Evolving Excellence

2007 In Review

2007 has been a fun year at the Evolving Excellence blog.  We've confronted, tackled, and complemented excellence and incompetence at organizations large and small, ranging from traditional automakers to sweatshops to charities and government.  Let's take a quick trip through the time machine to review some of our favorites from each month.

January saw the beginning of a series of posts on the craziness of the Boeing and Airbus supply chains, creating Dreamlifters and Belugas.  Dan Markovitz then kicked of a series of posts on lean in the apparel industry by telling us how Joesph Abboud was competing globally from U.S. factories.  Our ongoing rants on traditional accounting causing companies to chase low cost labor continued with a piece on NCR and Whirlpool.  And we kept a watchful eye on the supposed improvements happening at GM and Ford.

February continued to the auto wars with a post on how GM apparently doesn't understand the fundamental lean concept of respect for people.  After a couple years of thrashing business schools, we actually found a case where one, Wharton, was actually right.  We profiled the understated excellence at one of our favorite lean companies, Danaher.  And we commented on Herbert Meyer's article titled A Global Intelligence Briefing for CEOs, which bluntly analyzes the current geopolitical environment. Later in the month we began what would become an ongoing rant on companies that whine and complain about competitive burdens instead of focusing inward to improve.

March began with one of our more popular posts that tried to understand why consultants always feel the need to support their heads with their hands, and whether that indicates overly heavy brains or simply a hole in their heads.  We contrasted the lean operational attributes of Boeing's 787 and the Airbus A380 as well as the messy situation that is created when a politician takes the healm of a major aircraft manufacturer.  And we continued to keep a watchful eye on the auto wars, especially the upstarts from India and China. 

April kicked off with a post on the power of a global pull economy and then we continued the critique of Boeing with a story on how they spun off a manufacturing division that later became very profitable.  We couldn't let another month go by without complaining... about companies that complain.  We briefly touched on the nascent lean construction industry and narjed the milestone when Toyota surpassed GM in terms of sales... as if that really means anything.

May began on a more serious note we tackled how political policies can create a knowledge drain.  I commented on one of my personal highlights, where I moderated a panel discussion at Kellogg on the benefits of onshoring... right before another panel discussion on the challenges of outsourcing.  We told you how one steel company was complaining about competitive burdens while it's overseas competitor was building a factory in its back yard.  Our interest in Michael Bloomberg began to grow, and we couldn't let a month couldn't go by without commenting on Boeing.  And finally, after letting ERP systems off the hook for a couple months, we complained about SAP's chasm of complexity.

June kicked off with more kudos for Wisconsin's lean efforts.  We analyzed the productivity improvements at GM and took a peek at how low tech dabbawallas in India can run circles around FedEx.  Another month, another comment on Boeing's Dreamlifter and the battled of the false gods.  And then we told you about lean grocers and lean dentists. 

July began with a post on Michael Bloomberg's leadership style, which probably played into the results of a poll later in the year.  We told you how value isn't related to price, and we kicked off our occasional Fun With Statistics series of posts.  We even touched on the lean and free market aspects of religion and foreign development policy.  The ethical side of lean business was discussed in a post on Kyosei and the Caux Round Table and we commented on recent Chinese quality problems. 

In August we told you about how Toyota trains its new workers and the impact of Chinese quality problems on the value of reputation.  A new industry, filmmaking, began looking at lean manufacturing methods.  Craig Woll posted on the lean aspects of personal health, and later we described lean software development.  We analyzed Colin Powell's 19 Lessons in Leadership and then told you about a five part series on lean manufacturing by McKinsey.  And, yes, we continued the saga of Boeing's Dreamliner.

September kicked off with a post on the challenges of an organization that has gone from being non-existent to a larger employer than 96% of U.S. businesses... in six months.  We then told you about the carbon footprint of outsourcing and continued our rant on SAP.  Another month, another insightful analysis of Boeing.  The ongoing discussion of the outsourcing and productivity impacts on manufacturing jobs was touched on, we found another apparel company practicing lean, Mattel decided to apologize to China, and we even found a relationship between pirates and global warming.

October began with a post on former Delta CEO Gerald Grinstein and how he leveraged the power of people.  We dipped into the political sector again with an analysis of a Newt Gingrich article on "what works."  We lauded Parker, a company that really gets lean, and took General Dynamics to task for not really understanding what lean is about.  We couldn't help but comment on how a VP at Boeing won "Supply Chain Manager of the Year" which was almost as curious as Gore winning the Nobel Peace Prize.  In the past we've discussed the leadership styles of Bloomberg, Giuliani, and others so this month it was time for Schwarzenegger.   

By November it was time to take on the false god of the almighty algorithm again, so we told you about the silliness of using software for exception documentation management.  We reminded readers again that creating value was only pillar of lean, and that most companies still forget about respect for people.  Toyota helped us reemphasize that point later in the month.  Our observations on the auto wars continued with an updated analysis of who's really ahead in the battle between GM and Ford.  We took a look back at the best lean companies of 2007 and then did a poll on which would be the best for 2008.  And, with strong backbone and bravery, we then did a poll asking who would be the best president for manufacturing issues.

In December we told you about how China is aggressively moving into the personal and commercial aircraft industry, thanks to some help from Boeing and Cessna.  Some employers around Toyota's new plant in Mississippi are worried, but they shouldn't be.  PBS aired a good interview with some midwest manufacturers that have found they can compete globally from U.S. factories.  The auto wars continue with Chinese manufacturer Chery learning a thing or two about... learning.  Craig told us about another Japanese term, karoshi, and why it can literally be deadly.  And of course we had to comment again on... yes, you guessed it... Boeing.  In a strange twist of fate, the declining value of the U.S. dollar has made us a haven for outsourcing from Europe.  And finally we proposed a couple resolutions for the New Year. 

A little Boeing, a little SAP.  Ok, a lot.  Throw in the auto wars, a couple false gods, some bizarre statistics, companies that get it and some that just don't.  Lean in grocery stores, dentist offices, and even filmmaking.  Toss in a mild dose of libertarian politics, and even an occasional analysis of celebrity hairstyles.  Over 350 posts and 2,000 comments.  That's the makings of a fun year of blogging and ranting and raving, and hopefully some interesting reading for our subscribers and visitors. 

I'd also like to thank my fellow lean bloggers Mark, Jon, Ron, Peter, John, Joseph, Ted & Lee, Dan, Kathleen, Tom, Karen, Craig, and Mike.  The collaborative lean blogging community we've created is fun, inspirational, and informative. 

Best wishes for a healthy, peaceful, and prosperous 2008!

New Year's Resolution: Simplify and Learn

Two years ago I wrote about how lean manufacturing concepts can be applied to the home, and suggested some New Year's resolutions.  From 5S to inventory reduction, one piece flow, standard work, and even value stream mapping... there are applications in the home that can really be beneficial.  I'm happy to say that I actually accomplished many of those resolutions, but in doing so a common theme emerged that has developed into my resolution for 2008, both at work and at home:

Simplify and learn something new.

The resolution even in itself is simple.  There is the 5S component I described a couple years ago, there's an organization component, there's a work flow component, and a prioritization component... just to name a few.  I have found that a quest for simplicity feeds on and reinforces itself.  Similar to how an organization that reaches the tipping point in a lean manufacturing transformation creates employees that can become a bit obsessed... such as the Toyota employee that analyzes his morning shower routine.  Removing excess stuff creates a hypersensitivity to excess stuff, eliminating non-value-added activity creates a hypersensitivity to NVA.  And so on.

Here are some ways I'll be simplifying, beginning right now.

• Donate all excess books.  This was a tough one for me, as I grew up in a household full of books.  I liked being surrounded by the feel of knowledge.  But the lean guy in me, with the support of a wife with an eagle eye for dust, has changed my viewpoint.  With a couple exceptions for books I reference often, most of my business books have been moved to a common library at the office or donated to the library.  I don't read novels twice, so my collection of techno thrillers, including my Tom Clancy hardbacks, has been donated to the local library.  I don't cook much (see a dot point further down) so most cookbooks are donated.  Now others can access that value, we have more room, spend less time dusting, and the house just looks... simpler.  If I need a book, or a recipe (yeah, right...!), I can find what I need on the internet or in the library.
• If it's not being used, get rid of it.  This varies by type of item obviously, but err on the side of probably not needing it.  Karen over at Lean Reflections suggested getting rid of anything old enough to not have a bar code.  Clothes that haven't been worn in more than a year... donated to Goodwill.  I did that about six months ago, and surprisingly it cleared out over 50% of my closet.  Even more surprising was the fact that I still haven't missed anything.  Of course when you wear jeans and a t-shirt every day...!  Excess paint, tile, nails, hoses, used sandpaper in the garage... donated to Habitat for Humanity.  Food that has been sitting in the pantry for over three months will be donated to the local soup kitchen. 
• Simplify seasonal activities.  Do you really enjoy spending several days putting up Christmas lights, then removing them?  Then finding space to store them?  At the risk of being called a scrooge, I'll stick with the simple wreath (which is a gift, and perishable so it isn't stored), and put my time into helping others.  Weeks agonizing over gifts?  My wife and I go simpler every year, and will probably just make a donation to charity next year. 
• Simplify recordkeeping.  I'm going paperless.  American Express and other credit cards now have their bills and statements online and maintain history, so I don't have to keep the paper.  If I really want to keep local copies (such as online medical statements from Blue Cross) I download them to a file.  I've figured out which other bills are needed for tax or investment purposes, and I've bought a tiny desktop scanner to make them electronic.  I'm going through old files and shredding what isn't necessary, and scanning the rest.  The file cabinets, and boxes of old files, are history!
• Outsource chores someone can do better than me.  Yes, believe it or not, I'm actually telling you to outsource.  I don't necessarily mind cooking, but I always have something I'd rather do even more.  My wife and I have gotten in the bad habit of eating out a lot, or else having a gourmet meal from a box.  Even though we're both busy we could find the time... but we like to do other things.  So for Christmas we gave ourselves a personal chef service for a couple meals a week.  We eat better and we actually save over eating out... and we have more time for ourselves.  Similarly we have our yard maintenance done.  We used to have a housekeeper a couple times a month, but found that out of embarassment we cleaned before she came over which sort of defeated the purpose.  Maybe we'll try it again someday.
• Outsource those nagging projects.  We all have them... those things on the to-do list that never quite get done.  I have a long list of them from various business ventures, mostly clerical such as organizing address lists and updating marketing materials.  Some have been waiting for years.  Until now.  A friend of mine recently suggested Elance, which brings together people with projects and people with time to do them.  Anything ranging from typing letters to creating full websites to doing deep market research.  I tried it out on a couple of projects and was more than satisfied, so now I'm using the system for a couple projects a week.  You can go the very cheap route with providers from overseas or, as I did, you can use one of the numerous talented and experienced providers trying to eke out a living in places like North Dakota.
• Turn off the TV.  I did this when I went on vacation about six months ago, and have rarely watched a full non-news program since.  I'm a political junkie, so I couldn't go without my weekly Beltway Boys and McLaughlin Group with the occasional Hardball thrown in.  But everything else is gone... ok, ok, I do admit I watch an occasional Battlestar Galactica.  The time savings have been simply phenomenal... and disappointing.  I'm disappointed in how much time I wasted in the past.

So now you've simplified your life to the point that you have all kinds of free time.   Now what?  Learn something.  I've had a resolution for the last decade or so to learn something radically new each year.  Scuba diving, wind surfing, you name it.  The Superfactory website itself is an outgrowth (and a big one!) of learning about lean and then learning web programming over a decade ago.  Evolving Excellence grew out of wanting to learn how blogs worked about three years ago.  Last year I took a stab at learning to fly but my buddy bailed out so I stopped.  Maybe I'll complete it this year.

For more ideas, visit a couple of my favorite life and home organization blogs, such as Declutter It! and LifeHack.  Bootstrapper recently had a post of the 100 tools to keep you organized.

Here's to a simpler 2008!   

The Myopia of the Pessimists

I often rant against the outsourcing lemmings that insist on chasing low labor costs around the world while not looking inward to find efficiency improvements.  Improvements that will often more than offset any labor cost differential.  At the same time I also have a major problem with protectionists that believe other countries are sucking manufacturing jobs out of North America and that isolating ourselves from growing markets will somehow increase prosperity.  The truth is that manufacturing output in the U.S. is greater than it has ever been, and that job loss is due predominantly to productivity improvements.  Just like farming. 

Productivity-related job loss is not pleasant, it affects real people and real families, but it's the price of progress.  Our responsibility, as a society not necessarily as a government, is to continually invent new sectors to create new pathways of meaningful employment and provide a support and training safety net to those that get displaced. 

However the inaccurate voices of those that somehow believe the status quo should be constant is reaching a crescendo.  Luckily there are more intelligent and public heads than I telling the other side of the story.  Such as one of my favorite bloggers, Don Boudreaux of Cafe Hayek, who also happens to be chair of the department of economics at George Mason University.  In a letter published in The New York Times yesterday, he takes on the pessimists:

Bob Herbert quotes the observation by Andrew L. Stern, president of the Service Employees International Union, that Americans today “cannot see where the jobs of the future are that will allow their kids to have a better life than they had.” Mr. Stern adds, “And they’re not wrong.”

But when could Americans of any generation foresee future jobs? Did the blacksmith in 1890 foresee jobs in the auto industry? Did the corner grocer in 1940 foresee his son prospering as a regional manager for Wal-Mart?

Did the telegram-deliverer in 1950 foresee his child designing software for cellphones? Did the local pharmacist in 1960 foresee his daughter’s job as a biomedical engineer?

Our inability today to see the details of the future is no more worrisome than was the same inability of our grandparents. 

Donald J. Boudreaux
Fairfax, Va., Dec. 22, 2007

Bingo.  Instead of creating barriers to isolate ourselves from a global economy that is growing whether we like it or not, let's embrace and participate in it and develop new technologiesand industries that create new jobs.  Like we've been doing for a couple hundred years.

Merry Christmas!

Merry Christmas!  My wife and I typically take a last minute trip somewhere for a couple days over the Christmas holiday, and this year it was Lake Tahoe.  The lake is spectacular in any season, but surrounded by snowcaps is my personal favorite.  This year there was about 20" of fresh powder on the ground, but it was sunny while we were there.  We did pretty much nothing except sleep in, sit by the fireplace at the lodge, sip pinot and eat seared ahi at the Lone Eagle watching the sunset over the lake, and reflect on the past year and plan for the next.  No crowds, no presents, no schedules, no commitments.  Recalibration, reconnection, and simplicity.   

Here's wishing you and yours a healthy, peaceful, and prosperous 2008!

Chaotic Furrballs

Last year I wrote about my experience with driving in Italy. 

When most Americans visit Europe, and especially Italy, one of their first observations is the  traffic.  Cars and mopeds everywhere, often traveling at high speed, without much rhyme or reason.  This seems like pure mayhem and insanity to visitors from the U.S. with our highly disciplined traffic control... until you start to realize something:  Traffic flows continuously, everywhere.

Those of us in the lean manufacturing world recognize what is going on.

So with our [U.S.]  "highly disciplined system" we have slugs (batches...) of traffic starting then stopping at the next traffic control, while in Italy it may move a little slower... but it is always moving.  Very rarely did I come to a full stop.  Those of us in the lean manufacturing would should immediately recognize the consequence of continual versus batch flow... steadier and higher output.

Yes, believe it or not, the chaos is actually safer in addition to creating better overall flow, and the concept of "shared space" is a theory of traffic management that is rapidly gaining acceptance throughout the world.

In fact, the chaos associated with traffic in developing countries is becoming all the rage among a new wave of traffic engineers in mainland Europe and, more recently, in the United Kingdom. It's called "second generation" traffic calming, a combination of traffic engineering and urban design that also draws heavily on the fields of behavioral psychology and -- of all subjects -- evolutionary biology. Rejecting the idea of separating people from vehicular traffic, it's a concept that privileges multiplicity over homogeneity, disorder over order, and intrigue over certainty.

Today's Washington Post tells us of a German town with a traffic problem.

Like countless other communities, this west German town lived for years with a miserable traffic problem. Each day, thousands of cars and big trucks barreled along the two-lane main street, forcing pedestrians and cyclists to scamper for their lives.  The usual remedies -- from safety crossings to speed traps -- did no good.

So they tried something new, which has already been proven to work in countless communities across Europe.

So the citizens of Bohmte decided to take a big risk. Since September, they've been tearing up the sidewalks, removing curbs and erasing street markers as part of a radical plan to abandon nearly all traffic regulations and force people to rely on common sense and courtesy instead. This contrarian approach to traffic management, known as shared space, is gaining a foothold in Europe. Towns in the Netherlands, Denmark, Britain and Belgium have tossed out their traffic lights and stop signs in a bid to reclaim their streets for everyone.

Why does this work?

The assumption is that drivers are accustomed to owning the road and rarely pay attention to speed limits or caution signs anyway. Removing traffic lights and erasing lane markers, the thinking goes, will cause drivers to get nervous and slow down. "Generally speaking, what we want is for people to be confused," said Willi Ladner, a deputy mayor in Bohmte. "When they're confused, they'll be more alert and drive more carefully."

We previously discussed how this concept aligns with the traditional batch versus one piece flow concepts of lean manufacturing. But there are other parallels.  Perhaps you could even use it to explain why the free market trumps over-regulation.  Toyota is famously known for a corporate mentality that is always worried, always searching for a better way.  I definitely wouldn't call it "confused" but it is a culture that drives every employee to be continually on the lookout for an improvement.  But what about the lean concept of standard work?  Although even with disciplined standard work true lean companies drive continuous improvement, when does regimented standardization become too much?  When does a focus on achieving absolute consistency begin to take away from the learning power of chaos?

Many of us drive lean transformations in each organization we work with or for.  We create and operate within hoshin planning structures, lean and balanced scorecard metrics, and A3 reporting discipline.  But coincidentally, and independently, staff members in the last couple of organizations I've worked in have referred to the feel of the organization as "a chaotic furrball moving forward."  When lean gathers momentum and reaches the tipping point it can be a bit tough to control, but it is accelerating in the right direction. 

Chaotic furrballs are why I really enjoy going to work each day. 

Lost in Translation

Every day I scan a variety of sources to find the latest news on manufacturing, especially lean manufacturing, so I can bring the best to our readers.  Lately I've been seeing more and more blog posts and websites that try to lure unsuspecting visitors by using popular search terms.  They are really nothing except a bunch of advertisements surrounding a paragraph or two of text that happens to contain the search terms.  Perhaps the fact that "lean manufacturing" is now considered a popular and potentially profitable set of words is an indication that lean itself is becoming more prevalent or important, but for those of us trying to find new lean manufactuing information, these scam sites are truly annoying.

Some of the more interesting of the scam sites are the ones that steal a paragraph or two from a legitimate website and then embed that text in a page full of ads.  Some have even gone a further step by taking non-English text and then doing an online translation into English.  I won't link to the sites as the last thing I want to do is provide them with even more visitors, but here's a rather amusing example I came across this morning.

Lean manufacturing is a playing action transformation agency that focuses on enhancing quality, cost, delivery, and people. It helps guy squander and makes constant transformation doable by identifying and eliminating non-value-adding activities in design, production, cater concern and management.

Striving to meliorate aggressiveness by providing customers faster and meliorate products or services, which module fulfill more than bedevilment most the incoming orbicular crisis, is the base intend behindhand angle manufacturing. The exclusive mettlesome we requirement to be sensation at today is the digit that removes squander so the client sees more value.

In the concern of angle manufacturing, companies essay to display exclusive what has been demanded by the customer, and exclusive when the creation is required. To behave benefits of angle throughout the cater chain, it is primary to physique a partnership with your suppliers. This partnership staleness impact on the base generalisation that you vantage exclusive what you consume, and null more. Your suppliers change what you hit consumed. In this way, inventories are serviceable at their smallest for both moneyman and customer.

Achieving this take of consortium with your bourgeois module visit regular act and comprehensive distribution of information. Successful partnerships termination from tantalizing apiece another to strategic thinking sessions, present apiece other’s events and involved in another render activities.

Unlike some manufacturing trends, angle manufacturing appears to be here to stay. However, some firms are ease struggling to amount discover how to attain angle manufacturing impact for them. The denomination itself implies that companies module rise from the aggregation leaner than when they began. The constituent manufacturing suggests that the aggregation targets the manufacturing process, thereby making the products more consumer-friendly.

I thought about cutting out some of that long quote but it was just too amusing, not to mention completely unintelligible.  But then I got to thinking about all the companies try to implement lean but get it all wrong.  As Mark coined over at the Lean Blog, they are "LAME"... Lean As Misguidedly Executed.

Now I think I finally understand where they got their information.

Fun With Statistics, Ethanol Edition

In this edition of Fun With Statistics we'll consider the question of "using more to use less."  Earlier this week President Bush signed the new energy bill, which includes a host of incentives and regulations in an attempt to reduce the U.S. dependence on foreign oil.  I won't go into the political and even logical aspects of the various components to the bill.  Except for one.

Biofuel, predominantly corn-based ethanol, has become a hot commodity lately.  Supposedly the cure-all for our energy ills, but few are looking at the side effect of our new use for corn.  Such as the tortilla crisis in Mexico, where the price of that food staple is skyrocketing out of reach of the common folk.  We've said it before, and we'll say it again, fooling around with the free market is like pushing on a balloon... there will be an opposite reaction somewhere, and often we can't predict where.

But there's another aspect of ethanol that is being hotly debated in the scientific community, especially in the last year or so: does ethanol production actually create a net surplus of energy?  Planting, harvesting, and processing corn into ethanol takes energy, and therefore is the energy balance negative or positive.

Cornell University ecology Professor David Pimentel, however, sides with Patzek, calling production of ethanol "subsidized food burning."  "The USDA isn't looking at factors like the energy it takes to maintain farm machinery and irrigate fields in their analysis," he said, adding that the agency's ethanol report contains overly optimistic assumptions about the efficiency of farming practices. "The bottom line is that we're using far more energy in making ethanol than we're getting out."

Up until two or three years ago it was almost indisputably negative, with production and conversion energy required running between 35% and 65% greater than the ethanol energy created.  But ethanol plants have become far more efficient and the relative value of the crude energy required versus the refined energy gained has by most estimates created a net positive.  But controversy still exists.

"His figures (regarding energy consumed in fertilizer production) are accurate for older nitrogen fertilizer plants, but newer plants use only half the energy of those that were built 35 years ago," he said. He also cited the increasing popularity of no-till farming methods, which can reduce a corn farm's diesel usage by 75 percent. "With hydrogen fuel, people are willing to say, '25 years from now it will be good.' Why can't we also be forward-looking when it comes to ethanol?"

Some scientists claim that when all inputs are identified and added to the equation, it is still negative.  Others, in that same and remarkably balanced article, have data showing it is even more positive.  Interestingly enough, both claims are peer-reviewed and published in journals.  Others are concerned about the "collateral damage," such as the additional fertilizer required (which requires energy to make, by the way) running off and polluting the environment.

Patzek's report also highlights the potential environmental hazards of ethanol production. "When you dump nitrogen fertilizer on corn fields, it runs away as surface water, into the Mississippi River and Gulf of Mexico," he said. The excess nitrogen introduced into the water causes out-of-control algae growth, creating an oxygen-poor "dead zone" where other marine plants and animals cannot survive. And while ethanol produces fewer carbon monoxide emissions than regular gasoline, some researchers have found that ethanol releases high levels of nitrogen oxide, one of the principal ingredients of smog, when burned.

But perhaps the most interesting concept, and one that will ring a bell with our lean-oriented readers, is the one of value.  And just as manufacturing value isn't related to price alone, ethanol value isn't related to energy content alone.  We aren't trying to just create another source of energy, we're trying to create another source of portable energy.  Portability has inherent value.

Other contributors to the debate argue that ethanol's net energy balance should not be the sole consideration when policymakers are evaluating its usefulness -- factors like the fuel's portability and lower carbon monoxide emissions need to be considered as well. "So what if we have to spend 2 BTUs for each BTU of alcohol fuel produced?" reads an editorial in the Offgrid Online energy newsletter. "Since we are after a portable fuel, we might be willing to spend more energy to get it."

Although a negative 2:1 ratio makes you wonder if we should be looking at other solutions.

Patzek thinks lawmakers and environmental activists need to push ethanol aside and concentrate on more sustainable solutions like improving the efficiency of fuel cells and hybrid electric cars or harnessing solar energy for use in transport. If they don't, he predicts economics will eventually force the issue.

Some day, perhaps.

Update on the Candidates

This week's announcment that Tom Tancredo is dropping out of the presidential race provides a timely reason to do a quick update on our "Best Presidential Candidate for Manufacturing" poll.  Tancredo has now been removed from the poll (and his votes vanish), presumably to be followed by several other candidates within the next 45 days or so.  And, perhaps, the one person on the list (and leading the poll) who is not formally a candidate may change his status soon thereafter.  He's at least giving more indication that he might.

So the top five, without further commentary, are:

1. Michael Bloomberg
2. Mitt Romney
3. Rudy Giuliani
4. Mike Huckabee
5. Hillary Clinton

Not to be outdone by Evolving Excellence, the formidable TechCrunch blog has created a similar poll of the Tech President Primaries.  It is focused purely on the primaries at this point therefore there aren't any independent candidates, and it also forces voters to choose from the two major parties thereby no creating head-to-head matchups.  But that's fine.  We'll simply regale ourselves in the obvious superiority of our poll.  Alas the other side effect of TechCrunch's 60x popularity is that it brings out the fringies on each side, so their poll is overwhelmingly headed by Dennis Kucinich on the Dems and Ron Paul on the Repubs.  Want a little alien-protecting tin foil to go with your conspiracy theories? 

Lean Diamonds in the Rough

Once again we somehow predicted it over a year ago.  This prescience is getting downright spooky, but at least we'll try to use this newfound power for good rather than evil. 

In a post last year we (again) decried the outsourcing lemmings that chase low labor costs overseas rather than focusing internally to improve fundamental operations.  The problem we pointed out is that with a flood of lemmings, those low labor costs have a habit of increasing, thereby driving companies to look for other hunting grounds.  Perhaps, as we predicted, eventually including Africa. 

The fundamental flaw in that logic is the fact that many overseas companies are focusing internally and leveraging lean manufacturing methods to dramatically improve efficiency and customer service.  When companies that simply chase lower labor costs pull their heads out of the sand, they'll realize that they now have competitors that are so efficient that labor cost differentials are meaningless.  Some of those competitors may be from Africa.

The recent Lean summit Africa has spearheaded the formation of the Lean Enterprise Africa (LEA), which will facilitate the sharing of knowledge and expertise in Lean thinking.  Conference chair professor Norman Faull of the University of Cape Town's Graduate School of Business believes that there is vast potential in South Africa for the Lean approach, and that LEA will make the power of Lean accessible to organisations across the spectrum of South African industry. "Lean tools can have a tremendous impact, not only for businesses but also for government. The healthcare industry, for example, is under pressure to operate more efficiently with reduced budgets, and could reap the benefits of Lean thinking," he says.

It's not entirely new to Africa.  Remember that three carat diamond ring you bought your bride?  Oh... that's right... we're in manufacturing, not private equity.  Let's reduce the size a bit.  Remember that half carat diamond ring you bought your bride?

Lean Summit Africa lead sponsor, De Beers Consolidated Mines, began implementing Lean principles and philosophies in the organisation more than two years ago. MD David Noko said in his opening address at the event that Lean tools were being used to transform the core culture of De Beers Consolidated Mines, but could also play a role in transforming South Africa by increasing its competitiveness in the global arena.

But here's the bottom line:

More than 350 delegates attended the Lean Summit Africa at Cape Town's International Convention Centre, and plans are underway to make the conference an annual one.

Sure, that's no match for the 2,000+ attendees at a typical AME Annual Conference.  But those are 350 people from companies in a low labor cost part of the world that are also learning how to improve internal efficiencies and leverage employee knowledge through lean.

Do you still think just chasing low labor costs is enough to keep your company competitive?

Throwin' Away the Knowledge

A couple years ago Boeing decided to sell the Wichita/Tulsa division of its Commercial Airplanes Group to Toronto-based Onex for $900 million, which renamed it to Spirit.  The division was just too unprofitable for Boeing, so spinning it off seemed to make sense... even if it meant that thousands of knowledge workers were shed from the company.  One of those peculiar things that happens since knowledge and experience isn't captured on a traditional accounting balance sheet.  Onex saw an opportunity, and got to work.

First Onex had to get costs under control. The firm saved $40 million annually by slashing corporate overhead costs inherited from Boeing. It negotiated price reductions from Spirit's suppliers and simplified the procurement process. It managed to reduce the complexity of work rules, reducing 160 job classifications to 13.  Finally, it asked the unions for a 10% wage cut to better reflect the prevailing wages in the area.  For the wage and job cuts, Onex offered union members a 10% equity stake in an eventual IPO.

The result?

Now, 18 months later, the bargain has exceeded everyone's wildest dreams. An IPO on Nov. 21 raised $1.4 billion. Each Machinist is about to receive $61,440 in cash and stock. Given Boeing's backlog of orders, plus a surge of defense-related spending, analysts figure Spirit's stock will do well in the next few years.  The commercial plane business is booming, which is why Spirit expects to post a 2007 profit of $260 million on projected revenues of $4.1 billion, up from about $3.2 billion in 2006.

About a three year payback on Onex's initial investment... not too shabby.  Makes you wonder what could have happened if Boeing had decided to sink a few bucks into building the business instead of selling it.

Of course EADS/Airbus couldn't sit idly by and watch such brilliance in action, so they are trying to one-up Boeing by selling four factories as part of its Power8 program.

EADS and Airbus have selected Latécoère in France, GKN in the UK, and MT Aerospace in Germany as preferred bidders for the sites of Méaulte and Saint Nazaire Ville in France, the Filton wing component and sub-assembly manufacturing facility in the UK, and Nordenham, Varel and Augsburg in Germany.

The Airbus plants targeted for divestment employ a total of 7,400 employees, and represents € 1.4 billion of Airbus’ cost base in 2007. EADS Defence & Security's plant in Augsburg employs 2,000 employees and represents around € 450 million of its cost base in 2007. About 70 percent of the Augsburg plant's revenues come from Airbus.

Of course in their minds those are 7,400 knuckle-dragging manufacturing grunts, or about 15,000 hands used to assemble stuff.  Anything above the hands apparently doesn't matter, or at least it doesn't show up on the balance sheet.  But here's the kicker:

The Power 8 programme is a comprehensive improvement programme designed to reinforce Airbus' competitiveness in the face of the weakening dollar. It will enable Airbus to become more efficient and productive through a complete turn-around of the company. This involves becoming more integrated, with simpler processes, implementing lean manufacturing, shortening development times and reducing the number of suppliers.

Is spinning off four plants really reducing the number of suppliers?  Or just converting tier 1 to tier 2 suppliers?  Boeing just learned a painful lesson about the problems of longer supply and design chains, and the issues created by reduced direct oversight.  Outsourcing makes processes simpler?  The processes are the same... just that someone else is doing them (plus adding a process step to transact it between companies).  Implementing lean manufacturing?  Obviously they don't understand the fundamental lean principle revolving around the inherent value of people.

But maybe there is a silver lining.  Just as with Onex/Spirit, perhaps these new nascent companies will be able to create excellence in their own right.  And perhaps someday we'll get to wonder what could have been if Airbus had simply invested some time and resources into improving those operations instead of throwing the knowledge away.