Learning from Super Bowl Coaches

In the Lead - WSJ.com

The WSJ wrote Monday about the leadership styles of Tony Dungy and Lovie Smith, the Super Bowl coaches for the Colts and Bears.

The Super Bowl should be required viewing for managers who think screaming at employees is the best way to motivate them -- or simply their prerogative as bosses.

Do any of you still work for this type of troglodyte boss? There are plenty of them at GM in the mid-90's and I even ran into a few at Honeywell a few years back. This type of manager isn't extinct yet, unfortunately.

A calmer, more respectful style works for Dungy and Smith. Toyota teaches us (or tries) that "respect for people" is a key management concept. Easier said than done.

Both believe they can get their teams to compete more fiercely and score more touchdowns by giving directives calmly and treating players with respect.

This doesn't mean they aren't demanding or don't push hard. Mr. Dungy has a grading system that counts players' "loafs." If someone isn't running at full speed, or eases up or fails to hit an opponent when he could have, those are loafs, and it's hard to get through a game without getting at least one.

That point lines up perfectly with my understanding of TPS. "Respect" doesn't mean being easy on people. Respect means being tough and holding people accountable, to themselves and to the organization.

The WSJ article reinforces that the yellers and the screamers are still pretty common, the type of boss who doesn't show respect for people:

But there are still numerous business executives who ridicule and scream at employees. As a result, they undermine productivity, discourage innovation and may cause a talent drain at their companies, says James Clifton, CEO of the Gallup Organization.

"There's a big difference between saying 'you made a stupid mistake' and screaming 'you're really stupid,' " agrees Gary Hayes, a psychologist and co-founder of New York consultant Hayes Brunswick. He worked with a New York law firm where a senior partner flung heavy law books across the room at an associate. "The associate told me it was all right since the partner intentionally threw to miss -- not hit him," says Mr. Hayes. "But the associate soon moved to another firm."

The vice president of marketing at a Silicon Valley company attributes rapid turnover at many West Coast technology companies to what he calls "screaming-bully bosses."

One such boss, a body builder who liked to show off his strength to managers by doing 25 pushups at the start of meetings, called him at all hours to scream about things that had gone wrong. A second bully boss, the CEO of a semiconductor-network start-up, ridiculed him and his colleagues publicly. "He'd pick up something I'd written and say, 'Who wrote this? A second grader? It's the stupidest thing I've ever read,' " the marketing vice president says.

If you're working for one of those bosses, it might be time to move on. I'm lucky that, in my current job, I do have bosses that have respect for people.

Does Lean Increase Supply Chain Risk?

Coping With Disaster - 1/30/2007 - Manufacturing.Net

Here's another article with the theme of how "just in time" (JIT) is too risky for supply chain purposes. This type of article usually pops up in the WSJ about once a year (they're about overdue, I think).

"'Especially for the way business is done now, with companies using lean manufacturing and JIT techniques, and keeping inventories low,' said Mark Hillman, research director at AMR Research and one of the study's authors. 'They need to know that they will have a continuous supply of materials and components from their supplier (or their supplier's supplier) if problems occur.'"

This problem occurs if you define lean as "JIT." That's an incomplete definition of lean at best. Lean is a more comprehensive management system than that.

The goal of lean or JIT isn't to cut your inventory so close that you're shutting your production down. "Just in Time" deliveries, whether through kanban or some other method, still have to include some amount of "safety stock" to protect you against typical problems that might happen. The more risky your supply chain, the more variation you have, the more safety stock you need.

The supply chain risk is worse if you think you can pull off "Just in Time" with suppliers in China. That's crazy. Of course that's risky, doing something like that. What you should really be doing is taking steps to reduce the variation or the risk in your supply chain. The usual non-lean recommendation is "you need more inventory, move away from JIT."

The best way to ensure a "continuous supply" of parts is to do the following:

1. Keep suppliers close to you (as Toyota does with the San Antonio factory)
2. Have frequent, small-batch deliveries (like Toyota)
3. Partner with your supplier in continuous improvement and problem solving activities (like Toyota) rather than just relying on inventory buffers to protect you

Ideas for a New Lean Blog Challenge?

After a few successful Lean Blog Challenges, the last contest didn't get any entries.

Let's open it up to the Blog readers then. Do any of you have some ideas for a new Challenge? I still have an MP3 player and a copy of Bob Emiliani's book,"Better Thinking, Better Results," to give away.

Click on "contest" below for some examples of previous contests that had some good responses. If you have an idea for a theme, click "comments" or email me using the link in the left-hand column.

Toyota's First U.S. Plant

Press-Telegram - Toyota's Long Beach roots:

Here's an article about Toyota's first U.S. plant, where they finished trucks in California:

"Back in the early 1970s, the company's Japanese executives were wary of American production capabilities. The plant here served as a sort of guinea pig.

'It was a little bit of a test of cost efficiency and quality for Toyota (executives), but it ultimately gave them a great deal of confidence in expanding throughout the country,' said Irv Miller, vice president for Toyota U.S. motor sales.

The plant survived, and today stands as one of the last solid auto manufacturing sites in a region that has seen its manufacturing workforce dramatically downsized, outsourced and sent overseas."

The article says that the plant was started only because of some government regulation designed to reduce imports. I wonder how long it would have taken Toyota to try doing assembly work in the U.S. without that legislation? Does that go down in history as unintended consequences? Or, I assume it's a good thing that Toyota has continued to open plants to this day (and into the future).

Lean and Safety Go Together

Don't Strain Yourself

Here is a great article about how a company has implemented lean to improve safety. Concepts like 5S and waste reduction go hand in hand with ergonomics, safety, quality, and productivity. Oh, and this company is from the construction industry, even.

However, if a work site is cluttered and disorganized, training on poor lifting technique and proper body postures can fly out the window. That's one reason why Walbridge-Aldinger has adopted Toyota's lean manufacturing philosophy.

The philosophy involves identifying and reducing waste - such as overproduction, waiting and transportation - and adopting a system of workplace organization and visual controls known as the "Five S's." Loosely translated from Japanese to English, the Five S's are: sort, set in order, shine, standardize and sustain.

As an example of how the principles of lean manufacturing have enhanced safety - and minimized sprains and strains - Clabaugh pointed to an "old way of doing business."

"We'd have a laborer carry two 5-gallon gas cans out of a C container or storage area and walk the distance of the job site and walk down a ramp into a construction pit to fuel our equipment," Clabaugh said, noting that lifting and carrying the gas cans for such a distance posed the potential for sprains and strains or, at the very least, discomfort.

Using the principles of lean manufacturing, Walbridge-Aldinger purchased four-wheel carts from Home Depot and secured the gas cans to the cart, allowing workers to pull the cart from the C container or the storage area to the work area.

Notice how they used simple off-the-shelf solutions, sort of like the parts trays that Toyota bought from Wal-Mart down the road from the new San Antonio factory.

Toyota Video Online

Lean Six Sigma Academy Blog: The Toyota Way

Here is s news story that Ron, at the Lean Six Sigma Academy Blog, found on YouTube. The video is below and I had a few comments.



First off, the reporter says that Toyota builds cars just like Dell builds computers. That couldn't be further from reality. Here is an earlier blog piece of mine on that topic.

1. Dell does not subscribe to the Toyota Production System or Toyota Way approaches. Dell has a very different management system and has only, in recent years, started looking into the Toyota approach. They have never said that they patterned themselves after Toyota.
   
2. Dell builds everything (or virtually everything) in a customized way for a specific customer (except maybe QVC orders, but I don't know that for sure). Toyota builds a lot of its product for dealer orders and doesn't have the level of customization that Dell does.
3. Dell and Toyota have very different cultures. I worked at Dell and I've obviously studied Toyota, going back to before my Dell days. Dell was nothing like Toyota, that's one real weakness that Dell had, the management and leadership culture.

I don't mean to dump on Dell. It's just that Dell and Toyota are different in fairly significant ways. It does a disservice to true lean thinking to lump Dell in with Toyota. Sure, Dell builds computers pretty quickly and their factories are amazing examples of flow, but the similarities end there.

The difference between GM and Toyota isn't as simple as "push" versus "pull." There is a better example in the video about how Toyota only has one person looking at quality at the end of the line, while non-lean automakers have employees "crawling over the vehicle" as they inspect quality into the process. Toyota's approach of "building quality in" is a better approach and the video gets that right.

The video also talks about "just in time" delivery of parts. That is something that Dell also does. But, Toyota tends to group suppliers near their final assembly plants, keeping total supply chain inventory low. Dell buys its parts from Asia, with slow and relatively unresponsive supply chains with high inventory. Dell is criticized for merely pushing inventory back on suppliers, who hold parts at a shared warehouse near Dell's factories. It's more of an accounting trick than real supply chain mastery.

The video also makes a proper comparison in the management cultures, including "respect for people" including employees, suppliers, and customers. That's not something that Dell really focused on, from my experience. Dell had the production mindset and culture of mass production, at least in the way they treated people.

The video also correctly captures the culture of kaizen and teamwork. Toyota people talk about how Toyota will never "kaizen someone out of a job," an important part of the lean culture and something I don't remember Dell practicing at all. Toyota hasn't had layoffs since 1950. Dell has gone through mass layoffs in this decade, after their hypergrowth slowed.

OK, sorry to get sidetracked on Dell. It *is* an excellent video about Toyota, if you ignore that comment about Dell and Toyota being the same.

Pull System for Soda Machine?

Learning about Lean

Joe Ely has popped up on his blog with an interesting post about a potential pull system for stocking soda machines with the right mix for the customers in a given location. Joe points out that prediction is unnecessary if you react with a PDCA-type pull system.

Kaizen Newspapers Discussion

LeanBlog Message Board

We're getting some good discussion at times on the Message Board, people helping each other out with their lean challenges. Check it out.

"Kaizen newspapers" is one term used to describe the publication of before and after conditions related to kaizen events or kaizen improvements.

Moving Assembly Lines = "Lean?"

Airbus cuts costs by learning from auto industry - MarketWatch

Here's an article that talks about Airbus and their lean efforts.

The moving production line, which Airbus calls "lean manufacturing," breaks with previous civil aviation industry practice whereby aircraft were built in "docks."

I'm curious if this is the only "lean" method they have adopted? It's possible that Airbus has made improvements, but a moving line isn't necessarily "lean."

That said, Airbus credits lean (or the moving line) with a number of measurable improvements. It's the improvement that matters.

"The system allows us to reduce production costs and optimize our workflow, and requires less inventory," Hans-Henrich Altfeld, head of Airbus A320 family fuselage production center, told a group of journalists.

Altfeld said the new production technique has reduced the time necessary to manufacture a fuselage section by 40% to around five days, thanks to a system where the sections move sideways through the plant on rails at a speed of one meter an hour.

Quality has improved, and there's now less waste, Airbus officials said, and the company now has much greater flexibility to adjust production to its order book.

... the cost reduction compared to previous manufacturing techniques is about 30%.

Does anyone have better insights to share on Airbus and lean?

"The Vicissitudes of Over-production"

Why U.S. automakers like GM and Ford are losing money - Jan. 26, 2007

Wow, leave it to a professional journalist to spin a phrase like my headline for this post. We don't really need another post or discussion here about "how to fix the auto industry" but I couldn't resist posting that phrase. Vicissitudes, now that's an SAT word.

We could debate this until the cows come home, are GM, Ford, and Chrysler's problems externally driven or self imposed?

These costs are often used as excuses:

Health care is the biggest chunk. GM, for instance spends $1,635 per vehicle on health care for active and retired workers in the U.S. Toyota pays nothing for retired workers - it has very few - and only $215 for active ones.

Other labor costs add to the bill. Contract issues like work rules, line relief and holiday pay amount to $630 per vehicle - costs that the Japanese don't have. And paying UAW members for not working when plants are shut costs another $350 per vehicle.

And whose fault are these costs? These are contracts that GM freely agreed to with the UAW. You could view those costs as a "tax on bad management."

Here are some scary numbers that show why it "makes sense" to keep the plants running even without orders. I hadn't seen it broken down with precise numbers like this before:

If an assembly plant with 3,000 workers has no dealer orders, it has two options. One is to close the plant for a week and not build any cars. Then the company still has to give the idled workers 95 percent of their take-home pay plus all benefits for not working. So a one-week shutdown costs $7.7 million or $1,545 for each vehicle it didn't make.

If the company decides to go ahead and run the plant for a week without any dealer orders, it will have distressed merchandise on its hands. Then it has to sell the vehicles to daily rental companies like Hertz or Avis at discounts of $3,000 to $5,000 per vehicle, which creates a flood of used cars in three to six months and damages resale value. Or it can put the vehicles into storage and pay dealers up to $1,250 apiece to take them off its hands.

It's "cheaper" to keep the plants running, building up inventory. Yikes. I wonder how aggressive the Big 3 will be in their UAW negotiations this year, particularly about overly restrictive work rules. I remember, in my GM days 10 years ago, that if we needed a pipefitter to do one small task, we couldn't have an electrician do it. If it was Saturday work, we had to pay that pipefitter a minimum of 4 (or maybe it was 6) hours of work to do one motion with a wrench. Crazy. Have these rules gotten any less restrictive over time?

Is there a broader lesson to apply if you're working on lean? Maybe the lesson is to treat employees with respect, treat them fairly, use lean to avoid layoffs, and avoid unionization if you don't already have it. Any other lessons? Or are we just watching a train wreck and can't take our eyes off of it?

Toyota Product Development System

Industry Week Article

Here's a list of 13 principles from the Toyota Product Development System, as explained in the book The Toyota Product Development System: Integrating People, Process And Technology by Jeff Liker and James Morgan.

Is anyone working to apply this system at their company?

A Tax On Bad Management

U.S. Car Makers Stand to Gain From Bush Plans - WSJ.com:

"Though many factors have contributed to the industry's woes, soaring health-care costs are a big part of the problem. The Detroit giants are paying the price for years of buying labor peace by agreeing to provide rich health-care and other benefits to their unionized workers. GM, for example, has said its health-care costs average as much as $1,200 for each car it sells in the U.S."

There are two separate factors here: 1) healthcare in the U.S. is too costly, in general, but 2) GM gave away super generous benefits, such as the UAW workers making zero contribution, zero co-pays, etc.

As the article puts it, the company was "buying labor peace." It's too bad GM, etc. couldn't get labor peace by treating employees with respect day-to-day and over time. The wounds from how GM management treated UAW workers (generally speaking, and I saw this first hand in the 1990's) were so deep, that they had to try to spend their way out of it. Were the UAW folks to think "Management treats us like garbage, but at least I don't have to pay for healthcare." I guess that's labor "peace," if peace is defined as management and the UAW not nuking each other out of business.

I look at the "high healthcare costs" that GM is suffering as a "tax on bad management" basically. I don't feel much pity for them. They made the bed they are now struggling to get out of. I've been away from GM too long.... is the company doing any better at treating employees with respect and collaborating with them? Or is it still old-school GM at the plant level? I'd like to hear your comments if you're closer to GM than me.

A Different "Lock Box"

No, this isn't about Al Gore and his infamous Social Security "lock box."

This is about suggestion boxes that we sometimes see hanging on the wall in workplaces. With my current lean project, we co-opted the existing department suggestion box as a "lean box" and we're making sure to check it every day.

When I was in a different department today, something struck me, something that never bothered me before... the shiny brass lock on the suggestion box. Our box also has a lock and we have to remember the key every morning. It's kind of a pain to get that danged key.

Why is the suggestion box locked anyway? I started to question that. Is the country facing a rash of suggestion box thefts? Are suggestions to be kept away from employees to be read only by managers? What do you think?

I'm going to suggest that we take the lock off the danged box. Suggestion boxes are really a poor substitute for face-to-face discussion and on-the-spot problem solving. But, we have to take baby steps. Folks are afraid to make suggestions sometimes... sort of like giving them "permission to change," we have to give them permission to bring ideas forward without fear of being criticized or being dismissed.

This is a topic Norman Bodek talks about in our Podcasts.

Here is an earlier post of mine thinking back to the horrible suggestion system back at GM.

Waste in Your Mailbox

Productivity Cafe: Stop Junk Mail

Lean Blog reader Osvaldo brought this up as an example of waste -- mail that ends up in your mailbox (catalogs, solicitations) that goes right into your garbage can. Apparently, it's "National Junk Mail Awareness Week" in the U.S., so let's be aware of waste.

One stat: more than 100 million trees worth of junk mail end up in our mailboxes each year in the U.S.

I'm not a wild environmentalist, but I do know waste when I see it. Just because I bought one Christmas present from a catalog, that doesn't mean I need to get two catalogs every week. Enough. I need to do something about that. Junk mail works because it is cheap. Maybe the USPS needs to raise rates and stop subsidizing excessive junk mail? There's got to be a price, from an economics standpoint, that is high enough to slow junk mail, but still be revenue neutral for the post office. If prices are higher, the junk mailers will have to start being smarter about junk mail, which can save us all a lot of hassle.

NY Times article on the topic of how to get off junk lists.

Permission to Change

I went through a discussion today that reminded me of a similar situation early in a lean effort at my old manufacturing company a few years back.

Early in lean efforts, one of the things I focus on is 5S, for many reasons. One reason is that it gets employees evaluating their workplace, giving input, and making suggestions. One of the positive side effects of this change is the realization in some employees:

"You mean it's OK to move things, it's OK to make changes?"

And you know what... sometimes that unleashes a wave of changes that were pent up. I heard this comment today and it's exciting to see people changing things that they wouldn't have considered changing a month ago. These are little "just do it" ideas, sort of like Norman Bodek talks about. They didn't require suggestion forms or approval, no formal "kaizen event"... just do it, just make some small change that makes your workplace slightly easier... then repeat. That's kaizen, right?

The thing that's curious to me: nobody ever told them "don't make changes" but this fear or unease builds up to the point that the most obvious waste is never addressed by anyone. People dealt with it, or maybe complained, but didn't take action.

I guess it shows that when you don't ask people for their input, when you don't ask them what could be better, that people assume that you don't care and that they shouldn't either?

What are your experiences with these mindsets?

A Hospital Death in Florida

Kevin, M.D. - Medical Weblog: A woman dies after receiving 8 grams of Dilantin

I read about this on the blog linked above and the source article is here.

A nurse administered an incorrect dose to a patient, TEN TIMES the normal dose and well above an amount that would have been fatal, so of course it was a fatal incident (or "sentinal event") as hospitals would call it.

Rohart, an ER specialist for eight years and a doctor since 1989, said he ran tests and prescribed 800 milligrams of the anti-seizure drug Dilantin.

But Cooper [the RN] instead administered 8000 mg (eight grams), quickly stopping Plass' heart, hospital officials said. The fatal dosage is two to five grams.

The article doesn't say what the error was that led to 800 becoming 8000. I can't imagine it was a decimal place error. How could this have happened?

I'm normally quick to place blame on the system, but this one comes close to really seeming like the mistake of an individual:

The correct dose required 3.2 vials of the drug. Cooper gave Plass 32 vials, hospital administrator Joe Scott said. To get that many, she had to search the halls and take every vial from three computerized drug-dispensing machines, he said. "That would be a big red flag," Scott said.

All the Dilantin didn't fit in one intravenous bag, so Cooper hooked up two, one in each arm, Scott said. "That would be another big red flag," he said.

Cooper never double-checked or questioned the amount, Scott said. Nor did she explain her error to hospital officials, he said.

It would be a big red flag, I guess, but nurses are often scrounging for drugs in the hospital due to stock shortages and poor replenishment processes. But still.... yeah, it seems like she should have at least asked somebody. That's part of the problem with hospitals -- the culture of workarounds and "just getting the job done" instead of stopping to proactively fix problems. In a better hospital culture, the RN would have had someone to ask or at least make the suggestion, "We should stock more of this drug, I've had to look all over." A supervisor could have or should have caught it or questioned the action. The culture of workarounds and heroic measures means that, even in less fatal situations, that RN's are constantly fighting the same fires and battles every day, without root cause problem solving.

After the tragic death, the hospital took some systemic steps beyond firing the RN:

The death exposed gaps in safety procedures, Scott said, mainly that the drug-dispensing system did not detect such a huge dosage being prepared for one patient.

The machines have been reset to flag large withdrawals and to stock only small amounts of Dilantin and other high-risk drugs, forcing nurses to go to the hospital pharmacy in person, he said. After the death, the hospital retrained nurses and tested them on calculating dosages.

"I have a sense of comfort that they have taken all the steps necessary," Levine said.

OK, why wasn't that systemic fix put in place BEFORE? Will OTHER hospitals learn from this error and make sure similar protections are in place?

Also, RN's already struggle through enough systemic waste and non-value-added activity each day without forcing them to take a long trip to the pharmacy, taking them away from their patients.

There's a whole other subplot in the story about how the hospital warned the doctor to not ask questions about the death, which smells like a cover up attempt... that's a post for a different blog.

A call to all hospitals: Be proactive about preventing mistakes, don't wait for a death to respond. Learn from the mistakes of others so you can prevent this particular type of error from happening ever again, anywhere. Establish a culture where people don't have to be heroes, where they can ask questions and question things or ask for help without being viewed as lame or weak or incapable.

Lean Suits Story on NPR

NPR : Suit Maker Goes 'Lean' to Keep Jobs in U.S.

I'll comment more on this later, but this was on NPR this morning. Overall, positive mentions of lean, although there was a common complaint from a worker about having to do more of a variety of work tasks instead of sitting and doing nothing but large batches of sleeves all day. Some people love the variety and the flow that comes with lean, some people hate it.

Some workers like the new system. Others don't. Among the latter group is Louise Sanchez, who has worked for the Abboud factory for the past 17 years doing the exact same thing: stitching sleeves.

Sanchez preferred working alone at her own speed. Now, she's part of a team. And if she doesn't move fast enough, other workers give her a hard time, because it affects everyone's pay.

"It was just me doing a bundle. And I used to finish the bundle, tie it up and just put it aside," she says. "But now, I do a sleeve and I have to pass it on to the other operator. It's just, it's just a little nerve-wracking."

Lean is right for the customer though, and the piece features that.

"Today, if a Nordstrom wants more Joseph Abboud product in the middle of September — because the weather turned cold and folks ran into the store and started buying suits and stripes were popular — we can't deliver mid-season goods," he says. "Whereas in a lean environment, if we can make a sufficient quantity in a two or three-day cycle and ship it to the store, we can actually fill replacement orders and drive a business."

I'm glad it wasn't a Lean-bashing piece.

Evolving Excellence had some articles on Abboud earlier this week also.

Fixed the Streaming Podcast Player

For those of you who listen to the LeanBlog Podcasts using the streaming player in the browser, that is now fixed. That had been broken for Podcasts #14 (Dave Gleditsch) through #17 (David Meier).

If you were unable to listen to the Podcasts and want to check them out now, you can access them all through the LeanBlog Podcast main page.

A Wisconsin Lean Story

Metal expands when it's hot

Here's a story from a small company that's grown from $3m to $10m in revenue, in part due to Lean methods, but also due to apparent notions of "respect" for employees and customers. There are always a lot of Lean examples from Wisconsin.

The CEO of the family-owned company says:

"I’m only 1/70th of the success," said Isbister candidly. "Our focus is on employing the best people, treating them well and giving them the opportunity to use their brains." That approach has helped build long-term relationships and respect with customers, an identified top priority for the company.

They talk about Lean methods the company used:

Ongoing education is part of being a General MetalWorks employee. All employees are instructed in Lean Manufacturing training, and the company uses Value Stream Mapping initiatives.

It's instructive that ALL employees are trained in Lean, not just the managers. I'm reading a lot into a short article, but it sounds like the folks at GMW understand not just Lean tools (like VSM), but also the people and leadership sides of Lean and the Toyota Way.

How Specific an Example Do You Need?

From the Northwest Lean Network email listserv, about a week ago:

" I am looking for experiences using lean practices and tools in fruit juice businesses."

I've seen a lot of this, people asking for very specific examples of lean practices for their exact specific sub-industry for a specific type of customer. What if someone volunteered a vegetable juice producer? Sorry, not a close enough match?

It's OK to learn from others, but as long as you aren't trying to just copy practices without understanding Lean. GM tried learning Lean from Toyota... the businesses were too similar, GM saw things (through the filter of their own business) -- or they didn't see things -- and ended up copying certain Lean practices while missing most of the picture. And we see how that's working out for them.

One reason I think healthcare is doing well with Lean is that they've had to learn CONCEPTUAL Lean and TPS and then had to figure out how to apply it. I'm afraid that as we get more hospitals doing Lean, they'll only want to learn Lean from other hospitals and they'll start copying. Learning from others is good, if it drives you to figure it out yourself. Copying is a shortcut, but might not serve you well in the long term.

At a high enough level, Lean is Lean. Sure, aerospace Lean is slightly different than automotive lean (product cycles are different, volumes are different, customer/supplier/producer dynamics are different, etc. etc. etc.).

But "eliminating waste" and "respect for people" are pretty universal concepts that you can apply anywhere. Who cares if that other fruit juice producer did 5S first, then implemented standard work? Maybe they never did Lean well, why would you look to copy from someone exactly like you? I guess that's some people's comfort levels. Our business is unique... that's true, every business is unique on some level. But looking for that "mirror image" to benchmark is too often an excuse of why Lean doesn't work for us.

Blame the Vendor or Hospital Purchasing??

I'm sure most of you are familiar with or have used the Akro blue bins for organizing parts, tools, or a kanban system. The bins are used all over factories and they are used quite often in hospitals (look in the background of episodes of House or Grey's Anatomy and you'll see them, though it normally doesn't look like a Lean kanban system).



A bin with dimensions 5.5"W x 10.875"L x 5"H costs $4.55 from the popular industrial supply house, Grainger. Click the photo on the right for a screenshot (and hit "Back" to return to this page).




That same bin, same dimensions, same manufacturer, same everything can be ordered from a different distributor company that specializes in equipment for laboratories. Guess the price?

$13

See the screenshot on the left. I've checked into this multiple times. These are the SAME bins (a lab I've previously worked with used to order through the healthcare vendor) and they are 2.5x more expensive. That hospital promptly started ordering through a new Grainger account that I recommended. New hospitals I work with always end up ordering through Grainger.

My point isn't that I saved the hospitals some money. The money DOES add up when you buy hundreds of bins for organizing supplies throughout a hospital. My point is that it's sad that vendors and distributors apparently see large dollar signs when they look at hospitals. I don't know what's worse, the fact that hospitals get charged these prices or that hospitals PAY these prices. Why does the vendor charge $13? Because they can.

A topic I often beat into the ground is that the market sets the price. To have a price, you need a seller and a buyer. I guess, ultimately, we have to say shame on hospital purchasing departments for not being more savvy. I've often recommended to lean manufacturing folks that they should move into healthcare and try to help fix things here. I guess I can extend that invitation to purchasing agents, purchasing managers, and purchasing directors. You don't even need "lean" experience to come in and drive big savings, I'd guess. Come into healthcare. Please.

"I Canna Get Warp Drive Back In Less Than Two Days, Captain!"

By Dan Markovitz:

(Mark's note: I saw this article and instantly thought of Dan, re: Lean in an office environment. The dynamics in this article reminded me of the typical dynamics in a non-Lean factory, where lots of expediting takes place, orders are given false due dates, and we even sometimes expedite some of the orders on the expedite list. Hospitals are similar, where many lab orders are "STAT" and octors routinely abuse the "STAT" guidelines because their orders/patients are obviously most important. Seems like basic human dynamics and human nature... and we think Lean can have a positive impact in breaking that cycle of expediting).

In today's Wall Street Journal, Jared Sandberg writes about the prevalence of false deadlines in the workplace. He cites egregious examples of deadlines that create havoc in workflow for absolutely no reason -- among them, a molecular biologist who was given a do-or-die deadline for a Thursday, only to find that her boss had taken off both Friday and the following Monday. As Sandberg eloquently puts it,

The most nettlesome of false deadlines are those imposed by a manager whose next breath appears to depend on the deadline being met but who, once it has been, behaves as though the work was less important than the office's NCAA betting pool.

This sort of behavior is not just irksome or irritating -- though it certainly is that. More importantly, these false deadlines are anathema to lean. They create turbulence in the value stream, undermine efforts at heijunka (leveling the flow of work), and most importantly, lead to the 3M's -- mura, muri and muda.

Workflow on a physical production line is well-planned out of necessity, because the cycle time is fixed. (In the short term, anyway. The factory can certainly make manufacturing improvements in the long term, but not when responding to a sudden and unexpected request. In the short term, the factory can only add or extend shifts in response to a sudden increase in demand.)

Workflow for tasks and projects in the office environment are a bit fuzzier, because the cycle times are unclear. How long does it really take to compile a budget spreadsheet? A marketing plan? A speech for the CEO? But whether workers are building spacecraft assemblies or budget spreadsheets, they must know their production schedule in order to level the flow of their work. And that means knowing what they're going to produce and what the deadline is. It's the manager's job to provide this information. Accurately.

False deadlines make it unnecessarily difficult to plan work, even with the more uncertain production time for knowledge workers. Just like factory workers, knowledge workers must scramble to meet tight deadlines, staying at the office late or working on weekends (leading to mura and muri). And since these false deadlines are always shorter than they need to be, they often result in lower-quality work and unnecessary expenses (muda).

To be fair, multiple value streams flow through knowledge workers and managers, making it difficult for them to move value forward smoothly. In addition to their primary jobs, they sit on committees, get roped into meetings, manage special projects, and must always be available to handle the inevitable crisis. Moreover, as Sandberg points out,

this era of high-velocity communications doesn't grant the breathing space that the sluggish postal service once did, and interruptions can easily obliterate daily agendas.

But with an increasing amount of work to do and a finite amount of time in which to do it, better planning and accurate deadlines are not a luxury; they're a necessity. A production line can't run smoothly without a clear production and delivery schedule, and neither can a business process.

Hidden within the catchy term "3M's" is an awful lot of human stress -- late nights, lack of sleep, strained family relations. Managers need to recognize the burden that false deadlines place on their staff.

Either that, or they can play Captain Kirk to their employee's Scotty on Star Trek. Scotty regularly padded his repair time (fourfold!) so that he could be seen as a miracle worker when he finished the job ahead of schedule.

And that may be a decent way to run a starship. But not your company.

LeanBlog Podcast #17 - David Meier, "Lean in China"

LeanBlog Podcast #17 is a discussion with a good friend of the Lean Blog, David Meier, a former Toyota Georgetown Group Leader, founder of Lean Associates, and the co-author of the excellent book, The Toyota Way Fieldbook, and the upcoming Toyota Talent, due out in April (both co-authored with Jeff Liker, check out my Podcasts with him here and here). In this Podcast, we talk about David's recent first hand experiences with factories in China. Are there labor shortages? Is there a lot of waste in Chinese factories? Do the Chinese have good management skills at this point? What lean methods did David see in China? We'll cover all this and more.

If you enjoy this podcast, I hope you'll check out the rest of the series by visiting the LeanBlog podcast main page.

MP3 File (Right Click to Save-As)

Show Notes and Approximate Time, Episode #17

• 2:00 Overall, pretty surprised, Chinese factories are in good condition, but there are some real labor shortages growing, intense cost pressures from other countries (India, Vietnam, Turkey, etc.)
• 3:00 Lots of struggles from the supply chain side and total cost, "China isn't as great a deal as they anticipated in the beginning" (inbound supply chains)
• 4:00 "One company had 160% turnover last year"
• 4:15 Local management isn't that strong, so companies bring in their own management(which is costly to bring in foreigners)
• 4:45 David was frustrated to see the same challenges and problems in China that are typical here, including the "kaizen blitz" mindset (companies aren't getting long-term satisfaction or a sustainable process)
• 5:50 Saw one company (a clothing manufacturer in China) that took "one piece flow" to such an extreme that it was costing them in other ways, companies are missing the point of what Lean really is
• 6:30 More on the single piece flow situation - are you implementing single piece flow or are you improving performance?
• 10:00 What about Chinese factories and their metrics and goals? David was surprised to hear how everyone was focused on efficiency and labor cost
• 11:00 David saw a lot of Non Value Added activity (20-30% of people's activity) because ofthe way work was structured
• 11:40 "Big shortage of Industrial Engineers in China"
• 12:45 Chinese managers learn "mass production management" or lean management methods?
• 13:45 "I didn't see any factories that would be a model of lean" and David was visiting companies who had expressed some interest in being lean
• 14:15 What lean methods did David see at Chinese factories?
• 15:20 David says there is a general lack of understanding about how to use "Value Stream Mapping"
• 17:15 David and Jeff Liker are working on a new book about systems and how to develop the system properly, how to use the system (such as Kanban) to drive continuous improvement
• 17:45 An earlier new book, "Toyota Talent" is coming out in April
• 18:30 After the Fieldbook, David and Jeff realized there were some topics they could really expand on, Toyota Talent, lean systems, and problem solving.
• 20:15 A preview of Toyota Talent... didn't see much "Standardized Work" in China, the depth of lean there isn't as great as in the U.S. The book looks at how you break down jobs and train people.
• 22:00 People look at Toyota and assume that standardized work only applies in repetitive, highly cyclical jobs (but Toyota has a lot of jobs that don't fit that mold)
• 24:30 David comparing the high turnover in China with the high turnover in fast food and how McDonald's simplifies things, uses standard work, makes it visual, etc. But why do they accept the turnover?
• 25:45 The NPR piece on In-N-Out Burger and how they value employees.
• 26:45 David points out how you have to look at total cost, not just the low hourly labor cost
• 27:30 Is everything going to inevitably move to China? We're trying to compete against that with Lean, reducing costs through Lean methods and improved/faster response.

If you have feedback on the podcast, or any questions for me or my guests, you can email me at leanpodcast@gmail.com or you can call and leave a voicemail by calling the "Lean Line" at (817) 776-LEAN (817-776-5326) or contact me via Skype id "mgraban". Please give your location and your first name. Any comments (email or voicemail) might be used in follow ups to the podcast. Click here for the main LeanBlog Podcast page with all previous episodes.

How Much of Football is VA?

My wife would say "zero!" I mentioned the Sunday NFL playoff games and got a note from a Lean Blog reader, Chris, saying:

I use this in my orientation to new employees: How much time is value added in a standard three hour football game? 12 minutes.

My wife complains that football (and baseball) games are nothing but a bunch of standing around. True, there is a lot of "wasted" time in a football game. DirecTV's "Sunday Ticket" has an option where you can watch a game edited down to 30 minutes, nothing but plays (every play in the game) and some replays of key plays. I guess Chris was saying that the players are actually in motion (after a snap and before the whistle) for 12 minutes of the 60 minutes of clock time. I didn't know that stat. Interesting.

That said, I have to question the definition of "Value Added" here. Remember, "value" is defined by the customer. If the value of a football game is the full experience, seeing the game in person or on TV, being with friends, etc. then more than the 12 minutes can be defined as "value added." Look at the Super Bowl and the silly hype over the ads. If the ads are entertainment and you're enjoying that time, then that might be "value added."

Value Added depends on the particular customer (or customer segment). If you're such a football fan that you love the strategy and the playcalling (or the cheerleaders), then much more than 12 minutes is "value added."

Interesting example, Chris, and thanks for pointing it out. I just think there are other Lean lessons that we can glean from that example.

WSJ is STILL Shocked We Build Stuff Here

For Some Manufacturers, There Are Benefits to Keeping Production at Home - WSJ.com

This really is a recurring theme in the WSJ, this article starts:

"It has long been an axiom that U.S.-made consumer goods such as TV sets and kitchen appliances can't compete in a world where cheaper labor can be found elsewhere."

OK, sure, most of the business world thinks so (the non-Lean thinkers), but don't you think a certain influential newspaper has had just a bit to do with that, reinforcing the Business School notion that labor costs are the only things that matter?

The article wouldn't have any thing new to a Lean thinker, that certain types of products should obviously be made in local markets, for local markets:

"If the thing being sold to the U.S. market is locally customized, delicate, or very large, chances are it'll continue to be produced in the U.S.," says Bruce Greenwald, professor of business and economics at Columbia University in New York. The same, he says, is true "if the manufacturing process itself involves almost no labor, like medical testing or like some very automated electronic-component manufacturing plants, chemical plants and metal-fabricating plants."

I wrote before about how some Olevia TV's are made near LA, this article highlights how some large Sony sets are produced near Pittsburgh.

The TV sets employ cutting-edge technology and tend to be large, with screens ranging from 42 to 70 inches. Their size and the sensitivity of their electronics make proximity to the consumer a meaningful advantage, as does the ability to react quickly to changes in tastes for high-end equipment.

"It is important for us to produce these sets close to most of our customers," says Stan Glasgow, president and chief operating officer of Sony Electronics Inc., a Sony unit that also assembles customized VAIO computers in San Diego. Proximity "gives us a distinct advantage with our retail partners across the country, as we have the ability to quickly fill the channel with specific products."

There's a nice example of using a strategy other than low cost, namely fast cycle time and fast response to customers. Imagine that. Even in the face of high labor costs! Shocking! Does the WSJ think Toyota is stupid for building more factories in North America when they could have cheaper labor costs in Mexico or Vietnam?

The article mentions how manufacturing is down to being only 12% of the U.S. economy. As someone who believes that manufacturing is one of the true Value Adding sectors of the economy, this is troubling. Everyone else lives off of the value created by building products. I wish the manufacturing world would get a little more respect from the WSJ.

Does anyone else see this pattern in the WSJ, or am I oversensitive about the lack of respect that manufacturing gets sometimes?

Next Podcast: David Meier

Sorry for the delay. I was in a nice rhythm of having a new LeanBlog Podcast every Monday, but I fell behind with the football games on Sunday. I'm not sure if the customer "takt time" for podcasts is one week, but that's the cycle time at which I was running.

Podcast is now out.

I'm almost done editing and putting the notes together for my discussion with David Meier about Lean in China. David is a friend of the blog, a sometimes Blogger himself, and is the co-author of the excellent The Toyota Way Fieldbook and the upcoming Toyota Talent, due out in April (both co-authored with Jeff Liker, check out my Podcasts with him here and here).

I'm hoping to have the Podcast out late Monday night. If you have suggestions for future Podcasts, please email me (see the left-hand column) or post a comment here.

For an earlier Podcast about Lean in China (with Jim Womack), click here.