My Bitchin', Toyota

With apologies to the band the Dead Milkmen and their song "Bitchin' Camaro." Note the comma in my title, though.

It's ironic that my first-ever customer experience with Toyota would have some hiccups along the way. About a month ago, I took delivery of a new Prius (it's a company fleet vehicle from my employer, not something I purchased). I'll post my impressions of driving the vehicle in another post soon.

From a customer service standpoint, I wasn't thrilled that the dealer didn't put the front license plate frame on the vehicle. It was in the trunk along with a bag with two screws. I understand why Toyota doesn't install it at the factory (not every state requires front plates) and not every dealer puts that bracket on for you (this has been the case with GM dealers).

So my permanent plates arrived, the dealer offered to mail them to me to avoid the 60 mile round-trip drive it would have taken to go pick them up. The dealership paid for the postage and cheerfully said "We'll overnight it to you," which seemed like some muda since my temporary tags didn't expire for two more weeks and it wasn't urgent, but oh well.

Today, I went to put the plastic bracket on the front bumper. The idea of drilling through the plastic bumper myself made me a bit nervous (I'm not good with tools), but I figured I'd try. The bracket didn't come with a standard work document, so I was on my own. With only two screws, I figured the same screws would attach the plate to the bracket and also the bracket to the bumper. Nope. And I promptly cracked something on the plate bracket. Oops. Like I said, I'm not good with tools.

So I called a different dealer (only 10 miles away, I had no choice which dealership I could use for taking delivery of the vehicle) to come into their service department, explaining I think I had broken the bracket and needed help. The woman on the phone said there should have been four screws in the kit.

"Sometimes we forget to send out the screws.... that's an internal problem we need to solve."

It's certainly a systemic problem since, again, this was a different dealer than the dealer that was supposed to send me the screws with the plate. Are the dealers fixing the root cause of that problem? Apparently not.

I got to the dealer and they looked at it all and asked me about the extra screws. I don't have them, I had to tell someone again. The other dealer didn't send them to me. They informed me that they didn't stock extra plate brackets and the additional curved piece I supposedly needed (also not sent to me). The service rep said I had to go to the OTHER dealer to get it all taken care of. They couldn't take a bracket out of a different Prius (there were some in the lot).

I've read before and heard about how Toyota's dealers don't live up the Toyota Production System principles and quality execution. That's a shame. So far, I'm not impressed and I'm a somewhat irritated "customer" (I put that in quotes since it's not my vehicle and my money... just my time). Reminds me of the Lean Solutions concept of "don't waste the customer's time."

Quote from "Getting the Right Things Done"

So after getting such strong recommendations about the book from Norman Bodek and, then today, from Dwight Bowen, I finally started reading "Getting the Right Things Done" by Pascal Dennis.

A line in the introduction struck me:

"Strategy deployment is the antithesis to 'command and control,' still our predominant mental model and the reason the cartoon Dilbert is so popular. Command and control can suck the zest and meaning out of work.... 'Very strange,' my sensei once said, 'In North America you manage business the way the Soviets managed their economy."

That reminded me of a thought I also had a long time ago and a blog post from a while back about the Soviet nature of many businesses. It also makes me think of a book I've wanted to read for a while, Freedom from Command & Control: Rethinking Management for Lean Service.

Toyota's Top Suppliers

Toyota Motor Engineering & Manufacturing North America, Inc. :: Toyota Honors Top Suppliers For 2006

Toyota Way Principle #11:

Respect your extended network of partners and suppleirs by challenging them and helping them improve.

I'm sure Toyota won't be dumping these (or any?) suppliers because someone else offers a slightly cheaper price?

Another Drug Error Waiting to Happen?

Hazard Warning - Brethine and Methergine mix-ups

Can you tell the difference between these two drugs? You can even click on each photo for a larger view or compare them on the link above. This isn't an isolated case, this "lookalike packaging."

"Both of these products are packaged as 1 mL ampuls within an amber plastic tub covered by a foil label with the product name in tiny print, making them difficult to tell apart. Both ampuls also have similar colored "rings" around the ampul necks that can be seen through the amber plastic, which further adds to their similarity. With so many risk factors, these medications are prone to being interchanged."

What's the impact of mixing these drugs up? It can be fatal for a fetus, as one drug is meant to be used after delivery of a baby and one is meant to treat pre-term labor. The post-partum drug "has abortifacient properties, it is contraindicated in pregnancy." In layman's terms, that's bad.

The Institute for Safe Medical practices reports:

"Since 2000, we've received numerous reports of injuries related to look-alike packaging of these products, and published two alerts (April 19, 2000 and April 17, 2003) warning healthcare providers about the risk of mix-ups. "

Sharing information is a positive first step. If one hospital finds a potential "failure mode" or risky situation, don't we have a moral obligation to share that information with others? This doesn't always happen. Telling people to "be careful" isn't enough either. It's certainly understandable how these drugs could be mixed up.

There's one fortunate thing that could help provide some error proofing, but not complete error proofing:

"Methergine ampuls should be refrigerated, which will help separate the products. Errors are still possible, though, so be sure to apply label reminders to the ampuls to prevent mix-ups."

Even with warnings and reminders, the drug maker sure doesn't help with the lookalike packaging. You'd think they would do something about it right?

Until 2001, Novartis packaged both drugs; then aaiPharma acquired Brethine from Novartis. To our knowledge, no packaging changes have occurred since our initial report in 2000, and neither company has alerted the obstetrical community about the risk of errors.

This was published in 2004. Hopefully it has been fixed by then. If a clinical caregiver does make a mistake with the drugs, what is the root cause? In many cases, the caregiver is blamed and punished, leading to firing or even prosecution. But what about the drug maker and their role? What about the CEO of the drug maker, are they prosecuted?

We have to do better than telling people to "be careful." We can't just wait until after a death has occurred to fix the foreseeable problem. We can't let each hospital discover the problem on their own.

Our Lean Horoscope

I'm not a horoscope guy, but my client team found these in the paper yesterday and we all had a good dorky lean chuckle about how these different horoscopes applied to lean! Click on each photo for a larger, more readable view.

The first one was very relevant to Standard Work and 5S!



Virgo's was ironic as we were just starting our 5S "sorting" activity, finding those items that were either expired or no longer needed.... a "treasure" of sorts.

Scorpio (mine) should have said: "Implementing isolated lean principles, such as 5S, does not lead to a sustainable lean transformation. You have the right management on board to transform their behaviors to encourage a true lean culture, including a living standard work and kaizen system."

Boeing's Lean Bet

By Andy Wagner:

Kevin Meyer at Evolving Excellence commented the other day on the Wall Street Journal article about Boeing's recent supply chain challenges. I'd like to add to what he said from a broader perspective on the industry, and how I think Boeing's lean effort fits, if their commitment is real.

The aerospace industry, perhaps more than most, is plagued by severe economic cycles. During good times, airlines fly vacationers and business folks to their destinations at premium prices. They buy new batches of more efficient, higher-tech planes. Manufacturers take it straight to the bank. On the down side of the cycle, vacationers drive, business people stay home, and airlines and manufacturers lose money, layoff, and go idle. Making matters worse, airlines often find themselves entering such downturns with aging, inefficient airframes. Maintenance costs and reliability, instead of being level-loaded across a fleet of mixed ages, rise and fall with each replacement cycle. The effect is particularly harsh when fuel costs rise during a downturn as they have in the past two recessions. When money becomes available again, it's time to buy another batch of aircraft, quickly. These cycles perpetuate non-lean processes throughout the industry and the supply chain. (The defense side of the business exacerbates this with downright bulimic acquisition budgets, but that's another topic.)

Other commentators have already contrasted Boeing's lean point-to-point 787 strategy with Airbus's batch and queue A380 superjumbo. The airlines, judging by their orders, have bought into Boeing's lean point-to-point concept. Boeing's challenge today is to sell its customers on what lean level-loading of their fleet replacements can mean to them. Buying aircraft gradually, over several years, good and bad, will even out the ages of the airlines fleets. This will make them less vulnerable to unpredictable fuel cost spikes since they'll have mix of the most efficient and less efficient aircraft. It will also level their maintenance costs and reliability. Level maintenance loads over the years mean a more stable maintenance workforce, which could mean better labor relations. Leveling reliability protects your reputation with the flying public, by reducing cancellations. The worst case scenario for airlines in the past few decades has been to be in a recession with an aged fleet and no capital to rebuild. Buying gradually means less vulnerability to that risk as well.

In the early days of commercial aerospace, technology advanced so quickly that airlines faced block obsolescence as pistons gave way to turboprops and turboprops gave way to jets, then turbofans. Today's 737 and 747--even the new 777-- represent thirty-year-old technology, yet they are still dominant in the industry. The composite 787 is a revolutionary step, but the next big step is probably another thirty or forty years away. This means there is not time pressure to recapitalize all at once.

If Boeing has truly embraced lean and starts taking the lean gospel to its supply chain, their production capacity will grow through continuous improvement. While their current order book is full through 2011, steady improvements will free up capacity to increase production without breaking the supply chain. In theory, this means they can offer production slots to their US and European customers gradually, as they open up. Another requirement is to sell the Asian airlines on the same idea, and to spread those orders further into the future, integrating US and European airlines into the mix.

Boeing's global supply chain has understandably caused a lot of people to doubt the company's commitment to lean. How they react to the current supply chain challenge is the ultimate test. If Boeing's lean commitment is real, they could use this opportunity to change the entire industry for the better.

Here is a related article on American moving up the purchase of some replacement jets (737's).

What You're Searching For

I routinely scan the list of keywords that people use in the course of finding the Lean Blog. It's sometimes interesting (I think) to share some of those here.

The most popular current terms aren't surprising: lean manufacturing, leanblog, lean blog, dilbert lean (always popular), standard work.

Some of the terms ARE interesting (starting with the most frequent):

• 4 hits: "working in a completely demoralized manufacturing company ppt"
• I wonder this is coming from? I can understand a demoralized manufacturing company, but is word getting around about some presentation that's supposedly out there? The Lean Blog comes up #2 in google for that term.... I don't see a good ppt on the topic.
  
  
• 3 hits: "toyota principles and healthcare industry"
• A favorite topic of mine. I'm still reading it, but Kevin Meyer found a lean healthcare blog that appears to be VERY negative on the topic. I'll probably post about that blog over the weekend. I'm very POSITIVE about the topic, because I know first-hand that lean can help in healthcare.
  
  
• 1 hit: "toyota:strength and weakness?"
• Yes, Toyota has weaknesses, or potential weaknesses, as Jim Womack pointed out in our most recent podcast.
  
  
• 1 hit: "93 7253 pill"
• People are STILL confused by the generic Allegra pills and search google to make sure the pharmacy gave them the right pill. Lean Blog: providing generic drug information since 2006. We're not turning into WebMD, thankfully. The blog turns up #1 and #2 in google for that search, amazingly enough. The page is getting hits every day on that topic, mindboggling.
  
  
• 1 hit: "the toyota way critics"
• Haven't been real critical of the book or the concept here. Do you know folks who are? What do they criticize? The Toyota Way
  
  
• 1 hit: "good catchy slogans"
• This one comes up a lot. As a "Deming disciple," I don't care much for catchy slogans.
  
  
• 1 hit: "why does alan mulally fly on a private jets"
• Does he? I thought that was just Mark Fields (or used to be)
  

What are you searching for about lean? What topics should we be covering on the Lean Blog that we aren't? As always, I invite your comments and feedback.

Click below for previous posts about the search terms.

World Class Numbers?

Blog reader Darrin wrote and asked:

Do you have any up-to-date sources for "word-class" numbers for lean metrics like % of Leadtime that is wasted, % yields, etc.?

I know I've seen numbers for benchmark "% value added time", etc. but don't have the numbers ready, nor am I sure if the numbers are current. A google search turned up nothing but firms willing to do benchmarking studies.

Does anyone have any ready references (from lean books, articles, journals, etc.)?

Thanks for compensating for my laziness!

I've never fixated on the benchmark numbers, since I've always tried to set the bar against perfection, or as close as we can get. I know nobody fully eliminates non-value added time completely, but you can get it pretty low. In each of my lean endeavors, we always try to estimate where we can get based on our particular process and our analysis of the current state and expected improvements.

Leading Lean: Question Everything!

ASSEMBLY Magazine

Jamie Flinchbaugh has a new "Leading Lean" column in assembly magazine. Here's a great story, an example of "because we've always done it" waste.

"One of the most remarkable examples was a manufacturing company that was finally getting rid of standard paper time cards. In examining their time cards, the question kept coming up, “What does the ARS column stand for?” For years, new employees had been taught to put a zero in the ARS column on their time cards. So week after week, every person accounted for zero hours of time in the ARS column, but no one could remember what ARS meant. It finally came out that ARS meant air raid siren. During World War II, when the air raid sirens sounded an air raid warning, the employees went into the basement for safety. The company naturally wanted to track time lost due to air raid warnings. Although time cards had been reprinted, and even redesigned, the ARS column remained because no one questioned it. If you think this kind of thing isn’t happening in your company, think again."

For more, click on the link above.

Multitasking is NOT Part of Standard Work

By Dan Markovitz

The New York Times ran an article this weekend exposing the myth of multitasking. Despite the common belief that we have to multi-task to get our work done, and despite the presence of technology that encourages us to do more than one thing at a time, the reality is that we're undermining our own ability to do a good job when we try to do two things at once. (click photo for larger view)

René Marois, a neuroscientist and director of the Human Information Processing Laboratory at Vanderbilt University, says

A core limitation [of the human brain] is an inability to concentrate on two things at once.

The brain's limitations are important when you consider the implementation of lean in your office. Office workers are essentially monument machines: multiple value streams flow through them, and as a result, they have to continually switch from task to task. When you multitask (and you're not really multitasking, of course; you're actually doing serial processing, with rapid switching between tasks), you're reducing your efficiency and quality.

The article quotes David E. Meyer, a cognitive scientist and director of the Brain, Cognition and Action Laboratory at the University of Michigan, who explains that

Multitasking is going to slow you down, increasing the chances of mistakes. Disruptions and interruptions are a bad deal from the standpoint of our ability to process information.

So, how does this tie into lean and the concept of standard work? Consider: the goal in creating standard work on a factory line is to improve quality by reducing variation. Standard work in an office environment has the same goal. And standard work for both operators on a production line and operators in an office requires doing one (and only one) thing at a time.

Therefore, multitasking is antithetical to the concept of standard work. Whether it's building a spreadsheet, doing a performance review, writing an email, or answering a colleague's question, people need to focus on one task to do it efficiently. That's the rule in the factory. Ignore the siren call of multitasking, and make that the rule in the office, too.

(Read more of my comments on multitasking here and here.)

Toyota touts ongoing "waste removal"

Mlive.com Article

Here's an article with Toyota (and former Chrysler) exec Jamie Bonini talking about continuous improvement:

"Our 2010 vision is to be the most admired automaker through continuous improvement and respect for people," Bonini said. A New Jersey native, Bonini worked for Chrysler Corp., then DaimlerChrysler Corp., for 15 years before joining Toyota in 2002.

Parker Hannifin and Market Driven Pricing

Seeking Perfect Prices, CEO Tears Up the Rules - WSJ.com

I haven't mentioned it in a while, was trying to give it a rest for a bit, but the front page of the WSJ highlighted this basic economic concept: prices are driven by the market.

The Toyota/lean approach has preached this, that prices are set by the market and the only influence you have over your profit is your costs: Profit = Price (set by the market) - Cost

Traditional manufacturers have viewed price as something that they can set, as they are entitled to a certain profit over and above their costs, the "cost plus" model, where Price = Cost + Profit (entitled).

Parker Hannifin, a company that has done a lot of work with lean, has woken up to this reality, through their CEO:

In early 2001, shortly after Donald Washkewicz took over as chief executive of Parker Hannifin Corp., he came to an unnerving conclusion. The big industrial-parts maker's pricing scheme was crazy.

For as long as anyone at the 89-year-old company could recall, Parker used the same simple formula to determine prices of its 800,000 parts -- from heat-resistant seals for jet engines to steel valves that hoist buckets on cherry pickers. Company managers would calculate how much it cost to make and deliver each product and add a flat percentage on top, usually aiming for about 35%. Many managers liked the method because it was straightforward and gave them broad authority to negotiate deals.

Their pricing policies were shooting themselves in the foot when they actually made improvements:

...if the company found a way to make a product less expensively, it ultimately cut the product's price as well.

Why? If you can produce something cheaper and the market is still willing to pay the same price.... take the extra profit! Keep it and invest it in the future development and strength of your company. Likewise, if your costs go up (through material costs or labor costs), you have find other ways (such as through lean methods) to get costs down to maintain the same profit. You're never entitled to price increases because your costs go up. Customers might put up with it in the short term, but they'll find other options eventually.

The CEO realized this same thing, who knows if the epiphany was divine intervention or if it was through some lean reading:

While touring the company's 225 facilities in 2001, Mr. Washkewicz had an epiphany: Parker had to stop thinking like a widget maker and start thinking like a retailer, determining prices by what a customer is willing to pay rather than what a product costs to make. Such "strategic" pricing schemes are used by many different industries. Airlines know they can get away charging more for a seat to Florida in January than in August. Sports teams raise ticket prices if they're playing a well-known opponent. Why shouldn't Parker do the same, Mr. Washkewicz reasoned.

This basic recognition of supply and demand (something any MBA should know) has really helped Parker:

Today, the company says its new pricing approach boosted operating income by $200 million since 2002. That helped Parker's net income soar to $673 million last year from $130 million in 2002. Now, the company's return on invested capital has risen from 7% in 2002 to 21% in 2006, putting it on the verge of moving into the top 25% of Mr. Washkewicz's list comparing Parker with "peer" industrial companies.

From the end of 2001 to present, Parker's shares have risen nearly 88% to about $86, compared to a 25% gain in the S&P 500.

The article talks about other companies, including Intel, who use "strategic pricing," but also points out:

...much of industrial America -- 60% of U.S. manufacturers, according to Thomas Nagle, a pricing consultant at the Monitor Group -- still relies on oldfangled, "cost-plus" types of pricing methods such as the one Parker used.

The article also points out complicated this change was and how much it was resisted by the internal inertia of the company and its leadership.

There was so much pushback the CEO eventually assembled a list of the 50 most commonly given reasons why the new pricing scheme would fail. If a manager came up with an argument not already on the list, then Mr. Washkewicz agreed to hear it ouht. Otherwise, he told them, get on board.

The article and CEO also blame computers:

To his surprise, Mr. Washkewicz discovered that computer programs for calculating prices, adopted in the 1990s, were part of the problem. "It became a cookbook approach," he says. Managers typed in myriad costs, and the computer spit out a recommended base price which was used as the starting point in negotiations.

How did customers react to the price increases? Not surprisingly, an auto parts supplier put the parts up for open bid... and couldn't find someone else to produce the part at that price. Parker only lost 3 out of 50 items that went out for open bid. At least in the short term... only time will tell if they have the right pricing for the long term.

Dell, Wall St., and Toyota

Goldman upgrades Dell on turnaround hopes

Here's another contrast between Toyota and Dell, particularly striking in context of my recent podcast with Norman Bodek:

Dell shares rallied nearly 3 percent Monday after Goldman Sachs upgraded the stock to "buy" from "neutral" amid calls on Wall Street for the company to cut jobs and improve profit margins.

Meanwhile, a report in the Wall Street Journal's "Heard on the Street" column highlighted the argument for Dell to reverse a sharp rise in its workforce of over 50 percent during the past two years. Bernstein analyst Toni Sacconaghi, among others, has called for Dell to cut jobs by 10 to 15 percent.

Problem #1: Dell revenue was $49B in 2005 and $57B in 2007. How you grow the workforce 50% with only a 16% increase in revenue is pretty astounding. This is yet another reason why I don't like lumping Dell into the broad category of "lean" companies. Is Dell throwing people at it's processes rather than improving the processes themselves? Adding so many people so quickly leads you to....

Problem #2: Only Wall Street can see huge job cuts (10% of 82,200 employees is 8220 jobs) as a positive thing for a company. Toyota has gone over 50 years without huge layoffs, Dell does it every few years (starting in 2001). Think about the cost of poor morale that comes from these boom and bust cycles (and Dell's "boom" wasn't much of one). Think about the loss of human capital.

I'm guessing that one reason Toyota has been able to avoid layoffs is prudent and careful hiring in the first place. Dell might do well in "lean" measures of time to cash and inventory, but lean is about more than pure financial measures. I can't see how Dell can do well on the people side with all the hiring the firing and the fear that it must create within the organization.

LeanBlog Podcast #21 - Norman Bodek, "Building People"

LeanBlog Podcast Episode #21 features our friend and frequent guest, Norman Bodek, noted lean author, consultant, and President of PCS Press. In this Podcast, we talk about how Lean should be good for a company's employees, that Lean and the Toyota Production system are really about building people and investing in them rather than laying people off.

Norman's previous Podcast episodes can be found on the Podcast main page. Here is a link to Norman's books via Amazon.com.


MP3 File (Right Click to Save-As)
Show Notes and Approximate Time, Episode #21

• 2:00 Question from a blog reader: Is lean good for employees in the long term, or is it just good for the company and for management?
• 2:40 "Unfortunately, many companies are implementing lean to make more money, only.... without understanding the full power of the Toyota model"
• 3:00 Toyota not only builds cars, it builds people
• 4:45 Toyota has one team leader for every 4 to 7 people (as opposed to companies that often have a 100 to 1 ratio)
• 5:20 Toyota's Gary Convis
• 6:30 Toyota's two pillars: 1) Just-in-Time and 2) Respect for People -- the second pillar is now this instead of "Jidoka" (quality at the source)??
• 8:30 As Deming said, you have to root out fear from the organization, it's a form of waste that comes from viewing people as expendable
• 10:15 Examples of how Toyota has invested in people over time, made use of their talents
• 11:20 When has the "mass production" system ever been good for people?
• 12:15 Norman's "Quick and Easy Kaizen," making work exciting by getting ideas and suggestions from employees
• 16:50 "I want you to come up with ideas to make your work easier, to make your work more interesting..." that empowers people, as opposed to all decisions coming from the top down
• 18:15 "What's the ROI of bringing in Norman Bodek?"
• 19:30 "There's nothing magical that Toyota's doing that American companies can't do!"
• 19:40 The book Norman likes, "Getting the Right Things Done" and the Hoshin Kanri process
• 20:30 Norman, Gary Convis, and the A3 report

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.

Why few organizations adopt...

Ackoff Center Weblog: Why few organizations adopt systems thinking

Click on the link above for a blog post by the legendary Systems Thinker Russell Ackoff. He writes about reasons why more organizations don't adopt "systems thinking" if it works so well.

Ackoff says:

There be many reasons why any particular organization fails to adopt systems thinking but I believe there are two that are the most important, one general and one specific. By a general reason I mean one that is responsible for organizations failing to adopt any transforming idea, let alone systems thinking.

I think his points are absolutely transferable to the question of why more organizations don't try Lean (let's put aside those who try and fail).

1. The general reason: Fear ('tis easier and less risky to do nothing)
2. The specific reason: The Systems Thinking crowd writes primarily for the Systems Thinking crowd

Is this also true in the Lean community? Are we primarily speaking to each other or are we trying to get new Lean folks into the fold?

What's the mix reading this blog, in terms of A) just learning about lean, B) have worked with lean a little, or C) strongly part of the "Lean community"??

Leave a comment if you'd like to share which group you're a part of. I know my audience here has a wide mix of experience ranges in working with Lean. Should I set up a formal web poll to see what the experience mix is?

Is a "Rude" Customer Still Right?

Starbucks Gossip: I know Starbucks would never allow a sign like this to be posted...

One blog I follow sometimes is one run primarily for the purposes of allowing Starbucks coffee pourers, I mean "baristas," to bitch about us customers. They are coming dangerously close to biting the hand that feeds them, if these attitudes are widespread. I assume only the most disgruntled-y are taking the time to post on a site like this, but still, I'd be concerned if I were management. Is this a "lean" story? No, but I think it's a complex story that might be interesting to explore in lean terms, if we can.

To be clear: I'm not really setting out to bash Starbucks employees. As in any organization, management has a responsibility for helping create a good work environment. There was a WSJ journal article about two years ago about Starbucks corporate sending "efficiency experts" out to the stores. This isn't "lean." A "lean" approach would involve Starbucks management harnessing the ideas and suggestions of their employees, employees who consider themselves to be intelligent, above-average workers, I would assume. It doesn't sound like Starbucks management is doing a great job at that. The ideas need to be listened to, as long as those ideas don't involve cell-phone jammers..... read on, you'll see what I mean.

Starbucks is an interesting growth story. What began as a small upstart company that was passionate about coffee and the experience has lost focus and become commoditized as it has grown (and as us customers have "gotten used" to them). Starbucks isn't as special as it was when I first discovered it around 1994.

The corporate "bean counters" (now there's a horrible pun) have made a number of decisions in the name of efficiency -- stores no longer grind their own beans (removing the aroma portion of the experience) and manual espresso machines that required some knowledge and experience have been replaced by automated "push a single button" machines. Starbucks has been generous with their employees (good health insurance) and has created the idea that they are "coffee artists" (not their phrase, it's mine, to borrow a similar, and sort of silly sounding, phrase from Subway, the "sandwich artist).

Is the Starbucks employee a "barista" whose job is to craft a specialty drink and be chatty, creating a warm friendly customer experience, or are they part of a, sp coffee assembly line that values efficiency, speed, and revenue/customer? Starbucks chairman Howard Schultz recently wrote about the struggles with Starbucks growth and their loss of identity. Sounds like a problem with "constancy of purpose," as Deming would have talked about. Is Starbucks a coffee company or a place that sells candy, mugs, CD's, and whatever crap they can peddle? I imagine this shift and lack of constancy might be one root cause of employee stress, particularly among the long-timers?

Back to the employees. There are some "respect with people" struggles on both sides of the counter. If you read the blog, *$ employees (as they'll abbreviate the company name) hate you, the customer for:

• Digging for change and slowing the line
• Ordering Frappucinos
• Ordering drinks the wrong way AND
• Being on your cell phone while you order

For that last point, the baristas are complaining that many customers are "disrespecting" them by being on their phones while in line and either mouthing their orders, pointing, or ordering real quickly and going back to their phone calls. I'm not sure if that's people being rude or disrespectful as much as it is people being busy and just wanting coffee without human interaction. Maybe *$ needs self-serve kiosks?

Many employees report taking steps such as:

• Wanting signs saying you can't order if you're on the phone
• Refusing to take orders from customers who are on the phone
• Verbally abusing customers who are on the phone
• Installing (allegedly, in one case) an illegal cell phone jammer to kill phone calls

Has *$ lost their way? Should employees who are this insulted just quit and find another line of work? Can *$ afford to keep such crabby employees on the payroll in a customer-service business? I'd probably come down on the side of the customer, that the employees should be grateful that the cell-phone jerk is willing to pay $5 for a drink.

The employees also complain about corporate management, that they aren't doing enough to support their quality of worklife, as ruined by the cell-phone jerks. The customer defines "value" right?

No, I'm not one of the cell-phone jerks. But I really don't expect anyone at *$ to be my friend. I'd just like my coffee (coffee, not a latte) so I can go on with my day.

Maybe *$ needs a separate brand that's focused on ruthless efficiency and another that's the warm friendly place? Different customers value different things, apparently, so should it be broken out into separate "value streams?"

Some comments from their blog, in case you don't feed like wading through the hatred. We can only guess that these are from employees:

#1

Our poor precious customers can simply not go through there day and actually talk to the people serving them! Oh no they might get lower class all over their nice Gucci bags! Or their handsome suits![/sarcasm]

#2

I used to work with someone who, if he noticed the person ordering was on their phone would call it from bar as for "the customer on their cell phone". That way, every person in the store notices that this is the only person whose drink was not delivered by name, because they were too busy on their phone to give a name. Generally the person would look embarrassed/angry and everyone would glare at them while they walked away. It worked like a charm.

#3

If they are on the phone, I usually just continue what I'm doing behind the register until they are ready to have a real conversation with me, or I help the person behind them who has an annoyed look on their face because they also agree that this inconsiderate person can't take a minute to order, make a payment and leave the counter.

#4

We do not have this problem at my Starbucks. I bought a cell phone jammer and it works like a wonder. If a person walks within 30 feet of my store there cell phone connection is lost. Enough said.

Ugh. That's just a small sampling.

American Airlines and Employee Input

NPR : American Airlines 'Insources' Maintenance Work

Thanks to my friend Amber for passing this along. It's too bad that management can't empower the customer-facing staff at American the same way, which would undoubtedly improve their morale, as well.

In the NPR piece (no transcript, you have to listen), they point out:

• After 2004 financial troubles (a burning platform), the maintenance workers union and management realized they had to work together at their Tulsa facility.
  
• The 6,000 employees agreed to big cuts in pay, benefits, and vacation, but the tradeoff was that they would be given "equal say" in the running of the operation.
• Two years into it, the company is a "true believer" of having a workforce working "with" management instead of against it.
• The union leader pointed out that employees aren't just complaining about management anymore, they're talking like business people.
• Management wanted to cut the time required to overhaul an airplane in half, they promised the union that nobody would lose their job.
• The workers designed a model, top to bottom, completely redesigning the way work was done, cutting the time from 25 days to 13 days, cutting the cost by 55%.

Do you still think management needs to come up with all of the answers? Think of the knowledge, ingenuity, and problem solving skills that your employees have, if you'll only turn them loose.

It sort of seems like a shame that management felt like they had to extract such big pay cuts first. It amazes me that the American workers would rally in the face of such a loss. I guess part of the motivation was the fear that the whole place would get shut down. Not the ideal way to motivate people, but I guess it has worked. It will be interesting to see how the environment holds up in the long term, if management will further squeeze them during the next downturn or if they'll continue to cooperate.

In a twist of outsourcing, South American airlines are now flying planes up to Tulsa to have maintenance done by American's Tulsa workers. Amazing. Congratulations to American's maintenance employees.

There was an earlier article here on the blog about United Airlines and their lean partnership with the union.

Lean as a Learning System

lean as a learning system hospital ward - Google Search

I hope those of you reading won't consider this to be a "healthcare only" paper. It's written by Michael Balle, who you might recognize as the co-author of The Gold Mine: A Novel of Lean Turnaround.

There are good overview concepts that can apply to any system, healthcare, manufacturing, or otherwise.

Direct PDF download

Intro to Deming Video

I've been doing a lot of re-reading (and some fresh reading) of the concepts of W. Edwards Deming recently. I've decided April will be "Deming Month" on the Lean Blog. It's not that we'll exclusively write about Deming, but I'll make a more concerted effort to highlight his teachings. I was hoping we could all discuss his impact on lean and the Toyota Production System.

I gave an lean overview talk once at a healthcare conference, and an attendee afterward asked, "How can you talk about lean and not talk about Deming?" My only answer for that was just time pressures of the talk. It's hard to cover everything in an overview.

Below is a nice 30 minute overview video of the Deming teachings and Deming philosophies. Part 1 (9 minutes) is below. Part 2 and Part 3 can be found here on YouTube also.

Single-Piece Flow in Engineering

By Andy Wagner:

Monday afternoon, I have the honor of being part of a meeting to discuss "Project Executio." The bosses complain that engineers in our department aren't getting our cost reduction effort closed out fast enough. It's true. We aren't making fast enough progress toward our goals and it's a good sign, in my view, that we're taking some time out to focus on the process itself, rather than having another typical "status" session.

Looking through a Lean lens, I see the problem in very simplistic terms. Essentially, we're applying batch and queue to engineering tasks. We spent January and February "building a pipeline" of projects for the entire year. Brainstorming took all of our time. Execution wasn't on our radar screen. Now, instead of a handful of projects to work in a focused effort, we have dozens. We pick away, and finish nothing.

It's a paradoxical truth, in lean manufacturing as well as a lean office, that you finish more projects faster by working on as few projects as possible. Multi-tasking reduces effectiveness and therefore results. Indeed, studies have shown that engineers, much like production machinery, lose efficiency when loaded to greater than 85% capacity. Y et the same studies show product development staffs typically face workloads around 200-300% of their capacity. That's certainly true in my company.

While production machines can be budgeted, ordered, and purchased within a year to ramp up manufacturing throughput, skilled engineers (and skilled production workers), cannot simply be ordered and paid for. They must be developed over several years. This process doesn't meet our mad dash schedule for cost reductions. With capacity limited in this way, our only choice for improving throughput is improving productivity. We can tinker on the fringes of productivity with better software, improved coordination between departments, and process improvements, but I believe the best productivity gain we can hope for comes from a shift to single-piece or near single-piece workflow, focusing our limited personnel resources on the projects with with greatest impact and stepping up the takt time on each individual piece.

The challenge that we face in the engineering department is the same as that on the factory floor. Our culture and reward system cater to batch and queue operations. How do you convince management that it's more effective to work otherwise?

Russia: Not the Right Root Cause

SignOnSanDiego.com > News > World -- Russia probes claims medics tied toddlers to beds

I hope nobody finds this to be too insensitive of an example... it's obviously not good what happened to these toddlers. But, I think it's instructive as an example of non root cause problem solving.

Russian prosecutors said on Friday they were investigating reports medical workers in a hospital near Moscow tied children to beds to avoid having to look after them.

Major Russian television channels ran amateur video footage this week showing toddlers tied up.

Tying the children up was not the "root cause" solution to the staff being overworked/understaffed. We could have a long discussion about "why" this happened. One thing I've been trying to be better at is thinking "why" and not blaming. As much as I preach about it, I'm not always 100% good about that myself.

Why would employees tie the children up? Because they're bad people? Probably not. Are the employees overworked because management isn't staffing enough employees? Is management being held to some unattainable financial goals, preventing them from having the right staff?

Lots of "whys" get you to something different than simply blaming an individual. But that brings up an interesting question: at what point is personal responsibility the key and when can you blame the system? Do we have responsibility as individuals to say "no, system, this isn't acceptable?" If that means having to quit your job, that isn't something most of us can do.

Thoughts?

Summary: Remaking American Medicine

Andrew Castle, a lean healthcare consultant in the UK, generously offered up this summary of the 4-part PBS documentary series. It's a long summary, so I'll just post the start of it here.

Direct pdf file download

Buy the series at Amazon.com

"Are medical errors made within the NHS? Do we have prescribing errors? Do people suffer pain unnecessarily? Are people admitted unnecessarily? Do we lack good communication across multiple providers in primary, secondary and tertiary care? Do we fail to involve patients and their families in their treatment plans?

If the answer to one or more of these questions is yes then I suggest that watching the series Remaking American Medicine is worth taking some time for."

Andrew previously offered up a summary of "plant tours" at a Toyota forktruck facility and Northwestern Memorial Hospital, in Chicago.

Lean and Green

Global shipping must curb 'unchecked' pollution: study - Yahoo! News

Here's yet another reason to consider keeping production close to your customers and using Lean production methods: the environment.

Ocean-going vessels now belch out more of the major air pollutant sulfur dioxide than all of the world's cars, trucks and buses combined, according to a study released Thursday.

The group behind the report, the International Council on Clean Transportation (ICCT), also said the shipping industry emits more of the greenhouse gas carbon dioxide than many industrialized nations.

Cleaner ocean ships might not solve the "root cause" of the problem: companies chasing cheap labor in China and their resulting slow supply chains. Lean methods are a great alternative. Look at this quote from a company highlighted at Evolving Excellence:

"What's lean about throwing product on a boat and having it delivered here?" Wiff asked. "It's more lean to do it here." Wiff noted that to "survive in North America you have to rely on small lots," offering certain types of products in high mix and low volume. "There's a lot you can offer with fast response time, small lots, short lead times and the ability to manage a high amount of change -- engineering changes, scheduling changes," Wiff said. "The folks overseas just can't do that. Even if they accomplish a lot of the management aspects of that you've still got 8,000 miles of distance.

Here's another post of theirs on "lean and green". Toyota is also known for equating lean and green together.

LAME: Lean is Not Automation

Here's another example of what you might call "L.A.M.E" ("Lean" As Misguidedly Executed) instead of "Lean."

I received a disturbing report in my email inbox two weeks ago, a report that tries to co-opt Lean and the Toyota Production System to support what might be some very non-Lean ideas. The report, published by a healthcare industry group called the “The Advisory Board Company,” puts its agenda right in the title of the report, at least:

“Automating the Lab”

I work with a lot of hospital labs, helping them implement Lean. Many hospital labs are seduced by the promises of automation, a “siren song” if you will. This should sound familiar to the manufacturing folks reading this. Whether it’s robotics or software, a lot of money is wasted each year on technology and automation that fails to deliver on its cost savings promises.

Many hospital labs see a choice between automation and Lean (as factories do). That’s a false choice, but it’s especially painful to see hospitals spending money to automate a bad process. For example, if a hospital lab layout is poorly designed, instruments might be put in locations where space was available, rather than considering the flow of test specimens and employees. If a high-volume test instrument is located a long distance from the receiving area, many companies would be happy to sell you automation to carry the specimens instead of having a person carry them. The Lean solution would consider changing the layout so that the “waste of transportation” is eliminated or minimized, rather than just automating it.

So the “Automating the Lab” article starts with this header on the first page:

“Re-creating the Laboratory in the Image of Toyota.”

Ok, this is interesting, I thought. I thought this was an article about automation, but they’re immediately invoking Toyota. But Toyota’s success isn’t due to automation. Toyota’s success is arguably the result of its people… its culture of respecting people, investing in their growth, and encouraging (or demanding!) continuous improvement. Pushing "automation" as Lean might more accurately be described as "LAME" ("Lean As Misguidedly Executed").

The article takes a horribly wrong direction on this first page when it states:

"However, as health care professionals increasingly turn to other industries such as auto manufacturing for ideas on process improvement, the lab has emerged as the perfect assembly line model to revolutionize using LEAN Toyota principles and Six-Sigma concepts. Taking the concept of streamlining workflow one step further, many hospital leaders are embracing (and investing significant capital in) the totally automated, human-free laboratory system."

Whoa, whoa, whoa! Since when was Toyota’s goal a “totally automated, human-free” factory??? That was GM CEO Roger Smith’s goal in the 1980’s, the “lights out factory” (that didn’t pan out, did it??).

The article continues to talk about automation that ties together the receiving area and test instruments. The header of a diagram (click for larger view) says:

“Tracking Eliminates Need for Transport.”

WRONG. An automated track (like a conveyor) only automates the waste. This is a false efficiency gain, especially when the lab automation can cost hundreds of thousands of dollars (or even over a million dollars!). Lean is very inexpensive to implement, even if you include the cost of an initial consultant (Yes, I’m a consultant – if you want to write an “anti-consultant” piece on your own blog, go right ahead, I’ll even link to it).

The article does point out a lean notion, that you shouldn’t immediately cut employees, that you should allow them “scale back their staff levels gradually through attrition.” But if the goal of automation is cutting headcount, how many hospital administrators are going to get that message? Sure, Lean can reduce your headcount requirements, but Lean also leads