Bridging the Gap between Buyers and Suppliers | Robert Moakler | IndustryWeek

"Creating high performance, collaborative alliances between buyers and U.S. suppliers will ensure rebuilding a strong and sustainable American supply chain."



Michel Baudin's comments:

Robert Moakler reiterates the well known fact that collaboration between suppliers and customers is a win/win, and offers an e-sourcing platform as the better mousetrap that will make it happen.

As COO of an "online marketplace exclusively developed for the American manufacturing industry," Moakler is forthright about where he is coming from. But is lack of technology the reason why adversarial, arm's length relations between suppliers and customers remain the norm?

My own findings on this matter -- summarized in Lean Logistics, on pp. 342-350 -- is that each side stands to gain a short-term advantage from unilaterally breaking a collaborative relationship, and that the business history of the past 25 years shows examples of this happening.

On the customer side, a new VP of purchasing can instruct buyers to use the information suppliers have shared to force price concessions. Conversely, suppliers can leverage intimate, single-sourcing, collaborative relations with a customer to charge above-market prices.

None of these behaviors is viable in the long term, but not all managers care about the long term, and the toughest challenge in establishing collaborative relations is defusing well-founded fears about the future behavior of the other side.

While wishing Mr. Moakley the best of luck in his business, I don't believe technology is the problem.

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When Finance Runs the Factory | William Levinson | Industry Week

"Henry Ford achieved world-class results with three key performance indicators (KPIs), none of which were financial. His successors' changeover to financial metrics, on the other hand, caused the company to forget what we now call the Toyota production system."


Michel Baudin's comments:

Yes, giving power over manufacturing companies to accountants, as American industry massively did in the 1950s yielded disastrous results. The summary given in this article's lead paragraph, however, does not match the historical record from other sources.

First, Ford did not "forget what we now call the Toyota production system." Instead, Ford's people developed in the 1910s a system later called "mass production," that was the best of its day and was copied worldwide in many industries. But anyone who seriously studies mass production and the Toyota Production System (TPS) can tell the difference.

Second, Ford lost its position as the world's largest car maker long before accountants were put in charge. It was taken over in the 1920s by GM, not decades later by Toyota, while still led by Henry Ford. Historians blame this loss of competitive position on his dictatorial approach and on his failure to put in place the kind of management systems Alfred P. Sloan did at GM. Blaming the Whiz Kids of the 1950s is a misleading shortcut.

Third, the article seems confused about accounting. By definition, everything you own is an asset, whether desirable or not. In fact, when you produce as much as before with less inventory, you boost your return on assets by reducing assets.

Allocating overhead to products based on labor is simply a legacy of an era in which manufacturing was primarily manual and information technology was a paper ledger. It makes no sense today, and accountants trained in the last 50 years know it. But many large companies still have systems in place that keep doing it.

It is simply wrong economic thinking, and so is making decisions based on "unit costs" when you not making individual units but a flow of, say, 30,000 units/month. What really matters is the flow of revenue from this flow of goods, and what you have to spend to sustain it. And a flow may not just be of one product but of a family that includes free samples, entry-level, premium, and luxury versions.

All you can legitimately do with a unit cost is multiply it back by the size of your flow. Otherwise, looking at unit costs leads you to think of your product as you do of a carton of milk you buy at the supermarket, and to believe that its unit cost is money you will not spend if you don't make it. This king of thinking what leads you to outsource production to the latest cheap labor country and starts companies down death spirals.

Fourth, time, energy, and materials are not Key Performance Indicators (KPIs) but dimensions of performance. Order-fulfillment lead time, inventory dwell time, kilowatt-hours of electricity, percentage of materials recycled as scrap... are performance indicator. Going from identifying a dimension to having a good metric for it is not a simple step.

Wasted time, energy and materials are clearly important, but are those all the dimensions that need to be considered? What about equipment and facilities, for example?

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Setup Reduction Methodology | Alejandro Sibaja

"We may think, based in all the information about Lean Manufacturing, that many tools and methods are well understood, unfortunately on real live there is many misunderstanding about them, that’s why I decided to write this article, for one of the most popular and known tool, SMED."




Michel Baudin's comments:

It's good to see that not everyone has forgotten SMED or is taking it for granted. When you bring it up with manufacturing managers nowadays, they often respond with "Oh yeah, we had some consultants show us how to do this three years ago."

"And how long do you take to set up this machine today?"

"I am not sure. Maybe 90 minutes..."

They think SMED is yesterday's news, but they are not doing it, and they are often confused about its purpose. They think it is to increase machine utilization, as opposed to flexibillity.

Sibaja's article is a valuable introduction to the subject. I would have called it "Setup Time Reduction" rather than "Setup Reduction," which might imply that you are making fewer setups, or spending less time on setups overall. It's not what SMED lets you do. Instead, your total setup time budget remains the same, but you are using it to make more setups and produce smaller lots of more different products.

I would also have put more emphasis on the use of video recordings in analyzing setup processes. You don't just show up on the shop floor with a camera; instead, you have to prepare the ground carefully, secure the consent of the participants upfront, and know how to use the camera to capture the relevant details.

Sibaja's last sentence is about using the information "in your next Kaizen Event," which implies that Kaizen events are an appropriate method to manage SMED projects. It is not my experience. You might kick start a SMED project with a Kaizen Event, but not to finish it. Often, to achieve quick setups, you have to make changes to the machine and the tooling that require patient work over time. Standardizing the dimensions of 300 dies, for example, may take a year of incremental progress.

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Lean Lies | Wiegand's Watch

This is a translation of the bulk of Bodo Wiegand's latest newsletter, about Lean in Germany, followed by my comments:Bodo Wiegand

This year I've certainly visited 20 companies that have an American leadership or are managed by private equity companies.

With all the same phenomenon: Lean audit compliance 90% and above.

I visit every year at least 50 to 60 companies. Their degree of Leanness is in my estimation at best 70%, and at the companies mentioned above no higher than 50%. It's not being mean or petty, but just that these companies have not understood it.

In  one of them, I walk with two managers into the shop. I remain standing there, while  both of them keep going. After 20 meters, they notice that I am not following,and return.  Then we need an hour to walk these 20 meters again because, in these 20 meters, we encounter an abundance of issues with order and cleanliness, the environmental, safety and quality, as well as waste.

Another company, with a Lean grade of 92% is highly automated, with an OEE supposedly of 73%. During the tour, 50% of the machines were idle, and then you had enough inventory over inventory to go crazy. At the given bottleneck - no SMED - no Lean Maintenance - nothing that would optimize the most critical point in the production process - and then a Lean grade of  92%?

"Wonderful, the Germans!"

Again, another company pursues excellence in Lean, TPM and CI.  It has assigned members to the CI process, organized to push it through, and provided everything you must have to be successful. And ... all activities fizzle out almost entirely ... Lean is processed, there is no steering of CI and everything stops  at department boundaries, and there is therefore no interface cross-optimization.  And  worst of all... it is not measured.

As you know - if I do not measure, I have no success.

It reminds me of a project. There were 5 employees in quality management who did nothing but accompany audits, prepare for them, and post-processed them.

What nonsense! I closed this department immediately and transferred the responsibility to manufacturing and department heads. It took 4 audits with terrible results until all had heard that it is YOUR process that needs to be experienced.

Then something unexpected happened - yet actually predictable.

Suddenly, the audits were not a matter of quality, but the leadership, the champion and team leader. Suddenly quality was in their heads, because they have been responsible for the quality itself and suddenly there were YOUR quality processes.

Auditors came to me and told me something they had never experienced. Although one could forget the quality manuals confidently, the external auditors have not let them fall through, but were thrilled - the processes were well visualized and followed.

Lean audit compliance 90% and better means, for example, that all employees know what Lean is, detect and eliminate waste, adhere to good housekeeping, Lean thinking and strive for improvement.

Done correctly, the Lean audit helps maintain the set standards, identify problem areas, describe areas of activity and measure progress. If the Lean audit is seen as an obligation - as a kind of show for the owners - it does not really help the company - it is just another scam or metrics game, done for its own sake, and with nothing to do with Lean

Michel Baudin's comments:

For many reasons, management tends to overstate achievements, and I could add to Wiegand's examples. I remember being stunned when the plant manager told me that they had started their Lean implementation 8 years earlier, when I had not seen any trace of it on the shop floor.

Or my guide in another plant telling me about an assembly line "We have already optimized this, now we are working on scheduling," while it was obvious that much of the improvement potential had been left on the table. That encounter was one reason I banned the word "optimization" from my vocabulary, as I had found it used primarily to justify not pursuing continuous improvement.

But I part company with Wiegand when he seems to agree that there can be such a thing as a meaningful Lean score, and that "Leanness" can be measured by audit compliance. To me, Lean never has been about having a list of practices in place that an auditor can check off on a form. No matter what the list is, a "Lean score" belongs with IQs, food calories and other pseud0-scientific, misleading bad metrics.

Such scoring methods push managers to make their plants look Lean for the benefit of auditors. This is what you need to do to become certified as a "Lean supplier" or to win prizes. It is not what you need to do to improve quality, productivity, delivery, safety, or morale. It leads to place andon lights on each machine in a row to quickly score more points, instead of pursuing SMED.  You really need SMED to support your customers, but it would not immediately boost your audit score, and it therefore goes on the back burner.

Are Radical Improvements Too Risky? | John Dyer | IndustryWeek



" [...] I can remember the day I shut down a major GE manufacturing plant like it was yesterday. The year was 1988 and I was working as a process engineer on the shop floor of building 5 in Appliance Park where we made refrigerators. [...]"


Michel Baudin's comments:

The two stories in this article -- about refrigerator assembly and a heating process -- have the ring of truth. I have had similar experiences, both positive and negative

Both stories are morality tales and I don't want to spoil them for you, so I won't go into specifics. Read past the business-speak of "paradigms" and "significant changes, " go straight to the stories, and draw your own conclusions as to their lessons on management.

Dyer's own conclusions that follow, and his recommendations of tools like FMEA or DMAIC, are too specific for my taste. I understand he is explaining his approach, but it is beyond what is directly supported by the stories.

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Dr. Deming: 'Management Today Does Not Know What Its Job Is' (Part 2) | Quality content from IndustryWeek

"The usual procedure is that when anything happens, [we] suppose that somebody did it. Who did it? Pin a necklace on him. He's our culprit. He's the one who did it. That's wrong, entirely wrong. Chances are good, almost overwhelming, that what happened, happened as a consequence of the system that he works in, not from his own efforts. In other words, performance cannot be measured. You only measure the combined effect of the system and his efforts. You cannot untangle the two. It is very important, I believe, that performance cannot be measured."


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Dr. Deming: 'Management Today Does Not Know What Its Job Is' (Part 1) | IndustryWeek

[...]"Management today does not know what its job is. In other words, [managers] don't understand their responsibilities. They don’t know the potential of their positions. And if they did, they don't have the required knowledge or abilities. There's no substitute for knowledge."


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Change your production leveling strategy to achieve flow | Ian Glenday | Planet Lean

"...What I came to call Repetitive and Flexible Supply (RFS) is based on the idea of manufacturing the largest products in the same sequence at the same time every week. To many people, this sounds ridiculous and stupid at first.

My analysis consistently showed that, typically, 6% of a company’s products represent 50% of the volume it produces.

I started to see this happen in every factory, hospital, or office I went to. And that’s when it hit me - why not simply focus on stabilizing the plan for that 6% of the products?..."


Michel Baudin's comments:

Ian Glenday's idea of RFS is fine, but not quite as original as presented in the article. Making it easy to do what you do the most often is the motivation behind the Product-Quantity (P-Q) analysis I learned in Japan in the 1980s.

To use the terminology introduced  in the UK by Lucas Industries about that time, it breaks the product mix into Runners, Repeaters, and Strangers. You make each Runner is an dedicated production line, because it has a volume that justifies it.

Then you group Repeaters in families and make them in flexible lines, and you keep a residual job-shop to make the Strangers -- the long tail of your demand -- products in large numbers but with low and sporadic demand.

This method is described, as prior work, in Lean Assembly as a foundation for assembly line design, and in Lean Logistics for warehouse/supermarket design and for production scheduling, in particular heijunka.

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Using Poka-Yoke Techniques for Early Defect Detection | Accelerate Management | Jennifer R.

"Shigeo Shingo developed processes, called “devices,” which made errors much less likely. In one of the examples used by author Harry Robinson, Shingo created a process where workers were required to take two small springs and put them into a dish before assembling a switch (which used the two springs). While this seems like a waste of time, it stopped the workers from forgetting to put the springs into the switch to start with, which saved an enormous amount of time by preventing technicians being sent to customer locations for repair."


Michel Baudin's comments:

What could possibly go wrong? Placing two springs in a dish prior to assembly not only adds a handling step, but it neither physically prevents a mistake, nor immediately detects it once made. A new operator, or one who fills in for another who has the flu, is likely to skip this step, particularly if necessary to sustain the pace.

This example not like any Poka-Yoke I am used to, like the slots in my printer that are shaped so that an ink cartridge of the wrong color won't go in, or the food processor that is started by pressing on the lid. These devices actually make mistakes impossible without adding any work, so that there is no incentive to bypass them.

And it's not difficult to imagine methods that might have worked with the switches. For example, the springs, presumably prop the buttons up, and a whisker hanging over the assembly line might be triggered only if the switch is tall enough...

This article made me wonder whether Shingo, the inventor of the Poka-Yoke concept, had actually come up with this dish idea. It is indeed on p. 44 of his book, "Zero Quality Control: Source Inspection and the Poka-Yoke System," and he does call it a Poka-Yoke, even though he didn't coin the term until two years later.

It is the only example I remember seeing in the Poka-Yoke literature that does not meet the requirements of being 100% effective and not adding labor.

Devices and methods that make errors less likely are useful too, but not mistake-proof. It is usability enginering. If you make operations easy to understand with intuitive, self-explanatory user interfaces, mistakes may be so rare that you don't need mistake-proofing. It's fine, but it's not mistake-proofing.

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Two Vancouver companies get manufacturing awards | The Columbian

"Two Vancouver companies were among five top award winners in this year's Manufacturing Excellence Awards, sponsored by the Association of Washington Business and UPS. [...]  TigerStop won the Manufacturing Excellence Award for innovation. That award highlights a company's work in designing, developing and delivering a blockbuster product concept. TigerStop was founded in 1994 by Spencer Dick to develop a cutting machine that would consistently produce accurately shaped parts, whether metal, aluminum, plastic or wood. The company has sold more than 30,000 machines, and uses local sourcing in its production facilities, the business association said of TigerStop."


Michel Baudin's comments:

It's gratifying to see a former client receive an award. A few years ago, TigerStop asked me for Lean training. They went through a society of wood cutting machine makers and hosted a workshop at their site. For this small company, it was a way of getting what they wanted without bearing the whole cost.

I was impressed by the creativity, open-mindedness, and dedication of the TigerStop people. Congratulations on this award!

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