A Lean Guy Reads FORTUNE

As I was catching up on my back issues of FORTUNE, I had a few Lean thoughts as I read.

In the June 9 edition, the article "Wal-Mart puts the squeeze on food costs" caught my eye. It says:

Wal-Mart has temporarily rolled back prices on hundreds of food items by as much as 30% this year. How? By pressuring vendors to take costs out of the supply chain.

Read that again. It says "take costs out." This is different than the stereotype of Wal-Mart "squeezing" suppliers for a lower price. Demanding a supplier accept a lower price is NOT the same as real cost cutting that can be shared. I'm happy if Wal-Mart is really learning how to collaborate on real cost reduction. The article continues:

Ever wonder why that cereal box is only two-thirds full? Foodmakers love big boxes because they serve as billboards on store shelves. Wal-Mart has been working to change that by promising suppliers that their shelf space won't shrink even if their boxes do. As a result, some of its vendors have reengineered their packaging. General Mills' (GIS, Fortune 500) Hamburger Helper is now made with denser pasta shapes, allowing the same amount of food to fit into a 20% smaller box at the same price. The change has saved 890,000 pounds of paper fiber and eliminated 500 trucks from the road, giving General Mills a cushion to absorb some of the rising costs.

I've certainly wondered why some boxes (from Target) are unnecessarily big. The above sounds like a nice example of win-win collaboration and something that General Mills can do other than whining that their costs have gone up. The article also discusses how Wal-Mart is attempting to reduce transportation costs by purchasing more produce from local farmers. It might be a higher unit cost, but it's the total cost that matters, right?

I'm surprising myself that I had nice things to say about Wal-Mart.

In the July 7 edition, a quote from Barack Obama in this article caught my eye (for purely non-political reasons). FORTUNE asked:

How would your management style differ from that of the current occupant of the Oval Office?

and Sen. Obama responded:

And so I think the biggest difference in my management style and George Bush's is that I want a robust discussion around the table with a lot of different viewpoints and a firm footing in the facts. I always want bad news first. Good news takes care of itself.

This is a very Toyota approach. Toyota leaders always ask about the problems first (the "bad" news... although Lean thinkers wouldn't think of problems as "bad"... "No problems is a problem" as they say). I've also heard that Toyota leaders like to ask "what are your top three problems?" before they'll move on to talking about anything positive."

Fact-based discussion. Listening to different viewpoints from people. Putting politics aside, if this is possible in mentioning Sen. Obama, that's the essence of Lean thinking right there.

"Data is of course important in manufacturing, but I place the greatest emphasis on facts." --Taiichi Ohno

Thanks to Craig Woll for re-printing that quote. I was taught that what Ohno meant is that data (numbers in a report) are helpful, but you find real facts by visiting the "gemba," the shopfloor or the place where work actually happens (a hospital emergency department can also be a "gemba.")

I'm not saying "Ohno-bama" is the "Lean candidate" but he has an interesting take on leadership.


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These Wounded Soldiers Need Lean To Get Their Benefits?

Soldiers risk ruin while awaiting benefit checks - Yahoo! News

I've read about this problem before... and at the risk of this turning too political, I'm going to address the issue. Wounded U.S. soldiers are reportedly waiting too long to get the benefits to which they're entitled. In the case of one soldier:

Stevens' descent from Army private first-class, 3rd Infantry Division, 11 Bravo Company, began in 2005 — not in battle, since he was never sent off to Iraq or Afghanistan, but with a headfirst fall over a wall on the obstacle course at Fort Benning, Ga. He suffered a head injury and spinal damage.

The injury alone didn't put him in a homeless shelter. Instead, it was military bureaucracy — specifically, the way injured soldiers are discharged on just a fraction of their salary and then forced to wait six to nine months, and sometimes even more than a year, before their full disability payments begin to flow.

That's shameful, injured vets living in homeless shelters.

Nearly 20,000 disabled soldiers were discharged in the past two fiscal years, and lawmakers, veterans' advocates and others say thousands could be facing financial ruin while they wait for their claims to be processed and their benefits to come through.

It sounds like they need a serious dose of Lean thinking. If they're "waiting" for claims to be processed, I can only guess that the "process" is plagued by:

• Departmental silos
• Long delays between steps in the process
• Long delays before decisions or approvals are done as a batch
• Poor processes that lead to missing information or missing paperwork

I'm speculating and, call me a cynic, I wouldn't be surprised if any of that is the case. I wonder how long it really takes to perform what you might call the "Value Added" steps in this process, which might include:

• Receive paperwork
• Verify status
• Finalize paperwork
• Start sending checks

If it takes SIX MONTHS to get this done, I bet most of that time is waiting and delay. The U.S. government needs to do better than that. Use Lean thinking, create value streams that are focused on flow (and quality) of focusing on departments, efficiency, and internal politics or battles. Focus on the "customer" of the process - the wounded soldiers. Come on, get it done. I read about this months ago.... let's get this process fixed. For shame...

The point, with this or any Lean improvements, wouldn't be "doing things faster" or cutting corners. One should be able to take significant time out of the process without being sloppy and giving benefits, for example, to just anyone who applied. Reducing delays before verification steps, rather than eliminating such safeguards, would be the "Lean" approach.

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The USPS Should Error Proof This

Express Mail: USPS Says Guaranteed Overnight Isn't Guaranteed. What?

Saw this post on The Consumerist blog about how the United States Postal Service does NOT guarantee overnight delivery of "guaranteed" overnight documents.... IF you place the package in a drop box instead of handing it to an agent at the counter.

What?

According to the blog report:

Dorothy found out that the USPS's guaranteed overnight delivery doesn't apply if you use their Express Mail boxes, because "Letters get stuck up in the top of the box all the time. Sometimes, it takes days or even a week before we find them." Hey post office, maybe you should try to check the top of the box every day. Problem solved!

Checking the box every day would be a form of inspection -- that's waste.

It would be better if the USPS could design a drop box that prevents letters from getting stuck. It's called "error proofing" (or "poka yoke" if you insist on the Japanese term). It's not really a new concept. How hard is it to design a box that works perfectly?

Again, from the Consumerist:

...nowhere on the website, while purchasing the Express Mail option did it state that items needed to be taken to the window/desk in order for the guarantee to apply.

I asked her, "Where on the box does it say that?" She then told me she had handed my form over to her supervisor.

I was given my full refund without any further discussion, but we did have to wait for half an hour while all this occurred. Although the supervisor did not want to give me the refund. She actually explained, "Letters get stuck up in the top of the box all the time. Sometimes, it takes days or even a week before we find them."

Consider yourself warned. Does FedEx have this problem? Or DHL?

To top it all off, one commenter claims:

This is absolutely true. I worked as a USPS letter carrier and when I had to empty collection boxes at least half the time there would be a letter or two stuck against the side of the box or at the very top of the box. To combat this, the USPS has a company send out test letters to see how long it takes for them to reach their destination. They also do random checks after you leave to make sure you grabbed every single letter. People have been fired over this.

Step 1: Design a box that doesn't meet customer or employee needs
Step 2: Do inspections to see how badly it works
Step 3: Blame and fire people

If you believe that, it's not a very encouraging thought process they are following. Typical bad management, eh?

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This is what $1 billion (and $25 million a year) gets you.

by Dan Markovitz

The New York subway system has invested nearly $1 billion investment since the early 1990s -- and $25 million per year in maintenance cost -- in equipping stations with elevators and escalators. The results have been less-than stellar.

According to a recent article in the New York Times,

One of every six elevators and escalators in the subway system was out of service for more than a month last year.

The 169 escalators in the subway averaged 68 breakdowns or repair calls each last year, with the worst machines logging more than double that number. And some of the least reliable escalators in the system are also some of the newest.

Two-thirds of the subway elevators — many of which travel all of 15 feet — had at least one breakdown last year in which passengers were trapped inside.

Now, keeping the NYC subway system running is in many ways a Herculean task. The system serves five million riders per day, and runs 24 hours a day. It's also incredibly far-flung, which slows maintenance responses to breakdowns. And there's all kinds of, um, ancillary abuse:

Elevators become makeshift bathrooms, and escalator steps are pounded by heavily loaded hand trucks.

Notwithstanding those challenges, however, New York City Transit has sown the seeds of its own difficulties by violating key lean principles. Take investment in people:

In private industry, many workers go through a rigorous four-year training and apprenticeship to become elevator and escalator mechanics.

At New York City Transit, newly hired mechanics, many of whom have no experience in the field, are given a four-week introductory course in elevator and escalator maintenance. They are then issued a bag of tools and sent to work, paired up initially with a more experienced mechanic.

There is no requirement for refresher training.

It's not just a private sector/public sector difference, either: the Washington Metropolitan Area Transit Authority created its own training program that includes a four-year apprenticeship with 1300 hours of classroom training.

More significantly, the agency has a culture of trying to solve problems without trying to understand the root causes of the breakdowns.

In many cases, riders were trapped in elevators where a mechanical problem occurred again and again. Some times, mechanics may have lacked the ability to solve the problem. At other times, transit officials said, supervisors failed to see patterns of breakdowns or felt pressured to put the machines back into operation in a hurry even though they needed additional work.

In one particular case, an elevator had broken down five times in the eight days leading up to a serious (40 minute) breakdown. Each time, mechanics came, made minor adjustments and put the machine back in service — only to have it break down again. You'd think that an "Ohno Circle," or at the very least a "Five Whys"/root cause analysis, would have been not only useful, but ultimately more time efficient and cost-effective.

The transit agency is making important changes. Contractors are now supervised by experienced employees when they install equipment. And there's now a special group of mechanics to conduct tests at key stages of construction.

But there's still an attitude that the mechanics just "have to do better." After three out of six escalators were found with improperly installed bolts (which caused steps to literally fall out of the machine), Joseph Joyce, the transit agency’s general superintendent of elevators and escalators said that he was trying to

[foster] a culture of accountability among his mechanics and managers. “I’m trying to get these guys to think that, you know what, that could be your mom that’s walking with a cane and needs that escalator."

And after the drive chain on another escalator snapped, Joyce said

“They’re good mechanics, but they missed something that day. I think they had a bad day that day."

But as Mark has pointed out many times, this kind of thinking just doesn't work. For one thing, the implicit assumption is that the workers don't care enough to want to do a good job -- an assumption that flies in the face of lean thinking. More importantly, no matter how often doctors -- or mechanics -- are told to be careful, they're guaranteed to make mistakes if they don't have enough training, or sufficient authority to shut down a machine and conduct a root cause analyses, or proper standard work procedures to ensure they don't miss critical steps.

Human beings will always make mistakes. It's management's job to create a process that prevents those errors from occurring. The New York City Transit Authority is moving in the right direction, but at the top level they still need to change the way they think about the problems -- and their employees. At $25 million a year, the riders and taxpayers of New York deserve nothing less.

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"Stock Up?" Really? For a Penny Increase?

Time to stock up on Forever stamps - Yahoo! News

Sigh, first class postage has gone up from 41 cents to 42 cents. That really doesn't impact me, since I mail maybe two or three things a month (thanks to online bill pay -- something that hasn't always served me well).

The postal service did something interesting... they offered a "forever stamp" that can be used at any point in the future. So, paying 41 cents NOW is a hedge against future cost increases.

But does that mean you should have hoarded stamps and bought in bulk? This reminds me of classic non-Lean purchasing department behavior -- we got a great deal, so we bought a ton of them. OK, at least stamps can never go obsolete, so that risk is eliminated here with stamps. And, stamps don't take up much "home warehouse" space in a drawer, so that isn't a huge problem.

Let's assume you mail 20 items per month. That's 240 per year... you'd save a whole $2.40 a year by "stocking up" now (spending $98.40 on stamps). That money, kept in a bank account that earns 3% a year, would earn you $2.95.

What if you bought 30 years worth of stamps? That's a complicated calculation, depending on assumptions of inflation rates, generally and for stamps, over time. This article, from the last increase (from 39 to 41 cents), shows how, historically, the price of stamps has actually GONE DOWN when you consider the value of money over time.

My gut instinct tells me the "stock up" plan probably isn't going to save you much money unless you mail a TON of letters (such as a small business).

Who is benefiting from the "stock up" plan? The United States Postal Service:

The post office sold $267,696,023 in Forever stamps in March, up from
$207,900,132 in February and $115,303,031 in January.

Now, they probably "pulled ahead" sales from future months, but that's a nice cash flow difference for the USPS, getting that money now rather than later.

Don't get me wrong... even if a 30 year buy of stamps doesn't make sense, I'm not encouraging "single piece flow" of stamps. It doesn't make sense, from a total cost standpoint, to drive to the post office (or bank or grocery store) every time you need one stamp. Don't believe someone who says it would be "Lean" to do so, if "Lean" means low inventory. Low inventory of stamps would be traded off by the cost and time involved with driving to the store. Gas... now that's something that's REALLY going up in price more than stamps.

Did anyone stock up on stamps? If so, what was the economic case for doing so? Or did you just buy a pack of 20, as normal?

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Candidates at the Gemba

Video - Breaking News Videos from CNN.com

Sort of a funny video (linked above) on CNN/Headline News about presidential candidates being "clueless" about what they're seeing on the campaign trail and factory tours. The Headline News version (which I can't find online) had overlays that read:

• "Clueless on the Campaign Trail"
• "Candidates often don't know what they're looking at on business tours"
• "Candidates have some silly questions, don't seem to understand the answers"
• "Candidates do a lot of nodding when they don't understand tours"
  

Maybe Headline News doesn't rank high on the "respect for candidates" scale, but they're certainly fair game for mocking.

Now, a highly choreographed plant tour is not exactly the same as true "gemba time" where leaders walk (or just stand) and observe the process, talking to people in a less scripted (or non-scripted) way.

It can be tough being in a gemba when you don't really know the process. I know I've had my "clueless" moments the first time I've done through a particular hospital department. Even your own company executives might not really know what's going on... so to those of you hosting gemba visits, please be patient. If the visitor is really trying, be patient with them.

When Sen. McCain (left, click for larger view) was looking through a microscope and asked what he saw, the host explained they were colon cancer cells. McCain said "There are no stupid questions, right?" That's far better than pretending you know what's going on, don't you think?

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Lean and Ben Franklin

Lean Learning Center: Newsletter

The latest issue (#12) of the "Lean Progress" newsletter from Jamie Flinchbaugh and the Lean Learning Center is available now.

There's always great content in the newsletter. One piece I particularly liked was called "Lean Thinking from Benjamin Franklin," written by Debra S. Levantrosser, the Executive Director of Lean and Business Improvement at Johnson & Johnson.

I always enjoy reading about "Lean history" -- the origins of Lean thinking from sources such as Henry Ford, Samuel Smiles, the Training Within Industry program, etc.

Levantrosser's piece draws parallels between Benjamin Franklin's writings, philosophies, and business concepts and modern Lean thinking. Franklin's time as Postmaster General is highlighted as an early adaptation of Lean principles in efficient government operations.

Check it out, it's a very noteworthy piece. If you haven't already registered for Jamie's site, you'll have to do so to read the newsletter. But, that effort is well worth the time for the content that you'll receive.

An excerpt, reprinted with permission:

"...Franklin lived other lean principles. Innovation and experimentation, servant leader mentality, communication, customer-service orientation, striving for perfection and supporting small, incremental changes were central to the implementation of his virtues.

Regarding innovation, he experimented with ideas until he found something that was successful and met a customer need and was often many steps ahead of his customers’ thinking giving them more than they even thought possible. He finally created a new street lamp to keep the streets successfully lit all night and that could be repaired easily if broken. This may sound like an inconsequential improvement but going from little or no light to full light had a direct positive impact on crime and business performance."

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Misuse of the "Customer" Concept

FAA too cozy with airlines, whistle-blowers say | ajc.com

As a frequent flyer, it's really troubling anytime you read about systemic problems in the aviation system. First, there are problems in the air traffic controller world that lead to multiple near misses (problems that seem to go unfixed). Now, there's the ongoing scandal about airlines (including Southwest, American, United, and Delta) not following proper maintenance routines and practices.

How can you possibly be so short-sighted, in a business sense, as to take chances with passenger safety? It seems that the aviation industry is "results focused" in the sense that they brag about how they've had so few fatal incidents in the past few years. But that doesn't mean the process is perfect. They have been lucky for a while, possibly, but underlying process problems indicate an accident is bound to happen. Would a properly "Lean airline" be better about thinking in the long-term, ala Principle #1 of The Toyota Way?

One troubling development with Southwest is the management practices within the Federal Aviation Administration:

The Federal Aviation Administration has become so friendly with airlines that it no longer acts as the public's watchdog, whistle-blowers told Congress on Thursday.

"We are told that the airlines are our customers," FAA inspector Charlambe "Bobby" Boutris said. "But we have a more important customer, the taxpayers" who want government to ensure a safe aviation system.

That's crazy. The FAA is supposed to be serving and protecting the passengers, not the airlines. This is like a supervisor in a workplace treating their employee as a customer... even in a "servant leadership" environment, that's not right.

FAA administrators told inspectors to back off from Southwest... so the inspectors had to become whistle-blowers in front of Congress. Good for them!!

Boutris, who was assigned to the FAA office in Irving, Texas, near Southwest's headquarters in Dallas, had raised warnings about Southwest skipping inspections since 2003. His supervisor, who has since been reassigned, suppressed the information rather than inconvenience Southwest, he said.

For the life of me, I don't understand the dynamic of why the FAA would want to not "inconvenience" airlines, other than outright corruption in who has been appointed to oversee the industry.

Douglas Parker, another FAA inspector at Southwest, said he, too, "discovered that several aircraft had been operated in an unsafe condition."

Parker's voice faltered as he recounted how last June, while typing up a report about "unethical actions" at Southwest, he got a visit from a supervisor. The manager began picking up photos of Parker's family and commenting on the importance of family obligations.

"On his way out of the door, he made the following statement: 'You have a good job here and your wife has a good job over at the Dallas [FAA office]. I'd hate to see you jeopardize your and her careers trying to take down a couple of losers,'" he said.

Peters said that despite the intimidation, "the poor condition of the Southwest Airlines regulatory oversight was a risk that neither Inspector Boutris nor I was willing to accept."

Sigh, what a mess. What can we do?

"Customer focus" is good, but only if you properly define customer relationships. I'd prefer the FAA think of me and my fellow travelers as the "customer," not the airlines.

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PDCA at the TSA?

ABC News: Airport Security To Be Easier for Families?

I am probably giving the Transportation Security Agency waaaaaay too much credit here, but this story made me think of the "PDCA" cycle of "Plan Do Check Act" (known as the Shewhart cycle or the Deming cycle).

The Transportation Security Administration is experimenting with checkpoint lanes designed for families to ease the pressure on parents struggling through an airport with young children.

In one of the first efforts to ease airport security for infrequent travelers, "family" lanes are being tested at the Denver and Salt Lake City airports alongside "expert" lanes for travelers who know every nuance of security screening and lanes for "casual" travelers.

The emphasis on "experimenting" is mine. That's what PDCA is all about -- a small-scale experiment to see if an idea works or not. We often do that in the Lean approach, where someone has a theory (hopefully somewhat thought out) that making a change will improve a system. Supervisors might probe and ask why that idea is a good one or the best alternative. More often than not, we want people to make at least a small-scale trial with an idea, such as this TSA policy.

The article continues:

Segregated lanes could open around the country if the tests show the concept speeds up security lines.

That's the key -- spread the concept ("Act") if tests show ("Check") that the implemented concept ("Do") works well. If not, kill the program (another form of "Act") and try something new.

I've self-segregated myself in airport lines for a long time. Given a choice, I'd alway prefer to get behind an "expert traveler" instead of a family juggling a few kids and all of their stuff.

The concept is criticized in the article by someone with a somewhat undisclosed conflict of interest. Oh well, bad reporting. Of course the guy who wants to SELL expedited security passes to frequent travelers doesn't want the TSA to improve flow -- that lessens demand for his product.

So this policy seems OK to me -- if it's proven to work. But, then again, I don't have kids. How do those of you with kids feel about the policy?

Either way, maybe you can use this as an example of PDCA when you're talking about it in your workplace. My headline would have been better if I had called it "PDSA at the TSA" (Plan Do Study Act, an alternative way of saying the same concept).

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Deming on Education

If there was any value to the Industry Week commentary that tried to link Deming and Obama, it was that it prompted me to re-read some of Deming's work, namely the "management of people" chapter from The New Economics.

There's so much good stuff in there, including the 14 rules / guidelines for a manager of people to follow. You can read that online at google books (for free). There's so much that's re-stated, from Deming, in many of the more recent books about Toyota. You definitely see the Deming influence coming through. So it's sometimes interesting to go back and re-read earlier books.

In the chapter, Deming rails against business schools, pointing out what they SHOULD teach, which is, of course, the opposite of what's taught. Deming says business schools should teach students about the "evils" of short-term thinking and the "evils" of the merit system and ranking people. There's also a somewhat bleak chart on page 122 that makes the case that schools and management systems do nothing but demoralize people throughout their lives until they die.

Deming then, on page 145, rails against grading students and grading teachers or schools. Deming's argument is that grades (especially forced ranking and grading curves) rob students of their intrinsic motivation to learn (and probably robs teachers of their joy in teaching).

Deming recommends:

• Abolish grades (A, B, C, D) in school...
• Abolish merit ratings for teachers
• Abolish comparison of schools on the basis of scores
• Abolish gold stars for athletics or for best costume

He writes, "Our schools must preserve and nurture the yearning for learning that everyone is born with."

In recent years, the trend has been toward "merit pay" for teachers and schools. Hogwash. Deming, the hypothetical presidential candidate, would undoubtedly be against the "No Child Left Behind Act" (but maybe for different reasons than Democrats).

From the wikipedia page:

NCLB is the latest federal legislation (another was Goals 2000) which enacts the theories of standards-based education reform, formerly known as outcome-based education, which is based on the belief that high expectations and setting of goals will result in success for all students

High expectations and goals without a method? That's a recipe for failure and I assume Dr. Deming would have hated that. The focus is on measurement... but at the expense of learning? Given goals, people in any setting are clever about "gaming the numbers" (as the Wikipedia article points out) and educators are no different.

I'm not a NCLB expert... reading more, I'm guessing Dr. Deming wouldn't disagree with the whole act. Making sure that teachers are well qualified is a good thing. All things considered, I guess that Dr. Deming would suggest "leadership" as a replacement for NCLB. What do you think?

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Ohio Manufacturing Jobs & Presidential Politics

Politics | NAFTA bashing popular, but is it justified? | Seattle Times Newspaper

Google News Search

At the risk of stirring an unmanageable political debate (please keep the discussion in line with the "respect for people" principle and avoid name calling), it's interesting to hear so much about manufacturing jobs in Ohio. I was born in Dayton and I still have a lot of family in the Youngstown area. As a kid, we drove past the empty shells of closed steel mills as we went to my grandparents' house and that left quite an impression.

So Ohio has been losing industrial and manufacturing jobs since well before NAFTA. NAFTA is being blamed today, particularly by Obama and Clinton, as the main culprit for recent job losses to Mexico or overseas. I'm excluding McCain and the Republicans from the discussion since the primary race is over and the news coverage is dominated by the Democratic side of things.

I'm not an expert on any of this, so my questions, especially for readers in Ohio:

• What has led to more job loss -- NAFTA or business mismanagement (including faulty business cases for moving factories or traditional "mass production" approaches)?
  
  
• What, if anything, would lead to manufacturing jobs returning to Ohio -- repealing or changing NAFTA or more aggressively adopting Lean and newer management approaches?
  

What do you think? Click "comments" to chime in. If you are going to link to news articles or websites, please use HTML formatting rather than just pasting in a URL. If you need help with that, visit this page for a tutorial.

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Deming Endorses Obama (?)

Breaking: Deming Endorses Obama - IndustryWeek Forums

A few people have emailed me about this and it's easier for me to comment here than it is to register for the IW forums. An interesting idea is posed by Brad Kenney: would Deming "endorse" Obama as the result of this quote?

“Does experience help? NO! Not if we are doing the wrong things.”

- W. Edwards Deming (consultant, statistician and educator, 1900-1993)

That's hardly an endorsement and it raises the question of whether Obama really has "new" ideas or old liberal ones. The Deming quote is certainly a paraphrase of what Obama is trying to say about Hillary Clinton, that she has "experience" and it was the wrong things.

Yes, things are broken in Washington DC, as the writer points out. My own position is that things are equally broken on BOTH sides of the political aisle. Kenney is trying to be clever in comparing government problems to business issues, but I think he misses the mark -- badly.

The employees (us) aren't engaged, and the management (the three branches of government) range from hopelessly inept to criminally incompetent. Employee morale and "customer satisfaction" (approval ratings) are at an all time low (in the 20% range for both Bush and Congress). Our country is hopelessly in the red, and don't get me started on defect rates where legislation is concerned (Congress' first pass yield has got to be in the single digits).

Whoa whoa.... the American citizens, the public.... we're NOT "employees." We do not work for the government. The government is supposed to work for us. "Customer satisfaction" is maybe a better analogy than "employee morale."

Kenny equates political change to "pulling the andon cord." Maybe that's not a bad analogy. But, I don't think Dr. Deming would want change for the sake of change or merely "fresh ideas." I'll have to dig up some of his quotes from "The New Economics" for his thoughts on government, but I would suspect Deming would favor the PDCA process -- try a change, measure the results, see how it works. Too many government programs never go through the Check and Act phases... we just "Do" and programs are stuck in place forever.

Deming wrote, on page 123 of The New Economics:

Transformation is required in government, industry, education. Management is in a stable state. Transformation is required to move out of the present state, not mere patchwork on the present style of management. We must of course solve problems and stamp out fires as they occur, but these activities do not change the process.

... there will be cooperation on problems of common interest between people, divisions, companies, competitors, governments, countries.... the function of government should be to work with business, not harass business."

I quoted selectively and hopefully not out of context. You can read the whole page online at the Google Books page for the book (scroll to page 123).

If I had to guess Deming's views on the current election... he would be opposed to party divisions and the use of divisiveness to win votes. I'm guessing he would want a candidate with systemic solutions to broken government policies and systems, not just fire-fighting. I'm also guessing he would fall more along the Republican or Libertarian lines of not over-regulating or punishing business.

Too bad Dr. Deming isn't alive to be a third-party candidate, because I would have voted for him in a second. Heck, Dr. Deming had plenty of foreign policy experience with all of the countries he visited during his teaching and consulting!! Deming for President!

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Mindless Government Bureaucracy Puts a Halt to Hospital Checklists

A Lifesaving Checklist - New York Times

A number of you have emailed me, yes I'm aware of this horrible, ridiculous development that followed earlier reports of the success hospitals were having in reducing infections and improving patient care through "stupid checklists" (a form of Standardized Work) that aren't stupid at all. They're so simple, they're brilliant and they are saving lives, I mean WERE saving lives.

As Dr. Atul Gawande wrote about in the New York Times, a really misguided federal agency has shut the program down for some unbelievable reasons. You just have to read his column and then come back here.

Gawande pulls few punches in setting up the piece:

"In Bethesda, Md., in a squat building off a suburban parkway, sits a small federal agency called the Office for Human Research Protections. Its aim is to protect people. But lately you have to wonder."

I learned about this New Year's Eve and I tried to not let it ruin my holiday, nor did I want to start the blogging year on such a negative note. It must be incredibly frustrating for the people who have been working on this initiative -- to be making such great progress with a method that is repeatable and transferable to other hospitals and to forced to shut it down. Will the government pay for the care of patients who get infections as a result???

Maybe the fault in the Johns Hopkins program was that they purposefully set up this medical research structure of "we're using checklists for these patients and NOT using them for these... let's compare the results." That seems to be the tradition in medical research... it seems to be a bit different than the Lean notion of kaizen, don't you think? With kaizen, we would start with checklists in a small area, pilot to see the results, and then, given that it works, spread it to other areas as quickly as possible. Would the government see that any differently? I'd have to think you can't pilot changes in a small area first... but then again, if something works, why wait? To that end, why is the government not using its muscle to insist that EVERY hospital use the checklists method instead of slapping those who are, partly because it might make some doctors look bad?

Argh, there's more I want to write, but I need to step away from the keyboard and calm down again. This really worries me, the impact this might have on Lean methods and other process improvements that are going on in hospitals. I'd hate to think people would get scared and think it's safer or better to do nothing... the government doesn't seem to care if you do nothing to improve hand hygiene and prevent infections.

Gawande summarizes some of the history of healthcare quality improvement:

Scientific research regulations had previously exempted efforts to improve medical quality and public health — because they hadn’t been scientific. Now that the work is becoming more systematic (and effective), the authorities have stepped in. And they’re in danger of putting ethics bureaucracy in the way of actual ethical medical care. The agency should allow this research to continue unencumbered. If it won’t, then Congress will have to.

Ah the irony, as improvement becomes more "scientific," it somehow becomes more threatening to the feds. As I'm going through final editing of my book, this is really making me wonder about how "Standardized Work" and "kaizen" are really going to be implemented more widely in this industry. Maybe the hospitals who have done well so far should be lucky to have been "under the radar" if you will? Maybe we need less promotion of Lean and more action. What the bureaucrats don't know can't hurt them... but them taking action on stuff they know little about... that hurts patients.

Other blogs on this topic:

• Wachter's World
• Gemba Panta Rei
  
• To EHR is Human - Great headline, "Bureaucracy Kills!"
• Health Care Renewal
• Health Beat
• Health Care Organizational Ethics
  

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"FEMA Does Not Reward Innovation"

AP News | The Columbia Daily Tribune

How's this for government bureaucracy? People got creative in trying to save money to restock the New Orleans aquarium by chartering a boat to go catch fish instead of buying them. The catch? FEMA don't pay for that, they rather pay more because of their blessed regulations.

"It's relatively typical that when Louisiana, or an applicant, finds a unique way to solve a problem that FEMA comes in and throws a flag and says, `No, you can't do that,'" Smith said.

Local officials have complained that FEMA has applied the rules with maddening literal-mindedness..."

Standardized work NOT should be about "maddening literal-mindedness" or "mindless conformity." We have to leave room for flexibility and creativity, recognizing that changing the standardized work can be a good thing. FEMA has admitted some mistakes, but:

Bob Josephson, FEMA's director of external affairs in Louisiana, was alerted to the case by The Associated Press and reviewed it recently. He suggested FEMA may have made a mistake, but did not promise quick resolution.

Quick resolution and response to ideas is key, and FEMA isn't doing that. They certainly aren't Lean (who is claiming they are?) It's an interesting comparison between this and what the State of Iowa is doing to implement Lean principles. I wonder how they would handle the New Orleans situation?

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Lowest Bidder? No Wonder There Are Problems

Marketplace: Road construction paved with problems

Dr. Deming always preached to not choose suppliers based on price alone. Many companies and industries have never learned that lesson, so why should we expect governments to do any better?

This Marketplace story highlights how manyroad construction or improvement projects are beset with delays. The systemic culprit? Policies that mandate choosing the lowest bidder. Marketplace explains:

"Thousands of roads and bridges across the country are in this predicament. In Massachusetts alone, 43 percent of the road and highway projects under construction aren't finished on time."

The low bidders often don't have the resources to get the job done, or they won't go above and beyond to finish a job that might not be very profitable.

Another systemic dysfunction that's highlighted in the story is the practice of beginning work before the design is finalized and has been signed off on by the contractor. This, not surprisingly, leads to rework and additional delays. The governmental body is just chucking the design "over the wall" to the contractor.

Is there any hope that we can get government to focus on being effective instead of just focusing on trying to be cheap?

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Lean Transport: Buses vs. Light Rail

By Dan Markovitz

Mark posted yesterday about the relative leanness of light rail vs. buses. He pointed out that

a rail line probably has more capacity, but it's very much a fixed asset, a "monument" if you will. Buses are very flexible, both in terms of routes and incremental capacity, right? But, then again, buses do add to traffic congestion, so maybe there's no easy answer about which waste is worse.

But buses don't have to add to congestion as much as we believe. The January 2006 issue of the Sierra Club magazine featured an interview with Brazilian architect (and former mayor of Curitiba) Jaime Lerner about how to build a mass transit system that serves the needs of consumers without creating additional traffic. His questions, and his solution, demonstrate a keen eye for avoiding waste.

Lerner promotes a BRT ("bus rapid transit") system. Currently, more than 60 cities worldwide have some version of a BRT (including Seoul, with 10 million people, and Curitiba, with 1.7 million residents). A BRT requires only a few relatively simple modifications—dedicated lanes in the center of the street where transit vehicles run unimpeded, "boarding tubes" where passengers pay fares before their bus arrives, and curb-level entries so they board and exit quickly.

Lerner's team began with a clear customer focus: what do people value in a transit system:

We started by trying to understand what mass transit is and what it should be: fast, comfortable, reliable. Most of all, you shouldn't need to wait.

And in true lean fashion, they had to figure out how to do more with less:

We wanted to make sure we could run our system on surface streets because it's cheaper. We had no money and no loans. . . . When we started out, we thought our system could hold us until we could afford a subway. Now I'm sure we don't need a subway.

While Paris, London, Moscow, and New York have extensive subway systems, they were built at the beginning of the last century when it was significantly cheaper to work underground. BRT is also much cheaper than a light rail line. (Are you listening Seattle?)

Light rail is sometimes 10 to 20 times more expensive than a BRT, and it takes more time to implement. When you have time and money and are able to subsidize the system, light rail is OK. But when you have to subsidize every ticket, you're taking money from other social investments. That's the main issue. You can have a BRT system that's as good as an underground or light rail, and it pays for itself.

In true lean fashion, the city found (in Matt May's words) an "elegant solution" to their transportation issues. Lerner explains that

we had to have dedicated lanes. Not just separated by painted lines but physically separated and at the center of the street. And the system had to be fast. That means stops every five or six hundred meters [about a third of a mile], not every block. We transport 2 million people at one-minute intervals—and sometimes at 30-second intervals. Our BRT can carry the same number of passengers as a subway and is 100 times less expensive per kilometer.

The entire interview is fascinating and well worth reading. For my money, the best quote is Lerner's approach towards cars:

I'm not against cars. But your city doesn't have to be oriented toward them. A car is like your mother-in-law. You want to have a good relationship with her, but you can't let her conduct your life. When a city has good public transportation, it becomes for people and for cars. Imagine a city with 30 percent fewer cars on the streets.

30% fewer cars? Less traffic? Fast, cheap, mass transit? Public money freed up for other, more productive uses? Sounds lean to me.

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Bad Systems: TSA at DFW Terminal A

I'm going to try to tie this into Lean, or so I think. I had the most mind-numbing experience at the Dallas-Fort Worth International Airport (my home airport, Terminal A, near gate A35, last Monday night (Labor Day).

As I approached the private "security" worker at the podium before the screening, I was starting to hand her my boarding pass and ID, as I've done far too many times this year at different airports, it's always the same drill. You know, they take your boarding pass and scribble five times on it or play a game of Sudoku on it before letting you pass on. This time, the contractor didn't want any of that, she just mumbled something about "mmmbmbmbm laptop.... mmmmbmbm... belt." I know the drill.

I got a few steps closer to the TSA and it hit me -- she hadn't checked my ID and boarding pass. I told the TSA employee this, thinking there was maybe some security threat from the laxness, and the TSA guy mumbled something about "what do you expect?" and took only the most cursory glance at my ID and boarding pass.

At this point, I thought I could A) just move on and not risk saying something that would get me strip searched or arrested or B) say something. Having plenty of time before my flight, I chose door B, I asked to talk to a supervisor. I explained what had happened, basically that NOBODY had checked my ID. The supervisor told me that TSA and/or the airport had officially deemed the contractors to be ineffective at checking ID's, since boarding passes and ID's are too easy to fake and the contractors didn't know what they were looking for. Nice huh? And this isn't the case at other airports?

I guessing that the problem with the contractors might be at least partially a training issue.

The TSA supervisor said they were in the process of "phasing in" the new approach, where the TSA employees would now be checking ID's at that terminal, rather than the contractors. "Um, shouldn't you transition in before the contractors transition out?," I asked the supervisor. He didn't really have anything constructive to say, other than apologizing, so I didn't push the discussion any more. That's just horrible management and system design (or lack thereof). You don't pull the old person off the job before the new process and training are in place. Our government in action. Or, government inaction.

In part 2 of this post, I'll describe my phone call to the TSA asking about this situation and their response.

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Democrats at the "Gemba"

Clinton gets close-up glimpse of nurse's life - USATODAY.com

It's probably all just political posturing, but Hillary Clinton recently spent two hours shadowing and observing a nurse at a hospital in Nevada.

The New York senator spent more than two hours shadowing Estrada in the fourth-floor medical/surgical ward before heading to Estrada's home for dinner with her and her three children. "I'm following Michelle around today to see what a nurse does," Clinton explained to the patient in Room 471.

Politics aside (and it's tough for me to do that), this is admirable, on the surface. Granted, the RN works a 12-hour day and Hillary and the photographers may have gotten in the way or caused a distraction (always a risk when you go to the Gemba) during their two-hour visit. This was obviously a political gesture, where comments are going to be made that support her political agenda (as any candidate would do). Was she really at the Gemba to truly observe, or was she going in looking for things that support her views? Any of us have to be careful when going to the Gemba that we really use our eyes, not our bias. If you go to the Gemba in your factory with a mindset of "our workers are lazy," you'll find examples of that, trust me.

Other Democrats are doing similar Gemba visits, sponsored by a service workers union (so yes, it's overtly political). On the other side of the aisle, Republican Presidential candidate Rudy Guiliani was criticized for somewhat overstating his "Gemba" time at the World Trade Center site after 9/11. I saw a quote that said something like "shaking hands and saying 'good job' isn't the same as what we were doing." Empathizing with people at the Gemba is good, but going too far in saying "I understand what you're going through" might not seem credible and can cause resentment. Sen. Clinton runs the same risk if she talks like she knows everything about being a nurse after two hours.

I'm sure Sen. Clinton saw a lot of waste and problems and frustration. I wonder if it registers with her that process improvement can help, or if it just cements views that the government and unions must solve everything?

So, we can nitpick her Gemba time, but I'll ask this, for thought:

• How many hospital CEO's or executives (VP or above) have spent two hours shadowing an employee and looking for waste or soliciting improvement ideas?
  
  
• How many manufacturing CEO's or executives have done the same thing recently?
  

If they spent that time out there, what was accomplished as a result?

I'm always honored and humbled when I get time at the Gemba. I place limitations on myself on what I write about my daily work, my Gemba time in hospitals. Yes, as we've discussed here, hospitals are complex. But at some level, it's just people doing work and others managing those people. I don't say "just work" to demean or belittle -- it's work in the sense that all work should be honored and respected.

In that sense, the Lean mindset says we have an obligation to make sure work is designed and not just haphazard (especially in a hospital). It truly is a "type of waste" to see people frustrated and trying to do their best in the midst of a bad system. Work must be designed and managers must be leaders, to make sure people aren't robbed of their right to find "joy in their work," as Deming taught us (again, especially in a hospital). We have an obligation to all of the nurses working long, tiring, frustrated days to help improve the systems and environments in which they work.

Government, Soldiers, and Backlogs

Worldandnation: Backlog has veterans waiting for disability claims

Here is a sad case of bad flow, an imbalance in demand and capacity, and the impact it has on our country's injured and disabled soldiers.

Nearly 400,000 disability claims were pending at the VA as of February, including 135,741 that exceeded the VA's 160-day goal for processing them. The department takes six months, on average, to process a claim, and the waiting time for appeals averages nearly two years.

We can only guess what the "Value Added" time in that 160 days is. I'm sure it's a very short process with amazingly long "waiting time" and queues.

The only thing that can solve the backlog is increased capacity (either through improving productivity in processing claims or adding people).

Little's Law very much applies, where Cycle Time = WIP / Throughput

To reduce CT, you have to increase Throughput. With an expected increase of claims (from the deployments in Iraq and Afghanistan), Cycle Time and WIP will only get worse if the VA can't increase Throughput to 1) decrease the backlog and 2) meet new higher demand.

This strained system may grow more overburdened in years ahead as many of the troops deployed to Iraq and Afghanistan return from those wars, experts say.

Ronald R. Aument, VA deputy undersecretary for benefits, acknowledged that the department needs to do better, but he rejected the idea that the delays and denials are motivated by money concerns.

"It's not as though we're working on commission here," he said. "There is very much a shared passion in this organization in trying to do right by veterans."

It's probably either 1) lack of funding or 2) gross waste in the existing processes, not any lack of effort or lack of caring on the VA's part. Here's an opportunity where Lean, or dare I say, "Office Lean" can help immensely. Instead of pointing fingers, let's fix the process.

Toyota's Training Center

Toyota University Opens Admissions to Outsiders - WSJ.com

The headline is a bit misleading, it should say "Toyota Opens, Then Closes Admissions to Outsiders." The WSJ article is about the Toyota University site in Gardenia CA. It had been open to paying outsiders (or free students from the police or military). Toyota has such internal demand now for the lean classes, that they have shut it off from outsiders.

Based in Gardena, Calif., the Toyota program was started in 1998 to train the company's employees in its distinctive business philosophy and "lean-thinking" approach to producing cars.

Here's the example of teaching problem solving to the LAPD:

In 2005, Capt. Findley cast about for ideas to streamline the LAPD's jail division, a hub of inefficiency and low morale. A converted Cmdr. Downing recommended the Toyota program.

For the two dozen hard-nosed officers, the connection between making cars and processing thugs came slowly. Matthew May, a Toyota instructor, coaxed them along by asking questions like: "If you were a part of a car, what would you be?" The discussion led to discovering the most important part of any machine: The part that isn't working.

This helped the officers zero in on a persistent problem. If a prisoner awaiting processing at an outlying jail asked for treatment, protocol dictated they had to be taken to a regional jail first. Once treatment was done the