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NoMoreBackOrders2

Dec 15 2011

Lean causing an increase in backorders?

The following is lifted from the quarterly report of a public company and is attributed to the CEO:

We experienced a temporary increase in backorders at the close of the first quarter as we rebalanced inventories as part of our lean manufacturing initiatives. […] We also implemented a new ERP system during the quarter that will enhance our real-time information for inventory levels, shipments, sales information and production costs.

It seems that the leaders of their Lean Manufacturing initiatives forgot one key principle: First, do no harm! A professionally planned and executed Lean Manufacturing initiative enhances performance. It does not decrease it, even in the beginning and even for the short term.

It is essential for the long-term success of the initiative that its first pilot projects be unquestionable, rapid, obvious successes, and projects that lengthen order fulfillment lead times do not qualify. Nothing should ever take priority over delivering to customers, even Lean.

Furthermore, implementing a new ERP system before you are far enough along in Lean is a generally ineffective for two reasons:

  1. Lean changes your business processes, and embedding your old business processes in an ERP system is a waste of time and will make the changes more difficult.
  2. The implementation of ERP is a resource drain that you cannot afford while implementing Lean.

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By Michel Baudin • Management • 14 • Tags: Lean manufacturing, Management

Dec 15 2011

Libaries, warehouses, and “smart” numbering systems

Via Scoop.it – lean manufacturing

Like warehouses, libraries are storage and retrieval systems, and have the same need to identify and locate physical objects. Almost all manufacturing companies and libraries use numbering systems that are “smart” in that they encode information in the IDs. While it may have been a good idea in 1876, when the libraries’ Dewey Decimal Classification was invented, it is obsolete in the age of databases. But the weight of tradition keeps it going.

Encoding information in part numbers is just as obsolete in Manufacturing, where it increases training costs, unnecessarily complicates information systems, encourages confusion between similar parts having similar IDs, and makes data analysis contingent on the ability to extract the encoded information out of the part numbers. But you hear almost no voices making these points in the manufacturing world.

This article is from 2007 — not exactly breaking news — but it is the most recent I could find about a public library district, in Maricopa County, AZ, that has gotten rid of the Dewey system, uses the books’ ISBNs for IDs, and organizes the library floors like bookstores do. The readers no longer need to learn to decode the book IDs, the categorization of the books is independent of their IDs and can be changed, and all the book data can be retrieved on line without needing the ID, including availability status in branches.
Via www.nytimes.com

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By Michel Baudin • Press clippings • 1 • Tags: Information systems, Lean, Management

Dec 13 2011

Motorola Mobility’s Thomas Goodwin on Six Sigma

Via Scoop.it – lean manufacturing

Motorola Mobility is being taken over by Google, and the article is from October, 2011. It includes links to videos. In the first one,  Ashton Kutcher tries to figure out Six Sigma. Based on how youthful he looks, it must at least 15 years old. The others are introductions to “Six Sigma,” that discuss nothing but the obsolete, 80-year-old tools of SPC: histograms, control charts, etc.   The impresssion you get from the article is of Six Sigma as warmed up SPC sprinkled with a smidgeon of Lean. This is not the perception I had of the program.
Via www.supplychaindigital.com

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By Michel Baudin • Press clippings • 0 • Tags: Lean manufacturing, Quality, Six Sigma

Dec 11 2011

Russian Lean Blog Post about Cultural Differences

Via Scoop.it – lean manufacturing

This is a translation of my own comments in this discussion:

General statements about “the Japanese people” are never right. There are 130M of them, all with different personalities, and >1M companies. There is more to Lean than customer orientation and continuous improvement, namely specific tools developed over 60+ years, which must be learned rather than reinvented. People involvement, while necessary, is not sufficient. Company culture transcends national culture. We worked for Unilever in the Netherlands, the UK, Italy and the US, and the plants in all these different countries had much more in common than with plants of other companies in the same countries. Each country is special in some way, but these special characteristics mean little on a production shop floor. The only people who bring them up are those who want to prevent change.
Via www.leanforum.ru

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By Michel Baudin • Blog clippings • 0 • Tags: Lean, Lean manufacturing, Management

House MD with whiteboard

Dec 11 2011

Problem-solving: Dr. House versus the Shop Floor

Dr. House‘s fictional team of doctors may be the most famous problem-solving group on the planet. Week after week, they solve daunting medical mysteries under an abrasive, unfeeling leader, working in their differential diagnosis sessions with nothing more than a tiny white board to write lists of symptoms.

In real life, Steve Jobs, a man with character flaws on  a par with Dr. House, was able to lead teams in the development of products from the Apple II to the iPad. In light of this, you may wonder why, when faced with problems like an occasionally warped plastic part or wrong gasket, we need to have a team go through brainstorming sessions in which no idea is called stupid, draw fishbone diagrams and formally ask five times why the defect was produced and why it escaped.

House’s team, Apple engineers and Pixar animators are in professions they chose and for which a thick skin is required. They are the product of an education, training and experience in which abuse is used to filter the uncommitted. By contrast, assemblers and machinists are there not to realize childhood dreams but because these are the best jobs they could get. In addition, if they have even a few years of experience in a non-Lean plant, they have been trained to do as they are told. Outside of work, they can be artists,  do-it-yourselfers, or community leaders, but they have not been expected to use the corresponding skills at work.

Over the past decades, many manufacturers have realized that this is a mistake, and that there are emergency response situations that are resolved faster with the participation of the people who do the work than without it, and many small improvement opportunities that are never taken unless operators take them on. But welcoming and soliciting their help is not enough. Historically, the first attempt was the suggestion system, dating back to 1880. It is still in use at many companies, including Toyota, but, while it is part of continuous improvement, it is not an approach to problem-solving. Employees make suggestions about whatever they have ideas about; problem-solving, instead, requires a focus on a subject identified by management or by customers, and usually needs a team rather than an individual.

Kaoru Ishikawa’s concept of the Quality Circle in 1962 was a breakthrough, not only in organizing participants in small groups but also in teaching them the 7 tools of QC to solve quality problems, as well as brainstorming, PDCA, and presentation techniques. The key idea was that pulling a group of shop floor people together was not enough. Quality Circles still exist, primarily in Japan, but the ideas  of providing technical tools and a structure to organize small-group activities around projects have propagated many other areas. Setup time reduction projects for example, can be run effectively like Quality Circles but with the SMED methodology taught instead of QC tools. Conversely, if working on quality issues, a Kaizen Event team may use the same technical tools as Quality Circles, but is managed differently.

To an uninvolved engineer, a scientist or a medical doctor, “problem-solving” as practiced by shop floor teams may appear crude and simplistic. He or she may, for example, view a fishbone diagram as a poor excuse for a fault-tree because it makes no distinction between “OR,” “XOR” or “AND” combination of causes. In the fishbone diagram, these details are not omitted for lack of sophistication but instead by due consideration of the purpose. You can fill out a useful fishbone diagram in a brainstorming session with a problem-solving team, but you would get bogged down in details if you tried to generate a full-blown fault-tree. There are many simple techniques that could potentially be applied. The value of a problem-solving method is that, for a given range of problems, it has shown itself both sophisticated enough to work and simple enough to be applied by the teams at hand.

In this as in every other aspect of Lean, it makes a difference whether an approach is adopted for internal reasons or to comply with an external mandate. A customer that has developed a problem-solving methodology may require suppliers to adopt it when responding to quality problem reports. The suppliers then formally comply, but it may or may not be effective in their circumstances. For example, a car company that buys chips from a semiconductor manufacturing may mandate failure analysis on all defective chips, but this analysis will provide information on process conditions as they were six months before, when the chip was made. Since then, the process that caused the defect has gone through three engineering changes that make the results irrelevant. These results would have been relevant for mechanical parts with shorter processes and less frequent engineering changes, but the car company doesn’t differentiate between suppliers.

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By Michel Baudin • Management • 2 • Tags: Continuous improvement, Lean, problem-solving, Project management, Quality, Toyota

Dec 9 2011

Sundaram-Clayton wins Platinum in India Manufacturing Excellence Awards

Via Scoop.it – lean manufacturing

Continuing our round-the-world tour of awards, prizes and cups for Lean Manufacturing.
Via www.wheelsunplugged.com

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By Michel Baudin • Press clippings • 0 • Tags: Awards, Lean manufacturing, Management

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