Blog clippings

Mar 31 2014

Working outside in rather than inside out | Bill Waddell

See on Scoop.it – lean manufacturing

“Perhaps one of the most inane – but very typical – aspects of the business process in manufacturers is the construction of the supply chain from the inside out.  Three times in the last week – count ‘em – three for three – I visited a manufacturing company with (1) problems delivering in the time frame customers want; (2) lots of inventory but rarely the right inventory; and (3) a supply chain constructed by their supply chain people based on some idea of how to construct a supply chain but not one constructed based on a delivery objective.

In other words, some factory guys got together at some point – probably with an accountant or two breathing down their necks and decided this is how we purchase and this is how we schedule production and that is the resulting lead time, so sales …. Go out and try to shove those lead times down customers’ throats, regardless of what customers want or need….”
See on www.idatix.com

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Mar 30 2014

The Discovery of Lean | Narrated Prezi by Mark Warren

See on Scoop.it – lean manufacturing
Brief description on the origins of lean. Lean is an outcome of implementing Flow Principles + the TWI program

 

 

 

 

Michel Baudin‘s  comments:

This is a short version of a one-hour presentation I heard live a few months ago. Mark’s take is the result of more than 30 years of practical experience in all sorts of plants around the world and more than a decade of intensive research of original documents in numerous archives in several countries.

To understand where concepts and techniques are useful in manufacturing today, we need to know who invented them and for what purpose. The historical perspective is not a luxury, and the explanations of this history must be accurate if it is to enlighten us.

At historical research, Mark is a pro; I am an amateur. John Hunter thinks I have a “library full of dusty tomes.” In truth, I only have a few old books on manufacturing, half of them recommended by Mark.

See on prezi.com

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Mar 27 2014

Is it a Bad Idea to Pay a Lean Consultant Based on a Percentage of Cost Savings? | Mark Graban

See on Scoop.it – lean manufacturing
Blog post at Lean Blog : The price paid for most management consulting work is based on either a daily rate or some variation of a flat-rate fee based on what is being delivered. Enterprise software pricing is also often fixed. In both cases, the client pays this with some expectation of benefits and even an “ROI” for the customer.[..]

Michel Baudin‘s comments:

I agree with Mark, and I am happy when clients report that they get ten times in benefits what our services cost. A daily fee for work done on site and a fixed fee for deliverables for offsite work are simple arrangements; paying a percentage of benefits, whether cost savings or revenue increases, is a complicated arrangement, conducive to misunderstandings and disagreements.

See on www.leanblog.org

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Mar 20 2014

Is it Lean’s Fault or the Old Management System’s? | Mark Graban

See on Scoop.it – lean manufacturing
Blog post at Lean Blog :

“[…]The problem is the culture doesn’t change overnight. Leaders have years or decades of old habits (bad habits) that run counter to Lean thinking. They might be (might!) be trying to change, but people will still fall back into old habits, especially when under pressure.

I hear complaints (in recent cases) coming from different provinces in Canada that say things like:

Lean is causing hospitals to be “de-skilled” by replacing nurses with aides. Lean drives a focus on cost and cost cutting, including layoffs or being understaffedLean is stressing out managers by asking them to do more and taking nothing off their plateNurses hate Lean because they aren’t being involved in changes[…]”

Michel Baudin‘s comments:

In this post, Mark Graban explains how the leadership in Canadian hospitals is slapping the “Lean” label on ancient and counterproductive “cost-cutting” methods, and how the victims of these practices unfairly blame Lean.

This is definitely L.A.M.E., Mark’s apt term for “Lean As Misguidedly Executed,” and is found in Manufacturing as well as Health Care. Much of the article — and of the discussion that follows — is about what I call yoyo staffing: you hire more than you should in boom times, and lay off in recessions.

Of course, it isn’t what Toyota did, and churning your work force in this fashion not only disrupts people’s lives but is bad business. Hiring, training and firing repeatedly prevents your organization from accumulating the knowledge and skills it needs.

Mark makes the case that Lean should not be blamed for mistakes that have nothing to do with it. Other than raising consciousness, however, the post does not propose solutions to keep this from happening.

While there have been studies published on Toyota’s approach to Human Resources (HR), I don’t recall seeing much in the American Lean literature on topics like career planning for production operators.

In his comments, Bob Emiliani paints the current generation of leaders as “a lost cause,” and places his hopes on the next. He seems to suggest that the solution is to wait out or fire the current, baby-boomer leadership and replace it with millenials. I don’t buy it and, deep down, neither does Bob, because he ends by saying “While one always hopes the “next generation will do better”, it could turn out to be a false hope.”

Like everything in HR, generational change has to be planned carefully. The people who rose to leadership positions presumably did so not just because of bad habits but because they also had something of value to offer. And the way the baton is passed is also a message to the incoming leaders: it tells them what to expect when their turn comes.

See on www.leanblog.org

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Mar 18 2014

A Definition of Lean | Mike Rother

See on Scoop.it – lean manufacturing

Maybe it’s time for a better definition of “Lean.” Here’s one for you to consider and build on.

Michel Baudin‘s comments:

The proposal is “Lean is the permanent struggle to flow value to one customer.”

Permanent struggle is fine, but I prefer pursuit. It means the same thing but it is shorter and “pursuit of happiness” sounds better than “permanent struggle for happiness.”

On the other hand, I have a problem with “flow value,” which I see as the sort of vague abstraction that would prompt Mike Harrison to ask whether it come in bottles. It is exactly what Dan Heath is warning against in the video included in the slideshare.

I also have a problem with the exclusive focus on customers, which I see as Business 101 rather than Lean. Lean includes many features like heijunka, that are intended to make life easier for suppliers and are transparent to customers. Going Lean means looking after all the stakeholders of the business, not just its customers.

This is why I define it instead as the pursuit of concurrent improvement in all dimensions of manufacturing performance through projects that affect both the production shop floor and support activities. 

Yes, I know, it is specific to manufacturing, but that is not my problem.

See on www.slideshare.net

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Mar 11 2014

Lean Handbags and Micro Failures | Mark Graban

See on Scoop.it – lean manufacturing

Blog post from Mark Graban at Lean Blog :

“I enjoy reading the magazine Inc. for my interests in startups and entrepreneurship. There are often examples and case studies that directly reference Lean thinking or just sound like Lean and Kaizen with another label…”

 

Michel Baudin‘s comments:

Well run businesses are always good reading, even if their stories are usually embellished. Starting the design of fashion accessories from a market price or organizing to allow chefs in a restaurant chain to experiment with new dishes, however, just sounds like good management, not examples of “Lean Thinking.”

I have never found much depth in the contrasting of “Margin = Price – Cost” with “Price = Cost + Margin,” maybe  because I have never worked in a cost-plus business. Commercial manufacturers usually do not have the power to set prices this way. Perhaps, the Big Three US automakers did have that power in the 1950s, and Toyota didn’t.

In Tracy Kidder’s 1985 documentary book House,  a Boston lawyer hired a local contractor named to build a house in the suburbs. The contractor rigorously calculated the costs of the materials and labor, tacked on a 10% profit, and presented a bid with no wiggle room. It was not intended for negotiation, but the lawyer just had to wrangle some concession out of the contractor.  The culture clash between the two makes great reading, but also throws light on how “cost-plus” works in practice.

The equation “Margin = Price – Cost” is based on the assumption that Price and Cost are characteristics of the same nature, both attached to each unit of product. It is true of Price: whenever a unit is sold — in whatever form and however it is financed — it has a unit price, and it is not ambiguous.

Unit cost, on the other hand, is the result of allocations among products and over time done in a myriad different ways, with different results. By shifting overhead around, managers make the products they like appear cheap, and the ones they want to kill appear expensive. Once the “expensive” products are terminated, the same overhead is spread among fewer survivors, thus making new ones unprofitable, and the death spiral ends only with closure of the factory.

Instead of the simplistic  “Margin = Price – Cost” for each unit, a sound economic analysis of manufacturing considers the flows of revenues and expenses associated with making a product in given volumes over its life cycle, and sometimes a product family rather than an individual products with, for example, some products given away as free samples to promote the sale of other products.

See on www.leanblog.org

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