Evolving Excellence

The Two Faces Of Force Reduction

Lot's of hubbub today about Radio Shack letting 400 people know they were laid off via email.  I expect it will make them the butt of a lot of jokes and put Radio Shack at the top of a lot of lists of stupid, heartless managers, as well it should.

It seems to me that the real irony is that the outrage is limited to Radio Shack, and that the only reason for the outrage is that these are management jobs.  When production people are booted out on the street via a layoff notice nailed to the factory wall, nobody seems to give it a second thought.  As Alfred Sloan said, "the core of the business is management", while production folks simply have to "accept the consequences of the business cycle".  Sadly, I guess he was right.

Electric Boat announced layoffs of 170 people today.  Quaker Fabric gave 225 folks the heave-ho.  Intel plans to lay off more than 10,000 employees.  Signature Fruit Company told 1,100 workers they were no longer part of the family for "reasons beyond their control".  (I wonder who is in control of the company if it isn't management?)  380 from Navistar are on their way to the unemployment office.  And this is just this afternoon's news.  Does anyone think that any of these people had the courtesy of a personal, face to face explanation from their boss?

When management folks are treated with the same disregard for humanity, however, it is so outrageous it blasted all over the news.

We have a long way to go when it is regarded as business as usual for 170 people from Electric Boat to go home and give their spouses and children devastating news they got from reading their name on a layoff list, but we are morally outraged that 400 Radio Shack management people are given the same lack of respect.

Endless Delusions of a Difference

For years I've been reading the Algorithmics Anonymous forum, eagerly anticipating the discovery of a new form of lean that applies only to "high mix low volume" manufacturing operations.  I continue to wait, and it appears that many others are starting to get a little impatient as well.... about every week there is someone asking, or re-asking, "could this [insert topic du jour here] be our focus?"

Get used to it.  The group vascillates between trying to find an almighty algorithm solution to the unnecessarily complex scheduling problems of high mix operations and simply bashing "Toyota Lean" as not being applicable to such operations.  But over the years there has not been a single "a-ha!", and there probably never will be... because they are trying to identify a subset derivation of something that is already very simple.  Which is why out of many hundreds of members, there are about five or ten that actually post... and endlessly debate the same inconsequential points.

AlgoAnon tries to differentiate "assembly operations" and "job shops", but by doing so they miss one of the fundamental concepts of lean (TPS-lean, whatever): achieving one piece flow.  As Bill pointed out a few weeks ago, as you approximate one piece flow, even when building cars, the "volume" side of "high mix low volume" or "high volume low mix" goes out the window, thereby rendering the argument irrelevant.  This does not turn them into identical operations... they will always be optimized for certain types of products and operations.  But the continuous improvement aspects become analogous.

Algorithms can be fun to play with.  Trying to model manufacturing operations is an interesting challenge.  But try as you might, you can never perfectly predict the unpredictable or account for the unaccountable.  They can help you optimize, but they can be dangerous in a control situation.  The simplest manufacturing operation can be thrown out of kilter by the simplest of unexpected delays... let alone a highly complex HMLV operation reliant on widely disparate processes, deliveries, and suppliers.  The collaborative self-management and self-correcting aspects of simple intuitive visual displays can be far more powerful and agile in reacting to such circumstances than the most complex software "solutions."  Probably without knowing, the group argued that same point:

Toyota has mastered the thinking underlying this profession [IE, lean] while we in the U.S. got all taken up with math and MBA managers.  Go back to basics.

Yep, sounds like how we came up with all them there algorithms.

But what I find most dangerous is the idea that lean and Toyota-lean can't work in the job shop. How many job shops are buying that line, not bothering to improve waiting on the holy grail of the perfect ultimate solution, and are being forced out of business by domestic and overseas competitors who have their heads on straight?  Some of the comments from just last week alone, which I'll keep anonymous in the spirit of AlgoAnon, are downright scary:

TPS only offers a vision, a tool here and a tool there, it offers nothing comprehensive.

The Toyota-inspired lean is the wrong route!  An outside guru can go in and do his things, like VSM and SMED and 5S.  But with what long term effect?

Adaptability, flexibility, forecasting in the case of uncertainty... what has Toyota produced in this arena?

Value stream maps and lean assessments that are catering to high-volume assembly, and the focus that assembly cells provide, are not applicable to the typical jobshop.

Continuous improvement as done at Toyota is not what a jobshop should adopt.  It would set the jobshop up for a prolonged transformation, often totally wrong.

Do I believe that Toyota's version of lean is the only true lean, or even that lean is the only way to achieve excellence?  Of course not.  Toyota itself is always improving, and there will always be new and improved ways of doing things.  But do I believe that Toyota's version of lean can create tremendous value for all forms of manufacturers, and even non-manufacturers?  Yes.

Perhaps the best way to address this nonsense would be to take on the challenge that the group leader posted:

Ok, so you have this small shop owner that wants to improve, and then improve continuously.  Now what?  Value stream mapping?  5S?  Download the lean assessment tool that Eaton and Lockheed Martin use and use that verbatim? 

Yes, in a methodical and planned manner.

First, just start learning.  Get the knowledge, then teach it to your folks.  Learn about waste and how to recognize it from the perception of the customer.  Waste is waste... nothing job shop specific here.  Send people to AME conferences and hands-on workshops at real manufacturers.  You'll probably find that the desire and enthusiasm for change has been there all along... they just needed to be led.

Second, examine your organization and operation.  Yes, assessments can help focus that examination and provide a baseline and benchmarks.  I personally like Brian Maskell's Journey to Agile Manufacturing assessment tool as it clearly describes the environment at each level, which will often further open the eyes of people who take it.  Again, nothing job shop unique. 

Third, create a plan.  Look at the result of the assessment, think about what you've learned, review what you've seen at other plants, consider hoshin kanri.  Involve everyone in the plan.  Create goals for the next year and five years.  Determine what learning and perhaps even outside resources are required.  Share the plan, implement it, and review and revise it periodically.

Fourth, yes do implement appropriate tools.  VSM does not need to be applied specifically to a specific manufacturing line (or job shop process area...).  Feel out the concept by mapping how you take and process orders... a process common to all manufacturers, and most non-manufacturers for that matter.  If you are like 90%+ of companies you will immediately see how unnecessarily complex the process is, and you will typically be able to streamline it by about 30% on the first pass.  Do it again somewhere else.  Implement 5S... clear out unused equipment, tools, put things in a clear place.  This helps everyone... even outside of manufacturing.  Implement visual factory... post metrics, information, and status... even (egads!) try scheduling on a whiteboard in the middle of the production floor instead of relying on specialized people squinting at computer screens.  Suggestion programs, root cause analysis, rewards.  Continually focus on reducing waste in all forms... you'll be surprised with the dark corners where it is found (often literally).

Continuous improvement done right has a habit of becoming infectious.  You'll be able to feed on the energy.  You'll be able to liberate great ideas.  Best of all this has nothing to do with whether you're an "assembler" or a "job shop"... or even a manufacturer at all. 

AlgoAnon's moderator often asks

Does it not bother you that you get what you are learning from somebody else [Toyota]?  Do you not wish you were the person teaching others something that you invented?

Nope, I don't care in the slightest.  Who cares about NIH?  It does not bother me to learn from others.  My only desire is to help others succeed.  Do we simply want to copy Toyota?  Of course not.  That's why manufacturing executives are paid the big bucks... to lead and manage and find the right solutions.  Any street corner consultant can copy. 

Sure there will be differences... between "assembly" and "job shop" just like there are between "hospital" and "government" and "manufacturer".  But the relentless pursuit of perfection, waste elimination, and employee involvement is the same.  And by the time you get to the point where you've driven out the 90% of waste that is common to almost any organization and need to focus and optimize for the remaining 10% that is due to your specific niche you will be so hypercompetitive that it will be basically a non-issue.

Just do it.  Just start down the path.  By trying to convince job shops that traditional lean won't work, AlgoAnon is sacrificing companies at the altar of the almighty algorithm. 

Bring on the Lean Junk Mail "Innovation"

My color inkjet printer does about four or five photo quality sheets a minute.  Not too shabby, although it occasionally tries my patience.

Imagine a machine that could print over 2,000 photo quality sheets a minute using inkjet technology.  The velocity of the microscopic ink droplets and the complexity of the drive mechanisms is mind boggling to engineers like myself who are still fascinated by the basic Xerox copier.  Still not impressed?  How about if each page could be customized on the fly... at that same velocity.

That's exactly what Kodak has bet the farm on... a continuous high-speed inkjet process it has appropriately code-named "Stream".  As Bill would point out, this is technology, not manufacturing... Kodak has already taken a left turn to follow the outsourcing lemmings and is no longer a real manufacturer.  And although Kodak has acquired all kinds of supporting companies, I doubt that building an in-house manufacturing competency is part of this equation.  But the technology itself has the potential to revolutionize high-speed printing... and the "quality" of your junk mail.

Traditional printers of direct mail are already getting excited.  Imagine a Lands End catalog that is personalized just for you... your sizes and color preferences for example.  Most of us would still probably use it to wrap fish, but if it increased the response rate from infinitesimal to slightly better than infinitesimal, then I guess it would be worth it.  BusinessWeek claims this could be as "important an evolution in printing as movable type allowing for mass customization on unprecedented scales."  That is probably embellishing it just a bit, but it is pretty impressive.

It reminds me of Minority Report, that Tom Cruise movie where retina scanners would determine your identity and immediately display personalized ads as you walked through public areas.  One piece flow production of individually customized junk mail.  Just what we need.

But someday I still want to see the heads on an inkjet printer that can create photos at twenty four miles an hour.

NAM, meet Greenpeace

I always wanted to find a way to use NAM and Greenpeace in the same title.  NAM goes to great lengths to portray Greenpeace as one of the roots of all that's wrong with manufacturing competitiveness (although I'll admit that link was rather amusing).  Similarly Greenpeace is all over the evils (or "eeveels" for those movie fans out there) of the global military-industrial-capitalist-running-dogs-complex.

I've always been somewhat amused by the cadres of dreadlocked environmental activists that seem to smoke far more than today's evil businessmen and chase human-powered Inuit whale hunters with the oil-leaking Rainbow Warrior.  Likewise we've also jabbed NAM more than a bit with their incessant cry that manufacturing's problems are due to everyone and everything except internal process waste.  But I also believe that we need groups on the extremes... whether it's Greenpeace on one side or NAM on the other... to help define the continuum of our world and provide ideas for improvement.

Greenpeace recently posted it's Guide to Greener Electronics, which ranks some of the top electronics manufacturers in terms of their environmental impact.  The full detailed report is here.  The ranking is based on nine criteria regarding chemicals policy and practice and also producer responsibility with taking back discarded product.

Our friends at Dell tied for first, and were noted for being exceptionally proactive with chemicals management, PVC phaseout, BFR phaseout, and individual producer responsibility (IPR).  Surprisingly Apple, usually the darling of the anti-establishment crowd, was near the bottom.  Couple this with their recent sweatshop problems and you have to wonder who is a better model for industry.  Lenovo comes in dead last, which is perhaps makes it the poster child of the environmental disaster currently fermenting in China.

This does matter.  Contrary to what some NAM-ites would want you to believe, manufacturing is not about making a product at the lowest possible cost.  Instead it is about making a product with the highest possible value for the customer.  If you don't understand the difference, then I'd suggest you read some of the books on the right side of this blog.  Cost is only one component of value.

The high costs from our regulatory, legal, domestic labor, etc environment are real.  But simply removing those costs does not necessarily create more value.  As we've pointed out time and time again, Toyota knows this... and is very successful operating plants in North America.  Likewise there are many domestic companies that compete very successfully with Asia.  Value also includes quality, customer service, and delivery time.

And it increasingly includes sensitivity to the environment.  Many of us are already disgusted when buying a small virtually-indestructible product that is surrounded by irresponsibly larger packaging that goes straight into a landfill.  Such as the USB flash memory key I bought the other day... the size of a stick of gum in half a cubic foot of packaging that will be around for archaeologists of the future.  And I won't go into how it took a trip to my garage to find the tools required to open the double-sealed hard plastic blisterpak.  That's a double reduction in value as I see it.

We've written before about how lean and green are complementary.  Although this report wasn't the deciding factor, it did play a part in my decision to buy a Dell D620 instead of a Lenovo ThinkPad.  For some people, especially with some products and markets, environmental sensitivity may already be a predominant decision-making factor.

That's value, from the viewpoint of the customer.  The fundamental bedrock of lean.

They've Seen The Light

Just a brief, uplifting note on which to end the week ...

A few days ago I noted the hypocrisy of an outfit called Mine Safety Appliances (MSA) which proudly proclaimed their employees to be their "Greatest Global asset" on their web site, while kicking 65 of those 'great global assets' out on the street until the Army finished tested a new helmet design.

I am pleased to announce the occurrence of a genuine miracle at MSA.  Although the Army has not completed testing, MSA has decided to reverse itself and put those 65 folks back to work anyway.  I don't know if someone there reads the blog - maybe they just got around to reading their own web site for the first time.  At any rate, MSA is getting doing the right thing and 65 Vermonters are the better for it.

Lean Serenity

If manufacturing executives drank a little more they just might have an easier time pursuing lean.  While it is not the exclusive property of Alcoholics Anonymous, the folks in AA are all well acquainted with the Serenity Prayer, and it is quite relevant in quite a few areas, including lean.  It goes ...

God, grant me the serenity to accept the things I cannot change;  The courage to change the things I can;  And the wisdom to know the difference

As the brewing capital of America, maybe the AA prayer has become embedded in the Milwaukee culture.  Or maybe the cheeseheads are just a naturally serene, courageous, wise bunch of people.  In any event, the Milwaukee Journal-Sentinel ran an article that makes my point.

"We try to focus on the things that we can control and deal with the external issues the best we can," said Elliott Erickson, President of Heale Manufacturing Company. "If we don't continually get better, we fall behind. There are no two ways about it."  What he could control was getting lean and the company just landed a big military contract to pour on top of the already increasing sales growth.  Costs are going down in spite of rising costs for energy and other things.

Across town, N.E.W. Plastics dealt with the price of resin climbing from 40 cents to 70 cents by getting lean and offsetting the material cost increases.  Tailored Label Products countered high health care and raw material costs by eliminating waste in other areas.

How many companies do you know that reacted to Hurricane Katrina by violating Serenity Prayer tenet #1 - God grant me the serenity to accept the things I cannot change?  NAM and the big public companies squealed to Washington to somehow undo the damage done to the petroleum processing assets in and around the Gulf.  Or they want the government or the courts to somehow cut their costs for health care, or change their history of giving away the store to the unions.  Don't get me wrong - there may well be some long term resolution to the oil supply or health care costs and we all ought to work towards that end.  But it ain't gonna happen next month so whining about it is hardly a viable business strategy.

Far better for a manufacturing manager to look at the rest of the costs with the wisdom to recognize that they can be reduced starting next month, and have the courage to lead a lean transformation

On The Road To Common Sense

I got a couple of things wrong lately and figured it is high time I set the record straight - came clean and apologized for misleading anyone.  I wrote recently that it is an eternal business truth that "you get what you pay for".  I am very, very sorry if anyone in the manufacturing business in southern England opted to pack their bags and head up to University of Leicester, instead of calling the Southwest Manufacturing Advisory Service in Cheltenham just because the University charges a whole lot more for their lean thinking.

I also apologize for anyone who might have dismissed the Southwest MAS because a certain Linda Middleton-Jones dispenses lean advise there and she happens to have been a lawyer in a prior life.  I know I have trashed lawyers as unable to provide manufacturing leadership, but Ms. Middleton-Jones is walking proof that I am wrong, and that lawyers can reform their wayward thinking and, in fact, become outstanding lean leaders and thinkers.

To show just how wrong I was, you might want to read a bit of pompous nonsense from a professor Ashton from the University in which he asserts that training and involving workers is not always a good idea - especially if you are mass producing and do not see any particular need for the production folks brainpower.  He seems to think that only niche sort of companies that provide some special 'value added' feature or service should invest in training.  According to the good professor, if you are following a "Fordism" approach to manufacturing - like Toyota, for example - training is a waste of money.  Only cutting costs is important and the training budget is a good place to start. 

"The fact is, says Professor David Ashton, of the Centre for Labour Market Studies at Leicester University, that many businesses understand only too well that raising the skills of their employees eats into profits."  On the contrary, my egg-headed friend - the fact is that you demonstrate an appalling ignorance of both people and the nature of manufacturing.

Like the reformed attorney, Professor Ashton can be rehabilitated.  He just may be able to walk in the footsteps of former educator Allen Brue who saw the error of his academic ways, tossed his tweed jackets and meerschaum pipes in the trash and got into manufacturing.  As the top dog at Quick Start Products & Solutions, he launched a comprehensive training program, and has radically increased sales without missing an on time shipment for two and a half years.

Until Professor Ashton gets religion, however, a UK manufacturer looking for a little help with the lean journey would be very well served by calling on Ms. Middleton-Jones and the rest of the folks at the Southwest MAS.  They took the 'lean journey' concept quite literally and, among many other things, launched an "On The Road To Lean" program that has all sorts of UK manufacturers - from those just starting to get their arms around lean to old pros like Toyota and the Barden Corporation - traveling around England, talking to each other and swapping ideas.  In fact, taking the next tour might be a great place for the professor to start getting religion - one participant described the experience as something akin to a Billy Graham Crusade.  I think it is a safe bet that the MAS imparts more useful information in a few weeks through their Strategic Management Programme than the University does in better than a year at the feet of the professor and his associates.

The moral of the story is that common sense trumps self-proclaimed expert opinion every time.  Whether the expert is the professor expounding on the down side of training under 'Fordism' or me blubbering about getting what you pay for, ex-lawyers like Linda and ex-professors like Allen are the real experts.  They are the people out there changing the way the world manufacturers one kaizen event and one bus trip to Toyota at a time.

Note: If anyone wants a copy of the Southwest MAS 'On The Road To Lean' report - and I especially recommend it to any of the MEPs - drop me an email and I'll send a copy to you.

Managing Through A Rear View Mirror

Sometimes it can be pretty hard to tell whether folks are really dumb, or they are actually smart and are just being dishonest.  The Mine Safety Appliance company is an excellent case in point.  According to their corporate web site, they have no employees or workers - they have associates.  In fact, their associates are so integral to their business the company proclaims ...

"Yet, above all these strengths are what MSA considers to be its greatest global asset - its people. The high quality of MSA employees reflects a culture of people dedicated to protecting human life."

That said, the company announced that 65 of these great global assets are being laid off from the Vermont plant for a month or so while the Army tests MSA's new helmet.  "Company officials decided that since production might need to be adjusted after the testing, it made sense to stop manufacturing for a short period."

How about, Since the company really doesn't view its employees as particularly important to their success - despite the self-serving blather in their web site - and the company really doesn't know very much about manufacturing, it decided to forgo a great opportunity for training, an all out kaizen blitz, and a chance to make an investment in creating a high powered manufacturing machine.

The problem a client I am working with now has is how to free people from production for kaizen.  Their business is so good and volume is increasing so rapidly they are having a difficult time balancing growing demand with a growing list of improvement ideas.  Having 65 employees available for six weeks or so would be like manna from heaven for them.

Companies like Mine Safety Appliance just don't get it.  Their company literature is loaded with references to 'innovation' and platitudes about the value of their associates.  Scratch the surface, however, and they are nothing but an old fashioned, 1950's vintage outfit that has no idea how valuable their people really are.  As a result, they have no idea how low their costs can go or how good their quality can be.

To my opening point, I suppose the management of MSA is neither dumb nor dishonest - just so blind to what manufacturing can be that they really see no choice but to take food from the mouths of their "associates", and to gut their paychecks at the same time their "greatest global asset" is coping with the cost of sending kids back to school.

You'll notice that the MSA's of the manufacturing world are the ones that bray the loudest about the difficulty of finding capable people to work in their plants - they want the government and the schools to turn out higher quality fodder for their mismanagement.  There is no shortage of good, smart people to work in manufacturing.  There is only a shortage of people who will tolerate working for a company that has no idea of their true worth.

Valuing Silence

It’s been a rough few days. I just got back from a trip to the Midwest and you have no idea how glad I am to be back home. A nice quiet home where the only sounds are often the waves and occasionally a foghorn. Perhaps some birds in the morning, and in a few weeks the sound of grapes being harvested.

This trip was to resolve some difficult operational and personnel issues at a rapidly growing plant, and required considerable energy and focus. So much for that. Three nights of kids running around, banging doors, and screaming and yelling until well after 2am destroyed that dream. Literally. Unfortunately the location is a summer vacation spot, so options for different rooms or hotels are nonexistent, and the hotel management wasn’t exactly responsive. I made do with earplugs, white noise from leaving the fan on, and some decent wine. Three nights, about three hours of sleep a night. My only revenge was taking especially loud showers at 5:30 in the morning.

The five hour flight home just continued the hell. Thanks to a ridiculous amount of travel, United is nice enough to upgrade me on pretty much every flight. That usually puts me in a cabin of fellow business travelers and the occasional b-level movie star when going to or from LAX. Not this time… I was in an upgraded cabin with no fewer than six screaming kids. Apparently three different families had enough bucks or points to give three foot high munchkins an extra few inches of legroom and free drinks. My nerves were frayed to the very end, and I was scoping out tall guys in middle seats back in economy in the hopes they might want to switch seats.

How do kids do it? How do they know to tag team in order to provide five solid hours of non-stop screeching? How can their parents just sit there reading books and sipping cabernet? For god sakes give it to the kids… or break out the Benadryl!

No my wife and I don’t have kids, and I won’t go into the reasons why. So we haven’t experienced the “mystery and magic” that we’re told screeching rugrats somehow provide. My apologies to the good parents with great kids that I know are out there… I’ve even met a few. I have renewed respect for the job it must be.

I am willing to pay double for silence. Triple when my wife, who is even less tolerant of noise, is with me. A kids-free section of a hotel or cabin on a plane. I appreciate the wine and legroom, but I’d trade that for a quiet seat in coach any day.  Just let me sleep, work, or watch a movie in peace.

That’s value from the perspective of a customer.

Draining Think Tanks in Traverse City

A couple days ago I arrived in Traverse City, Michigan... right after the conclusion of the 2006 Traverse City Auto Conference.  Organized by the Center for Automotive Research, the theme was "The Auto World Future: Round or Flat?"  The Center calls itself a "think tank", but the news from this conference makes me wonder what fluid that particular tank is filled with.

Here's the news report so you know I'm not making this up.  First there was some truly earthshattering and groundbreaking news:

• The challenges that automakers are grappling with are not cyclical, but structural.
• The industry is global and competition unrelenting.
• GM's CEO Rick Wagoner was especially brilliant when saying "I know the world is changing, and fast."

I'm glad someone finally figured that out... just a few decades after the first Toyota hit our shores. 

But here's the amazing part:

• The "convergence of increasing competition, rising raw material prices, and growing labor costs" have created the "perfect storm" and are the reason why U.S. automakers can't compete.
• Richard Dauch, CEO of American Axle, urged companies to set up manufacturing in India and China to help reduce labor cost.

So let me repeat to ensure I get this straight... automakers are experiencing increased competition and higher material and labor costs, so they must flee to China and India in order to succeed (or "avoid dying" according to Dauch)... and get further away from their customers.

Toyota is building more plants in the U.S., including Michigan.

Who is successful? 

Perhaps Toyota has access to a top-secret supply of cheap material and troll labor, and can push a button to erect a competition shield.  Or perhaps they just know how to lead and excite their knowledge workers to help reduce every last ounce of internal waste... instead of laying off 30,000 of their best and brightest while blaming everyone else.

It's time to drain this particular think tank.  It's already pretty shallow.