Dr Deming, I Feel Your Pain

by BILL WADDELL

I don't for a minute pretend to compare myself with the great Dr. W Edwards Deming; far from it; rather, like most lean practicianers I walk in his large footsteps.  Nor do I really know that much about his personal history.  The story is that his message largely fell on deaf ears at home in the USA so he spent his years in Japan where he was held in higher esteem and found a loyal following.  It is that part of the Deming story that resonates with me as I enter my third week preaching and teaching lean in New Zealand.

Over the last few weeks I have met with and come to know quite a bit about six companies that are well on their lean journeys.  One of them makes a product based on a distinctly New Zealand natural resource.  The other five make products that can be (and are) made in the United States, Europe, China ... just about everywhere.

All five are solid and profitable - four of them largely because of their strong sales in the United States.  Let's put that into perspective.  The port at Auckland is 6,500 miles from the port at Long Beach - just a shade further than Shanghai is from Long Beach.  The average working man in the New Zealand factory I visited makes about $15US an hour.  So these manufacturers pay US-type wages, have China-type logistical disadvantages - and still grow their profits by selling into the United States winning head to head battles with both US and Chinese competitors.

... and they invite me to their country and their factories because they want to get even better.

I am happy to be here and to help them.  New Zealand is a great country, a staunch ally and as committed to freedom and human rights as anyone.  There is nothing unpatriotic about helping them succeed;  and these are great people to work with.  But just the same, they only succeed because their American competitors are mismanaged; and I am a bit embarrassed and frustrated that manufacturers in my own country allow this to happen.

As a rule, a lean Kiwi manufacturer provides six week lead times into the USA - a week to make the product and get it to the port, then four weeks on the water and a week overland to the destination.  That is not a problem, for the most part, because their US competitors have comparable lead times - the difference is that the US company lead times is almost all manufacturing time.

They beat their Chinese competitors by avoiding the race to the bottom and providing quality and reliability at US standards, rather than Chinese.  They operate in a country with first world financial institutions, regulations, health and safety laws, environmental standards, intellectual property protection and the rest ... and have the cost structures that go along with all of that.

I am here simply because their US competitors haven't called me - or apparently anyone else like me.  I can envision their competition - offering excessive lead times (because that is just the way it has to be in their industry - lean doesn't apply to them because they aren't like Toyota) - and marginal quality (because there is a limit to how good quality can be before it is prohibitively expensive) - relentlessly beating on their direct labor (because it is the only way they can compete with China) - and griping long and loud about taxes, the government and everyone else.  And all the while losing business to New Zealanders, of all the unlikely people.

Finally, lest anyone think I have become brainwashed during my stay, I offered up a similar rant against the Kiwi's last week because one of my US clients makes good money selling its products into New Zealand, and it has no business doing so.  The product it sells could and should be made here but for the mediocrity of its New Zealand competition.

Excellence (and its opposite) know no global boundaries.

Original: http://idatix.com/manufacturing-leadership/dr-deming-i-feel-your-pain/

Comments

[Steve Brenneman]

Very interesting thoughts! We sell trailers into Austrailia and New Zealand. Can't wait to here more about this. I'll buy you a beer in Orlando.

[Donna]

Now *this* is an excellent post.

[Peter G]

Bill, I do not know whether to post this on yours or Kevin's post. From Chinadaily
"Homeward bound? Firms mull return"
http://www.chinadaily.com.cn/business/2012-07/23/content_15607290.htm
Having lived and worked here for nearly 10 years now there is a lot of truth in some of the comments, Liveris comment on page 3 really resonates "So you start by outsourcing production... and end up outsourcing creativity," So so true and 70 percent agreed that "sourcing in China is more costly than it looks on paper". long lead times, inconsistent quality, corruption at all levels. For the record I work for an American company supplying into Asia, so we are close to our customers, shorter lead times faster response time.

[Bill Waddell]

Thanks for the comment Peter. Seems the realities of China we have been talking about for years have finally become too big to hide or ignore.

[Ari Krause]

Well written and passionate post. Thank you for sharing your experiences and your frustration for your readers to relate to. Everyone involved in Lean implementations has probably experienced similar instances on both large and small scales. We experience ours in many industries, but probably the most frustrating is in healthcare.

[Phil R.]

Well said. I have been saying for years we are in a "leadership crisis" in the US more than anything else. I worked for General Motors from 1967-82 and watched them playing on the slippery slope back then. The board room players never would listen to what people were trying to tell them about the changing landscape.