Womack on Respect for People

Jim Womack's E-letters - Respect for People

I'm not sure if the link works (given the LEI's login requirement), but Jim Womack's most recent e-letter is one of the best I've read in quite a while. I think he really nails it, the compare and contrast of a Lean notion of "respect for people" and what traditional organizations mean when they say they respect people. Somewhat paraphrasing Jim:

Traditional Organizations:

• Set individual goals (top down), but give people wide latitude in how the work is done
• They "trust" their people to get their work done and solve problems on their own
• Managers and experts help people work around problems
• Play cheerleader and say "great job!"
  

Lean Organizations:

• Highly specify how the work is done, but give employees latitude to improve things
• Managers and supervisors get directly involved with their employees in problem solving
• Managers ask the employees how root causes can be fixed
• They challenge employees in their thinking, driving toward better solutions in a collaborative way

For anyone who thought "respect for people" meant "being nice all the time," I hope Jim's letter helps clarify the true difference. The Lean organization had far less turnover and far better productivity than Jim's "non Lean" example. Better process.... better results!

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Former GM Chief Passes Away

Roger Smith, Former G.M. Chief, Dies - New York Times

Roger Smith passed away at age 82. While he was demonized by Michael Moore and he's been criticized here for his "lights out factory" vision, Roger Smith tried many innovative things.

Jim Womack is quoted as saying:

“To his credit, he knew something was wrong there, so he began an age of frantic experimentation,”

Smith should be remembered for reaching out to Toyota's Chairman, Eiji Toyoda, leading to the creation of NUMMI. That paved the path for Toyota's North American expansion. (Detroit News photo)

This has most certainly been good for the spread of Lean beyond the automotive industry, the realization that Lean is not a "Japanese system."


Other remembrances:

• Wall St Journal
• Detroit News
• Detroit Free Press

Womack on China Costs and Lean Healthcare

IndustryWeek : Thought Leaders -- Lean On Me (Full Transcript)

IndustryWeek : Thought Leaders -- Lean On Me (Print Version)

Other blogs, including Gemba Panta Rei have already linked to this, but I'll also post it with a few different highlights. Jon Miller has a very good discussion about Womack's assertion that "Toyota does it right the first time" while American companies are on the "kaizen kick." I think the truth is somewhere in the middle, that Toyota doesn't magically do it right the first time, there is a lot of planning and PDCA involved early on. Kaizen shouldn't be an excuse to not plan and say "we'll kaizen our way out of it."

Two details I'll pull out of there. I always like the way Jim tries to explain the need to look at total cost when making sourcing decisions. It's not that anyone is stupid, but that company departments and silos tend to suboptimize their own measures. Companies need to reorient their incentive structures to make sure people are making decisions that are best for the company as a whole. Womack says:

" most companies in my view are pretty abysmal at calculating total cost, and I was just up in the Midwest talking to a big company that has absolutely no way to figure out total acquisition costs for materials that they are buying in. Which is to say they've still got a purchasing organization that whatever they may say, is incentivized on lowest piece part right now, and so it's lowest piece part plus slow freight is what purchasing is doing. And then it turns out that nothing ever comes on time so there's lots of expediting, but that's on the logistics budget. And they've got big quality problems, but that's on the quality budget. And then the biggest thing is they've got very long lead times so they're always ordering the wrong stuff, which means that they're either remaindering or they're doing more expediting, and that goes on the SG&A budget. So you say, gee, can anybody count? All you have to do is add up the quality budget, the logistics budget, the SG&A budget and the purchasing budget, and what you'd see is that an awful lot of what you're buying is not cheap the way you think it is. It just amazes me every day -- big companies can't do simple math. If you did do simple math, does that say people would quit going to China? Well no, not for certain categories of things, but there are a lot of other places like Mexico that would be an awful lot better for the North American market, and Eastern Europe for the Western Europe market if you did what we call lean math and counted in all of the factors."

They can do the "simple math" but they're doing locally isolated math, not system-wide, company-wide math.

Jim also chimes in on the opportunity for Lean in healthcare, saying:

"that's a particular challenge in healthcare because the management is just so hopelessly screwed up with the doctors, the managers and the nurses pulling in opposite directions. These kind of three big factions of doctors who are point optimizers, managers who are asset optimizers and nurses who are process optimizers, except historically they didn't have any method, they were just workaround specialists. So you put that together, and the challenge in healthcare is not whether these ideas work -- they absolutely do, and we've seen demonstration after demonstration -- the problem is how do you change the management system and the mentality of the professionals working in the system so that you can actually sustain them?"

That's very true that hospital employees (not just the nurses) tend to be workaround specialists. But that sounds like exactly the situation Jim found at Boeing -- lots of managers being heroes, expediting, and working around the system (you can read his comments on that at the Industry Week website). What is it about human nature that drives us to be heroes, rewarding that behavior, instead of rewarding the practices that proactively prevent problems from occurring?

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Womack & Defining Lean

Recently, I saw Jim Womack give two talks at the Global Lean Healthcare Summit. One was a talk that could have applied, about Lean in a general sense, to a manufacturing audience as well as a healthcare crowd.

One point Jim kept bringing up was the need for simple definitions of Lean. Most of you are probably familiar with the five principles of Lean from the book Lean Thinking.

Not that it was a terribly complicated definition, but now Jim is talking about Lean as three principles. As he puts it, "If you like the definition, use it, otherwise you can come up with a different one."

• Purpose - start with a definition of your purpose, why are you in business?
  
• Process - define your processes and work toward perfection constantly, focus on your processes, not just on results
  
• People - Involve and develop your people.
  

It's reminiscent of a different Toyota "3P" model.

What models or frameworks do you use for giving people a brief overview into the Lean approach?

LeanBlog Podcast #24 - Jim Womack, State of the Auto World

Episode #24 of the LeanBlog Podcast is the 2nd part of my recent conversation with Jim Womack, of the Lean Enterprise Institute. In this episode, we talk about the state of the auto industry, from the time of The Machine That Changed the World through today. Who does Jim think is in the best shape among the "Detroit Three?" Jim also answers some questions from Lean Blog readers.

MP3 File (Right Click to Save-As)

Show Notes and Approximate Time, Episode #24

• 1:50 “We had some brief hopes for Ford in ‘Machine’”
• 2:20 “Mind of Toyota” book is a Womack must-read: “it’s a great book, harder than heck to read” Inside the Mind of Toyota: Management Principles for Enduring Growth
• 3:00 Womack on GM’s decline
• 4:15 What about the Ford Atlanta plant going from most efficient to shut down? The Taurus story, original development took 7 years when Toyota was taking only 3. At least it was what the public wanted and was easier to put together than the comparable GM product.
• 7:00 GM’s political footprint is shrinking as factories are closed outside of Michigan and Ohio, while Toyota’s is growing with factory expansion.
• 9:15 BBC series on the auto industry and lean production, pulling the cord much more at Toyota, and how people were scared at the Ford plant to pull the cord (mistrust between workers and management).
• 10:15 “If it were just a plant-on-plant competition, they [Ford] would be OK, they’ve learned enough… all over the company, the managers are not pulling the andon cords.”
• 10:40 More on Ford management and the “corrupt” Ford culture
• 12:10 How things stand with GM today, according to Jim
• 12:50 “Ford and Chrysler have a different magnitude of problem than GM.” If not for the legacy problems, GM would be OK, not a world-beater… “not as good as they should be.”
• 14:30 “Ford and Chrysler’s problem is management.”
• 14:45 Question from the blog, from John Hunter, “What 3 publicly traded companies have the deepest understanding and execution of Lean?” Danaher, “can’t vouch for it personally….” Tried to put them in the Lean Thinking, but was escorted off the property because the President declared they had deep secrets….
• 16:15 Article about Danaher from Business Week
• 17:00 G.E. has been a “make the numbers” company as opposed to a “fix the company” company, says Jim. But now GE is saying they have to be like Toyota… “is there anything beyond Six Sigma or even to Six Sigma?”
• 18:25 Lots of other little guys out there, privately held. “Wish I could point to other examples of large companies…”
• 19:00 LEI is doing some research for how to take a traditional mass production mentality company and transition them to a lean management approach, what methods do you have to implement?
• 20:00 “The world is pretty Dilbert-like.”
• 20:30 “I wish I could rattle off the 14 companies who have actually done it…. No stock tips.”
• 20:50 From Joe Wilson, what about “Lean and Mean? Do you wish you had picked a different word than Lean?
• 21:15 “It also rhymes with green…. A word is a word, you have to pick something.” Jim meant it to describe “how to do more with less” but many have spun it into “how to do less with a whole lot less, including people.”
• 22:00 “If lean is taken on by managers who are clueless to the real meaning, well then over time, the meaning becomes the meaning that people deduce from the behavior of those managers. I can’t do anything about that.”
• 23:00 “Lean got us out of the nationalism and ethnic focus,” that it had something to do with Japan. “Lean” was designed to focus on an objective measure of performance. (the term coined by Jon Krafcik)
• 24:40 “Sorry that so many clueless people [made lean “mean”]… it’s a lot of stupid meanness, where you try to hurt others and end up hurting yourself.” Toyota was about growth, not trying to get rid of people. “Where you get into the problem with Lean is when you have these big behemoths that are fading fast…”
• 26:10 Jim spent a week in Australia looking at healthcare organizations… “How would Toyota run healthcare?” “Toyota treats car parts better than a hospital treats its patients, and treat people better than hospitals treat their staffs.”
• 26:45 “We’re going to bankrupt every company with our healthcare practices.”
• 27:45 Far more than half of the visitors to the LEI website and those signing up for workshops have nothing to do with manufacturing… “How would Toyota run Starbucks?”

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.

LEI Response to "Lean Killed Rover?"

Check out the comments below this earlier post to see an initial response from the Lean Enterprise Institute's Chet Marchwinski. He promises a lengthier response from Womack and Jones after they have had a chance to read the book that claimed lean is a "myth" and that there were flaws in the research behind "The Machine that Changed the World."

Lean Killed Rover?

Driving on the wrong side of the road -- the myth of Japanese efficiency in car manufacturing

A new book is out attacking Lean. Or maybe the book is actually attacking "L.A.M.E.", or "Lean as Misguidedly Executed" at Rover. This is Rover, the car company that failed and went out of business in 2005 after earlier being taken over by BMW. This is not the Range Rover brand, that was purchased by Ford from Rover previously. Ford also then bought the Rover name and intellectual property after their failure. It sounds like the company had a number of long-standing marketing and quality problems in their attempts to compete with Jaguar, BMW, Mercedes, and the like.

The book, The Myth of Japanese Efficiency by Dan Coffey, says the "just-in-time" supply system at Rover destroyed its manufacturing flexibility, increased its production costs, and fueled hostility within its factories towards its marketing plans. Its publication will reopen the debate over the collapse of Rover just as car production resumes at its Longbridge factory under Chinese ownership.

The findings are based on the author’s extensive field research including independent and detailed participative research carried out within Rover Group itself.

"Lean" shouldn't decrease flexibility. Toyota plants are incredibly flexible, as the BBC also wrote about.

Lean shouldn't increase production costs. Toyota is a low cost producer, which leads to very high profits.

The researcher did "extensive" research within the Rover Group. Does that mean this book is helpful only for those within Rover? Or is there something transferable to those outside?

Without reading the book (it's $100, so it's not a high priority purchase for me), it's hard to see what conclusions the authors are drawing. Is it a problem with HOW Lean was implemented at Rover or does it highlight problems inherent to Lean?

I'd guess it's the former (HOW "lean" was implemented). Too many of us have had first hand experience with successful Lean implementations to want to blame Lean for Rover's problems. We also know that Lean Failures are far too common, even the most vocal Lean proponents (such as Jeff Liker) will admit that.

The book isn't just trying to point out what went wrong at Rover, they are trying to expose a "myth" of Lean production. It's hard to understand how somebody can take something very visible and call it a myth. Toyota is measurably more successful than the rest of the automakers, including the Detroit Three. Toyota does things measurably different and manages people in a different way. This is a "myth?"

I don't have a problem with people questioning Lean practices, but I do have a problem with people calling Lean a "myth." This isn't Bigfoot we're talking about, it's a proven management and process improvement methodology that has been very successful outside of Toyota and outside of automotive manufacturing (and outside of manufacturing!)

The book will force academics to review the findings of the 1989 Massachusetts Institute of Technology (MIT) survey of the global car industry, which gave birth in the first instance to the notion of ‘lean production’.

The MIT survey found Japanese plants enjoyed much higher labour productivity advantages than could be explained by investment in automation.

Dr Coffey shows the methodology for this revered research project was flawed both because of how the data was interpreted statistically and because it omitted overtime work in the index of labour used.

As a real-world Lean practitioner, I could honestly care less that "academics" might have to re-think Lean. The Lean cow is out of the barn, it's been proven in the real world.

I emailed Jim Womack and asked him about this book. Jim had heard of the book, but didn't know any details about the case it was making. I then asked Jim about the claim of omitting overtime data and I haven't heard back from him yet.

As Japanese imports made significant in-roads into Western markets in the 1970s and 1980s, this was more easily explained by finding a fictional manufacturing revolution.

This really makes me wonder if the researchers visited Toyota, to compare Rover and Toyota, or if they visited any sites of Lean success stories. This is not a "fictional" revolution. That sounds like the excuse-making talk of people who failed in their lean implementation and the researchers who parroted their claims.

The book has received praise from academic experts from across the world. Writing from the world-leading Stanford University in the US, Professor Sarah S. Lochlann Jain describes the book as "of exceedingly high calibre" and predicts it will make a "critical contribution to the literature on the automobile industry".

I'm not sure professor Jain knows about manufacturing or Lean. She's a cultural anthropology professor. Now, Jim Womack was a Political Scientist, but it's easy to argue he has made quite an effort to learn about manufacturing. I'm not sure if Professor Jain did anything other than read the "Myth" book.

The book's table of contents includes:

1. Introducing the Myth of Japanese Efficiency
2. Wide Selection / a Myth Encountered
3. Production Malapropisms: the BMW-Rover Group Controversy
4. Lean Production: the Dog That Did Not Bark
5. Back to the Future - the Reorganization of Work at Toyota
6. Rivalrous Asymmetries and the Japanese Myth
7. Rethinking Lean Thinking: Substance and Counterfeit
8. The Totalising Myth: Japanese Efficiency as a Cultural Fiction
   

Fair and balanced? If someone has $100 to throw around and wants to read this book, please report back to us.

Correcting a GM Assembly Line Story

In the past, I've referenced a story I had heard about a GM plant in 1980's where the "completed" vehicles went to one of two areas: "minor repair" or "major repair", the implications being that the factory relied on inspection to ensure quality and that nothing was ready to ship without some sort of repair.

I referenced the story most recently in my piece "How Toyota Can Save Your Life... At The Hospital, attributing it to the GM Hamtramack Cadillac plant.

I had someone question the story and its accuracy, that things couldn't possibly have been that bad. Having just done a podcast with Jim Womack and thinking that I had heard the story from him while I was at MIT, I followed up and got a recounting of the story from Jim (which I'm sharing with his permission). For one, it wasn't Hamtramack, but it was the older Cadillac Clark Street plant, in Detroit. My dad filled in some detail that the plant was technically on "Clark Avenue" but everyone called it "Clark Street."

Jim wrote:

You got the story from me somehow -- I often use it in my talks on just how far we have come since 1980. However, let's be careful with the facts. I used the story for a metaphor on many levels. Using it as a plant "case study" misses the point.

The story. When we started the MIT car project in 1980 (or was it 1981 or...), Dave Potter, then the group VP for all the staffs, suggested that maybe we ought to learn something about the auto industry. (Not a bad idea!) I ended up making many plant tours arranged by GM. One was to the old -- long, long gone -- Clark Avenue Cadillac plant in Detroit. (The plant Hamtramck replaced.)

What I remember -- this is 27 years ago! -- is:

(a) I was 31 years old and had never been in a factory except for the 4th grade tour of the Westinghouse lightbulb plant on Roosevelt Road in Little Rock, Arkansas. (It's just over the MoPac bridge as you drive west, before the juncture with Wright Avenue...or at least it was 47 years ago.

(b) That meant that I didn't know what I was supposed to see. Instead, I could just see what I was actually seeing.

(c) What I remember seeing: amazingly bad line balance -- I thought everyone worked at the same pace on a line; amazing confusion in materials handling; lots of confusion in the aisles -- what were all those people doing?; and...two doors at the end of the line marked "Minor repair" and "Major repair."

(d) At the end of the line, my young industrial engineer tour guide told me the tour was over. But I wanted to see the two mysterious rooms. This caused the plant manager to show up on the floor -- my first experience with managers whose standard work included damage control. He stated that the rework areas weren't part of the tour. So I walked straight through the "Major repairs" door to see a vast room with cars parked nose to nose. An army of reworkers were looking at build manifests and going off to get parts and tools. After looking at the "Minor repairs" room as well, I concluded that practically everything built that day was in one room or the other. I also concluded that headcount in rework must be nearly equal to headcount on the line.

(e) This was 27 years ago and I have no notes or photographs. Could it have been this bad? I certainly clearly remember the situation as described in (a) through (d), but....it sure ain't science.

(f) What I also remember: The plant manager -- who figured I was probably going to cause him a lot of problems when I reported back to Dave Potter -- stated that there were also two doors at GMAD plants (remember that only Cadillac was able to keep its own assembly plant in the GMAD reorganization in the 1970s). He stated that at GMAD plants there were also two doors. One said "Minor repairs" and the other said "Ready for shipment". [I can't verify that that's true: maybe it was his metaphor for how the world worked?] But, he stated, the actual condition of the cars -- with regard to conformance to specification -- was the same. His view of the world was that Cadillac built a higher quality product because -- to use the GM ad slogan -- it sweated the details while GMAD shipped junk and knew it. And reworking your way to quality cost a lot of money, which Cadillac could afford for a luxury car but Chevy couldn't. And that was just the nature of things.

That's what I remember. Is any of this story completely accurate? Or is it full of assembly defects? I think it's pretty accurate but I think it's really accurate as a metaphor of the mass production mindset. And what I'm absolutely sure is that this tour caused me to realize I was studying the wrong thing in my PhD research. I was looking at industrial policy in the U.S., Japan, and Germany as an explanation of why Toyota and Honda were winning. Yet the actual reason was right in front of me on the assembly line (and, as I later learned, in product development practices and in supplier management practices and in general management methods and attitudes.)

So I changed careers that day to study how people work together to create value within companies and between companies along extended value streams. I had started my real life's work. Thank you Clark Avenue!

LeanBlog Podcast #19 - Jim Womack, "Machine Revisited"

Episode #19 of the Lean Blog Podcast brings the return of Jim Womack. Jim was sitting in Melbourne Australia, where he had been speaking about lean healthcare, a topic that we will discuss in a future podcast. In this podcast, we talk about Jim's reflections on the book The Machine That Changed the World and its recent reissuing by the publisher (with updates). In the podcast, Jim not only talks about Toyota's success, but ways in which Toyota could fail or falter in the future. This is the first part of our discussion, I will release the second part in the upcoming weeks.

If you enjoy this podcast, I hope you'll check out the rest of the series by visiting the LeanBlog Podcast main page. Earlier podcasts with Jim can be found here (#12) and here (#13).

MP3 File (Right Click to Save-As)

Show Notes and Approximate Time, Episode #19

• 1:30 Jim’s thoughts on “Machine,” written about “why the teams [GM, Ford, Chrysler] can’t win the away games”
• 1:55 The book before “Machine” was “The Future of the Automobile” (1984)
• 2:15 The job of “Machine” was to describe a complete business system… “the biggest disappointment… was to have people tell me it was a great book about fa factories.”
• 3:00 “You get the feeling that a lot of people read the book, but just that one chapter [on manufacturing].”
• 3:50 Probably about a million copies sold so far
• 4:00 The publisher said that 2007 is the year when Toyota is probably going to pass GM, so why don’t we re-issue it?
• 4:20 The new subtitle is “Why Toyota Won”
• 4:45 “We’ve learned a lot since then… some of what we told you in the book is not exactly right, so we’re thinking of it not exactly as a product recall, but as a model line enhancement. This is what might have been the 1991 model if we had done annual model changes.”
• 5:30 Is there risk of a backlash with Toyota becoming #1? Jim talks about “ways in which Toyota could lose,” starting with manufacturing
• 10:50 “They could go native”
• 10:05 How Toyota could lose with the product development system (book by Al Ward)
• 10:40 The Jeff Liker book on product development (“they are complements to each other,” Jim says): The Toyota Product Development System: Integrating People, Process And Technology
• 14:30 How Toyota could fail with their dealer system
• 15:45 Jim’s essay on farmers and hunters
• 22:40 GM and the X-cars (info here and here)
• 24:10 Jim asks, “Can Toyota screw up? For the short term, the answer is no, for the long term, absolutely!”
• 24:30 “Most any other company would be fat, dumb, and happy.”
• 24:50 What about the excuses the Big 3 make about currency factors, etc.?
• 25:30 How the Big 3 are like the Detroit Lions

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.

Call for Questions: Upcoming Womack Podcast

Lean Blog

Jim Womack has agreed to do another LeanBlog Podcast interview, in conjunction with the release of the updated The Machine That Changed the World.

We are tentatively doing the recording sometime next week, the week of Feb 28. If you have questions for Jim, related to the book, what we've learned since it was first published, what he now thinks of the book and its relevance today, etc., we want to hear from you. The best or most interesting question (judged by me) will win an MP3 player with all LeanBlog Podcast episodes pre-loaded and you'll also win a copy of the revised edition of "Machine."

You can email me, using the link in the left hand column of this page, or you can send a question via Skype voicemail. You can do this via a regular phone by calling (817) 776-LEAN (817-776-5326) or you can contact me through Skype via my id "mgraban". Please give your location and your first name only. Any questions (email or voicemail) might be used in the podcast. Please get me your questions by the 28th.

Here is a retrospective on the book by Jamie Flinchbaugh.

For earlier podcasts with Jim, visit the Podcast main page at www.leanpodcast.org.

An earlier text Q&A with Jim can be found here (all five parts, part 1 is here) and a second Q&A from a year ago.

Ford must copy Toyota, which copied Ford

Detroit Free Press Commentary

Excellent commentary here from columnist Tom Walsh. He says, in part:

GM and Ford butchered the lean-production system in subsequent decades and lost their zeal for rooting out waste. When Toyota and Honda and other carmakers set up shop on American shores in the 1980s, Detroit responded with denial and excuses for its loss of market share to foreign-owned rivals. But even after conceding the merits of Toyota's system, the Detroit Three have found it difficult to duplicate.

Wonder why?

Walsh has some quotes from Jim Womack and makes reference to an upcoming republication of the seminal book, The Machine That Changed the World: The Story of Lean Production-- Toyota's Secret Weapon in the Global Car Wars That Is Now Revolutionizing World Industry (which deserves an award for it's long non-lean title!).

LeanBlog Podcast #13 -- Jim Womack, "China, Part 2"

LeanBlog Podcast #13 brings us part 2 of our discussion with James P. Womack of the Lean Enterprise Institute, the author of many books including the classic (published 10 years ago) Lean Thinking and the more recent Lean Solutions. Part 1 can be found here.

In the second podcast, Jim discusses the state of manufacturing in China, including some factors to consider when competing with China, or setting up shop in China. Jim talks about the tradeoffs between manufacturing for export versus manufacturing in China for the local market.

You can use the player (use the VCR-type controls) below to listen to a "streaming" version of the podcast (or click here for the streaming audio and RSS subscription). The streaming link is faster for one-time listening (hardly any delay to start listening). Or you can use the download link to put it on your iPod or other MP3 player.



MP3 File (Right Click to Save-As)

Show Notes and Approximate Time, Episode #13

• 1:00 Are Chinese companies focusing on the short term, as they transition to market practices, or can they focus on the long term?
• 2:10 How Chinese companies are often getting rid of headcount as fast as they can, as opposed to being rewarded for finding something for people to do
• 3:20 "Had two years to become a modern mass producer"
• 4:00 Smart ones are building for the long term and for the Chinese domestic market
• 4:37 "If you're just coming in as an exporter, a lot of things could happen," referring to instability or political risk over time with China
• 5:00 "Iron rice bowl" -- the idea that your job came with housing, education etc., a social control mechanism, everything came with your job... "the last thing you want to do is get anybody upset at Widget Factory #9."
• 6:00 The amount of dislocation in people's lives in China
• 7:00 What about "sweatshop" conditions alleged at the iPod factory?
• 7:30 Womack says the plants run by multinationals are, generally, run right (for safety, cleanliness, etc.)... "they don't know how to run a sweatshop"
• 8:30 "Corner cutting doesn't really save you any money... stupid meanness." Those factories not directly run by multinationals might be tempted to cut corners because they just don't know any better
• 9:50 "... what kind of doorknobs are you?"
• 10:10 What if we had a campaign to enforce safe work practices? Cost might actually go down.
• 10:40 Lots of people just moving material or sorting product in the Chinese pencil factory, lots of waste, "what a sad thing"... some minimal quality processes could save a lot of cost
• 11:30 "Quality is free, safety ought to be free, if you know what you're doing..."
• 12:00 Many Chinese factory managers "just don't any better, it's better here than the old factory"
• 12:30 What about the environment (air, water) in China?
• 14:45 China is facing the same demographic problems as Japan, Europe, the U.S. with a large older retired population (with the one-child policy)
• 16:00 Has the "lean math" that Jim talks about changed? If you're going to set up in China just for exporting back to the West, you have to really stop and evaluate the risk factors (political, etc.)
• 18:30 "What's wrong with Mexico? It's a truck location, not a boat location."
• 19:00 What about reports of cars being imported from China?
• 20:30 Chinese car companies are a long way off from being able to compete here, quality wise.
• 23:20 There are 12 Lean Institutes around the world, "we are equal opportunity educators."

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.

LeanBlog Podcast #12 -- Jim Womack, "China, Part 1"

Update 12/17: Click here for part 2 of the Womack podcast.

LeanBlog Podcast #12 brings us a special guest, James P. Womack of the Lean Enterprise Institute, the author of many books including the classic (published 10 years ago) Lean Thinking and the more recent Lean Solutions. We ended up talking for about 40 minutes, so I'm going to split the discussion into two podcasts. In this first part, we focus more on China's adoption (or lack of adoption) of lean practices. In the second podcast, Jim talks more about general trends for China and for those considering doing business in China.

You can use the player (use the VCR-type controls) below to listen to a "streaming" version of the podcast (or click here for the streaming audio and RSS subscription). The streaming link is faster for one-time listening (hardly any delay to start listening). Or you can use the download link to put it on your iPod or other MP3 player.

MP3 File (Right Click to Save-As)

LeanBlog Podcast #12 Show Notes and Approximate Timeline

• 1:45: Womack’s trips to China started in the 1980’s… on his honeymoon
• 2:15: http://www.leanchina.org/ is the Lean Enterprise Institute in China
• 2:45: The Chinese have gone from being “not even mass producers” (staggering, mindboggling inefficiency) where the goal was job creation and control (20 years ago) to where now they are trying to be globally competitive in a serious way (but with a LONG history of doing things the wrong way)
• 4:10 : “Management is hard” – what is modern management (or even lean management) for the Chinese?
• 5:00: Chinese learned management from multinationals, entrepreneurs (including “Andre the Pencil King”)
• 6:00: No real Toyota presence in China (other than a few joint ventures)
• 6:30: Any evidence of lean practices or lean thinking in China’s shopfloors?
• 8:00 : Stories of waste from China
• 9:45: It’s hard, from a cultural standpoint, for the Chinese to hear they should be like the Japanese (due to long standing animosity)
• 11:45: Lean can be a universal way of doing things, just as mass production can be a universal way
• 12:50 : Does China have more hope for lean if they don’t have such a long history with mass production? Womack says “why put in place the wrong thing (mass production)?” We can be General Motors or we can be Toyota… let’s be Toyota.
• 14:30 : “They sense this low-wage thing is time limited…. They can’t go on building cheap goods for Americans forever.”
• 17:30 : Womack’s recent lean e-letter
• 19:10 : Wages are rising on the coast, but for commodity stuff, manufacturers will just move inland. We won’t see the cost of labor really going up. The price of management is really going up though – seeing what ex-pats are being paid is putting upward pressure on management wages (folks with education)
• 22:30 : “I saw nobody at all working to improve the process… it looked like nothing had changed in 40 years.” Big big leap from there to everyone thinking its part of their job to improve.

A complete list of Jim's books can be found here.

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.

Linking Lean Thinking to Education – Conference Notes: Womack's vision of a 'Gemba University'

By Luke Van Dongen

I am a huge fan of Jim Womack's ability to identify and describe problems within complex systems simply and absolutely. Womack was a keynote speaker at the conference and used his time to convey his understanding of the current problem, the lean approach to education and his vision for a 'Gemba University'.

Womack began his talk with his definition of a lean process as, "a series of steps/actions taken correctly in the right sequence at the right time along a product value stream" in which, value is correctly identified by the customer. A few more slides followed that reinforced that any process can be shown visually using a value stream map before he asked the question; "What is education?"

Of course, the answer was that education is nothing more than another process in which teaching is the input and learning is the output. Because it's impossible to create a better process for delivering value without understanding what value is, Womack continued by offering suggestions as to who the customer of education is and the purpose of the education process.

So who is the customer of education? Is it the Student (also the supplier of raw material), the Parent (who may or may not pay), the Government, Employer, the University and faculty or Society? Womack contended that it didn't really matter who exactly the customer is because the value or purpose for education is mostly similar for each of these individuals or groups. That value, from Womack's presentation may or may not include:

• Transfer of hard, bounded knowledge
• Maturation of the student as a person
• Creation of a support network
• Creation of certificates of knowledge that are portable in a highly mobile society
• Inculcation of a thought process

Next in his presentation was a description of the current process; how we educate today. Womack pointed out that current teaching methods designed to transfer large batches of knowledge are quite different from the process of gaining new knowledge through research and experiments. He questioned the effectiveness of presenting abstract principles, applied to abstract problems well ahead of actual need, through courses and classrooms. If we gain new knowledge through experimentation, why doesn't all learning work this way?

Toyota educated new hires by first assuming they only know math, reading and writing. New employees are immersed in the processes and asked to make improvements. They are assigned to a problem and provided with a teacher or mentor who guides them through the PDCA cycle, beginning a self-educating mechanism that continues throughout their careers. Learning is viewed as an integral secondary consequence of solving problems, without the use of classroom training or off-site university style training. A3 documentation containing the problem, process, recommendations and implementation / results becomes the record of improvement and evidence of learning.

Herein lies the heart of Womack's vision for lean education. He contends that a better process for educating would have students learn about process thinking and process improvement through "Gemba Learning". This would provide students with not only the abstract theory, but the opportunity to apply the methods without the theoretical tone and foster confidence in applying the knowledge and skills gained. Gembas for applied learning can be created by partnering with industry, or by using the university itself if no other Gembas are available. The key is that the work involves a real value creating process and problem solving. Students should be graded on the degree to which problems are solved and their A3’s become their certificates of learning.

There are significant challenges to achieving this vision, but I agree with the direction that Womack suggests. Establishing the necessary relationships with industry, providing new problems that consistently fit both the available time and learning objectives and changing standards for accreditation are just a small sample of obstacles that would need to be addressed. Personally, I always prefer working on real problems rather than studying from case studies, journal articles or other academic materials and I feel that the change would be worth the effort.

Are there any blog readers who are opposed to this vision? It would be particularly interesting to hear from some full time academics, or people involved with corporate training activities.

Womack's presentation, Lean Thinking for Education is available by following the link.

Previous posts on the Lean Education Conference held at WPI in October can be found here.

Upcoming Podcast - Jim Womack, on Lean in China

I have a LeanBlog Podcast interview scheduled with Jim Womack of the Lean Enterprise Institute on Wednesday afternoon. Our topic is going to be the state of lean in China, after some visits that Jim has recently made to that country.

If you have any specific questions for Jim on that topic, please post them here, email me (using the link on the left hand side of the page) or leave an audio message by calling (817) 776-LEAN (817-776-5326). Or, if you're on the Skype internet phone service, my user ID is "mgraban" and you can leave me a voicemail that way. I might incorporate your audio into the podcast if you have a good question for Jim. (Sorry, the call for questions is now closed).

Stay tuned. Tomorrow, I'll be releasing my latest Podcast interview with Jamie Flinchbaugh.

Update (11/22/ 9 AM): Jamie's podcast is here.

Update (11/22 3 PM): I had a great interview session with Jim, will probably release two podcast episodes in the next month.

Lean-icopia of Toyota Articles

Here's a flock of articles about the new Toyota San Antonio plant that opened last week:

Off to an aggressive start (Houston Chronicle)

Plant President Hidehiko "T.J." Tajima said the goal was "to build trucks where they are sold — in Texas."

The assembly line won't be producing at maximum capacity until March, officials said.

Also next year, the plant will be opened on a limited basis to allow the public to see its complex operations.

Toyota's Texas plant promises 'kaizen' for cowboys

Reminders of the automaker's culture of "kaizen" -- or continuous improvement -- are everywhere as workers with "Team Texas" badges run slow-speed test production of the Tundra, a product Toyota has called the most important in its history.

A rope along the assembly line allows any worker to summon help and stop the line if needed to address a quality problem. Parts follow trucks in the making in wheeled kits that resemble closet organizers -- an innovation that saves space and time

Workers are encouraged to post their thoughts on the root causes of any glitches on big pieces of white paper after asking the "Five Whys" -- a style of critical thought pioneered by Toyota founding father Sakichi Toyoda.

"Our belief in the 'Toyota Way' is to make sure everyone does the same thing steadily," said Toyota Motor Manufacturing Texas President Hidehiko "T.J." Tajima. "It sounds simple but it's very important to make sure things are done properly."

Toyota Says Steel Costs, Katrina Swelled Costs for Texas Plant (Bloomberg)

Toyota Motor Corp. said higher-than- expected expenses for construction materials and labor, due in part to Hurricane Katrina, drove up costs for its San Antonio pickup plant by 50 percent from an initial estimate.

Note Toyota says nothing about being "forced" to increase vehicle prices as a result. They understand that prices are set by the market.

Toyota's big truck launch targets Texas, Bubba (Reuters)

Interesting "voice of the customer" discovery:

When Toyota researchers saw silver miners in Wyoming who kept trucks idling with the air-conditioners on for a full shift, they saw an opportunity by adding more powerful cooling system and knobs that can be manipulated without taking off work gloves.

Toyota Gambles, Deep in the Heart of Texas (NY Times)

In a sign of its importance to the automaker, Katsuaki Watanabe, Toyota’s president, will make a rare American appearance to dedicate the factory.

James P. Womack, co-author of “The Machine That Changed the World,” which studied Japanese companies’ American operations, agreed that the Texas plant was fraught with symbolism.

“Tundra in Texas marks the complete Americanization of Toyota,” he said. “There are no segments left to conquer and no part of the country overlooked.”

Linking Lean Thinking to Education – Conference Notes: Lean Certification

My apologies for the delay in following through with posts from the EdNet / LEAN conference. Here's a bit on one of the presentations from the conference that I'm sure will spur on some discussion.

Randall Cook from Utah State University presented on the availability of Lean Certification from SME in conjunction with AME and The Shingo Prize. Here's a rundown of certification basics from the presentation. You can find all the details on the SME site.

The idea for certification is to provide lean practitioners with credible evidence of their lean knowledge from a third party and to establish a standard by which to gauge understanding and experience in lean. There are three certification categories, Bronze, Silver and Gold, each of which is valid for 3 years.

Bronze certification is mean to establish a level of knowledge and demonstrated application of key lean principles and tools. Silver recognizes achievements as a project leader and Gold is intended to recognize enterprise wide lean transformations.

Certification is awarded by a peer group and is based on knowledge as demonstrated through successfully passing a written exam, as well as review of portfolios submitted by applicants and formal training requirements. Exams are based on required reading and are multiple choice. (The SME site has a sample test consisting of 10 questions taken from the Bronze exam – I scored 9/10 but I'm sure many of you will get a perfect score). Reading lists are included on the SME site as well. The portfolios are composed of examples of actual lean projects and reflection. The form provided is similar to an A3.

The cost to take the exam is about $250 for SME members and $600 for non-members. The SME site does not have actual prices listed for Lean Certification so these are estimates from other exams listed which were all in the same range.

The question is, does being 'Lean Certified' provide any value to individuals or organizations? It was interesting that the presentation on Lean Certification followed Womack's address to the group in which he questioned the underlying value of certificates as indicators of knowledge. Womack used a personal example to illustrate his point that individuals 'know what they use' and explained that his evaluation process for potential employees does not even include review of a resume. He solely bases his hiring decisions based on examples of work and experiences.

Personally, I can see how being certified in lean could help boost my resume and potentially enhance my mobility, but I'm not sure if this is worth $250 of my own cash every 3 years. What does everyone else think about lean certification? Is there any value to individuals? Is there any value to organizations?

Womack and Shook Leadership Webinar

Here is an archived webinar with Jim Womack and John Shook, brought to us by the Lean Enterprise Institute, titled "Lean Management and the Role of Lean Leadership."

Here is a link to a text Q&A that Womack did with questions sent in during the webinar.

One interesting topic that came up was the balance between vertical functions and horizonal "value stream" leaders. While Womack strongly advocates a dedicated "Value Stream Leader" position, he is also advocating for strong vertical function knowledge bases and leadership. What he warns against is the "dreaded" matrix organization, where someone has two equally strong bosses. That sounds like a recipe for chaos.

John Shook then talked about how lean leaders change the lean process:

"A leader's job is first to get each person to take initiative to solve problems and improve his or her job. Second, ensure that each person's job is aligned to provide value for the customer and prosperity of the company."

Another great quote, as told to Gary Convis when he first joined Toyota: "Lead the organization as if you have no power."

I really like how Shook puts this idea out: The "old" style of leadership said "Do it my way." I think we could all agree (if we're working on lean, that is) that the old style is not ideal, it's not respectful of people and it doesn't get the right results. The 1980's "empowerment" model says "Do it your way." I agree that this approach isn't the essence of lean -- empowerment of this style is an abdication of your leadership responsibility. What if everyone decides to do things differently or in a way that's bad for quality?

Shook says lean leadership says "Follow me... let's figure this out together." I like that.

Lots of good stuff in there, particularly the Shook material -- check it out, see the slides, and take a listen.

Womack's Take on Ford

Jim Womack sent out one of his emails today, this time focused on Ford, with their termoil. Either he writes quickly or he already knew Ford was in trouble and was inspired to write by the appointment of new CEO Alan Mulally.

It's a long email, I'll post the full text under "comments". I don't think the LEI posts them online, but you can subscribe to Womack's emails by clicking here. Update: here is a direct web link to Womack's piece.

A highlight:

"In 1997 I got a call from Jac Nasser, who had just taken over Ford’s North American Automotive Operations on his way to becoming CEO of Ford. He matter-of-factly told me that Ford’s Explorer and F100 pickup series were the only Ford products that made serious money and that he calculated that he had four years to become as efficient and effective as Toyota. Otherwise, the large pickups and SUVs would be copied by foreign firms at lower cost with higher quality and Ford would be in terminal decline. “So,” he asked, “how can Ford become Toyota in four years?”

We sat down to talk over just what this would mean -- dramatically changing the supplier management system, dramatically changing the product development system, dramatically changing the production management system, dramatically changing what managers do -- and he quickly concluded that it was just too hard. So he changed the management metrics, purged the poorest managers according to the metrics, and experimented with selling cars on the web! I was not asked back and had no desire to go back."

I wonder what Womack's history with Alan Mulally is? I've heard Jim tell the story about how Boeing wouldn't listen to him and how they kicked him out, thus prompting Jim to start the non-profit LEI.

So lean transformation IS hard. That doesn't mean the alternatives were necessarily any better or helped Ford any more. At least they would have gotten somewhere had they tried to follow the Toyota path.

It's not a lack of knowledge that holds the auto industry back. It's not the unions, it's not labor costs. It's a lack of leadership. Thanks to Womack for making that very clear.

Part of Womack's prescription for Ford, circa 2006, is good advice for many companies:

"Fundamentally rethink the supplier management system. Fundamentally rethink the product development system. And fundamentally rethink the production system from order to raw materials and from raw materials to delivery, with special attention to the information management system. (Much can still be learned from Ford’s Mazda subsidiary, which became an able pupil of Toyota after a crisis in 1973.) Above all, fundamentally rethink what mangers do and how they do it in order to regain the gemba consciousness that originally took Ford to world dominance. In brief, Ford needs to remake itself once more, this time in the image of the company that copied Ford’s original system: Toyota."

The Machine That Changed the World

By Jamie Flinchbaugh, Lean Learning Center

As posted by LeanBlog.org founder Mark Graban, there is a new website available that focuses on helping individuals who want to guide their own self-learning, called The Lean Library. It includes a comprehensive list of lean books, book reviews, links and lean news. We thought we would add our own perspectives on some of these books, as it is part of the original intent of this blog. The first book we choose to discuss was The Machine That Changed the World, in part because it was the first book that influenced many, many people on the benefits and pursuit of the Toyota Production System and lean.

The Lean Library has a comprehensive review of the book, including all of its strengths and weaknesses. It will help you and others decide if it is the right book for you to read. You can find a link to the book here: The Machine That Changed the World at The Lean Library.

I thought I would start w