Comments on: It Depends on What "Lean" Means http://www.leanblog.org/2006/10/it-depends-on-what-lean-means/ Mark Graban's leanblog.org - Lean Healthcare, Lean Thinking, Lean Manufacturing, Toyota Production System Thu, 09 Feb 2012 22:59:58 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jon Miller http://www.leanblog.org/2006/10/it-depends-on-what-lean-means/#comment-1160 Jon Miller Mon, 30 Oct 2006 20:58:00 +0000 http://leanblog.bigbigdesign.net/2006/10/it-depends-on-what-lean-means/#comment-1160 Speaking of NUMMI, there was an article in the October 16th issue of Nikkei BP in which Kan Higashi, the Toyota executive who helped set up the NUMMI operation and was the head of site there, blasts GM for not having learned from that experience. The article title is something like "Toyota is Total Company Discipline - GM Fails through Partial Learning". I might post more on it later. Speaking of NUMMI, there was an article in the October 16th issue of Nikkei BP in which Kan Higashi, the Toyota executive who helped set up the NUMMI operation and was the head of site there, blasts GM for not having learned from that experience. The article title is something like “Toyota is Total Company Discipline – GM Fails through Partial Learning”. I might post more on it later.

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]]> By: Mark Graban http://www.leanblog.org/2006/10/it-depends-on-what-lean-means/#comment-1158 Mark Graban Mon, 30 Oct 2006 18:44:00 +0000 http://leanblog.bigbigdesign.net/2006/10/it-depends-on-what-lean-means/#comment-1158 If GM could only design cars that people wanted and build them with sufficient quality, they wouldn't have "excess" employees right?<br/><br/>GM is a mess. If APICS tries to hold GM up as an example of lean, then APICS is a mess. If GM could only design cars that people wanted and build them with sufficient quality, they wouldn’t have “excess” employees right?

GM is a mess. If APICS tries to hold GM up as an example of lean, then APICS is a mess.

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]]> By: Anonymous http://www.leanblog.org/2006/10/it-depends-on-what-lean-means/#comment-1159 Anonymous Mon, 30 Oct 2006 18:44:00 +0000 http://leanblog.bigbigdesign.net/2006/10/it-depends-on-what-lean-means/#comment-1159 APICS became irrelevant years ago, the MRP folks can't adapt to lean. APICS became irrelevant years ago, the MRP folks can’t adapt to lean.

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]]> By: Anonymous http://www.leanblog.org/2006/10/it-depends-on-what-lean-means/#comment-1157 Anonymous Mon, 30 Oct 2006 18:32:00 +0000 http://leanblog.bigbigdesign.net/2006/10/it-depends-on-what-lean-means/#comment-1157 "Still, one of the central tenets of lean is to eliminate waste—and if an organization finds that it’s wasting resources trying to support a workforce larger than it needs, it is obligated to do whatever it can to reduce that waste."<br/><br/>So lean is elimating the waste of too many people?<br/><br/>Priceless... “Still, one of the central tenets of lean is to eliminate waste—and if an organization finds that it’s wasting resources trying to support a workforce larger than it needs, it is obligated to do whatever it can to reduce that waste.”

So lean is elimating the waste of too many people?

Priceless…

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]]> By: Mark Graban http://www.leanblog.org/2006/10/it-depends-on-what-lean-means/#comment-1156 Mark Graban Mon, 30 Oct 2006 14:21:00 +0000 http://leanblog.bigbigdesign.net/2006/10/it-depends-on-what-lean-means/#comment-1156 A Lean GM?<br/><br/>By Douglas R. Kelly<br/><br/>It’s been a busy month for General Motors. First came word that the automaker had broken off talks with Renault-Nissan aimed at forging an alliance between the three companies. Seems that a GM demand for payment to join such a partnership sank the negotiations. Rick Wagoner, GM chairman and CEO, told the media, “When you added it up, it wasn’t good value for GM shareholders.”<br/><br/>Then GM announced October 24 that it had posted a third-quarter operating profit nearly double what Wall Street had expected, prompting most analysts to echo Wagoner’s claim that the company’s turnaround efforts are beginning to bear fruit. “Our third quarter results again reflect significant progress in our fast-paced initiatives to turn around our business and create a company that is leaner, faster, and positioned for long-term sustainable growth,” Wagoner said in a statement.<br/><br/>The word “leaner” caught my attention when I read of the earnings news, because it’s descriptive of an organization that is on the road to greater efficiencies and faster time to market. GM has been a leader in developing and implementing lean methodologies for more than 15 years. In the early 1990s, the company’s joint venture with Toyota, called New United Motor Manufacturing Inc. (NUMMI), resulted in significant decreases in assembly hours and defects. At the same time, GM launched its Purchased Input Concept Optimization with Suppliers (PICOS) initiative, in which GM engineers worked with the automaker’s suppliers to design and implement lean tools and solutions in the suppliers’ operations. One of the leaders in GM’s push toward lean was the Spring Hill, Tennessee Saturn manufacturing plant, which managed to save some 270 tons of paint solvent in 1995 and 1996 by instituting lean production methodologies.<br/><br/>GM faces a large number of hurdles in its efforts to get back on its feet. We reported on one of those challenges, the skilled worker gap (“The Shortage”) in the June 28 edition of APICS Extra. The company had just announced that more than 25 percent of its hourly workers in the United States had accepted the company’s offer of buyout or early retirement. That’s around 35,000 employees, which accounts for a pretty sizable cost savings for GM in 2006, but which further exacerbates GM’s shortage of skilled labor.<br/><br/>Still, one of the central tenets of lean is to eliminate waste—and if an organization finds that it’s wasting resources trying to support a workforce larger than it needs, it is obligated to do whatever it can to reduce that waste. GM has adapted the Toyota Production System, creating what GM personnel call the Global Manufacturing System (GMS). The Cadillac division, in particular, has achieved good results using GMS methodologies in the quality and design areas.<br/><br/>Lean isn’t only for production operations; it can be, and often is, applied to other functional areas such as administration, accounting, and so on. Can GM apply what it’s learned from the Toyota Production System and its own GMS initiative to challenges like its pension funding system—which adds hundreds of dollars to the cost of every vehicle the company produces—and its product design and launch operations? The answer lies, at least in part, with GM’s next two quarterly earnings statements.<br/><br/>Douglas R. Kelly is editor-in-chief of APICS magazine. He may be contacted at editorial@apicshq.org. A Lean GM?

By Douglas R. Kelly

It’s been a busy month for General Motors. First came word that the automaker had broken off talks with Renault-Nissan aimed at forging an alliance between the three companies. Seems that a GM demand for payment to join such a partnership sank the negotiations. Rick Wagoner, GM chairman and CEO, told the media, “When you added it up, it wasn’t good value for GM shareholders.”

Then GM announced October 24 that it had posted a third-quarter operating profit nearly double what Wall Street had expected, prompting most analysts to echo Wagoner’s claim that the company’s turnaround efforts are beginning to bear fruit. “Our third quarter results again reflect significant progress in our fast-paced initiatives to turn around our business and create a company that is leaner, faster, and positioned for long-term sustainable growth,” Wagoner said in a statement.

The word “leaner” caught my attention when I read of the earnings news, because it’s descriptive of an organization that is on the road to greater efficiencies and faster time to market. GM has been a leader in developing and implementing lean methodologies for more than 15 years. In the early 1990s, the company’s joint venture with Toyota, called New United Motor Manufacturing Inc. (NUMMI), resulted in significant decreases in assembly hours and defects. At the same time, GM launched its Purchased Input Concept Optimization with Suppliers (PICOS) initiative, in which GM engineers worked with the automaker’s suppliers to design and implement lean tools and solutions in the suppliers’ operations. One of the leaders in GM’s push toward lean was the Spring Hill, Tennessee Saturn manufacturing plant, which managed to save some 270 tons of paint solvent in 1995 and 1996 by instituting lean production methodologies.

GM faces a large number of hurdles in its efforts to get back on its feet. We reported on one of those challenges, the skilled worker gap (“The Shortage”) in the June 28 edition of APICS Extra. The company had just announced that more than 25 percent of its hourly workers in the United States had accepted the company’s offer of buyout or early retirement. That’s around 35,000 employees, which accounts for a pretty sizable cost savings for GM in 2006, but which further exacerbates GM’s shortage of skilled labor.

Still, one of the central tenets of lean is to eliminate waste—and if an organization finds that it’s wasting resources trying to support a workforce larger than it needs, it is obligated to do whatever it can to reduce that waste. GM has adapted the Toyota Production System, creating what GM personnel call the Global Manufacturing System (GMS). The Cadillac division, in particular, has achieved good results using GMS methodologies in the quality and design areas.

Lean isn’t only for production operations; it can be, and often is, applied to other functional areas such as administration, accounting, and so on. Can GM apply what it’s learned from the Toyota Production System and its own GMS initiative to challenges like its pension funding system—which adds hundreds of dollars to the cost of every vehicle the company produces—and its product design and launch operations? The answer lies, at least in part, with GM’s next two quarterly earnings statements.

Douglas R. Kelly is editor-in-chief of APICS magazine. He may be contacted at editorial@apicshq.org.

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