Evolving Excellence

Evolving Excellence and Lean Printing

A few months ago I was approached by a couple publishers interested in turning our best blog posts into a book.  I guess some of our writing is interesting... or at least entertaining.  Of course we hope we've helped provoke some thought and conversation on what excellence is really about.

Through discussions with those publishers I learned about minimum lot sizes, batch runs, and long lead times.  There seemed to be something fundamentally wrong with eschewing the very concepts we promote, so I decided to take a closer look at other publishing options.  And I discovered "print on demand."

POD is relatively new, primarily due to the obvious technological issues.  And as a new industry and technology there are a multitude of companies delivering a very wide range of service quality as standards, methods, expectations, and business models have not been fully developed and proven.  This range of quality has cast a negative pall on the nascent industry. 

I had some fundamental requirements: the book had to be professionally-printed, I wanted some editing and cover graphics support, I wanted Bill and I to retain all rights, and it had to be available via the major online retailers such as Amazon and Barnes & Noble.   That immediately weeded the field down from about twenty publishers to two: iUniverse and Xlibris.  iUniverse is a venture of Barnes & Noble, and Xlibris is owned by Random House, which gives both of them the industry knowledge and management depth to deliver a superior service. 

I chose iUniverse for a variety of minor reasons.  Their cafeteria-style package provides editing, proofing, graphics design, indexing, and marketing support, all coordinated through an actual human project coordinator.  The final product is available directly from the publisher as well as all major online retailers such as Amazon.

Printed in units of one.  At a price comparable and sometimes even lower than traditional bulk printing. 

That concept still boggles my mind.  Almost 500 pages printed, folded, cut, bound, and covered.  Then wrapped, boxed and shipped.  All for $29.95 in our case, including author royalties, iUniverse profit, retailer profit, and even shipping if you belong to certain Amazon programs.  One at a time.

I often write about the value of simple processes and the effectiveness of simple visual controls over complex software, but this is one case where technology makes all the difference.  Orders from multiple sources are fed to the factory, where a computer analyzes each order with regards to size and layout, and then groups it into a continuous stream with other incoming orders of differing sizes and layouts.  In order to optimize paper usage on wide format printers, it is often preferable to have a single order rather than multiple orders of the same book in order to provide the flexibility to more efficiently fill up the "jigsaw puzzle."

The blog has been a fun and rewarding experience.  We thank you for adding to that experience through your comments, suggestions, questions, and emails.  The book is designed to capture and organize some of our thoughts into a series of short stories than can be read whenever you have a few minutes. 

Bill and I hope you enjoy the book.  You can learn more about it  on Amazon.

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Formal book description:

A 450-page categorized compilation of favorite posts from the Evolving Excellence blog, this book offers different—even outright contradictory—viewpoints that explore various aspects of lean enterprise excellence. In the shared desire to see American manufacturing thrive, authors Kevin Meyer and Bill William H. Waddell have poured their knowledge, opinions, and ideas into their blog for the past two years. Sometimes tongue in cheek, usually provocative, occasionally humorous, but always passionate, they point out the failures of companies, organizations, and individuals in the manufacturing industry while also lauding those that understand true excellence.

“Evolving Excellence is the most insightful blog I have ever read.”
- Ross Robson, Executive Director of the Shingo Prize for Excellence in Manufacturing

“If you love manufacturing then we hope you’re reading Evolving Excellence. It’s a must-read for manufacturers and those who dream.”
- Pat Cleary, Senior Vice President, National Association of Manufacturers

“The authors are knowledgeable and they tell it like it is.”
- Bob Emiliani, author of Shingo Prize winning Better Thinking, Better Results

Contents

• Preface
• Chapter 1 – Lean Machines - Thoughts on the fundamental aspects of lean manufacturing
• Chapter 2 – The False God of the Almighty Algorithm - Various rants and ramblings on MRP, ERP and enterprise software solutions to manufacturing problems
• Chapter 3 – Looking Lean vs. Being Lean - How some companies can look great and win awards, yet find themselves in bankruptcy court
• Chapter 4 – Ramblings on Lean Management and Culture - The myths and realities of people, culture and the soft side of lean
• Chapter 5 – Missing a Few Rungs on the Corporate Ladder - What we think about this matter of leadership
• Chapter 6 – Playing the Long Shot - And the latest buzzword – innovation !
• Chapter 7 – It’s About Cost, Stupid! - Diatribes on accounting, finance, and lean thinking
• Chapter 8 – Yet More Lean Supply Chain Nonsense - And of course we have to scoff at the great outsourcing binge
• Chapter 9 – A Little Bit of History - Tipping our hats to the great thinkers who brought lean to life
• Chapter 10 – Either They Get It or They Don’t - Stories of manufacturers who have made great strides and some who have made a mockery of lean
• Chapter 11 – News From India, Detroit and Other Exotic Places - Our ongoing reactions to the news of trials and tribulations in the auto industry
• Chapter 12 – Theory Meets Reality In the Heartland - A few comments on politicians, academia and other know-it-alls
• Chapter 13 – Are Houses Next? - And finally, tales of lean in places other than factories
• Afterward
• About the Authors
• Glossary
• Resources
• Index

Visit Amazon for more information and to purchase.

Lean Manufacturing Training, Workshops, and Conferences

Every week or so we update the Superfactory Events Calendar with the new seminars, workshops, and conferences that have been submitted to us.  We've been providing this free event listing service for almost the entire 10 year history of Superfactory, and it is now the most comprehensive listing of lean manufacturing related events on the internet.

This year we've seen, by far, the most submissions.  If you ever wanted to attend an event, this is the time.  Virtually any facet of lean manufacturing, virtually anywhere in North America and even the world.  In addition to the usual hodge-podge of individual events, the top tier consulting and knowledge organizations are presenting numerous learning opportunities throughout the year.  Some examples follow.

There are several significant conferences this year.  The Shingo Prize Annual Conference is in Jacksonville in late March, the new TWI Summit is in Orlando in early June, following a hugely successful event in 2006 this year's Lean Accounting Summit is also in Orlando in late September, and the largest lean conference will again be the Association for Manufacturing Excellence Annual Conference in Chicago this October.

AME also has a full slate of events planned, with some of the more unique being the Lean Product Design Workshop in San Antonio next month followed by the Lean Supply Chain Summit.

Gemba Research, home of our friend Jon Miller of the Gemba Panta Rei blog, is also hosting numerous training events at their Lean Learning Lab in Mukilteo, Washington.  Each month they run a series on lean office, value stream mapping, 5S, standard work, and problem solving.

The Lean Enterprise Institute also runs a consistent series of events each month, including value stream mapping, continuous flow, lean supply chain management, strategy deployment, and lean logistics.  Each month's events are at a different location around the country.

Other top tier organizations offering regular lean events throughout the year include the Lean Learning Center, the University of Dayton's Center for Competitive Change, the Greater Boston Manufacturing Partnership, Productivity, the Auburn University Technical Assistance Center, and IIE... just to name a few.

Check out the Superfactory Events Calendar to find events near you on virtually any topic.   

Ford vs. GM: Who's Ahead?

AP's Tom Krisher penned a story last week titled GM, Ford at Different Stages of Recovery, where he proposes that GM is further along the transformation path than Ford. 

The essential difference between Ford and GM, according to some industry analysts, is that GM went into the tank first and is ahead in the restructuring game. "I consider Ford to be in crisis and GM to be in transition," said Gerald Meyers, a former chairman of American Motors Corp. who now teaches leadership at the University of Michigan. "The future is not clear yet at General Motors. There is a future. It's just a matter of how much and when, and that's a big step ahead of Ford."

Far be it for me to criticize a former chairman of AMC... we know how successful they were.  Or at least those of us that go back that far.  I can understand the superficial rationale of GM hitting bottom first while Ford just announced rather phenomenal losses, but that isn't the only criteria when evaluating turnaround efficacy.

But the Dearborn-based company [Ford] doesn't have the momentum that GM has, said Rebecca Lindland, an auto analyst at Global Insight, an economic research and consulting company.

"The biggest difference is GM is on track. They have a mission. When I talk to the people there, when you see the products, you get a feeling of confidence and empowerment," she said. "With Ford, all we hear about is conflict, turmoil, uncertainty. Internally this is at all levels."

Ok, so now we have anecdotal evidence of the beginnings of a culture change at GM.  A "feeling of confidence and empowerment"... perhaps similar to that felt by the troops on the eventual losing side of World War II?  Don't worry, the analogy ends there.  I guess having a positive-minded set of troops is better than the alternative, so I'll let this slide.

Meanwhile, Ford is "conflict, turmoil, uncertainty."  Is that necessarily a bad thing?  I would be more concerned with a company that was "complacent, steady, overconfident" to use just one set of antonyms.  In fact, we've written before about the Toyota culture, which has a presumption of imperfection. That type of stress can be good, and the fear of a cataclysmic industry or market disruption is often what drives the most successful lean manufacturing efforts.  Change is hard; you have to really want to change... or be scared into doing it.

A lean transformation takes real leadership, and that's where we see a wide disparity between Ford and GM.  On the Ford side we have CEO Alan Mulally who came from Boeing, a company with a very strong lean program.  We have some problems with Boeing's offshoring practices, but much of that is driven by political necessity.  Bottom line is that he understand lean, and just recently visited archrival Toyota with VP Mark Fields.

At a private dinner on Wednesday, Ford CEO Alan Mulally told journalists that the recent visit he and Mark Fields made to Toyota's headquarters was born out of a desire to understand more about the Japanese automaker's manufacturing and product development processes, which Mulally holds in very high esteem. He went so far as to refer to Toyota as "the finest machine in the world, the finest production system in the world," adding that "we (Mulally and Fields) went to study with the master."

How many CEO's do you know that would visit a competitor and then hail them as being the best?  And it says something about Toyota that they welcome a competitor, and they are well-known for helping teach other companies, and even competitors, how to manufacture better.

Then we have GM. CEO Rick Wagoner has an obsession with being number one... number one in sales, not in profits.  So much so that he's considering an investment in an unprofitable Malaysian automaker simply to keep total vehicle sales bragging rights in GM's court.

So on one side we have Ford with a leader who understands lean and is willing to visit the best in the world to learn, with a stressed workforce that is in the middle of tumultuous change.  On the other side we have GM with a confident workforce and a "leader" who is investing in unprofitable companies to maintain an egocentric metric that has no relationship to long-term success.

Which company is really ahead? 

Remember the Humans

Friday's post on the 101 Dumbest Moments didn't discuss one incident we all heard of last year: Radio Shack firing 400 employees via an email message.  It takes a true invertebrate to concoct such a gross abdication of responsibility.  I'm sure that most readers of this blog have had to make very difficult business decisions, but I'm guessing they also took on the responsibility to communicate the decision in an appropriate manner. 

Most humans would.  Because they recognize that fellow humans are impacted by their decision.  And in many cases they may have been on the other end of that type of decision in the past.  The human side of lean manufacturing is often forgotten, and sometimes we need a course correction like the one our friend Norm Bodek gave us last September.

I've had to make such decisions a few times as well, most notably on September 10th, 2001, the day before 9/11, when I laid off 183 people, including myself, and shut down two plants.  The next day helped put things in perspective, but doing something like that changes a manager forever.  My team had done a good job of communicating continually and openly with employees during the sharp business downturn, which helped prepare them.  However I still felt like I failed as we had created a world class lean operation and I couldn't convince the corporation to keep our facilities open instead of the far less efficient operations closer to headquarters.  That's one reason I included myself in the layoff.  The other being that jobless was still better than living in LA.  That leap of faith did lead to starting my own contract manufacturing company and several consulting gigs.

Last week as I was reading the 101 Dumbest list and reminiscing about the Radio Shack incident, I was flying from California to northern Michigan for the second time in five days.  A grueling cross-country trip requiring three flights in each direction, arriving in a blizzard, and this time for just a one hour meeting.  But it was important: I had to tell a plant that they suddenly had a new plant manager.  I won't go into the reasons for the change, but it was a good decision, and we identified a top-notch replacement.  Coincidentally he's one of the guys that had helped create the great organization I had to shut down on 9/10/01.   I was able to get him (and a few others) into a company I'm currently working with, and he created a great team that generated amazing results.  In promoting him to his first autonomous plant responsibility, I felt like a proud papa watching his son go out into the real world.

The employees at this plant were very apprehensive when the two of us showed up unexpectedly.  That's understandable.  When two executives go to the pain of swooping in from the mother ship in the middle of a blizzard it must be bad news, right?  These people lived in a rural (but beautiful!) part of northern Michigan where good jobs are very hard to come by, especially in a non-automotive sector like medical products.  They were concerned about their livelihood, their families, and their future.

We spent the next hour doing the opposite of what they expected.  We explained the reasons behind the decision, how we identified one of the company's best to be their new boss, and how the company was also going to invest in the future of the plant by adding several other new people and growing several product lines.  And we told them first, before the rest of the company found out.  A potentially difficult or scary meeting became exciting and positive.  Almost everyone thanked us for making the trip and said they were impressed that the company considered them important enough to invest many thousands of dollars of management time and last minute plane tickets just to tell them first, in person.

As I arrived home, weary and blurry-eyed, I continued to see in my mind one employee who shook my hand and simply said "you did it right."  That made it all worthwhile.  $217 million golden parachutes can't give you that feeling.  That day it simply felt good to be a leader.

Because we treated employees like humans.   

Just Think First

While catching up on some reading on a flight yesterday I came across an article in Business 2.0 on the 101 Dumbest Moments: The Year's Biggest Boors, Buffoons, and Blundereres.  The online version (linked) is even better, with a "where are they now" look at the winners from 2003 through 2005. 

The 2006 list is amusing, and actually rather stunning.  These moments were created by supposedly bright, experienced executives.  Didn't they think first?  Did they talk to their customers and staffs?  Or did they simply have a brain fart in the shower one morning, which they executed as soon as they walked into the office?  You have to actually work hard to pull off some of these doozies.  Just a couple examples:

#4: General Motors.  They created a website with video and music clips, and asked visitors to help create a new ad campaign for the Chevy Tahoe.  The result?  Ads with taglines such as "Yesterday's technology today" and "Global warming isn't a pretty SUV."  In a roundabout way, this was perhaps a bizarre form of market research.  I wonder if GM learned anything.

#11: Starbucks.   The company created a coupon for a free iced coffee and asked employees in one regional location to email it to a few friends.  But someone apparently didn't understand how email worked, and the coupon got sent globally.  The company recinded the offer after realizing that anyone and everyone on the planet can basically get a free drink, but one disgruntled customer has already filed a class action lawsuit.  Ask someone about technology first.  Like an average six year-old.

#51: Honda.  The car company apparently didn't proof its owners manual, as over a million copies went out with a typo in a toll free service number that sent callers to a phone sex hotline.  Although a big improvement over the translated owners manuals we've seen from foreign companies in the past, when something is going out to a million customers it's worth the time to proof it line by line.

#89: City of Hoboken.  A new computerized multi-story parking garage triuped the parking density, but then Robotic Parking hiked its monthly fees by 20%.  The city booted the company, the company shut down the software, and dozens of cars were trapped in the garage.  The city then paid $1.9 million to a new firm to install new software.  We often rant against being too dependent on software, and this is a perfect example of why.

#90: Bristol-Myers Squibb.   Company executives signed off on an agreement to stave off a patent challenge on a profitable drug.  However in the fine print was a loophole that allowed a generic drugmaker five days to flood the market with an off-brand version.  By the time BMS got an injunction, they had lost more than $500 million in profit.  Take the time to read the fine print, especially if it could be worth a half a billion.  Although I also wonder how that generic drugmaker had that much product available on a moment's notice... what would have happened to it if the loophole had been closed before signing?

Think, people.  You have a staff for a reason.  And if you don't have a capable staff, then ask a six year-old kid.

Damn the Profits, Full Speed Ahead!

GM continues to be insanely focused on "being number one"... number one in sales that is.  We've written before about how this is a meaningless metric, and finally the business press is starting to see it the same way.

The January 29th issue of Business Week has a commentary by David Welch titled Sacrificing Size for Success at GM.  It is right on the money, and as he summarizes,

Maintaining the crown as the world's largest automaker doesn't matter.  If you can't keep it while boosting profits, let Toyota have it.  Let Toyota face the scrutiny of being number one.  Then you can focus on increasing profits.

Welch goes on to describe how GM is looking at taking a stake in Proton Holdings, a Malaysian carmaker that is not exactly profitable, just to augment reportable sales to stay ahead of Toyota.  Yes, really.  A company that can't even turn around their own operations wants to buy another unprofitable automaker just to maintain a sales lead... while falling further behind in profitability.  Of course they are claiming "strategic reasons"... the great subcompact war with Toyota-controlled Daihatsu.  But when you're in danger of completely folding, do you focus on a competitive growth strategy?  No.  Focus inward for a change, fix your current operations just to stay in business, then go on the attack.

Marek Fuchs at TheStreet.com has also picked up on this craziness, and applauds a business journalist that finally gets it right.  He's even a little more eloquent than I am,

The auto company has been guided to the lip of a cliff in part by following the flawed line of thought that it needs to be No. 1 in market share -- as if there were some eternal prize for the car company that sells the most cars or being the girl with the most cake. And the business media generally play along, reporting sales rankings as if they were the end-all and be-all.

Valuing such a showy if meaningless sign of strength might seem important if you're working in the traditionally macho world of the newsroom, and it also resonates in the equally testosterone-filled boardroom, particularly for boardrooms in Detroit.

But being No. 1 doesn't matter one whit.

Those of us that have started small companies soon realize a very important fact: you can sell yourself right out of business.  Too much sales too fast usually results in a cash flow problem that prevents you from fulfilling orders; a problem that will often find bankers and investors willing to help out.  And sales mean squat if they have negative margin.

Perhaps GM needs to look in the classifieds in the back pages of Entrepreneur magazine to find an executive staff with some fundamental business sense.

Brazilian Bikinis and Toyotas

Are Brazilians just naturally lean?  Is it something in their genes?

I started to ponder that after flying, for the fourth time in the past seven days, on an Embraer EMB120 Brasilia, flown by Skywest for United.  To get from my home airport of San Luis Obispo to anywhere, you first have to fly one of those props to either LA or San Francisco.

A little light research into Embraer brings forth an image of a rather interesting company.  Founded by the Brazilian government in 1969 and privatized in 1994, the company now employs over 20,000 people and is one of the largest aircraft manufacturers in the world.  They manufacture 18 types of aircraft, including a new 120-seat commercial jet that has secured orders from some major airlines.

They are at least making an attempt at being lean.  A search on the subject yields a long list of consulting companies that claim Embraer as a client, and executives from the company have been speakers at several lean and six sigma conferences.  Much of their effort appears to be in the lean supply chain arena, which is perhaps to be expected as the have followed Boeing and others to China, although the vast majority of their Chinese production is destined for use in China.  Are they really lean or just looking lean?  I don't know yet. 

Lean actually has considerable history in Brazil.  Jon Miller at Gemba Panta Rei had a great story last year on Taiichi Ohno's visit to Toyota do Brasil.  The Brazilian affiliate had figured out how to do quick changeover on a forging operation and via Ohno taught the rest of Toyota.  There were several reasons for this, first and foremost being that Toyota do Brasil was "the smallest automobile company in the world" according to Ohno, producing just three cars per day.  As a result they had only one forging press that had to make over 60 different forges.  The operation was brought inside because no external supplier would tackle such a low volume high mix requirement.

Taiichi Ohno gives a lot of credit to Toyota do Brasil as being a good model plant or test case for implementing high mix low volume Toyota Production System. At Toyota in Japan the volumes were so high that many lines were dedicated and practically no changeovers were done. When Ohno says “Toyota do Brasil may be doing TPS better than any other Toyota factory” he seems to be saying that true TPS is high mix, low volume and when you have high volumes and you do not need to implement SMED, you are not really doing TPS.

That should throw the "lean and TPS can't work in high mix low volume" types at Job Shop Lean into a tizzy.  I would even bet that Toyota do Brasil did it without complex software solutions.  But we've mentioned this before: as mix becomes greater, the impact and importance of one piece flow and minimized inventories also becomes greater.

Brazilians love to minimize wherever possible.  We all know and love the brazilian thong bikini. The bare minimum, and only what's required... usually.  And of course there's the brazilian wax.  If it's not necessary, remove it.  I'll leave a discussion of value from the perception of the customer up to your imagination.

I just hope, for my own safety, that those engineers at Embraer don't take the Brazilian penchant for minimalization too far.

Joseph Abboud: The Respectful Suit

A few weeks ago, I wrote about the lean transformation at Joseph Abboud.  Unlike most American apparel makers, they've kept their production in the US instead of outsourcing, and reaped the benefits of shorter supply chains and faster customer service.

The company is in the news again today, receiving credit for its lean transformation efforts.  But what struck me was the attitude of the CEO, Marty Staff.  In a world in which "maximizing shareholder value" (and we can argue what that really means, when Bob Nardelli walks away with $210 million for mediocre performance) is the focus of business leaders, Mr. Staff says that he

regards his Whaling City employees, their salaries, raises and bonuses, and their job security, as his primary responsibilities. "So, we need to be as resourceful as we can to ensure the factory is vibrant and in existence in the years to come."

But he doesn't stop there.  Mr. Staff goes on to say that despite the many changes the company is making,

one of the changes not in store, however, is the addition of multiple shifts. "We're a one-shift factory," Mr. Staff said, explaining how that fits with the family orientation of its mostly Portuguese workforce.

How refreshing to see a leader not only focus on the business side of lean (reducing waste, providing faster response time, etc.), but  recognize that respect for employees is at the core of lean.  Without that respect, there's no chance for lean initiatives to take root and succeed in any company.

From a traditional business perspective, running a one-shift factory must seem insane.  Lower utilization of assets drives up the cost of goods sold and makes it more difficult to compete on price with Asian countries running double and triple shifts.  But as this blog has often pointed out, there are significant off-balance sheet benefits to keeping production in the hands of skilled, experienced, local hands. 

Joseph Abboud's CEO gets that.  And his respect for employees and their needs is eloquent testimony that lean is not just about "maximizing shareholder value." 

Toyota Optimizes Military Supply Chains

Today's issue of Federal Computer Week gives us another story about how the U.S. military is turning to lean manufacturing methods to improve operational efficiency.  This isn't new... many military commands have been successfully implementing lean and some have even won Shingo Prizes.

However this time the military didn't turn to the usual bevy of consultants.  The Department of Defense Transportation Command (Transcom), responsible for the entire military distrbution system, went straight to who understands lean best: Toyota. 

Late last year, the command sought the expertise of Toyota Motors.  Toyota has been involved with DOD at an executive management level, and DOD officials have attended Toyota demonstrations, said Jason Korbel, assistant operations improvement manager at Toyota, who helped conduct the training.  But the Transcom training was the first time the company sent out field trainers and worked with DOD employees at distribution centers.

This is a long-term endeavor, not the typical kaizen-in-a-box event offered by traditional consultants.

The key to TPS is building the culture to support the program and then expanding it throughout the supply chain, Korbel said.  “We can give you the skills and the tools that we use to improve processes. But if you don’t have the culture there, you’re probably going to see process decay over time,” Korbel said.

This effort moves the military one more step toward achieving lean critical mass.  A big step, considering that Transcom is responsible for $56 billion in military assets.  Military leaders move around quite often, and instead of programs faltering after a lean leader leaves, they are flourishing and multiplying.  Letterkenny Army Depot, Hill Air Foce Base, Warner Robins Air Force Base, Rock Island Arsenal, Red River Army Depot, Tobyhanna Army Depot, Sandia National Laboratories... the list of operations with lean knowledge is growing.  And Toyota may play a growing part.

The Toyota sessions may be the first of many at DOD, Korbel said, adding that the automaker would welcome more tutorial opportunities from the service branches.

Diluting Lean

I just returned from Chicago where I attended the quarterly board meeting of the Association for Manufacturing Excellence.  The meetings are always interesting and thought-provoking, primarily due to the diverse nature of the board members.  Company executives, shop floor practitioners, consultants, academics, private equity investors... you name it.  The new chairman, Keith Syberg, even runs an executive search firm specializing in lean. 

Aside from a handful of administrative support people, the board and management team of AME is all volunteer and unpaid, which creates some interesting managerial issues but also means that everyone is there because of a genuine passion for manufacturing excellence.  That passion helps AME put on the largest lean conference each year, and run hundreds of smaller events.

One highlight of this past meeting was reviewing the results from an extensive survey of thousands of practitioners and several CEO focus groups.  Obviously I can't disclose most of it, but I will say it will lead to some interesting new AME programs in the future.  However one fundamental piece of summary information was interesting: the top five "hot topics" by hands-on lean implementers:

1. culture change
2. supply chains
3. leadership
4. value streams
5. visual controls

You have the original basics, such as value streams and visual controls, as well as newer concepts like culture change.  The old is still new, but some organizations are wrestling with fundamental issues that go beyond the tools.  This then led to what I found to be one of the more interesting discussions of the weekend: the impact of lean efforts moving beyond basic manufacturing and into the overall enterprise, and especially into non-manufacturing organizations.

There are obvious benefits resulting from applying lean manufacturing techniques to enterprises such as health care, government, education, and the like.  Massive waste and associated costs can be removed while improving the level of service, and we've talked about many of those opportunities here and on Superfactory.

How and why did lean move into those new realms, and what is the impact?  Lean started on the factory floor.  Then it became obvious that the techniques could be applied to the manufacturing support and administrative functions, and later to enterprises that had nothing to do with manufacturing.  Some of this evolution was due to natural organic growth as shop floors were optimized, exposing waste in support areas.  People who honed their skills on the shop floor moved to completely different organizations and saw the opportunity to introduce and implement what they had learned.

But in other cases it is due to manufacturing organizations trying to implement lean widely and quickly... not deeply.  And unfortunately some consultants trying to find new niches to make a quick buck with their ubiquitous "kaizen-in-a-box" programs or creating questionable "extensions" of lean.  Short-term, narrow-focus, shallow programs that have no hope of creating a sustainable lean organization.  Even the PowerPoint presentation downloads on Superfactory are designed to be just a tiny part of an overall lean program, but I'm sure some short-sighted organizations use them once and declare themselves magically "lean."

Surveys have shown that roughly 60% of manufacturing companies are "complacent."  What they're already doing is deemed acceptable by the owners, and they see no reason to change.  Those are the companies that are likely to wake up one morning and find themselves almost immediately nonexistent or irrelevant when a new competitor surprises them with a new business model.  Another 35% "dabble" in lean.  They have some level of desire to "do lean" but don't really understand how or don't have the executive commitment required to really implement it.  Although the AME survey also showed that many company executives simply didn't know where to go to get the knowledge... even if they truly wanted a real lean program.  The last 5% are the companies truly executing a deep lean transformation.  And many of those are teetering on the edge of failure.

Becoming a truly lean organization takes a long-term and deep commitment.  So what is the impact of this "dilution" of lean?  Is it hurting the potential sustainable transformations, especially of factory floors?  Or is it creating greater overall value by casting a wider net?  How do we enable and stimulate the creation of deep sustainable lean programs that require long-term commitments?