Respect for People at eBay

And now, for another example of a company embracing the lean principle of respect for people, we turn to… eBay.

            An online auction site may not be the first company you think of when it comes to lean. But Pete Abilla argues that you should.

            A lean believer, Abilla writes the Shmula blog. He also just started working at eBay a few weeks ago.

            In the blog, he describes eBay’s values, which he contends embody respect for people:

            One area that is perhaps unheralded and not known by many people are the eBay values. Below are the eBay Values:

1. We believe people are basically good.
   
2. We recognize and respect everyone as a unique individual.
   
3. We believe everyone has something to contribute.
   
4. We encourage people to treat others the way we want to be treated.
   
5. We believe that an honest, open environment can bring out the best in people.

Below are the companion to the above values — the eBay Behaviors:

1. Lead Completely
   
2. Practice Judgment
   
3. Trust Each Other
   
4. Keep it Human

The eBay Values and eBay Behaviors above are absolutely astounding to me. Not only are the above items on my lanyard next to my picture badge, but I see the behaviors and experience the values in the people at eBay. It’s really very cool. The eBay Values are not just rote statements and the behaviors are not just empty slogans, but they are truly practiced by the people at eBay. Also, the values and behaviors above are also encouraged within the much larger eBay community — both buyers and sellers. This, to me, is almost magical to see. Pierre Omidyar, the founder of eBay, was not only bohemian in his approach to founding eBay, but ultimately he was visionary and also incredibly community and customer focused.

            I’m not familiar with whether eBay is actively involved in deploying lean strategies and techniques. But if they’re not, I’m sure they soon will be with Abilla on board, since lean is an important part of his background. In addition, he mentioned in the blog that he is looking for a manager of process improvement.

            By the way, eBay CEO Meg Whitman was recently featured on the cover of Forbes, which described her as successful, ethical, and a good value for the money she is paid. We could use more companies like eBay.

 

Ron Harbour: How Auto Manufacturing Will Evolve

The future of automotive manufacturing is a continuing trend toward greater flexibility produced with fewer resources.

            That’s the view of consultant Ron Harbour, who spoke at the recent Automotive News Manufacturing Conference. And while the thoughts offered by Harbour – head of Harbour Consulting and author of the annual Harbour Report on auto plant productivity – weren’t revolutionary, they help trace where the industry has gone and where it is likely to go.

            In materials prepared for his speech at the conference, Harbour outlined what he called the evolution of the manufacturer/supplier continuum. (I encountered delays in flying to Nashville for the conference, so I arrived near the end of Harbour’s talk and didn’t actually hear all his comments.)

            Harbour looked at production of 1,000 vehicles per day at three points in time: 1987, 2007, and his view of 2027.

            While those 1,000 vehicles might have required a plant of 3.5 million square feet in 1987, the number is down to 2.5 million square feet today. He didn’t try to predict plant size in 20 years.

            But he did note that a 1987 plant was typically one multi-floor building, while today it is three to four separate but close one-story buildings – with a similar configuration likely 20 years from now.

            (By the way, while at the conference I toured the Nissan plant in Smyrna, Tennessee, which opened about two decades ago. It’s a collection of buildings, though more two-story than one-story. A Nissan speaker at the conference noted that having several buildings increases the number of outside walls and makes it possible for the plant to have about 130 loading docks – which increases the ability to deliver parts exactly where they are needed.)

            While the 1987 plant may have had 3,500 workers, the number is more like 2,500 today, with Harbour predicting it will drop to 1,500 in 2027. And he argued that the number of suppliers, having gone from about 2,500 in 1987 to 500 today will drop to perhaps 100 in another two decades.

            More importantly, the production process will be more flexible, he predicted. A production line could produce only one vehicle in 1987, and perhaps two or three today, but in 20 years one line will produce an infinite number of models, he said.

            Similarly, the product complexity might only have been two models for those 1,000 vehicles in 1987, and perhaps five to 15 today, but that number will also be infinite in 2027, Harbour contends.

            He also stated that modularity, nonexistent in 1987 and somewhat in evidence today, will become part of the basic build philosophy. In addition, Harbour said, part sequencing, which didn’t exist in 1987 and today involves 50 to 100 key parts, will encompass 500 key parts in 20 years.

            Is Harbour right? What are your thoughts?

 

Gas Prices and Biofuels: How Lean Can Help

Gas prices are setting new highs, concern is growing over environmental effects and the movement to produce ethanol and other alternative fuels is snowballing.

            A strong dose of lean strategies could help.

            The latest news reports include an intriguing article in The New York Times. In this piece, oil industry executives are quoted as saying that gas prices are likely to remain high for some time since they are cutting back on plans to increase refinery capacity. Why? Because of the movement to increase the supply of biofuels like ethanol.

            That may be understandable. But the article, written by Jad Mouawad, also notes that the biofuel movement is not the reason for the current, short-term rise in prices. Mouawad says that reasons cited by experts include:

 

            …many oil companies are doing maintenance work on refineries; new federal rules make fuels cleaner but costlier; and a string of delays, fires and accidents in the industry have reduced supplies just when drivers are starting to hit the road for summer vacations.

 

            Consider the first and third reasons cited in that paragraph. Maintenance work should be ongoing, not something that requires you to shut down or scale back production. It sounds like the oil industry needs a good total productive maintenance program. And while bad things do happen sometimes to even the best processes, if the industry is experiencing “a string of delays, fires and accidents,” I can’t help but believe that the efficiency and safety of their processes leave something to be desired. An army of cross-functional kaizen teams should be sent to do battle with these problems.

            Regarding alternative fuels, this is the perfect time to build lean approaches into that industry, as it is just getting off the ground. I hope that at least some of the entrepreneurs building ethanol plants have lean in their backgrounds.

            By the way, one of the more fascinating efforts in that regard was described in another Times article, published about a week before the article cited above. It noted that several business leaders in Hawaii – which relies on imported oil for nearly 90 percent of its energy needs – want to build plants in the state to produce ethanol from sugar cane. (Hawaii has passed a bill requiring that 20 percent of all highway fuel demand by 2020 must be provided by renewable fuels.) Plant construction won’t begin before 2010, but the goal is to produce as much as 28 million gallons of ethanol a year.

            The situation is complex, being shaped by both market and political forces that are sometimes in conflict. However, there is no downside to taking a lean approach, and significant benefits could result from such an approach. Is anyone involved listening?

 

Does Global Sourcing Ever Make Sense?

Looking at a manufacturing supply chain strictly from a lean perspective, you should obtain parts locally, as close to your plant as possible, to eliminate the waste of transportation.

            But in the real world, life is complicated. Sometimes it appears that sourcing parts from overseas makes sense. That appearance may be wrong, but perhaps on occasion it is right. And calculating when long-distance sourcing makes sense is difficult.

            That is the overall impression I come away with after attending the Automotive News Manufacturing Conference in Nashville last week. The presentations and discussions frequently focused on the challenges of a global marketplace, and even the best people seemed occasionally confounded by those challenges.

            To be sure, almost every speaker agreed that most of the time, sourcing parts locally is the best course of action. And there was recognition that too many companies are seduced by low foreign labor costs without really thinking about the bigger picture.

            “We see a lot of pressure toward globalization toward parts due entirely to labor costs in Asia,” said Vicki O’Meara, president, U.S. Supply Chain Solutions, Ryder Systems. “But they are uncertain on total landed costs, and there are a lot of surprises after the fact.”

            However, most speakers agreed that sourcing parts from overseas occasionally makes sense. Sanjiv Sidhu, founder and chairman of i2 Technologies, which makes supply chain software, commented that obtaining one part from China would be unwise. But, he added, if you are also obtaining four other parts from the same region of China, then importing all of them becomes feasible.

            I was struck by some of the comments in a dinner address by Bo Andersson, GM group vice president for global purchasing and supply chain. Andersson, a blunt, amusing speaker, commented, “I don’t have a North American supply base. I have a global supply base.” As one example, he said, “we are shipping windshields from China to the U.S. today, three bucks apiece,” the clear implication being that this was a good, competitive price.

            (By the way, Andersson mentioned that GM spends $70 billion annually on parts in North America, $20 billion in Europe, $11 billion in Asia-Pacific and $5 billion in Latin America and the Middle East.)

            Another fact: While I was with other conference attendees touring the massive Nissan plant in Smyrna, Tennessee, our tour guide mentioned that about 70 percent of the plant’s suppliers are in the U.S., with the remaining 30 percent in Japan.

            GM and Nissan are no strangers to lean approaches. Both employ good people dedicated to squeezing waste out of their supply chains. And while imported parts are in the minority, they still constitute a considerable part of operations.

            During a panel discussion on supply chain issues, I got the impression that the issue that seems to perplex all the automakers is how to calculate the true cost of imported parts. Even Chris Nielsen, vice president of purchasing for Toyota’s American operations, said “we have to try to understand at a deeper cost level.”

            No one had a clear answer on when it does or does not make sense to source parts globally. I’d like to hear what you think and what you have experienced, and also whether you believe global sourcing can ever be consistent with a lean strategy. Post your comments below.

 

Reducing Hospital Infections Through a Lean Strategy

Embracing green principles makes sense in healthcare construction because it saves energy and lowers infection rates, a new report says, and lean principles are at least a small part of that movement.

            The report is from Health Technology Center, a research organization that provides hospitals and health systems reports, decision support tools and educational events.

            The organization says the $41 billion healthcare construction industry is finding that sustainable design practices reduce the transmission of infections through technologies such as motion sensors for lights, faucets and doorways.

            Other infection-reducing strategies in healthcare facility design include wireless communications, RFID tracking, anti-microbial surfaces, negative pressure isolation rooms, single patient rooms and emergency department entrance alternatives.

            Another trend is “the use of evidence-based design to assure that facilities support clinical efficiency, patient safety and deployment of emerging information and clinical technologies,” the company’s news release says.

            Where does lean come into this? According to the release, “design research databases, modeling and simulation, virtual environments, process software and manufacturing quality techniques (e.g. lean, six sigma) are among the tools increasingly used by hospitals and design firms.

            That makes it sound like lean is only of passing interest in this area. But think of it another way.

            You could say that, where a manufacturer seeks to produce quality products, a hospital seeks to produce healthy patients. If a patient falls victim to an infection while in the hospital, that is a defect that undermines the hospital’s mission and causes rework (having to cure the infection, in addition to the original illness). Therefore, reducing or eliminating infections is equivalent to eliminating waste in the form of defects and rework. And that is fundamentally lean.

            Maybe that’s a bit of a stretch, but in my view, not much of a stretch. What do you think?

 

Respect for People at Delta

If respect for people is a fundamental lean principle – and it is – then Delta Air Lines CEO Gerald Grinstein is someone who could be an excellent lean champion.

            The May 21 issue of Forbes profiles how Grinstein has taken Delta out of bankruptcy to a point where, in the words of the article, the company has “clout to challenge industry leaders American and United and beat back low-fare rivals Southwest and JetBlue.”

            A lot of what Grinstein did was painful and decidedly un-lean, including laying off thousands of employees and slashing salaries of those who remained.

            However, the article notes,

 

            But as workers screamed, Grinstein downsized his own salary, from $500,000 to $250,000 (since increased to $338,000). Next he swore off bonuses, cash payouts and gifts of stock, and capped other executive incentives. 'Management shouldn't get a reward while everybody else takes a cut,' Grinstein said.

 

            To further please workers he said he would plow $1 billion back into employees' pockets, including $190 million in cash incentives--provided Delta met financial goals once it emerged from bankruptcy. The cloud cover began to lift. Delta's pilots, receiving a 1.5% pay increase and a 401(k) in return for giving up defined-benefit pensions, jumped onboard. So did 39,000 noncontract workers. The employees garnered $350 million in new stock, $130 million cash, a 4% raise and $250 million toward retirement postbankruptcy. 'Has it been ugly for employees? Absolutely. But Delta has a good business plan,' says Donald Lee Moak, chairman of the Delta Air Lines Pilots Association. 'The employees are working together here.'

 

            Other paragraphs sum up Grinstein’s insight:

 

            Grinstein needed happy workers if he wanted to pull off his business plan: winning over business travelers who typically generate 10% of an airline's revenue and 40% of its profit. 'He simply realized you can't run an airline with pissed-off workers,' said Richard Gritta, a finance professor at the University of Portland (Ore.) who follows the airline industry.

 

            'People say 'You changed the culture at Delta,'' Grinstein says. 'I tell them I didn't change anything. What I tried to do is restore what we had before--an ability of employees to work together and solve problems.'

 

            I said earlier that Grinstein “could be” a lean champion. I used that qualification because, as far as I know, Delta is not on a lean journey. I’ve seen no evidence that Delta is currently committed to lean principles, lean training or even use of lean tools. (I did find the phrase “continuous improvement” in one presentation on the Delta website, but no supporting detail.)

            I wrote an article in our newsletter, Lean Manufacturing Advisor, about how Delta was using a lean approach to increase its capacity to overhaul and repair engines. However, that was published three and a half years ago, before the current bankruptcy and before Grinstein become CEO. I suspect whatever lean effort existed was not sustained.

            But respect for people can be valuable to any organization, even if it isn’t truly lean. And since Grinstein seems to be a person who understands that, perhaps he is also open-minded enough to appreciate the value of lean if he is made aware of it. I hope someone will see that he is.

 

The Chrysler Deal Doesn’t Look Lean

I’m generally in support of the idea of Chrysler being owned by a private equity group. It eliminates the need to look for so-called synergies, which Daimler tried to do unsuccessfully. It also removes the pressures faced by public companies to satisfy analysts and the SEC.

            But I have doubts that the takeover of Chrysler by Cerberus Capital Management will involve any application of lean principles, which Chrysler could certainly use.

            A lean strategy involves treating both employees and suppliers with respect, as partners. Will the new owners do this? Consider the following description of two of the principals of Cerberus, from an article in The New York Times:

            David W. Thursfield, 61, a senior member of the operations team in Cerberus’s automotive and industrial practice, once seemed to be headed to the top of the Ford Motor Company. An Englishman who made a name for himself running Ford in Europe, Mr. Thursfield came to Ford’s headquarters in Dearborn, Mich., in 2002 with a clear mandate: cut costs and whip operations into shape. He did so, but his hard-charging style made him few friends among Ford’s suppliers or, for that matter, among his colleagues in Ford’s executive suite.

Many of Ford’s suppliers complained bitterly that Mr. Thursfield was putting undue pressure on them to reduce prices. And reports of tension between Mr. Thursfield and Nicholas V. Scheele, then Ford’s president and chief operating officer, were so persistent that Mr. Scheele felt obligated to deny them in a letter to employees in 2003. The denial notwithstanding, relations worsened. Mr. Thursfield retired from Ford in May 2004. He joined Cerberus the same month.

Wolfgang Bernhard, 46, a newcomer to Cerberus who was actively involved in the firm’s negotiations with DaimlerChrysler, has held high-level jobs at Chrysler and Mercedes-Benz, a unit of DaimlerChrysler. At both companies he wielded a cost-cutting ax, ruffling the feathers of the labor unions and higher-ups.

He resigned from DaimlerChrysler three years ago and joined Volkswagen. Mr. Bernhard had been widely considered to be in line to run Volkswagen as Mr. Thursfield was at Ford. Instead, Mr. Bernhard was forced out this year. Now he is expected to play a major role in running a Cerberus-controlled Chrysler.

            I could be wrong about Cerberus supporting lean, and I hope I am, but these descriptions are not very encouraging.

            Cerberus may very well succeed in making Chrysler profitable. I am skeptical that they will make it lean.

Lean and SCOR for Supply Chains

You will only truly optimize your supply chain by using not only lean and six sigma, but also the Supply Chain Operations Reference model, known as SCOR.

            So argues Matthew Milas, a senior logistics engineer with Lockheed Martin and the head of a committee involved in SCOR.

            As background, SCOR was created by the Supply Chain Council, an independent consortium of supply chain companies formed in 1996. SCOR is a diagnostic tool for supply chain management, designed to enable companies to address, improve and communicate supply chain management practices among all parties involved.

            Milas, speaking at the recent conference of the Lean Aerospace Initiative, focused on what he called convergence – a coordinated approach to supply chain management.

            His key point is that lean, six sigma and the SCOR do different things and work best in combination.

            In several cases, they overlap. But Milas contends that SCOR does at least three things that lean and six sigma do not:

 

• Provide a common language and architecture from supply chain to supply chain
  
• Provide supply chain level metrics for system performance measurement and benchmarking
  
• Prioritize process improvements for the system

 

            Convergence, he says, bridges the gap between strategic enterprise planning, continuous improvement and transformation.

            I don’t know whether all that is true. But as a general rule, I certainly support the idea of not using lean and/or six sigma to the exclusion of anything else. Anyone who believes in continuous improvement ought to be open to new ideas and new approaches.

            Your comments?

 

Does Boeing Have a Cutting-Edge Supply Chain?

The relationships between Boeing and its suppliers represent the future of aerospace supply chains, according to an analysis conducted at MIT.

            And what distinguishes those relationships, the analysis contends, is the increased risk-sharing and cost-sharing between the parties.

            It’s an interesting suggestion, but it raises some questions about what Boeing is doing and whether it makes sense from a lean standpoint.

            The analysis was conducted by Tzu-Ching Horng, a graduate student, and presented at the recent conference of the Lean Aerospace Initiative. Tzu-Ching Horng could not be at the conference, so the project advisor, Professor Kirk Bozdogan, presented the results.

            The analysis looked at the newest, biggest projects of Boeing and its chief competitor Airbus: Boeing’s 787 Dreamliner and the Airbus A380. Among the observations about Boeing’s supplier relationships on the 787:

 

• Boeing has asked all suppliers to carry all of the non-recurring costs; in return, gives back to risk-sharing partnering suppliers the intellectual property rights on the components or systems they provide.
  
• Contracts are so designed that if the aircraft does well in the marketplace, the risk-sharing partners derive direct benefits (revenues above amortized costs of non-recurring investments based on initially-agree-up expected unit sales volume).
  
• Major partnering suppliers (e.g., Hamilton-Sundstrand), with big “chunks” of the aircraft, can make design trades within each work package and across company units to find optimal system solutions.
  
• Boeing only provides high-level interface definition; the first-tier (major partnering suppliers) are responsible for the detailed interface definitions & designs.
  
• Suppliers work together and Boeing acts as referee in case of conflicts.

 

Boeing retains no more than 35 percent of the total 787 work share. In contrast, on the A380, Airbus has “risk-sharing partnerships” with suppliers who cover only 25 percent of total program non-recurring costs, though what that means is not entirely clear. Further, Airbus continues to exercise control over all system and detail engineering (component level) interface definitions. And Airbus, the analysis says, “has no strong partners” for major risk-sharing activities or as contributors to development spending.

The analysis goes beyond simply pointing out the differences between the two supply chains. It states:

 

Aerospace supply chain management will continue to evolve from a transactional or relational business model to one involving risk-sharing and cost-sharing prime-supplier partnerships, alliances & closely-knit collaborative relationships.

      Global outsourcing – aerospace supply chains are likely to be a lot more quite internationalized in the future.

 

And the analysis contends that “the Boeing model is about optimizing the total business, not just the supply chain in the traditional sense.”

Not everyone believes that Boeing’s development of the 787 involves true optimization. Major parts of the aircraft are built around the world and shipped to the Boeing facility in Everett, Washington, for assembly, a practice some see as very un-lean. Kevin Meyer at the Evolving Excellence blog, for one, has written about this in detail.

Generally speaking, I support the idea of supply chain partnerships (unlike certain Detroit automakers who believe suppliers are not partners, but companies to be squeezed whenever possible). Whether the degree of risk-sharing and cost-sharing attempted by Boeing makes sense is a separate issue, and I’m not sure it’s a lean issue. It is also a separate issue from whether work should be handed off to a partner hundreds or thousands of miles away.

One question might be whether these kinds of relationships create any obstacles to truly optimizing the entire supply chain. What do you think? Post your comments below.

 

Lean and The Resilient Enterprise

“Resilient” is not one of the adjectives typically used in describing a lean enterprise. (“Flexible” or “agile” can be heard more often.)

But I believe that many lean organizations are resilient, a conclusion I come to after hearing a speech by Yossi Sheffi, professor of engineering at MIT, director of the MIT Center for Transportation and Logistics, and author of The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage (MIT Press, 2005).

Sheffi, a keynote speaker at the recent conference of the Lean Aerospace Initiative, defines resiliency as the ability of an enterprise or a company to get back to its former level of service or production after being hit by some type of disruption. In his book, he describes how some organizations successfully recovered from disasters while others did not.

            Resiliency can be achieved in two ways, Sheffi contends: redundancy or flexibility.

            I don’t believe anyone would argue that redundancy is consistent with lean principles. But flexibility is a different story, as that is a hallmark of a lean enterprise.

            I also got the impression that Sheffi believes the flexible approach is better, as he spent more time talking about it during his presentation. Not surprisingly, Toyota is one of the organizations he cited as having flexibility built into its DNA.

            According to Sheffi, that DNA – the cultural characteristics of flexibility – includes:

• Continuous communication, through which all employees constantly know what is going on
  
• Distributed power (meaning empowerment of lower-level employees, with power not concentrated in top management)
  
• Passion for the company’s work and its mission
  
• Showing deference to expertise
  
• Conditioning for disruptions

 

            On showing deference to expertise, Sheffi made the interesting point that some organizational structures are designed to break down when there is a problem. What he meant is that the chain of command may be deliberately ignored so that lower level employees with the greatest expertise and knowledge can adapt to the situation. He cited the Marines, the FAA and certain chemical plants as embodying this idea; one example might be a Marine sergeant who changes his company’s mission when he finds that the situation is not what was expected. (I question whether “break down” is the correct phrase here, but that’s a minor quibble.)

            One part of the presentation I found intriguing was when Sheffi laid out a four-quadrant chart of possible disruptions. One axis of the chart was a scale for the severity of the disruption, the other for its probability.

            He said that one mistake companies make is focusing on the high-severity/high-probability disruptions. As an example, he mentioned a hurricane damaging an offshore oil drilling rig – which happens almost every year.

            When a disruption occurs frequently, even a severe one, a company has usually developed procedures for dealing with it, Sheffi said. The bigger problem, he argued, is the high-severity/low-probability disruption for which no one is prepared.

            But I digress. My main point is that the flexibility and reliability of the processes in a lean organization contribute to that organization being resilient.  Do you agree?

 

The Value (?) in “Charlie’s Angels”

I couldn’t resist writing about this one.

            In the category of eliminating waste and leaving only that which adds value, consider an article this week in The New York Times:

 

            Exactly how much worthwhile entertainment was there in shows like “Charlie’s Angels,” “T.J. Hooker,” and “Starsky and Hutch”?

            The Sony Corporation and its production studio, Sony Pictures Television, which controls the rights to those and many other relics of a distant era of television, have come up with an answer to that question: three and a half to five minutes.

            That’s the length Sony has shrunk episodes down to in order to create what the company hopes is an appealing new business in retooling old shows for a new era of entertainment.

 

            These “minisodes,” as Sony calls them, will initially be posted on the Web on MySpace, but Sony may later create a separate Internet channel called the Minisode Network.

 

            As Steve Mosko, the president of Sony Television, described it, “So, in ‘Charlie’s Angels,’ they have a meeting, Charlie’s on the intercom telling them what the assignment is, there’s a couple of fights, and then a chase, and they catch the bad guy. Then they’re back home wrapping it up.

 

            Sony is obviously trying to tap into the huge and growing market for online video clips. 

            But never mind that. I couldn’t help thinking of this (with tongue in cheek) in lean terms. Did someone create a value stream map to identify which parts of the programs constituted value? Could this kind of mapping help television critics and viewers identify the best shows on TV?

            Of course, there may be an issue here in defining value – which is supposed to be what the customer (viewer) sees as value.

The editors creating the “minisodes” seem to be focusing on the key plot points. Does anyone really believe the millions of viewers who watched each episode of “Charlie’s Angels” were interested in the plot? Wasn’t the real appeal of that show – at least to the male viewers – the opportunity to watch Kate Jackson, Farrah Fawcett and Jaclyn Smith bouncing around in skimpy outfits?

            On the other hand, if plot does constitute value, then one of the best shows on television today must be “24,” which has more plot points in a single episode then most series have in an entire season.

            The assignment-fights-chase-capture-wrapup formula for the “minisodes” will undoubtedly work just as well for “T.J. Hooker” and “Starsky and Hutch” as it does for “Charlie’s Angels.” However, the article also notes:

 

            Sony is even making a mini-version of “Ricki Lake,” one of its syndicated talk shows. “It’s great,” Mr. Mosko said. “The people get introduced, there’s a big fight, then they come together, and cry and hug. You get everything in five minutes.'

 

            Maybe Tivo could come up with technology that applies lean concepts and not only allows you to zap out the commercials, but also to zap any “waste” in the program itself. Maybe we’re on the verge of a whole new lean approach to television programming.

            Or maybe not.

 

We Need a Lean Farm Bill

The way the United States feeds its citizens is out of whack because the farm bill distorts the free-market system. In my mind, that means the farm bill interferes with the application of lean principles because it encourages farmers to grow specific crops that are not necessarily what customers would consider to be of value.

            An excellent essay on this topic by journalist Michael Pollan appears in the April 22 issue of The New York Times Magazine. (You need to register on their site to read the article; registration is free.) Pollan notes that the farm bill encourages production – actually, overproduction – of corn, soybeans, wheat, rice and cotton. He writes:

           

            That’s because the current farm bill helps commodity farmers by cutting them a check based on how many bushels they can grow, rather than, say, by supporting prices and limiting production, as farm bills once did. The result? A food system awash in added sugars (derived from corn) and added fats (derived mainly from soy), as well as dirt-cheap meat and milk (derived from both). By comparison, the farm bill does almost nothing to support farmers growing fresh produce. A result of these policy choices is on stark display in your supermarket, where the real price of fruits and vegetables between 1985 and 2000 increased by nearly 40 percent while the real price of soft drinks (a k a liquid corn) declined by 23 percent. The reason the least healthful calories  in the supermarket are the cheapest is that those are the ones the farm bill encourages farmers to grow.

 

            I don’t agree that a farm bill ought to support prices or limit production, as Pollan implies. In fact, I question whether we should have the government playing any role in determining what should be sold in a free market, or how it should be priced. But if we are going to have a farm bill, it ought to support public goals of good nutrition and good health. Instead, we have a bill that contributes to obesity.

            Pollan also contends that the farm bill distorts the federal school-lunch program by encouraging schools to serve too many calories. And he says it has a global impact, affecting the price of corn in Mexico and the price of cotton in Nigeria, for example, as well as employment of farmers in both of those countries. He argues that this is a contributing factor to illegal immigration of Mexicans to the U.S.; he quotes the Mexican government as saying cheap U.S. corn has thrown two million Mexican farmers out of work since the mid-90s.

            Why aren’t people up in arms about this? Pollan explains:

 

            Because most of us assume that, true to its name, the farm bill is about “farming,” an increasingly quaint activity that involves no one we know and in which few of us think we have a stake. This leaves our own representatives free to ignore the farm bill, to treat it as a parochial piece of legislation affecting a handful of their Midwestern colleagues.

 

            However, he sees seeds of change, arguing that “a grass-roots social movement is gathering around food issues today.” A solution won’t be easy, but the first step, he says, “is recognition that the ‘farm bill’ is a misnomer; in truth, it is a food bill and so needs to be rewritten with the interest of eaters placed first.”

 

            Providing what the customer wants – and changing what you provide when the customer’s desires change – is a fundamental lean principle. The food industry has shown it can be responsive to customers. (The sudden growth in low-carb offerings a few years back is one example.) We need the farming industry to be just as responsive, and that means we need a major revision of the farm bill.