Want to Live in a Model T Factory?

Omaha Chamber Press Release

I was in Omaha Nebraska yesterday and saw what looked like an old Ford factory near the airport. It had an old water tank on the top with a weathered Ford logo. The plant had apparently been turned into loft apartments. It looked just like the old pictures of the Highland Park plant and other auto plants of that era.

With a quick Google search, sure enough it was a Model T plant built in 1916, "strategically close to rail lines." Lean thinking at Ford, I suppose.

That would be a cool place to live! Here's a picture, as it appeared prior to the renovation.

Tiny Jets

The New York Times published an article today around the F.A.A.'s annual aviation forecast.

"In its annual aviation forecast, the F.A.A. projected sharply higher levels of non-airline flights in coming years because of the new planes, called "very light jets," which will seat four to six passengers. The new planes can fly almost as fast as an airliner, and at even higher altitudes, but will land easily at fields with 3,000-foot runways, half the length of those at big airports. With a range of 1,000 miles or more, proponents say the new jets will spawn a new generation of air taxis and charters that will carry travelers to airports within 20 minutes of their homes or destinations, at a price comparable to a coach airline ticket."

If this model is in fact adopted, there will be several benefits to travelers that fit nicely with at least 3 principles of the 'Lean Consumption' model:

1. Don't waste the customer's time – passing through smaller airports to board jets that only seat 4-6 people will involve less queuing and waiting times for check-in and security processes as well as boarding and exiting the plane.

2. Provide value where the customer wants – the ability to use smaller airfields will allow these flight services to bring people closer to where they need to be upon landing.

3. Provide value when the customer wants – with less passengers required in order to reach the break-even passenger load factor for each flight, more frequent scheduling of flights will likely result.

Happy Birthday to the Blog and A New Design

Hello blog readers and lean folks....

Between being busy with work and just not paying attention, the Lean Manufacturing Blog celebrated it's 1st birthday/anniversary in January. I started this in January 2005, since then there have been 570 posts and links to lean articles. The blog has had over 34,000 visitors and readership has grown steadily. I enjoy working on the blog and I hope it brings education, enjoyment, and inspiration to others.

You may have noticed "Google ads" on the blog. I'm not doing this to make money, but I use ad revenue to cover the modest expenses of a site like this. I did decide to "re-invest" in the blog by contracting for a custom re-design of the site. If you've visited the site before, you'll notice the changes.

• A new name: While I've been calling this the "Lean Manufacturing Blog," I find myself writing more about lean healthcare, lean enterprise, and customer service issues. I am transitioning to the more inclusive name, "Lean Blog."
  
  
• A new logo/banner: The graphics at the top of the page are designed to represent two things.
• First, the gears represent the industrial origins of lean thinking, as well as the synchronization of two things working together in the harmony of motion.
  
• Secondly, the people... no they aren't the bloggers on this site, but it's a factory photo that reminds me of how a lean team looks. The team is smiling and looks proud of what they have accomplished. Nobody is wearing a tie.... can you tell from this picture who is a production associate and who might be a VP of Operations or a Plant Manager? The photo is meant to serve as a reminder that lean is about PEOPLE, not just about technology.

If you have feedback on this redesign or about the site in general, please click "Comments" or use the "Email" link to the left.

See also: A Reflection on a Year of Blogging

Reflections on a Year of Blogging

Where It’s Been

For years before starting the blog, I was the “emailing articles out to people guy.” I would often find an interesting article on lean manufacturing or supply chain concepts and would email them out to friends and colleagues in the field. After discovering blogs, I realized that publish that material and let people “pull” that info by visiting my blog. That way, I wasn’t “pushing” material into friends’ already-crowded email boxes.

I started the blog in January 2005 and published just a few article links. I quickly realized that the blog was a good way to store my own personal archive of lean articles and links, an archive that I could access from any browser. I also realized that I could do more than post links to articles, that I could provide commentary and share my opinions that others might learn from. Or, I hoped it would stimulate debate and discussion through the “comments” feature of the blog.

What started as a “lean manufacturing” blog moved into other related areas, “lean healthcare” (which I’ve moved into careeer-wise), “lean solutions” and consumer related issues, things that weren’t strictly factory related. Hence, the name change to the more-inclusive “Lean Blog.”

I am also proud of the direction that this is becoming less of a “Mark Blog” and more of a group blog, with my collaborators Luke and Mark E. I’m hoping to add a few other trusted lean practitioners as contributors this year, as well.

What I’ve Learned

Much as you get from teaching or conducting training classes, I have found that writing is another way to force you to think through concepts and to understand them better in the process. I have learned a great deal about lean this year, from the articles I’ve read, the other lean blogs that have popped up, and from comments or emails that I have received from blog readers. I don’t take the “know it all” position with my blog. Rather, I realize I know some things from my ten years of experience in this field. But, I want to “learn it all” and the blog contributes toward that, at least for me.

Through the blog, I have made contacts and deepened relationships with a lot of fantastic people in the lean world. This ranges from some of the world-renowned experts, but I also greatly appreciate some of the connections I’ve made with grass-roots lean people from Germany to Brazil and in between. This proves that the web and blogs are technology that can help bring people together and can build “real world” professional relationships.

Where It’s Going

I plan on continuing the blog as long as I can, particularly since it doesn’t take up much of my time and I enjoy doing it. As with other bloggers, my participation fluctuates a bit in inverse with the workload in my real job.

I am very happy that the “lean blog” world has so many contributors now. I don’t think this was the case a year ago. I wasn’t the first lean blog, but I have been around to see many others pop up and take off this year (see a list of them in the left-hand column). There is so much more good lean writing happening now, ranging from practical shop-floor level “how to’s” to the “cranky” among us who rail about fixing the whole of the American (or Global) manufacturing industry. I hope this community of lean bloggers grows and that the bloggers cooperate and help each other, rather than viewing each other as competitors. We all have a perspective to offer and we are building a new lean community.

As always, if you have comments/suggestions/feedback, use the “comments” field, or look for my email link in the left-hand column.

Mark

Lean Sandwich Ovens

Lincoln Foodservice to capitalize on ‘toasted’ craze:

Here's an article about a company that produces flow ovens for making toasted sandwiches (think Quizno's). As an aside, I've seen Subway is copying Quizno's with toasted subs, but they use a stationary "batch" oven instead of the Quizno's oven which flows along with the customer flow, it's a continuous moving oven. I heard how Quizno's started off by buying old Burger King flow broilers that had been used for hamburgers. That seems "lean" to me in the sense that they were making do with something cheap and found a new purpose for it.

Anyway, details from the company that makes these ovens... they've used flow and lean in the production of the ovens themselves, with good results:

"From became president of the division in August, and since he has come on board, Lincoln Foodservice has sought to involve more employees in the improvement of its lean manufacturing processes.

The division also has put three oven production lines and a heat lamp line through “Kaizen,” a Japanese business term for taking something apart, making it better, and putting it back together.

Switching to a cluster of workstations near necessary tools and parts, from a system where workers brought what they needed for heat lamp assembly to two long production lines and a substation, shortened the lead time to fill orders from three weeks to nearly one day.

Virginia Stewart, who has worked at Lincoln Foodservice 23 years, said the more conventional production system seemed less organized and subject to unforeseen problems.

The new, one-piece flow-through approach, where the product is at each station about 4.5 minutes, seems simpler and “makes the training process easier because they have less to learn at each station,” she said.

From said adopting the new approach has enabled the heat lamp work team to increase its maximum daily production to 75 units from 56 units. And there is room for further improvement, he said, because the team’s productivity is affected at times by “issues when suppliers aren’t meeting quality expectations.”

In addition to the work to improve its lean manufacturing, the launch of new products by Lincoln Foodservice this year will benefit from more than $1 million the division invested in production equipment in 2005, he said."

Toyota keeps costs 'slim'

PittsburghLIVE.com

Here's an article that highlights some of Toyota's innovation and success, including a brief description of a "u-shaped cell" for a casting process, which is pretty unheard of. This article also details some of Toyota's financial results, which are pretty impressive.

Using Lean to Ship TO CHINA

Neosho Daily News

For a while there, Wisconsin was the hotbed of lean articles. This week, it's Missouri, and both articles are in a small town newspaper, the Neosho Daily News. First, it was La-Z-Boy, now it's K&S Wire.

Who is K&S Wire, you might ask? They're a proud lean company that just shipped their first container TO China. Let me repeat that, they are shipping product TO China. That's much better than shipping empty ocean containers back.

From the article:

That major announcement by company president Gene Schwartz Sr. this morning prompted a standing ovation by those who earlier saw Schwartz receive the Missouri impact! Award by Missouri Enterprise.

The award was given for K&S Wire's continuous improvement in manufacturing excellence and its implementation of “lean” enterprise principles into its everyday operations.


It is because of these principles that Schwartz was able to make the announcement about the shipment to China.

“We took the order to construct 111,000 wire frames that will hold flip-flops,” said Schwartz. “Because of our ‘lean' principles, our price was better than could be found in China. This is a first for us and I hope we will have many more in the future.”

That's very powerful, that the wire products are being shipped to China, they'll be made into final products, and probably mostly shipped back here to the U.S. What if there was a lean flip-flop maker there in Missouri? The supply chain / value stream would that much leaner without two trips back and forth across the ocean.

It sounds like they are on the right track with lean:

‘Lean enterprise is a systematic means of identifying waste in a company's operations and reducing or eliminating those activities that do not add value to the company's products,” said Schwartz. “It is not a way to reduce the work force. For K&S, it's the opposite. As we have embraced a lean culture, we have been able to grow and add employees.”

Why can't the automakers understand this principle??

"I'll Meet You at 2 AM...."

I keep seeing this ad on the local Dallas-area cable system, for Lewis Chevrolet in a small town, Canton TX. It's a folksy car dealer ad, not shouting like most car ads. The ad features a guy who must be the owner, he's at least 80 years old, it appears, and has probably had the dealership forever.

What jumps out is his statement, "I'll meet you here at 2 in the morning if I know you're coming."

Now, THAT is customer-focused. I wonder if anyone ever takes him up on that offer? I'm not commenting on it as a "lean" issue, other than it's great to see someone so customer focused, I guess I will call that "lean."

You want to buy a car on your schedule?? How rude.

By comparison, I remember growing up in Detroit, where the auto dealers conspired in the 1980's to not stay open evenings or weekends, when most people might want to buy a car, but it was inconvenient for the dealers' employees, I suppose. This was later ruled to be an illegal restraint of trade.

So, we wonder why the American automakers are in trouble... it's not just lack of customer focus on the product side, the dealers, other than bend-over-backward small-town Texas dealers, didn't necessarily do them any favors either.

NPR Show Discusses The Future of U.S. Manufacturing

On Point : American Manufacturing and Jobs

Here is a 45 minute audio program from National Public Radio, discussing the future of manufacturing, focusing on the question of "how are we going to have a rising standard of living in the U.S. with falling manufacturing employment?" The main guest is a professor of mine from MIT and the Leaders For Manufacturing Program, Don Rosenfield. No easy answers, but this show is representative of the struggle and debate that's going on right now.

Update 2/24/06: I'm not above being goaded into further comment by our cranky lean pal Bill Waddell. I'll agree there wasn't anything particulary enlightening in the show. One thing that frustrated me was how Don was really put on the spot by the liberal host and the retired-auto-worker callers.

They demanded that no individual be hurt by the shift in our economy, whether its due to companies making (dopey) decisions to chase cheap Chinese labor, or due to productivity improvements. That's not how our economy works. We can't afford to protect individuals... so if I were Don, I would have had trouble keeping my cool while be bombarded with that socialistic attack. That's my natural crankiness coming out, Bill. :-)

While I believe we can't protect individuals from the standpoint of government relief, I still hold by the recommendation that companies marry lean efforts with a "no layoffs" pledge... only if they can grow and take their savings through hiring avoidance rather than layoffs. If companies want to be dopey, I don't think we can demand the government to protect us by closing the borders or any of the other crazy things suggested by the socialists on the NPR show.

"The Customer Is God"

tompeters!

This quote came from a frenetic Tom Peters slide deck (link above, see slide #14).

"THE CUSTOMER IS GOD AND THE MARKET DECIDES EVERYTHING."

That sounds pretty much a lean philosophy to me. Make only what the customer wants, when she wants it, and how she wants it. The market decides everything, including the price of your product (you can't just take your costs and tack on your "entitled" profit).

Is this quote from Toyota? Is it from an American company?

CHINA.

It's a banner hanging at the Hua Xin Dress Co, Ltd., in the Rongcheng Industry Zone.

You know what scares me more than China's low costs? China figuring out lean faster and better than us Americans have.

La-Z-Boy changing production lines to compete with China

Neosho Daily News

Here is a nice story from Missouri about how La-Z-Boy is converting it's plant (and others) from "batch and queue" to a lean, cellular production layout. Using lean to cut cycle times and costs is a great way of competing with China, particularly with furniture being large and expensive to ship.

In the new concept, the chair or sofa is manufactured by a team within a cell, thus eliminating separate departments. No jobs will be lost in the transition from batch-and-queue to lean cellular.

That's great that they've apparently taken the "no layoffs" pledge, which is critical for maintaining employee involvement. I'm certain the cellular layout would require fewer people than batch-and-queue, but it sounds like the company is trying to grow, as well, which means they can avoid additional hiring.

The primary purpose of the new concept is to increase product numbers. The cells have become so efficient that it has cut the manufacturing time of a chair down from two and one-half days to just three hours. “This is now a three-hour process from start to finish in the cell,” said La-Z-Boy Midwest production manager Bill Snow. “The process ends with a 12-point inspection. The cell members will not get paid for the piece until it is taken to where it will boxed. But eventually, boxing will take place in the cell as well.”

Again, I like the sound of that, except for "will not get paid for the piece..." which certainly sounds like a "piece work" pay system. The problem with piece work is that, often times, quantity is encouraged over quality. Sure, you can say "we only pay for good quality pieces," but the incentive is still there to work faster. Instead of working faster, a lean cell needs to run at the rate of customer demand (the concept of takt time). If it were my plant, I'd rather see an hourly wage paid, with a bonus structure for plant performance.

Meyer said that all employees will receive training in team work, conflict resolution, lean manufacturing and continuous improvement.

Again, this is nice to see. They are focused on running the plant differently, it appears, not just changing the layout and saying "we're now lean." Good luck to everyone at the La-Z-Boy plant!

Lean Eyes on Customer Service

Evolving Excellence: Adventures in Customer Service

I was already thinking of blogging on customer service adventures today when I saw the post by Kevin Meyers on his blog. His post is worth reading, as it illustrates how a lean process thinking can shed insight on non-manufacturing issues.

I love complaining about bad customer service more than most, it's not always a good trait, I realize. But, I think it might be bearable when I can put it into lean terms.

Episode 1: Why bother with your "contact us" button??

My wife and I are looking into options for new flooring in our living room. We discovered the idea of cork flooring, which is becoming more popular and has some interesting advantages. I found a store in the area that carries cork flooring and got a brochure for the cork flooring manufacturer. After browsing their site, I thought "maybe this manufacturer will give me a list of retailers and installers in the Fort Worth area." So, I clicked on their large inviting "CONTACT US" button. I clearly entered a request to be contacted, that I was a prospective customer and wanted some information to help me purchase their product.

Three days later, I've heard nothing. I'm looking to spend thousands of dollars and I've heard nothing.

My challenge to companies --- why have a "CONTACT US" button if your customer contact is going to enter a black hole?

The suggestion: clearly state, like some websites do, what your "turnaround time" on replying to the customer is. It might be "unreasonable" to them for a customer (me) to expect a response within three days, but my "voice of the customer" would tell them that.... if I wasn't afraid to again click "CONTACT US" to tell them so :-)

This manufacturer might be incredibly lean, from a factory standpoint. But, their customer acquisition process is clearly broken, which must hamper their success.

Episode 2: How many times do I have to repeat my story?

I run into this all the time when having to contact a company to do some customer "problem solving" --- airlines, hotels, cable companies, and now my bank. It rhymes with "Stank of Blah-merica." I called to question a check card transaction and had to repeat my question/compaint FIVE times to different departments and representatives, sitting on hold in between each interaction.

Now, when calling customer service, I realize no one single representative can handle all questions and inquiries. Nobody can be that fully cross-trained. I fully expect that the first person I talk to serves the function of classifying and sorting calls. I have learned to be as brief as possible, to save my time and breath, to say just enough to get my call routed to someone who can solve my problem (or so I hope)

When that first transfer happens and the rep CANNOT solve my problem, that's when I get frustrated. I spent 45 minutes on the phone today with my bank and never got the question answered, after asking it five times. As Jim Womack writes about in his book, Lean Solutions, far too many companies think your time, as a customer, is "free" and they treat it as such. That erodes much of the loyalty I might have had in seven years of holding an account there.

My challenge to companies -- make sure the second person (if not the first person) I talk is fully empowered to research and solve my problem. I've heard many phone reps say something to the effect of "I don't have enough authority to fix that, let me transfer you to a supervisor."

Pure waste, having to repeat your story again to the supervisor.

I recall a TV ad, I don't remember what it was for, where the customer had recorded his beef on a tape recorder and hit "play" when he was transferred to a new phone rep. I'll have to start doing that. It would be nice if these "Customer Relationship Management" software packages that these call centers use could record your complaint and automatically play it back for the next person who comes on to help.

"Your call may be recorded for waste reduction purposes." Now that would be music to my ears. Music that would get that hold music out of my head.

'Breaking the rice ceiling'

Battle Creek Enquirer - www.battlecreekenquirer.com

Here is an outstanding profile of Gary Convis, the President of the Toyota Georgetown (KY) plant and the highest-ranking American executive in the company.

I've written about Convis before and have seen him speak at a lean conference. He really seems to exemplify what you would want to see in a "lean leader", in his words and his manner.

From the article:

Convis, who relaxes by playing golf and riding a Harley Davidson, describes his management style as leading by example and not asking others to do what he wouldn't do himself.

"You respect people," he said. "You listen to them, you work together. You don't blame them. Maybe the process was not set up well, so it was easy to make a mistake."

Convis also has a dedication to the Toyota production system, knowing it well enough to solve problems and "sell" the solutions to the workers, who, by the way, must be appreciated and cared for, he said.

That's all done in the traditionally humble style of Japanese managers.

These days, Convis still oversees the Georgetown plant and its 7,000 employees. But he's also traveling to other Toyota plants and focusing more on long-term strategic planning.

But he won't give up one activity that dates back to his early days in the auto industry: walking the manufacturing floor.

He does it whenever he can.

"It's my favorite time of the day," he said. "It's where I grew up and that's where we add value. I like to say that the rest of us are all overhead. If I don't add value, there's no reason for me to be there."

Peggy Ferris, a conveyance manager in the Georgetown plant who has known Convis since he came to the plant in 2000, said he's a president who connects well with workers.

"To me, Gary is always teaching," she said. "He's a president that's very involved in the daily activities and projects. When he sees you're at a stumbling block, he offers support and follow-up, and then follow-up on that support to see if it's helped you," she said. "...He's out there on the floor and he's interested, and people respond to that."

She also appreciates his accessibility. "He's very, very busy, but you don't feel he's very, very busy because he makes time for you," she said. "That's very unique."

Convis said it's not about being a boss, but about being a facilitator and a coach. When he became a vice president at Toyota, his supervisor told him to manage as if he had no power.

"I thought about that and I thought 'My goodness — what an amazing approach.' And I thought at the time, would a North American executive in a similar type of business ever say that to a newly promoted person? Never. So I've never forgotten that."

2006 Shingo Prize Winners

Reliable Plant Magazine

The latest Shingo Prize winners have been announced. Congratulations to them all! And good luck to them all! I hope they realize that their lean journey isn't over, it's only just begun.

Now some have taken issue, rightfully so, with the Shingo Prize. It's possible to have plants that "look lean" and even have the metrics headed in the right direction, while management has totally taken their eye off the ball, business wise. I share the frustration of the Evolving Excellence blog that four more Delphi plants have won the Shingo. At what point does it become embarrassing to the Shingo Prize people that they are giving prizes to a bankrupt company??

I still think the ultimate lean measure is PROFIT. Not just short-term profit, anyone can fudge the budgets and the books to show a profit, but long-term Toyota-style sustained profit. Maybe if I have time, I'll try to research the profitability of the Shingo Prize winners versus their industry peers. (Update 3/10/06 -- see my post on "Shingo Investing" here).

Here is a link to a press release from Steelcase, one of this year's winners. Steelcase results include the following. I hope profits are also up!

• Improved efficiency by 40 percent
• Reduced cycle time between raw materials and finished goods from 6-8 days to less than 3.5 hours
• Improved raw material turns by more than 250 percent
• Reduced inventory space from 250,000 square feet to 75,000 square feet
• Reduced paint cycle time from 2.5 hours to 85 minutes or less
• Reduced floor space for finished goods shipping by over 85 percent

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Toyota Makes Fortune's "Most Admired" List

Fortune: Most Admired Companies: Snapshot

Toyota is the first non-U.S. based company to make the list, in the #9 slot. The top 10 are GE, FedEx, Southwest, Proctor & Gamble, Starbucks, Johnson & Johnson, Berkshire Hathaway, Dell (falling from #1), Toyota, and Microsoft.

Toyota ranks #1 in the auto sector in the survey for:

• Social responsibility
• Quality of management
• Financial soundness
• Long-term investment
• Quality of products/services

They are ranked #2 for:

• Innovation (I'm surprised by that)
• Employee talent (I'm not surprised by that, as with TPS you would expect a company to do "great" things with "good" people because they work as part of a high-performing system.)
  

What Are We Searching For?

No, this isn't a 5S discussion. Every once in a while, I peek at the blog servers stats to see what people search for (on Google, for example) before getting here to the blog. This is just a sample that covers the past week or so.

#1 term: "lean manufacturing", that makes sense. "lean manufacturing blogs" is right up there too.

We're searching for lean people, in order: Steven Spear, Jim Womack, Norm Bodek, David Meier, Taiichi Ohno, and Tom LaSorda.

We're searching for "lean stuff": lean posters, lean articles, lean TV, lean examples, lean software, lean manufacturing benchmarks, and a list of companies that use lean.

Someone was searching for a "free kanban formula." I hope they found it without paying (although many good lean books, with that formula, are worth paying for). Two people were also looking for "free kaizen training slides." Part of me wants to say you get what you pay for :-)

I'm happy to see a number of people searching for "respect for people and lean".... hopefully because they want to instill that, not because they're complaining about not having it where they work.

People are still searching for "12,000 paid not to work" as they were searching heavily for two weeks ago.

A more profound question was asked, "Is human error accepted in 5 Why's?" This question is directed at the lean problem solving methodology of asking "why" 5 times to help get to a root cause problem. Human error, or making a mistake, is likely a cause of many mistakes, but it's not usually the answer to the 5th why nor is it usually the root cause. We might ask why the human error was not prevented, which would drive us to a root cause and a solution. I was taught that the "respect for humanity" piece of the Toyota Production System included the idea that people make mistakes, even the best of us. It's for this reason that error proofing (or "Poka Yoke") and Jidoka are such core lean concepts.

Someone also searched for "Ford's future." Who knows?!?! :-)

Lean Healthcare: Park Nicollet Again

kare11.com :: KARE 11 TV - Auto concept drives Park Nicollet strategy

In the news once again, Park Nicollet Hospital in Minnesota is getting media attention for its lean efforts. They claim a $15 million savings over the past two years, although I'm glad to see this is not just a "cost cutting" exercise, they are focused on patient care improvements, using flow and value stream mapping concepts.

An earlier article on Park Nicollet.

Lean As A Business System

IndustryWeek : Continuous Improvement -- Taking A Big-Picture Approach To Lean

Here's a good column from IW, comparing the enterprise lean approach of Newport News ship building with the "plant floor only" approach taken by GM and Ford.

An excerpt:

Until Detroit's Big Two implement lean as part of their companywide cultures, they'll never realize lean manufacturing's full benefits, if any. And once implemented, lean must flow smoothly from the decision-makers at the top down to the engineers and the shop floor. That means ensuring every division throughout the company is practicing lean together.

Getting to this point will require some humility on the part of U.S. automakers.

Toyota has been preaching/teaching for a while that lean/TPS is not just for the factory floor. This message was amplified by Jim Womack in his latest newsletter, that GM and Ford are pretty competitive when it comes to factory quality and productivity, but they have to embrace the full TPS business philosophy to move foward.

Why doesn't this marker cap fit?

Bad Designs - Why doesn't this marker cap fit?

This is a fascinating website, full of examples of things that are designed poorly. Many of them are designed poorly because they don't include error proofing as a core principle, such as with this example. Good learnings for lean thinkers on this website.

What Are Your Reasons?

Seth's Blog: The Reason

A great piece here on Seth Godin's blog. He's primarily a marketing guru, but I thought this was thought-provoking about why things "have always been this way." It certainly applies in the lean world, we forget sometimes why something is the way it is. Maybe the assumption behind that doesn't exist anymore? His last example is a good example from old manufacturing history as well, check it out.

New Q&A With Jim Womack

Here is the latest exclusive Lean Manufacturing Blog Q&A With Jim Womack, author of Lean Solutions and founder of the Lean Enterprise Institute. We did an extended Q&A late last year, and here are some new responses to our questions to Jim, based on his latest newsletter (full text here).

Q: With "The Machine That Changed The World,” there was a clear and widely recognized problem to be solved, via lean production. Are business leaders outside of manufacturing recognizing the need to improve and, for example, to not waste their customers' time?

A: All change starts with one person or a small group. What I see today is lots of experiments in lots of industries. But I'm confident that these will succeed and that the trend toward lean solutions will grow. The reason will not be that companies suddenly want to be nice to their customers. Instead, it will be the discovery by some trail blazer that doing the right thing for customers actually costs less than doing the wrong thing. (For example, the Simao car dealer chain in Portugal -- featured in this week's Automotive News by the way -- discovered that they could cut the time customers spent on repairs more than in half while reducing Simao's cost of providing the typical repair by 30%. And that 30% dropped directly to the bottom line.) As the word spreads that lean solutions are good for greedy capitalists as well as consumers, I guarantee that they will be adopted. And...it only takes one trailblazer in any industry -- the Toyota if you will -- to force every other player to pay attention. Still it often takes a generation -- as we are seeing in auto manufacture -- before everyone gets with the program or gets out of the industry.

Q: In your latest newsletter, you state:

“Finally, a lean management system involves managers at every level posing the key problems that need to be solved and asking the teams they lead to develop and implement the answers.”

How can people be creative and take risks when they fear mass layoffs?

A: When a company waits until very late in the game to embrace lean principles -- and Ford has waited very late indeed -- there are only two choices: fewer jobs or no jobs. So every employee has a choice to make: Participate in leaning of the business knowing that they may be out but the company will survive or sit on their hands (or even sabotage change) so that everyone is out. That's a hard choice and everyone will need to chose. The pity is that this choice was really unnecessary if senior management had had its head in the game years ago when there were more options.

Q: You suggest that they do so, but car companies say its too expensive to simplify model lines.

A: O.K. It's cheaper to go bankrupt instead? The folks in MoTown need to understand -- as Sloan did in the early 1920s after GM skated around bankruptcy, risking Sloan's own fortune -- that this isn't normal times. The situation calls for kaikaku (revolution) rather than kaizen (evolution). So, whenever I hear MoTown executives say that some action is desirable in principle but impossible in practice, I say: "Well in that case -- if it's really that difficult -- it's important to start immediately!" Contrast their reaction with Carlos Ghosn when he got to Nissan: He slashed half the models under development to rationalize their product range, arguing there were no resources to get a kazillion derivative products done, told the suppliers that they weren't going to live higher on the hog than Nissan but wouldn't be asked to accept more pain than Nissan either, and closed the facilities that needed to be closed in a country where "we never close anything because we believe in lifetime employment." And...people were so happy to hear a "way forward" that was actually a way forward that they played with their hearts and saved the company. That will work in MoTown too.

Q: You ask “but what will really happen?” Will you make any forecasts about the chances for GM, Ford, or Daimler Chrysler to implement any of your suggestions?

The future is in our hands, not in the hands of a mindless machine. So...what happens depends on who emerges to lead and who decides to follow. As I have said, lean thinkers don't believe in forecasts and I have none to make. But...it sure is getting late in the day.

Q: Why try to fix Ford, GM, and Daimler Chrysler? Shouldn’t we just encourage Toyota, Hyundai, Nissan, etc. to continue growing in the U.S.? That growth would create jobs and tax revenue. Should government policy be neutral about what automakers grow in this country, or should government do something to help “the Big 3”?

I'm not trying to "fix' anything and I strongly suggest that governments let the competitive process play out without interference. But...there is a human dimension here: An enormous number of employees of the big car companies and their suppliers have had their expectations about their careers and their retirement dashed and many more lie in harms way. The best ending would be for the MoTown team to get its act together, play a brilliant, lean game as the only "way forward" and produce a new equilibrium in the industry.

Paperless Boardroom at Toyota

Article Link

I found this story today about the newly developed 'Paperless' Boardroom at Toyota. By utilizing and combining IT technologies a boardroom was created that allows for a variety of electronic data management functions.

The article purports that this application of technology eliminates waste by not having to provide directors with large stacks of printed information that may change before it is needed. Here are some of the highlights of what the boardroom enables:

· Access to information with last-minute changes on the system including alerts to changes
· Greater accessibility of information
· Information is more easily audited
· All members simultaneously see updated data

Often new technologies and high tech gizmos do not deliver on promised organizational efficiencies. In fact, many times use of new technology creates more waste in a system – hence Toyota's principle to only use reliable, thoroughly tested technology that serves your people and processes.

I have to admit, I'm a bit skeptical. The way this boardroom is being presented as the latest and greatest advancement towards a paperless world makes me wonder if it truly is 'reliable and thoroughly tested'. That being said, if anyone can pull this off and prove that this new system can eliminate waste, it's Toyota.

NPR on the Jobs Bank

NPR : Future Uncertain for Auto Workers' Safety Net

I don't mean to focus so much on this Jobs Bank issue. But, this piece is one of the reasons this blog got such a spike in readership last week.

Members of the United Auto Workers union enjoy a one-of-a-kind deal with U.S. car makers: Idled workers do community service or watch videos and play cards -- all while earning full pay.

This is why it's a lean issue to me. Toyota talks about having "respect for humanity." It seems the ultimate disrespect to pay people to do nothing. GM hasn't respected its workers. It's a shame GM management couldn't have found a way to keep people busy, but one long-time GM employee wrote me:

I had experience with some of the first jobs bank people in about 1986. They were there to help us with clerical work, but despite being nice guys who tried to help, this was out of their area of expertise - I don't think most of the group of about 6 employees in the pool helping service even had high school diplomas. They were much better at gopher tasks or even measuring things, although their data collection capabilities were somewhat limited.

Sad, sad situation, then and now. Again, from NPR:

People have spent 15 years in the program -- more time than they've spent actually making cars.

Get Your Payback From Lean!

Leading Lean: Get Your Payback From Lean!

Here's the latest column from the Lean Learning Center's Jamie Flinchbaugh, focused on leadership's responsiblity to create opportunities for successful factories. If you're freeing up resources, equipment or people, it's the responsibility of top management to find ways to increase sales.

Otherwise, you end up in the situation of General Motors. Many, including Jim Womack, have pointed out (correctly, I think) that the problem with the infamous Jobs Bank is that GM didn't sell enough vehicles to keep employees busy, whether that was the fault of design, quality, or whatever. That's all management's responsiblity ultimately, that's why they are paid the big bucks.

I think GM's employees were freed up, not so much from GM being a "stage 3" company, as Jamie describes it. That would have been a nice problem to have, having too many employees due to productivity improvements (yes, I know the data that show GM's productivity and quality have gotten better). But the reality is they weren't selling enough cars, and that was the reason for the excess employees.

Womack's WSJ Piece

WSJ.com - Why Toyota Won

I still haven't found a free version, but here's a site with slightly more detail.

Here is piece written by Jim Womack, in a similar vein to last week's email newsletter.

His main bullet points:

• GM and Ford can't design vehicles that Americans want to pay "Toyota money" for.
• GM and Ford are clueless as to how to work with their suppliers.
• GM and Ford have miasmic management cultures.
• GM and Ford cling to their wide range of brands
• GM and Ford still treat customers as strangers engaged in one-time transactions.

Why the Interest in GM's Job Bank?

Lean Manufacturing Blog: GM Jobs bank programs -- 12,000 paid not to work

I know it's kind of weird to link to my own post, but I saw the traffic logs and I had HUNDREDS of visits to this page today. Lots of people were searching google about GM's jobs bank and the "12,000" number. Why is that? Was something about that in the news separately today?

Jim Womack's Latest Letter and a Q&A

This week, Jim Womack sent out his latest email newsletter, entitled "A Tale of Two Business Systems." The Lean Enterprise Institute has offered up some of Jim's time to answer a few selected questions about that letter or his recent book (with Dan Jones), Lean Solutions. We did a Q&A late last year, but it won't be as extensive this time, but Jim will answer a few selected questions.

To read the full letter, click on "Comments" below, where I'm re-printing the letter, with LEI permission. If you have a question to submit, use the comments box or click here to email me. I'll choose a few questions to pass along. Check back, as I'll post Jim's responses on Monday.

---------------------

n the fall of 1990, Dan Jones, Dan Roos, and I co-authored The Machine That Changed the World, our description of lean enterprise. On page 253 we forecast that 1991 or 1992 would be the moment of crisis as the full power of lean (represented by Toyota) threatened to topple mass production (defended by General Motors). And in 1992 GM nearly did go bankrupt.

However, as usually happens with forecasts, we were off in our timing. The moment of truth was actually delayed 15 years. What now seems certain is that Toyota will pass GM in 2006 to become the world’s largest industrial enterprise and that GM and Ford will undergo a profound transformation, whether led by current managers or by someone else.

(Click Comments to read the rest)

Analysis of Ford Buyouts

Here is a current blog posting (11/30/06) for those of you looking to read about the accepted Ford buyouts.

Detroit News Article Link (from Feb)

From a friend.....

Here's a creative, preemptive move most certainly designed to head off the potential impact of a huge flux into the job bank. The Way Forward plan announced late January called for the elimination of 30,000 hourly jobs over the next 6 years. It is expected that half of these will be cut through attrition, but the other half will need to be encouraged to leave voluntarily. While yet to be agreed to by the union (which must be done at the local level), here's the layout of the options Ford is offering:

· A special $100,000 buyout offer for those who agree to leave the company and forgo all benefits except pension benefits they have accrued.

· An Educational Opportunity Program to help workers move into a new career. The program provides workers with at least one year of seniority with up to $15,000 a year for tuition to an accredited school of their choice for up to four years. Those workers will receive full medical benefits and half their regular pay while they attend school.

· Two early retirement programs. The first is for workers 55 and older who have 30 or more years with the company. They will receive a $35,000 check and begin retirement immediately, with full retirement benefits. The other program is for workers 50 and older with 10 or more years at the company. They will be provided a fixed level of income for life, though not as much as they would receive through the regular retirement program. The amount will vary from individual to individual, Mulloy said.

· Fin