Innovation, Logistics, and Lean


Amonth ago, a reader asked Michael Ballé “If lean really is about innovation, why does so much of it seem to be about logistics, with truck preparation areas, leveling boxes, small trains, kanbans and so on?” His short answer “because logistics is the way into innovation” is a head scratcher and I fail to see any support for this assertion in the rest of his response.

While TPS and, more generally, the Toyota Way are innovative in the management and technology of operations, discussions of innovation are usually about products. Even in the car industry, which companies come to mind today about product innovation? Which ones would you want to learn from? Most likely not Toyota but Tesla for its electric cars and Alphabet/Google’s subsidiary Waymo for self-driving cars, both based in Silicon Valley.

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Productivity and Technology

Journalist Charles Duhigg has a new book out on the subject of productivity and was being interviewed about it on NPR. I heard him express as a general principle that new technology never increases productivity when first implemented because organizations and individuals use it as a new way of doing exactly what they were doing before. Over time, productivity does increases as users discover new tasks or methods that the technology enables but were beyond the imagination of its early adopters.

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The Downside of Six Sigma | Don Peppers | LinkedIn Pulse

“Revered for decades as one of the world’s most innovative companies, 3M lost its innovative mojo when it began using Six Sigma to try to improve its operational efficiency. James McNerney, the CEO named in 2000, was a Jack Welch protégé from GE. He introduced the Six Sigma discipline as soon as he took the helm of the firm, streamlining work processes, eliminating 10% of the workforce, and earning praise (initially) from Wall Street, as operating margins grew from 17% in 2001 to 23% by 2005.

But when McNerney tried to apply the Six Sigma discipline to 3M’s research and development processes it led to a dramatic fall-off in the number of innovative products developed by the company during those years.”

Sourced through from:

Michel Baudin‘s comments:

Don Peppers describes “eliminating 10% of the work force” as part of implementing the “Six Sigma discipline,” but I don’t recall seeing anything on that subject when learning about Six Sigma.

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