 1 of the Q&A, if you missed it. Check out my Podcasts with Norman Bodek, as well.

Q: Do you think the failure to implement lean stems mainly from poor management and poor leadership at upper levels?

A: It’s not poor management. Maybe they’re being pressured in a direction that Toyota doesn’t have to follow. With top-down management, all brilliant thinking comes from the top. All strategy comes from the top. And, implementation of all strategy has to come from the top; they have to tell people what to do.

Toyota has switched this around very subtlely. They will direct the strategy for what people should be doing, like making cars, the best possible cars, but we don’t tell people how to do it.

I have an example, I use this in my book Kaikaku. A Toyota leader was standing in front of a warehouse and said, “I want you to get rid of this warehouse because at Toyota we don’t need a warehouse, we do it all just in time.” He said, “I want the warehouse to disappear in one year. I want you to make it into a machine shop and train everyone in that building to become a mechanic. I’ll give you one year,” and he left. He didn’t tell them how to do it, that’s the power of Japanese management.

Management, instead of being controllers and not trusting people, we reverse it and give people incredible respect and say, “look you know your job better than anybody, you’re doing it every day.” Instead of me telling you how to do it, I’m going to ask you to solve problems in your area. I’m going to help you implement. That’s management’s job, to help get the resources you need to do your job better and trust that you can do it.

Q: How do you get people to give up that power/control at the top?

A: People have to give up the power, that’s the secret of this. For management to recognize that instead of being “the boss”, they are the coach. Their goal is to be like Phil Jackson, the coach on the L.A. Lakers. You have great talent. You have to be very careful in hiring people, that people are going to fit the Toyota mold and image. You want people who are going to be team players then teach them to play in a team.

We [in America] don’t teach people how to work in teams. We want to keep them isolated little pawns that we control and hire and fire at will. A team is so much more powerful than separate individuals that are part of a team.

Q: Don’t most companies and HR systems provide incentives against working as a team?

A: Even though GE did get rid of the 10% at the bottom [every year], which I don’t like, what they did very positively was they really developed the best. GE probably spent more money training than any other company out there. They really invested.

Q: What is powerful about “Quick and Easy Kaizen?”

A: What I like about Quick and Easy Kaizen, is that the best way to teach people is from their own ideas.

In Japan, at Nippon Steel, this man was working on the factory floor and he noticed when the door to the oven opened up and the steel wasn’t moving along, a tremendous amount of hot air came out of the oven and when the door closed they had to reheat the oven again, which was very expensive.

His wife suggested that when she went to a department store in the winter time, there was no door, there was an air curtain. He came back to work and asked “couldn’t we do the same thing?” The boss said “great, you go do it.”

But the man argued, “I don’t know anything about electricity.” The boss offered to get an electrician to show him how to install the electricity and to put in the fan. That way, the worker is developing talent from their own ideas, that’s very very powerful.

There’s always a million excuses for not to do something, but if you want to be internationally competitive, you have to involve every single worker in this process. It’s so simple to do.

You’re not looking for big ideas, you want small ideas. Innovation will come from your engineers, your selected people. We want everybody to look for opportunities for a safer place to work. We want everybody to focus on quality improvement.

Q: How do you teach people that focus?

A: To add to the strength of the worker, we should teach them the fundamentals of industrial engineering. We should teach them value analysis. We should teach them the quality tools. Give them the skills so they can solve problems.

It’s a simple system. A worker finds a problem and has a suggestion, they write it up for their supervisor. The write-up goes on the wall so others can see it and learn from it, so they can copy it.

Q: Is this suggestion process similar to the scientific method, where you have a hypothesis for change, and then you test it?

You have to be careful, every idea is a great idea. If a supervisor says “that’s not really what we’re looking for” and the worker turned to his colleague and said “I’ll never give another idea again.”

You have to teach supervisors how to be positive, even when the idea is absolutely crazy (such as putting a roof over the parking lot to avoid getting drenched). You say “what else can we do?” If you ask the right questions, the worker will come up with the right answer, maybe they just need an umbrella.

You’re empowering the workers to be part of the improvement process, you’re giving them respect as people.

You can learn more about Mr. Bodek and his books at his website, www.pcspress.com as well as his new blog. His books are also available at Amazon.com. His upcoming book is titled, Rebirth of American Industry - A Study of Lean Manufacturing, and is co-authored with Bill Waddell.

Bill Ford: Get on board or leave

CEO tells employees who have adopted a skeptical stance toward turnaround plans to join him or quit.

I've read this article a few times and can't decide if:

A) I admire Bill Ford's leadership and message of "quit complaining and work with me to right this ship, otherwise the door is over there."

or

B) It's heavy handed and will discourage people from questioning the wise leader on top of the pyramid.

"Anyone who thinks or attempts to convince you that it's business as usual at Ford is wrong and would best serve us all by pursuing their interests elsewhere," Bill Ford said in an audio message e-mailed to workers Monday afternoon. "

Thoughts? Click comments to chime in.

Kaikaku, by Norman Bodek

Look for Part 2 of my interview with Norm Bodek, coming later today. I've enjoyed his recent book, Kaikaku. It's written as a series of essays and short vignettes, very powerful stuff, especially Mr. Bodek's writing about working with the originators of the Toyota Production System. I should pick up on my original idea of posting thought-provoking quotes from the book, here is where I started that back in May.

A little TPM could save China's drinking water?

Reuters AlertNet:Poisoned river shows dark side of China's boom

The growth of China, along with the outsourcing of manufacturing work, isn't just an economic issue, it also impacts the environment and worker safety. Recently, a major chemical spill has threatened the drinking water in cities in China, and soon Russia when the spill moves downstream. (Another article on the spill and its effects).

I'm not against China's growth. I hope economic development will lead to greater freedom for the Chinese poeple. But, I hope they can grow in a responsible way, hopefully taking advantage of lean principles to help their growth. From a lean mindset, this idea stood out:

"Others run equipment for too long, risking accidents from human error or faltering machinery."

A classic argument for TPM, or Total Preventive Maintenance, aka Total Productive Maintenance.

In a bad system, can any manager succeed?

BLACK, BLUE & BOOTED-Mooch out, Jauron in; why is Millen still here?

I grew up a Detroit Lions fan, as difficult as that could be (thankfully, we had Barry Sanders to enjoy). The Lions have fired yet another coach. Who would want to take this job next?

This reminds me of a previous company, where a General Manager of a division was let go, I mean moved on, after about 15 months in the job. An executive assistant, in a moment of total honesty, blurted out:

"Wow, the GM before him couldn't make the numbers either."

I don't know if she was thinking "we had two bad GM's in a row" but I was thiking "Wow, this must be a systemic problem, maybe the bar is set too high and these guys have unrealistic expectations. Maybe our products are overpriced and we're too far behind technology wise? Maybe this is just a bad business where anyone but Jack Welch would struggle?"

Either way, it's something to think about.... do you blame a succession of managers, supervisors, engineers, operators or do you fix the systemic and cultural root causes?

Go Cowboys!

I'll Bet That Merck's "Lean" Effort Fails

The Manufacturer.com - Merck to cut jobs, close plants, get lean

Merck was in the news quite a bit today, but this is the first article I've seen that mentions any claim to a "lean" strategy. If Merck thinks they are going to cut 7,000 jobs over the next two years AND implement lean, they've stumbled across a lean strategy nobody else has ever made successful.

They've "announced" the layoff number, but not who is going to be laid off. Leave that hanging over people's heads and then expect them to contribute to continuous improvement efforts, or any sort of true lean effort? Good luck! Why would people make improvements that are going to possibly lead to their job going away? Merck might be able to do some things to cut cycle time or inventory, probably because the starting point is so "non-lean." But, will they have a sustainable lean model? I doubt it, with the layoffs hanging overhead.

It also sounds like Merck management is grasping for a strategy and credibility, after the Vioxx problems. The Wall St. Journal this morning said the Merck CEO made mention of wanting to be like Dell.... so do they want to be Toyota or Dell? The analyst reaction was curious, to say the least:

In the private meetings, Mr. Clark, whose experience is mostly in Merck manufacturing, has talked about his admiration for the low-cost manufacturing process at computer maker Dell Inc. That left "a couple of people scratching their heads," said David Risinger, an analyst at Merrill Lynch who attended one of Mr. Clark's sessions. Dell makes a low-margin product with a short life cycle, while Merck makes a high-margin product with a long life cycle, said Mr. Risinger.

It's strange, but this afternoon the WSJ updated the article, removing the references to Dell and adding the lean story. I wonder if Merck was embarrassed that the analysts were "scratching their heads"??

Toyota learned from Ford and others, but they invented their own system. Dell didn't really have anyone to copy in the PC industry either (they didn't copy Toyota). Will Merck be successful trying to copy them, or do they have to find their own way? I'd suggest Merck should develop a business system that works for Merck's business, then stick with it. For now, it sounds like a desperate attempt to convince Wall Street that they're getting better.

Updated in January 2006

Teaching TPS in the US

Article Link

This is a great Q&A with Seizo Okamoto - president of Toyota's truck plant in Princeton Indiana focusing on the challenges of teaching the Toyota Production System to US workers.

The focus on teaching as the best method to continue learning is very clearly communicated throughout Mr. Okamoto's responses. He also stresses challenging teams with questions rather than dictating answers, the necessity to implement TPS as a total system, and maintaining the goal using TPS tools to surface issues (not necessarily to cut heads or reduce cost!).

Here is the best question and answer from the article:

Q. Is it different teaching the Toyota Production System to American team members than it is to teach it to Japanese?

A. It's not so different. Americans are eager to learn. American team members are more serious about job security, so their motivation is higher than that of the Japanese. The Japanese are more obedient to the boss. Americans show more individual initiative. Once they understand why we have to continue kaizen, we get a much better result than you'd expect.

Makes you wonder, with greater eagerness to lean, more motivation due to job security worries and with all that initiative why have the domestics not been able to latch onto the same successes through kaizen? There can't be many excuses left...

The Blue-Collar CEO

Newsweek: The Blue-Collar CEO

This article ushers in Tom LaSorda as Chrysler's new CEO. LaSorda is the first child of labor leaders to become CEO of a car company - and perhaps even more importantly, he's a manufacturing guy!

The article talks briefly about his Lean Manufacturing background at GM prior to arriving at Chrysler and the moves he has been able to make since being at Chrysler by working closely with the UAW.

Most notably he negotiated the contract for the Toledo Jeep plant to allow outside suppliers to run major parts of the factory, such as the paint shop and to establish an auto-parts industrial park nearby to bring in new jobs. Whether or not plant arrangements such as this represent the future of manufacturing (there was a similar plan in Windsor Ontario that fell through...), LaSorda has established a reputation of balancing relationships with employees and the needs of the business for both the short and long term.

Last week the UAW voted to consider giving Chrysler the same health-care concessions it recently granted GM—even though Chrysler is in much better shape. "You don't do innovative things," says a UAW spokesman, "unless you have a good working relationship."

The article also addresses LaSorda's desire to steer Chrysler out of the Big Three and towards Honda, Nissan and Toyota in terms of efficiency and profit.

Despite this very narrow view of lean presented by the article, having a manufacturing guy who understands the value of relationships and how to improve processes in charge very closely approaches Toyota's approach to leadership. I can't wait to see if he's able to break Chrysler out of the Big Three box!

Interview with Lean Guru Norman Bodek, Part 1

Recently, I had the wonderful opportunity to have a telephone chat and discussion with Norman Bodek, a man who needs little introduction to this lean audience. Norman is, most recently, the author of books such as All You Gotta Do Is Ask and Kaikaku: The Power and Magic of Lean.

Stay tuned later this week for additional installments of the interview.

Q: Mr. Bodek, thanks for agreeing to talk, what lean topics are you talking about most lately?

A: I’d like to talk really about empowering people, the concept of Toyota developing people, the concept of how do we really become a lean company and what’s stopping us?

Q: It’s often said 50% of companies are trying to be lean, but only 2% are actually doing it. What are the obstacles that stand in the way of companies actually implementing lean?

A: The real challenge for us in America is both an accounting problem, the measuring system which puts pressures on management is in the opposite direction of lean, and how we develop people. In our measurement system, inventory is very powerful metric for managers. Managers know at the end of every quarter, especially if they’re a public company, they have to produce as much inventory as possible. I don’t even have to sell it!

In lean, we know we should eliminate inventory, but how can I eliminate it if the board wants profits this month?

What is Toyota doing that we’re not doing? We in America are going to China. We think that’s going to save our manufacturing efforts, to get cheap labor and produce quality products through China. Yet, Toyota comes here. They’re the one making the money, how does Toyota do it?

I was in Georgetown and 75% of the part content was made in America, the goal is 100%, with American workers, they’re paid very well.

Q: But they don’t have retirement costs here, like GM, right?

A: They do have a full retirement plan and retirees there, they have a huge retirement process in Japan, probably equal to GM.

Let’s talk about the two pillars of their success:

1) Just-in-time or lean, which is a simple focus on eliminating non-value-added activity and waste (8 types of waste). They are relentless in getting rid of that waste, inventory, defects, etc. The biggest waste is, of course, the underutilization of people’s talents.

2) Toyota really tries to support the 8^th waste, with a principle called “respect for humanity”. Jidoka is giving people power to stop working, not just themselves, but the other workers in working to resolve a problem so a defect is not passed onto a customer.

I am given the respect that I can stop everything else from working, to find the root cause and prevent the same problem from happening again.

Q: How are companies learning about these pillars and emulating Toyota?

The real difference is that what Toyota does today isn’t hidden anymore. When I first went to Japan and I spoke to [Taiichi] Ohno and asked him for information, he said “we don’t have anything written down”. I sort of laughed and I knew why he was saying that, because they just didn’t want to share their secrets.

But now, everything is printed. Ohno gave me everything and [Shigeo] Shingo gave me everything: the principles I brought over from Japan and the Shingujitsu people brought us the kaizen blitz. We’ve learned virtually everything Toyota is doing, but not 100% of course. It’s available to us today, yet Toyota is making a bundle and we’re not. I think the missing power at this moment, the lean side we have the handle, we follow the elimination of waste relentlessly, we know how to do that, it’s not complicated.

The other side, for some reason, we can’t emulate, which is how do we develop our people?

Q: Why are American companies having trouble emulating that piece?

There are very simple differences. It’s all available, if we can just wake up managers to doing it. It’s not the people, the workers, the workers are wonderful, Toyota is showing us how wonderful they are. We [Americans] look at people as if they’re expendable. Toyota develops people and teaches them skills, they realize long term success comes from building up peoples’ skills. We say people are our most important asset, but we don’t mean it.

A company is people. You can buy the machines anywhere, the differential is the talent I have in people. The more I invest in people, the more I develop in people, the stronger my company. It’s what has made companies like IBM, GE, and AT&T (in the past as a model) successful, they invested in their people.

GM didn’t do that because Frederick Taylor and Frank Gilbreath in the early 1900’s, they came up with a philosophy that was “we want the worker to work, we don’t want them to think, leave their brains outside.” Thinking and planning was management’s job and the workers do the work.

Toyota did the same thing until about 1970 until they realized what a terrible waste; we’re not developing our people. The advantage was, at the time, they had lifetime employment, so if I’m keeping this person for a lifetime, I should really invest in them to get the most out of them. Developing people isn’t so complicated, that’s what I try to teach. All you do is ask people to solve the problems they’re faced with every day.

Click Here for Part 2 of the Q&A

"Made in America" via Mass Production

I love the show "Made in America" with John Ratzenberger (of Cheers fame) that airs on the Travel Channel. Ratzenberger tours the country visiting factories and American-made products and you get to see a sincere sense of pride and wonder for what the workers do.

But, it's frustrating to often see textbook examples of mass production! In one episode, they visit the Kitchen Aid factory in Ohio. I was pleasantly surprised to see these appliances, the heavy mixers at least, are still made in America. But, in the picture below, you see a "process island", a worker doing nothing but grinding the edges of cast metal pieces. He takes a piece from the large pallet bin and then places it back into that same bin. Look at all the muda!

Imagine the savings and improvement that could be made if this grinder was tied into the flow of the final mixer assembly area (which did seem to flow, at a 26 second cycle time).

Officials wary of border uniforms made in Mexico

News 8 Austin | 24 Hour Local News | LOCAL NEWS

This begs the question -- how many uniform/clothing factories are left in the U.S. that could make these uniforms? There must be some, I mean New Balance uses lean methods to economically make running shoes here in the U.S.

Detroit News on Toyota: "Relentless"

Article Link --> Relentless-Toyota is poised to overtake GM, but here's the scariest part: Now it's stepping on the gas.

Interesting "state of Toyota" article by the Detroit News.

Like a great tanker holding its course through stormy seas, Toyota Motor Corp. is gaining share in the world's most competitive markets and steaming ahead with new technology. Already the world's richest automaker, it is on track to become the largest.

With General Motors Corp. losing ground in its home market, Toyota's path to the top seems unobstructed.

Yet Toyota's top managers aren't satisfied.

Ah, continuous improvement!!

After outlining the company's strengths and weaknesses, new Chief Executive Katsuaki Watanabe glumly concluded, "There's still room for improvement."

Operating on the wrong body part

Serious errors by doctor, nurse reported at St. Mary's Medical Center

This kind of article is published far too often, but this statistic is alarming:

"Doctors operating on the wrong body part have been a rare but persistent problem. In Florida last year it happened 52 times, according to the Agency for Health Care Administration."

It's discouraging how some basic error-proofing and improved processes could have prevented all of these mistakes. There's really no excuse. That's why many health advocates are encouraging patients to write "NO!" in magic marker on the "wrong limb." This is obviously a systemic problem, one that has to be accounted for with better methods than to tell doctors to "be careful."

There are some corrective action processes in place, but hopefully they are using the "5 Whys" method to get to a true root cause solution. It would be nice if hospitals could proactively address avoidable problems rather than just reacting to every problem that occurs.

Also from the article:

In the case of the burned baby, the state Agency for Health Care Administration cited the hospital for the mistake and required it to submit a correction plan explaining what the hospital had done to avoid a similar mistake. In St. Mary's correction plan, submitted in March, the hospital said it had retrained its nurses and eliminated the practice of using warmed fluids in the neonatal intensive-care unit.

Muda = "Stupid-Nothing"??

Institute for Healthcare Improvement: Improvement Tip: Find “Muda” and Root it Out

The IHI is doing a great job of driving lean in the healthcare world. This overview of waste reduction has a noteworthy comment. They claim that the Japanese word "muda" (which I knew as "waste") is sometimes translated as:

"Stupid-Nothing"

Has anyone else ever heard that? It's a very apt term, even though I don't think I'll go around pointing out the "stupid nothings" with my clients!

'Roger & Me' all over again

Similar Article, Free Link

A friend sent this link to me this afternoon almost immediately following a discussion we had about the current state and immediate challenges facing the US auto industry.

The article quotes Michael Moore who spoke yesterday on a talk radio show in Flint Michigan; his home town, the site of his 'Roger and Me' film and the location of one of the plants GM recently announced plans to close.

From the Just Auto editorial team article:

"Moore blamed current GM leadership for their claimed US$4 billion revenue loss. He asked: "Has any GM executive in the last 30 years even bothered to take a Honda or Toyota for a drive around the block?", suggesting that those in charge at GM may realize the qualities consumers are looking for in foreign-badged vehicles."

Judging from GM's new product entries and their activities to continually move inventory with discounts and specials, the answer to Moore's question might be - "Not yet..."

Skilled Worker Shortage - Only for "Bad" Companies?

CNN - Nov. 22, 2005

How ironic that we're reading about mass layoffs in the "big, old, and slow" companies (such as the auto industry) while there is a projected shortage of skilled manufacturing workers. There's no shortage of people who want to "mow lawns for $65 an hour" as Delphi "leader" Steve Miller complained about in a Detroit News Q&A. The days of high pay for low skill are over, that much is clear. But, wouldnt' Delphi do better (and be more lean) if they didn't view their people as a "cost", but rather treated them with respect, as intelligent people who can solve problems and add value? (Thanks to Norm Bodek for expressing that idea so well).

This article, from MSNBC, includes a quote about how young people don't want to go into manufacturing. Who can blame them, with the stories in the news? Manufacturing in America is comatose, dying, or dead according to the mainstream media. Who would want to work at a company like GM or Delphi, based on what you read?

The UAW is fighting, rightfully so I think, the large bonuses being paid to Delphi executives. How hypocritical to be talking about cutting workers' pay in half, but thinking you're so valuable as executives that you have to be kept happy.

Delphi has claimed that its "key employee executive compensation" is vital to retain executives during bankruptcy, as well as to "boost employee morale" among its top management.

I find it hard to believe the Delphi execs couldn't realize how callous that statement sounds when they're ignoring the morale of their value-adding employees. What a way to boost morale!

I'd imagine that Delphi, at whatever size it operates in the future, will have trouble finding skilled workers. Who would want to work for people like this? Delphi is right, maybe, to be offering $10 wages because that's all they'll be able to attract in the future -- people who are worth $10 an hour. That will push Delphi deeper into the death spiral while smaller, growing companies, who treat their people with respect will be able to attract quality people, grow, and succeed.

Last I heard, Toyota doesn't have trouble finding skilled workers. They're beating down the doors at new factories Toyota is building. Go figure.

Level Loaded Heart Attacks?

Doctor's Advice: Have Your Heart Attack During Normal Business Hours

Now this is sad, maybe it's not surprising. A study has shown that a heart attack patient will get worse care outside of normal "business hours". Any hospital that is the least bit customer focused would hopefully realize that people aren't going to have heart attacks on a convenient schedule (although people do have more heart attacks on Mondays, the stress of starting the work week).

In any process, you have to look at your demand patterns and plan your capacity according, doctors and support processes both. Since the healthcare world is starting to adopt lean practices, I'd hope they start looking at providing consistent service at all times, it's only fair and humane.

Is this the medical equivalent to the old joke about not buying a car that's built in the first week of hunting season? Cars should be the same quality regardless of when you buy them, right? Wow, I'd hope we could get the same medical care regardless of when we have a heart attack.

Welcome to the Blog World, Mr. Bodek

Kaikaku

Norman Bodek now has a lean blog, the link is above. I conducted an interview with Mr. Bodek last week. I'm hoping to get that posted here on my blog over the weekend or early next week.

Toyota Quickens Quest to Unseat GM

Toyota Quickens Quest to Unseat GM - Yahoo! News

As a friend in Detroit pointed out, it's interesting that Toyota is allowing Fuji/Subaru to build Toyota vehicles in Indiana, might be the first time Toyota is allowing others to build their cars. I'm sure it's faster to use that existing capacity than it is to build yet another plant (although two plants are already in the works, San Antonio and Ontario).

Am I right to assume that Toyota will manage this plant along the lines of NUMMI, where they do their best to use the full TPS approaches? Even if it's not 100% Toyota employees, can we assume that they will run it as if it's a Toyota plant and make sure people have learned and use TPS principles?

Toyota plant halted after fire

Reuters Business Channel | Reuters.com

Unlike another blog, I'll point out that were no injuries here. Here's proof, for those of you who want it, that Toyota isn't perfect. We should wonder how Toyota will use root cause problem solving to prevent this type of fire from happening again here or in other plants? How do they share information across body shops around the world?

Remember the 5 Why's in your daily work... between that and FMEA, try to prevent problems from occurring.

Quelling Command and Control Thinking

QW: Freedom from command

This might make for interesting reading in conjunction with the earlier piece on a Lean Air Force.

Consultant and writer John Seddon highlights some of key conceptual differences between command-and-control management with what is needed in a lean environment.

Seddon is also the author of a new book on lean service, Freedom from Command & Control: Rethinking Management for Lean Service.

Can the value of a process be defined by its output?

Something happened this morning that caused me to start thinking about this and it's been hanging around with me all day. Outputs, in my case today quality documents, can certainly provide value. But should we rank this value based on the conclusions presented in the document, or rather by the inputs employed to generate the knowledge?

How do we know if the conclusions to an investigation are valid if there is no understanding of the process followed? In reviewing such a document, would a 'Lean Thinker' ask, "What are your results?" or would the correct first question be, "how did your team come to these results?"

Following the Toyota example, some processes should actually take more time and resources to complete, not less. Decide slowly, execute quickly. But then again, it all comes down to how value is defined. Truth is, I think a lot of value is lost if the goal is the output and processes are not followed. One such pitfall is in comparing results with similar, or complimentary functions or systems. How can such a comparison have any validity without a strong basis in the process for arriving at conclusions?

If shortcuts are available and easy to take, the process likely needs to be reviewed for opportunities to eliminate wasted steps and standardize. Looks like I found myself another assignment...

Getting Xbox 360 to market requires coordination

Article Link:

Today is the launch date of the new Xbox 360 video game system. Although it's a Microsoft product, it follows the typical Asian contract manufacturer supply chain path.

"Mr. Holmdahl is the Microsoft vice president in charge of Xbox manufacturing. He works behind the scenes as the conductor of a global train of component suppliers, factories and distributors that are turning 1,700 different parts into what will likely be one of the hottest holiday gifts of 2005.

How he and his team perform will help determine whether Microsoft can challenge Sony Corp.'s position as the world's No. 1 videogame-console maker. How they do will also be crucial to Microsoft's strategy to use the Xbox to link the Web and entertainment of all forms in consumers' living rooms. One manufacturing misstep -- a shortage of graphics chips or a recalled hard drive -- could derail those ambitions and drag Microsoft's unprofitable videogame business even deeper into the red. 'With 1,700 components all it takes is one not being there and it's an issue,' Mr. Holmdahl says."

I highlighted that last line because it always makes me chuckle a bit when people feel the need to highlight the "if we're missing just one part, we can't build them" concept. You'd think that was a "well duh" comment, but think about it.... how many times is that NOT true in the auto industry? How many times does a Ford or GM plant keep cranking out trucks although they're missing a part, even if it's something major like seats (I recall that being done with SUV's when there was a parts plant strike a few years back).

I'm sure the Microsoft Xbox supply chain isn't a "lean" model, but at least they don't crank out thousands of Xboxs, each one missing a video chip, only to park them in a "rework parking lot" to be fixed later. Remember the story of the Cadillac plant where "finished" cars went to one of two places: Major Repair and Minor Repair. No wonder GM is a mess, even today.

Anyway, click on the article link above and there are some more details about the Xbox supply base, factories, and supply chain. Interesting stuff to have to ramp up a product so quickly.

What's inside the 360 box? Click here to see a tear-down analysis.

Passport Processing

I recently renewed my Canadian passport. Expected completion and delivery of the passport was indicated to be 20 working days from the point the application was received by mail. Unfortunately, my case extended beyond this expected delivery date and I started the process of contacting the Passport Office to inquire about the status of my application.

I found the 1-800 number on the government website, but was surprised to see a disclaimer below the number stating that callers should expect that inquiries as to the status of their application are likely to cause further delays. I elected to take my chances and call, seeing as my delivery was already late.

When I called, as expected I was greeted by an automated queuing system. However, after negotiating through the menu I listened to a message that told me, "at this time the number of people in line has exceeded allowable limits. Good Bye." Then I was disconnected!

I was able to get into the queue later in the day. I was quite impressed with the system this time around, as every couple of minutes I was told how many people were ahead of me. This feedback certainly helped maintain my patience as I waited through the 18 people ahead of me in line.

After inquiring and understanding what was going on with my specific application, I asked why it was that inquiring about status delays processing. Turns out, only one activity is permitted to act on an application at a time. Every time an enquiry is made against any specific application (or file by this point) it 'loses it's spot' in processing to be available for inquiry, then needs to start over again in the processing loop.

This whole experience was very unsatisfactory for me as a customer. There are many hints of opportunities for lean improvements, just within the small areas of the process that I experienced directly:

1. Processing: Why 20 days to process applications? How many non-value add steps are included in the process? What are the batch sizes? Is there an opportunity for one piece flow?

2. Defects: How many applications are not processed in time? (i.e. what's the defect rate?) What are the common causes? What's the root cause?

3. Information Flow: link processes and people together. Feedback should be immediately available, without having to disrupt flow. This should also help to more readily bring problems to the surface.

4. Reduce Inventory: The phone queue has had some thought put in it, but why the long lines? Are there not enough customer service rep's? Do they not have the information they need at hand to reply to inquiries? Are there opportunities to implement some standardized tasks and best practices for how to deal with specific issues or problems?

I'm also reminded of something I heard from Jim Womack last week during the LEI webinar on Lean Solutions. He said, "Every customer contact is a Kaizen opportunity" and he recommended that organizations use highly trained customer service employees to explore root causes with the customer. Quickly eliminating the root cause will prevent future customers from having to call.

I wonder what the application fee will be in another 6 years when I need to renew again? With continuous improvement I should expect that it be considerably lower than I just paid - and maybe, just maybe it will be completed on time, and in less time. I hope they're listening.