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May 23 2014

Are Silos The Root of All Evil? | Bill Waddell thinks so

See on Scoop.it – lean manufacturing
“Functional silos – the idea that all engineers have to work in an engineering department, all sales people have to work in a sales department and all procurement people have to work in a purchasing department – represent the over-arching deficiency in just about all companies.  They are at the root of enormous amounts of wasted time and money and they are at the root of most lousy cultures. ”

Michel Baudin‘s comments:

We all know bureaucratic horror stories associated with functional silos, like the manufacturing company where Sales, Engineering, Manufacturing and Accounting all had different product nomenclatures. Not only did they have multiple names for the same products, but they grouped them into families differently, so that it was impossible to get aggregate measures of anything.

In light of this, it is tempting to just dissolve these departments and reorganize along the lines of what Wickham Skinner called “focused factories,” Hammer and Champy “business processes,” and Womack “Value Streams.” The idea has been around a while.

1996 Ford Taurus
1996 Ford Taurus

According to Mary Walton’s account of the development of the Taurus 1996 in Car, this is what Ford did at the time.  and it cut the development time down to 30 months. According to Sobek, Liker, and Ward, however, this is NOT what Toyota did, and it was developing cars in 24 months with functional departments exchanging memos!

1996 Toyota Camry
1996 Toyota Camry

In addition, the Taurus 1996, while undeniably an artistically unique design,  did not set the market on fire and included body parts that were difficult to stamp out of sheet metal, Walton’s book suggests that the marketing and manufacturing members of the team, having completely transferred their allegiance to the team , failed to make it give due considerations to the needs of the groups they came from.

This suggests that, while often a good idea, collocating all the participants in a business endeavor and breaking all the functional departments is not a panacea.

Sometimes it is technically impossible, because, for example,  the functional department is operating a monumental machine that you don’t know how to break down into smaller units that could be distributed among different “value streams.”

Sometimes, you can’t do it for operational reasons. For example, you don’t distribute Shipping and Receiving among the different production lines in the same building, because it would require more docks and access roads, and it would make truck drivers deliver to different organizations at multiple points around the same building.

Sometimes, you end up having specialists report to managers who have no understanding of what they need to be effective, and can’t evaluate their requests for equipment, training, or permission to attend a conference.

Sometimes, you locate an engineer who needs a quiet space to concentrate on technical issues next to a boisterous sales rep who speaks on the phone all day…

Unfortunately, I don’t think all evil has just one root. It’s a bit more complicated.

See on www.idatix.com

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By Michel Baudin • Blog clippings • 5 • Tags: Business Process, Focused factory, Fort, Toyota, Value Stream

May 22 2014

Health systems learn to be lean | Jodi Schwartz | Argus Leader

See on Scoop.it – lean manufacturing
Without adding staff, the Avera Medical Group gynecologic oncologist spends 10 more minutes with each patient than he used to and leaves work two hours earlier.

‘We were often stressed at our clinic and running late,’ he said. ‘Patients sometimes had to wait, and I was always behind on documentation.'”

 

Michel Baudin‘s comments:

See Mark Graban’s blog post about this article. It is a case he has been following, and is featured in the 2nd edition of Lean Hospitals.

See on www.argusleader.com

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By Michel Baudin • Press clippings • 0 • Tags: Lean Health Care

May 21 2014

Dispelling myths about manufacturing | James Manyika and Katy George

See on Scoop.it – lean manufacturing

“Myth 1. All manufacturing companies need the same things — low-cost labor, access to raw materials and markets, and a favorable business environment.

Myth 2. Trade and offshoring drove the decline in manufacturing in the U.S.

Myth 3. Manufacturing employment means assembly line work.

Myth 4. Manufacturing employment can someday return to historic peak levels.”
See on www.washingtonpost.com

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By Michel Baudin • Press clippings • 0 • Tags: Low-cost labor, Manufacturing, Manufacturing Employment, Offshoring, Outsourcing

May 17 2014

Who Invented the Car? | Ronnie Schreiber

See on Scoop.it – lean manufacturing

Marcus’s 1870 car

“[…] the Nazis tried to write Austrian inventor Siegfried Marcus (who was Jewish) out of history by ordering German encyclopedia publishers to replace Marcus’ name and credit Gottlieb Daimler and Carl Benz as the inventors of the automobile[…]”

 

 

 

Michel Baudin‘s comments:

As this article is not about manufacturing or Lean, I hesitated about posting it. Who cares who invented the car anyway?

When President Obama mistakenly referred to the car as an American invention, it created a small diplomatic row with Germany because, as everyone knows, the car was invented by Gottlieb Daimler and Carl Benz…

Or was it? Not according to Ronnie Schreiber, and he shares plenty of  evidence that, until the Nazis decided otherwise, the inventor of the car was an Austrian jew named Siegfried Marcus who beat Daimler and Benz by about  two decades.

We should care about giving credit where it is due, even for inventions that are 150 years old, and for practical reasons. We want the inventors of today and tomorrow to know that they will be properly honored for their contributions, whether or not they are able to profit from them.

Now back to manufacturing!

See on www.thetruthaboutcars.com

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By Michel Baudin • Blog clippings • 0 • Tags: Benz, Daimler, Inverntors, Marcus

May 16 2014

Does the World Need More MBAs? | Sally Blount says “Yes” | Business Week

See on Scoop.it – lean manufacturing
“Business is our most important social institution—improving the lives of millions. Yet it falls far short of its potential to serve society […]  When you’re creating the next Google, Tencent, or Apple, you’re going to need people with the training, skills, and network that business education is uniquely good at providing. There’s a reason all of those companies hire people with MBAs. Even more important than the skills argument, however, is the intellectual argument for an MBA education, where there is critical knowledge to be gained. Business has evolved to be the dominant social institution of our age. Business is the cultural, organizational, and economic superforce in human development.”

Michel Baudin‘s comments:

Bill Waddell disagrees. I do too, for different reasons.

While I agree with Blount about the value of business skills, I see MBA programs as steeped in the druckerian fallacy that management is a profession in its own right, like Medicine or Engineering, and that a well-trained manager can be equally effective at running businesses in any industry, whether selling sugared water or making computers that change the world.

Rather than being a specialty in its own right, “Business Administration” is best viewed as a set of skills that complements industry-specific knowledge and experience.

That business is “the cultural, organizational, and economic superforce in human development” is something the dean of a business school would say. You could easily make the case for other forms of human endeavors, like universal public education, scientific research, or even democracy.

Bill Waddell seems to think that MBAs are inherently unable to implement and sustain Lean. I have, however, met several leaders who excelled at Lean while having MBAs. But it was not all they had.

A unique feature of this degree is that it takes over the identity of its holders, to the point that they describe themselves as “being MBAs” rather than “having MBAs.” The ones I have admired for their excellence in Lean had an engineering degree and had worked as engineers before getting MBAs.

See on www.businessweek.com

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By Michel Baudin • Press clippings • 1 • Tags: Lean, MBA, Peter Drucker

May 13 2014

The GM Toyota Rating Scale | Bill Waddell

See on Scoop.it – lean manufacturing

“In a survey of suppliers on their working relationships with the six major U.S. auto makers – Toyota, Honda, Nissan, Ford, Chrysler and GM – GM scored the worst.  But of course they did.  They are GM and we can always count on such results from them. […] Toyota scored highest with a ranking of 318, followed by Honda at 295, Nissan at 273, Ford at 267, Chrysler at 245, with GM trotting along behind the rest with an embarrassing 244.”

 

Michel Baudin‘s comments:

While I am not overly surprised at the outcome, I am concerned about the analysis method. The scores are weighted counts of subjective assessments, with people being asked to rate, for example, the “Supplier-Company overall working relationship” or “Suppliers’ opportunity to make acceptable returns over the long term.”

This is not exactly like the length of a rod after cutting or the sales of Model X last month. There is no objective yardstick, and two individuals might rate the same company behavior differently.

It is not overly difficult to think of more objective metrics, such as, for example, the “divorce rate” within a supplier network. What is the rate at which existing suppliers disappear from the network and others come in? The friction within a given Supplier-Customer relationship could be assessed from the number of incidents like the customer paying late or the supplier missing deliveries…

Such data is more challenging to collect, but supports more solid inferences than opinions.

See on www.idatix.com

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By Michel Baudin • Blog clippings • 1 • Tags: GM, statistics, Subjective data, Supply Chain Management, Toyota

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