Lean Insider

The Wall Street Journal and "The Drawbacks of Lean Manufacturing"

2010-08-24T12:02:00.005-04:00

Back in July, an article, authored by Daisuke Wakabayashi and Jung-ah Lee appeared in The Wall Street Journal that reported such companies as Apple Inc. and Nissan are experiencing delays in production because their respective suppliers cannot fill the currently increased demand for certain parts required in popular products. The authors claim that the reason for this these shortages stem from "the drawbacks of lean manufacturing methods, which call for carrying little inventory but make supply snags tougher to offset" and generally believe that "the pitfalls of Lean manufacturing methods, a hallmark of cash-rich and efficient companies, arise when parts either prove faulty or in short supply."

Previous to this article, I had never seen Apple referred to as a Lean organization -- I've come across no other articles that have described the company as such, and I've never seen Apple reference it in its literature. Surely the authors could have provided a bit more discussion about Apple's global supply chain and how it functions before making the claim to help warrant their argument.

This article has come up quite periodically during discussions with colleagues during the past month, and I'd very much like to hear readers' opinions and thoughts about it. What was your reaction when you first read this article?

The Lean Plateau

2010-08-16T13:41:00.005-04:00

According to this article on the Supply Chain Brain forum, which details survey results provided by Capgemini Consulting, "dissatisfaction with lean initiatives is highest one to two years after initial launch." As expected, the initial enthusiasm resulting from practical process improvements of first-time kaizen events and the application of Lean tools soon gives way to stagnation or backsliding because "long-term behavioral changes have not yet become embedded in the organization." In other words, if an organization's culture is not altered or transformed, the Lean initiative will eventually hit a sluggish plateau.

The article contends that the absence of four correctly functioning key factors -- Leadership, Recognition, Strategic Alignment, and Performance Management -- often lead to an initiative's inability to sustain. I have always maintained that there is that crucial disconnect between the application of Lean tools and and true behavioral change when participants are just "applying" but not "understanding." In your experiences, what causes Lean initiatives to stall? Can participants who expressed enthusiasm and optimism for the Lean initiative when it commenced, but are now disheartened at two-year mark, be reinvigorated?

So Lean, What Have You Done for New Hampshire Lately?

2010-08-10T12:44:00.007-04:00

According to this article authored by Catherine Blake and published on the Business NH Magazine website, the New Hampshire Manufacturing Extension Partnership (NHMEP) the economic effect of Lean in New Hampshire during the past five years has been "305 new jobs, 593 retained jobs that didn't go off-shore or get eliminated, $194.9 million increase in sales, $75.2 million spent on new investment, and... $29.1 million in cost savings." The article contends the reason why all companies don't embrace Lean initiatives "has everything to do with human capital" and the investment in training to build Lean culture. What many New Hampshire manufactures don't know is that a grant is available "for qualified prospects through Governor John Lynch's job training fund."

Some of the New Hampshire companies that have benefited from successful Lean adoptions are: RF Hunter (a maker of oil filtration systems), Salient Surgical Technologies (a developer of technologies to simplify surgeons' work), High Liner Foods (a processor and marketer of seafood products), and BAE Systems (a global defense, security, and aerospace company).

Lean as a Political Platform

2010-08-04T09:28:00.006-04:00

The Lean Insider blog is not endorsing any particular candidate for the Senate seat in Washington state, but in terms of political angles, I could not help but find one of independent candidate Paul Akers' positions quite interesting. In this article published on the Edmonds Beacon site, Akers (the owner of FastCap -- a product development company that makes woodworking tools and equipment) believes he is a different type of candidate because he is a "Lean manufacturer" and "Lean thinker" and would use this methodology to reshape the government culture if elected.

Although many politicians speak of eliminating waste in government, Akers feels most don't have the proper skills to accomplish it. He contends, however, that his background in owning and managing a company that "empowers people to eliminate waste every day" makes him especially qualified.

Here's Akers' summation of his "10 to Lean" plan: "You cut taxes by 10 percent, you cut spending by 10 percent, across the board, for three consecutive years, and implement a Lean strategy throughout the federal government. Every federal agency will have one Lean thinker who will teach people how to eliminate waste and increase quality. By default, that will shrink the size of the federal government, shrink spending, create more jobs, and more opportunity for everyone with lower taxes. It’s a winning formula."

I'm sure this is the first instance in which I've heard such an explicit use of Lean as part of a political campaign. What are you thoughts? I welcome all insightful comments.

Staying Lean (and Beautiful) While Outsourcing

2010-07-29T10:26:00.007-04:00

In the June 2010 issue of GCI magazine, David Becker, in an article titled Speed to Market: Becoming Lean Through Outsourcing, contends that although outsourcing is usually incorporated to just save costs, it actually can save time, foster creativity, and improve quality and flexibility. Becker focuses on the beauty-products industry in which "taking a product from trial to mass production" can be the most wasteful and time-consuming task in product development. As in most industries, full supply-chain development and partnership, which should be based on constant communication and realistic expectations, is crucial to any product.

An interesting quote comes from Justin Ames, director of custom manufacturing at Neways Inc. (a company that focuses on the research and development, manufacture, and fulfillment of personal care products): "Look for companies on a continuous cycle of implementing initiatives. Neways Inc. is obsessed with quality and on-time deliveries. If one of our initiatives positively affects this measurement, then we build on it. If it doesn’t, we review it, change it, or throw it out and try something else." Essentially, Lean customers can foster Lean suppliers and Lean Suppliers can enhance Lean customers.

Please feel free to comment or cite examples in which a supplier has hastened or energized a customer's Lean initiative.

Manufacturing Today... In a Nutshell

2010-07-20T12:34:00.008-04:00

I recently browsed across this clear and concise article by Stephen Jannise titled "A Plain English Guide to Modern Manufacturing Methods" on the Manufacturing Software Advice website. Stephen maintains that modern manufacturing should comprise three main concepts:

Reducing waste.
Maintaining quality.
Accelerating production.

The reduction of waste focuses on seven methodologies: Just-in-Time (JIT), Kanban, Just-in-Sequence (JIS), Total Productive Maintenance (TPM), Quick Response Manufacturing (QRM), Cellular Manufacturing, and Single-Minute Exchange of Die (SMED).

For maintaining quality, the concepts that enhance Six Sigma are listed: Define, Measure, Analyze, Improve, Control (DMAIC); Define, Measure, Analyze, Design, Verify (DMADV); Critical to Quality (CTQ); Quality Function Deployment (QFD); and Suppliers, Inputs, Process, Outputs, Customers (SIPOC).

Accelerating production is crucial because of the customized needs of the modern consumer. To maintain flexibility, manufacturers embrace: Machine Flexibility, Routing Flexibility, Computer-aided Design (CAD) and Computer-aided Manufacturing (CAM), Computer-integrated Manufacturing (CIM), and Taguchi Loss Function.

Stephen essentially contends that for a current manufacturing operation to remain successful, it must embrace an initiative that combines both Lean and Six Sigma. I found this article a great primer on the targets and techniques all manufacturers should be incorporating into their respective business strategies. What are your thoughts? Do you think Stephen has has overlooked any important areas?

The Seattle Children's Hospital Improves Its Own Health

2010-07-13T11:19:00.009-04:00

On Friday, July 9, The New York Times published a revealing article about the continuous performance improvement initiative (C.P.I.) at the Seattle Children's Hospital. Not only has this initiative dramatically improved patient care, but it helped cut costs per patient by 3.7 percent, which resulted in a saving of $23 million.

The article interviews Patrick Hagan, the hospital's president (as well as co-author of the forthcoming book Leading the Lean Healthcare Journey: Driving Culture Change to Increase Value), about the use of tools used most notably at Toyota such as kaizen. Hagan believes that "the highest-quality care also is the most cost-effective because we make fewer mistakes and create better outcomes."

An interesting part of the article deals with initial resistance to C.P.I. from doctors because many thought some patient-care decisions would be removed from the physicians. Dr. John Waldhausen, the division chief of pediatric general and thoracic surgery at the Seattle Children's Hospital, changed his mind as the initiative developed. He states that "C.P.I. is the same scientific method we learned in medical school, including hypotheses, data collection and analysis. It is not opinion and conjecture — it is data-driven."

Customization Versus Price

2010-07-08T10:01:00.004-04:00

Do you think the buying habits of online shoppers are changing rapidly? According to this revealing article by Peter Crawfurd published on the Huffington Post site, the habit of conveniently purchasing a variety of standard items quickly and cheaply from one online retailer might be evolving into a different buying pattern: customers are seeking more personalized and customized products at affordable prices with quicker delivery times.

One of the goals of Lean production is dynamic flexibility -- to efficiently produce customized products in the smallest lot sizes possible while satisfying customer demand and clearing a reasonable profit. Crawfurd cites some companies that are currently striving to follow this model (including his own ShirtsMyWay.com), but do you think customization at this very individual level will ultimately survive and overcome the expense? Is this the model that most online retailers will soon be adapting?

Lean and Theory of Constraints

2010-07-01T12:53:00.007-04:00

The article titled Lean: One Size Does Not Fit All, authored by Tim Sramcik and recently published on the SearchAutoParts.com site, raises many important points. Sramcik believes there are five crucial myths that often derail leaders at the outset of a Lean implementation in an auto repair shop:

There's a single lean model shops can adopt.
Lean, by itself, can supply you with answers.
The lean journey is predictable and affordable.
You can count on your staff to buy in.
Lean is the only way.

I was particularly intrigued by his discussion of myth #5 in which he describes some shops using other methodologies such as Theory of Constraints (TOC) to remove bottlenecks and increase productivity. He states that "TOC stands in contrast to Lean because its intent is using existing resources to spur substantial growth. Instead of doing more with less, shops maintain reserve sources... to handle spikes in work, thereby expanding the customer base."

Sramcik goes on to quote John Fagan -- the manager of Smail Collision Centers in Greensberg, Pennsylvania -- "With lean, your capacity is limited. You can only do so many jobs a day, and the only way to grow is to open a new location." Do you agree with this statement? Is Lean really relegated to increasing flow and reducing waste but not for spurring growth and increasing market share? Please post your thoughts.

Improving Healthcare in the Lehigh Valley

2010-06-29T11:15:00.004-04:00

I recently read this interesting white paper titled Using Lean Management to Improve Access to Both Psychiatric and Medical Care, authored by Dr. Michael W. Kaufmann, the chairperson of the department of psychiatry at the Lehigh Valley Health Network. He documents four quality improvement projects using Lean methodology. The four projects focused on: a collaboration plan for medical floor transfers, inpatient psychiatry units, an ancillary reduction project, and an emergency department LOS (length of stay) reduction project.

The most revealing section explains the two main reasons for the success of the projects: 1. A collaborative, interdisciplinary approach, which ultimately results in a “peaceful, silo-busting approach." 2. Buy-in from key stakeholders.

What are your reactions to the results and the lessons learned?

Lean Logistics Meets Zero Emissions

2010-06-22T15:18:00.005-04:00

The future design of ocean cargo marine terminals, specifically, and the efficiency of global supply chains, in general, may defined by a concept unveiled by Wallenius Wilhelmsen Logistics. According to this article, the "Castor Green Terminal" will be powered solely by the sun and the wind -- By using no fossil fuels, these groundbreaking terminals will release no harmful emissions into the atmosphere.

Although the wind turbines and solar photovoltaic roof panels will provide the main source of power, these terminals will also harness their own water supplies. Rain water will be collected from the roofs and then stored in underground tanks.

Complementing the intelligent design of these terminals will be the processes by which they will run -- Lean production techniques "focusing on the elimination of waste and adding value" will be applied during each stage of the cargo’s movement through the terminal. In addition, all waste from such facilities as workshops and paint shops will be considered "a resource to be recycled used for heating or properly transferred."

Can the future of global supply chains and logistics really be imagined without "Lean, green, and clean" sensibility?

The 2010 Lean Logistics Summit

2010-06-18T10:24:00.006-04:00

From Tuesday, June 22 through Wednesday, June 23, the leading authorities -- authors, researchers, and company representatives -- on the subject of lean logistics will gather at the 2010 Lean Logistics Summit in Cincinnati to discuss experiences and share insights. This conference is the newest addition to the series of fine targeted summits, which include the Lean Accounting Summit, the TWI Summit, and the Lean and Green Summit. Like these other Summits, the Lean Logistics Summit will take a focused look at a specific aspect of the Lean enterprise. This year's agenda of speakers and presenters is quite impressive.

To read a very helpful article on mapping a Lean supply chain authored by Robert Martichenko, one of the keynote speakers at this summit, click here.

Traditional Change Models and Lean and Six Sigma Implementation

2010-06-15T06:42:00.009-04:00

I recently posed the question -- Do traditional change models help or hinder Lean and Six Sigma implementation? -- to Larry Solow and Brenda Fake (authors of What Works for GE May Not Work for You: Using Human Systems Dynamics to Build a Culture of Process Improvement) and I've decided to post their reply here:

"We believe the answer is 'yes!' While we are glad many Lean/Six Sigma leaders and project managers attempt to address organizational change at some level... it is not nearly enough. Change today can no longer depend on a linear six or seven step model that is easy to follow in 'the change plan' or project charter. Those models fail because linear plans fail to address the complexity of the problem itself and the larger systems in which they are embedded.

We as Lean and Six Sigma leaders owe it to ourselves, the projects, the employees, and the customers to look at business improvement change through the lens of complexity. This requires today’s successful Lean/Six Sigma professionals to understand the initial conditions for why a change is needed, and the many moving parts that are impacted by the improvement. It is not enough to analyze the problem in a vacuum. It is critical to be able to see and influence the patterns of the relationships to the business improvement, set the initial conditions, and implement improvements that can adapt to rapid and unpredictable changes in order to sustain themselves beyond the initial implementation."

Feel free to post your thoughts or comments.

William Balzer Makes the College Connection

2010-06-09T15:52:00.007-04:00

William K. Balzer (author of Lean Higher Education: Increasing the Value and Performance of University Processes) will appear on the College Connection radio show discussing the implementation of Lean in a university administration environment.

College Connection is the public’s radio link to information about Oklahoma’s colleges and universities and the importance of college degrees for individuals and for the state. On the air since 2004, the state-wide, weekly program targets a general audience and features news on higher education issues and interviews with education experts and newsmakers from around the state and nation.

Here are the air times and radio stations:

Saturday 10:00 a.m. & Sunday 10:30 p.m.
KOKC- AM 1520 Oklahoma City

Sunday 6:00 a.m.
KOCU-FM 90.1 Altus
KLCU-FM 90.3 Ardmore
KYCU-FM 89.1 Clinton/Weatherford/Elk City
KCCU-FM 89.3&102.9 Lawton/Ft. Sill/Duncan
KMCU-FM 88.7 Wichita Falls, TX.

Sunday 6:30 p.m.
KOSU-FM 101.9 Okmulgee
KOSU-FM 107.5 Stillwater
KOSU-FM 91.7 Tulsa/Bartlesville

Monday & Wednesday 4 p.m.
KSSU-FM 91.9 Durant

The show will also be archived on the College Connection web site.

Alaskan Lean

2010-06-03T11:53:00.005-04:00

I had the pleasure of meeting Patrick Anderson -- the director of Chugachmiut (a Tribal consortium created to promote self-determination to the seven Native communities of the Chugach Region of Alaska) -- at the recent TWI Summit in Las Vegas. He told me about his organization and its Lean initiatives -- in fact, they are detailed right on the Chugachmiut site.

While perusing the site, I noticed a link to Patrick's engaging blog and perused some of the entries including this recent post about a kaizen event in the human resources department. In addition, Patrick participated in a podcast on the Lean Blog site hosted by Mark Graban in which he discusses applying Lean principles to healthcare delivery in Alaska.

NYU Langone Medical Center Embraces Lean & Six Sigma

2010-06-01T07:01:00.004-04:00

The NYU Langone Medical Center partnered with the Institute for Management and Executive Development (IMED) at the Rutgers University School of Business in Camden, New Jersey to become a "world-class" and "patient-centered" medical facility according to this article on the Rutgers University Continuing Studies site.

Martin Costa, the director of Organizational Development and Learning at NYU Langone Medical Center, is now the director of the new Lean Management Office as well. He states that, other than the benefits of waste-reducing pilot projects and increased operational efficiency, "we are creating a different atmosphere here in terms of how people identify, address, and collaborate on solutions." It appears this initiative is not focusing merely on cost-saving activities, but creating a cross-functional, team based culture.

In addition, it seems change is occurring from the top down -- Martin points out that “one of the most valuable gains is a deeper knowledge of how to be effective as a leader of change.”

Can any Lean initiatives sustain if the leadership of an organization does not embrace and direct the culture change?

Is This Really a Surprise?

2010-05-24T18:52:00.005-04:00

The University of Leicester recently published a press release titled "Quality Management Means Lean Management" that details a 22-year study (conducted by Stephen Wood, Professor of Management and Director of Research, University of Leicester School of Management) of the integrated use in British manufacturing of a set of Lean management practices in which employee empowerment was a major component. The conclusion? "We found in all 22 years that those firms that used the integrated Lean approach have higher levels of productivity (measured by value-added)."

One very interesting point caught my eye: "... pioneers in integrating these practices (the total approach) outperformed even those that subsequently adopted it. Later adopters caught up in practice usage by the end of the period studied, but their productivity growth was not sufficient to catch up with those which had adopted it earlier." This conclusion reinforces the benefit of building Lean into the culture of an organization -- the "pioneers" would not have able to sustain their rates of improvement if Lean was simply reduced to the application of a set of tools.

Are any readers of this blog surprised by the conclusion of this study?

Brett Wills on The Lean Nation Radio Program

2010-05-19T07:53:00.011-04:00

Brett Wills –- author of Green Intentions: Creating a Green Value Stream to Compete and Win -- will be a guest on the The Lean Nation radio show May 19th from 4pm to 5pm (EDT) on 790 AM Talk and Business, hosted by Karl Wadensten. He will discuss important Lean and Green topics, and he's looking forward to sharing his insights on air to a wide audience of business leaders and change agents.

You can listen to his appearance live on 790AM (Citadel Broadcasting, ABC Affiliate) in Providence, Rhode Island. The show is also globally available via a live audio stream at 790business.com. Brett would love to hear your opinions and answer your questions, so feel free to call in to the show. The call-in number is 401-437-5000 or toll free at 888-345-0790. If you can’t tune in live, a podcast will be available after the show.

The Lean Nation is a new show on 790AM and airs from 4 pm to 5 pm, weekdays and streams online at 790business.com. The Lean Nation features real world examples and actionable advice from local and national business leaders on how to reinvent yourself into a Lean operation in business and in life. The show's host, Karl Wadensten, is the president of VIBCO, a Rhode Island manufacturing company. During the past three years, VIBCO has created a Lean Revolution using lean methodologies (based on the Toyota Production System).

3P at GE

2010-05-17T15:57:00.007-04:00

According to this article posted on Business Wire portal, all major products manufactured by GE at its appliance and lighting facility in Louisville, Kentucky will be developed using Lean techniques. More specifically, the company is embracing a 3P (production, preparation and process) strategy.

It appears that Dirk Bowman, GE Appliances manufacturing leader, has the correct outlook and expectation because he states that "the journey will take several years to fully implement" and realizes that a Lean initiative is not merely a quick fix or a simple program to exploit short-term profits.

3P is a powerful tool that often results in the elimination of multiple process steps and dramatically reduces rework. Have you used 3P in the product development process?

Mike Osterling Explains the Differences Between Lean on the Shop Floor and in the Office

2010-05-14T09:02:00.006-04:00

Over at the Velaction site, I came across this quite helpful podcast that features an interview with Mike Osterling conducted by Jeff Hajek. Mike discusses how Lean in the office differs from its implementation on the shop floor. He explains how to manage changes, the difference in ownership of jobs, how to recognize abnormal conditions, and what to do to manage the pace of work.

Mike was one of the principal founders of San Diego State University’s Lean Enterprise Certificate Program, where he continues to teach, and is the co-author of The Kaizen Event Planner: Achieving Rapid Improvement in Office, Service, and Technical Environments.

The 2010 TWI Summit

2010-05-10T22:14:00.010-04:00

I am currently attending the 2010 TWI Summit in Las Vegas and am quite glad to see a steady increase in attendance since this conference's formation. The TWI (Training Within Industry) program was established more than 60 years ago by the the US government during World War II to increase productivity and standardize work during a time of crisis. The goals were to: get more done with less machines and manpower; improve quality, reduce scrap by achieving standard work across workers and shifts; reduce safety incidents; decrease training time, especially for temporary workers; reduce labor hours; reduce grievances; and transfer knowledge from a skilled, retiring workforce to an unskilled, green workforce.

The conference will feature presentations by well-known authorities and authors on the subject such Patrick Graupp, Bob Wrona, and Don Dinero.

Has TWI been instituted in your organization? This program became an essential part of the Toyota Production System, but for many years, it remained in obscurity, and many organizations instituting a Lean initiative overlooked it.

Is the Pharmaceutical Industry Ready for Lean?

2010-05-07T09:48:00.004-04:00

I recently read this comprehensive article on the Pharmaceutical Processing magazine website titled "How to Unlock $43 Billion in Value by Improving Working Capital Management." The section on what differentiates the pharmaceutical industry from other industries in working capital performance is quite revealing. Although three main areas are defined -- inventory turns, accounts receivable, and accounts payable -- it is the information on inventory that caught my eye.

The article claims that inventory turns are poor in the pharmaceutical industry due to three specific reasons:

A “no stock-out philosophy" -- the high margins and impact on patients maintain this philosophy.
FDA regulations -- which add to lead times.
Unique labeling requirements and SKUs -- which result in greater inventory complexity.

In regard to improving performance, the article first suggests that pharmaceutical companies should adopt lean production techniques. In addition, it suggests using Toyota's two main metrics: cost structure and return on sales.

Do any readers have any experience working with pharmaceutical companies? Do you agree with the suggestions posited in this article?

Toyota from the Inside?

2010-05-04T11:27:00.004-04:00

I've been acquiring and editing books about the production system, culture, and tools used at Toyota for many years now. Some of these books were written by leaders formerly employed by the automaker, and most are analytical and explanatory.

It was quite refreshing to read this article on the Kentucky.com site about a book written by Tim Turner, a team leader at Toyota's Georgetown plant. The book, titled One Team on All Levels: The Story of the Toyota Team Members, compiles true narrative stories composed by actual Toyota employees illustrating teamwork, principles, leadership, and values. All proceeds from the sales of book will be donated to the Toyota benevolent fund, which helps team members in times of need.

It quite interesting to read what working at this Georgetown plant actually means to this cross section of team members. This book gives a glimpse past value stream maps and A3s and reveals a part of the "on the ground" culture of dedication -- to improvement and each team member.

The writing of the book started in 2008, so the recent recall and associated developments at Toyota are not addressed in the book, but as Turner states in the article, "... the chapter's not yet written for our company, and we're all in the right mode."

Has anyone read this book yet? Feel free to share your thoughts.

Are Electronic Networks the New A3s?

2010-04-29T14:05:00.008-04:00

I recently read this short article titled Lean Project Ideas by Dan Antony, which appeared on ehow.com. The article reviews basic concepts as defining value streams, identifying waste, kaizen events, and automation. The section that specifically caught my attention advises to "implement social media" -- that is, using electronic tools to share and illustrate improvement ideas throughout the company and worldwide locations. For example, Siemens has established an internal blog so employees can share benefits worldwide almost instantaneously while Microsoft is encouraging its employees to use podcasts to proliferate ideas throughout the organization.

A3 reports have used by Toyota for decades to document improvements, and this problem-solving tool has gained much popularity and use in the US during the past few years. A3s were named after the size of paper used to document a particular solution -- but it's the concept, and the thinking behind it, that holds the real power. Are electronic networks the next logical step in the evolution of A3s?

Lean... For the Beginning of the New

2010-04-27T10:22:00.005-04:00

Last week, the New York Times published this great article detailing a fresh approach to creating new companies dubbed "Lean start-up." The companies that have initially embraced the method are Internet based -- "Free open-source programming tools and easily distributed Web-based software drive down the cost of developing new products and services."

Although the "Lean start-up" concept applies to both both product design and market penetration, the most important benefit is its early emphasis "and constant focus on customers." Eric Ries, who is credited in the article with coining the term Lean start-up, believes that the traditional start-up model can lead companies to invest too much in "one technology path and one business plan" -- thus, losing their ability to change and adapt to the market. Steven Blank, cited in the article as "serial entrepreneur," adds this very interesting definition: "A start-up is a temporary organization designed to discover a profitable, scalable business model."

I would surely appreciate hearing the reactions of Lean advocates and those involved in Lean initiatives to the points raised in this article.