Is This Really a Surprise?

The University of Leicester recently published a press release titled "Quality Management Means Lean Management" that details a 22-year study (conducted by Stephen Wood, Professor of Management and Director of Research, University of Leicester School of Management) of the integrated use in British manufacturing of a set of Lean management practices in which employee empowerment was a major component. The conclusion? "We found in all 22 years that those firms that used the integrated Lean approach have higher levels of productivity (measured by value-added)."

One very interesting point caught my eye: "... pioneers in integrating these practices (the total approach) outperformed even those that subsequently adopted it. Later adopters caught up in practice usage by the end of the period studied, but their productivity growth was not sufficient to catch up with those which had adopted it earlier." This conclusion reinforces the benefit of building Lean into the culture of an organization -- the "pioneers" would not have able to sustain their rates of improvement if Lean was simply reduced to the application of a set of tools.

Are any readers of this blog surprised by the conclusion of this study?

Brett Wills on The Lean Nation Radio Program

Brett Wills –- author of Green Intentions: Creating a Green Value Stream to Compete and Win -- will be a guest on the The Lean Nation radio show May 19th from 4pm to 5pm (EDT) on 790 AM Talk and Business, hosted by Karl Wadensten. He will discuss important Lean and Green topics, and he's looking forward to sharing his insights on air to a wide audience of business leaders and change agents.

You can listen to his appearance live on 790AM (Citadel Broadcasting, ABC Affiliate) in Providence, Rhode Island. The show is also globally available via a live audio stream at 790business.com. Brett would love to hear your opinions and answer your questions, so feel free to call in to the show. The call-in number is 401-437-5000 or toll free at 888-345-0790. If you can’t tune in live, a podcast will be available after the show.

The Lean Nation is a new show on 790AM and airs from 4 pm to 5 pm, weekdays and streams online at 790business.com. The Lean Nation features real world examples and actionable advice from local and national business leaders on how to reinvent yourself into a Lean operation in business and in life. The show's host, Karl Wadensten, is the president of VIBCO, a Rhode Island manufacturing company. During the past three years, VIBCO has created a Lean Revolution using lean methodologies (based on the Toyota Production System).

3P at GE

According to this article posted on Business Wire portal, all major products manufactured by GE at its appliance and lighting facility in Louisville, Kentucky will be developed using Lean techniques. More specifically, the company is embracing a 3P (production, preparation and process) strategy.

It appears that Dirk Bowman, GE Appliances manufacturing leader, has the correct outlook and expectation because he states that "the journey will take several years to fully implement" and realizes that a Lean initiative is not merely a quick fix or a simple program to exploit short-term profits.

3P is a powerful tool that often results in the elimination of multiple process steps and dramatically reduces rework. Have you used 3P in the product development process?

Mike Osterling Explains the Differences Between Lean on the Shop Floor and in the Office

Over at the Velaction site, I came across this quite helpful podcast that features an interview with Mike Osterling conducted by Jeff Hajek. Mike discusses how Lean in the office differs from its implementation on the shop floor. He explains how to manage changes, the difference in ownership of jobs, how to recognize abnormal conditions, and what to do to manage the pace of work.

Mike was one of the principal founders of San Diego State University’s Lean Enterprise Certificate Program, where he continues to teach, and is the co-author of The Kaizen Event Planner: Achieving Rapid Improvement in Office, Service, and Technical Environments.

The 2010 TWI Summit

I am currently attending the 2010 TWI Summit in Las Vegas and am quite glad to see a steady increase in attendance since this conference's formation. The TWI (Training Within Industry) program was established more than 60 years ago by the the US government during World War II to increase productivity and standardize work during a time of crisis. The goals were to: get more done with less machines and manpower; improve quality, reduce scrap by achieving standard work across workers and shifts; reduce safety incidents; decrease training time, especially for temporary workers; reduce labor hours; reduce grievances; and transfer knowledge from a skilled, retiring workforce to an unskilled, green workforce.

The conference will feature presentations by well-known authorities and authors on the subject such Patrick Graupp, Bob Wrona, and Don Dinero.

Has TWI been instituted in your organization? This program became an essential part of the Toyota Production System, but for many years, it remained in obscurity, and many organizations instituting a Lean initiative overlooked it.

Is the Pharmaceutical Industry Ready for Lean?

I recently read this comprehensive article on the Pharmaceutical Processing magazine website titled "How to Unlock $43 Billion in Value by Improving Working Capital Management." The section on what differentiates the pharmaceutical industry from other industries in working capital performance is quite revealing. Although three main areas are defined -- inventory turns, accounts receivable, and accounts payable -- it is the information on inventory that caught my eye.

The article claims that inventory turns are poor in the pharmaceutical industry due to three specific reasons:

1. A “no stock-out philosophy" -- the high margins and impact on patients maintain this philosophy.
2. FDA regulations -- which add to lead times.
3. Unique labeling requirements and SKUs -- which result in greater inventory complexity.

In regard to improving performance, the article first suggests that pharmaceutical companies should adopt lean production techniques. In addition, it suggests using Toyota's two main metrics: cost structure and return on sales.

Do any readers have any experience working with pharmaceutical companies? Do you agree with the suggestions posited in this article?

Toyota from the Inside?

I've been acquiring and editing books about the production system, culture, and tools used at Toyota for many years now. Some of these books were written by leaders formerly employed by the automaker, and most are analytical and explanatory.

It was quite refreshing to read this article on the Kentucky.com site about a book written by Tim Turner, a team leader at Toyota's Georgetown plant. The book, titled One Team on All Levels: The Story of the Toyota Team Members, compiles true narrative stories composed by actual Toyota employees illustrating teamwork, principles, leadership, and values. All proceeds from the sales of book will be donated to the Toyota benevolent fund, which helps team members in times of need.

It quite interesting to read what working at this Georgetown plant actually means to this cross section of team members. This book gives a glimpse past value stream maps and A3s and reveals a part of the "on the ground" culture of dedication -- to improvement and each team member.

The writing of the book started in 2008, so the recent recall and associated developments at Toyota are not addressed in the book, but as Turner states in the article, "... the chapter's not yet written for our company, and we're all in the right mode."

Has anyone read this book yet? Feel free to share your thoughts.

Are Electronic Networks the New A3s?

I recently read this short article titled Lean Project Ideas by Dan Antony, which appeared on ehow.com. The article reviews basic concepts as defining value streams, identifying waste, kaizen events, and automation. The section that specifically caught my attention advises to "implement social media" -- that is, using electronic tools to share and illustrate improvement ideas throughout the company and worldwide locations. For example, Siemens has established an internal blog so employees can share benefits worldwide almost instantaneously while Microsoft is encouraging its employees to use podcasts to proliferate ideas throughout the organization.

A3 reports have used by Toyota for decades to document improvements, and this problem-solving tool has gained much popularity and use in the US during the past few years. A3s were named after the size of paper used to document a particular solution -- but it's the concept, and the thinking behind it, that holds the real power. Are electronic networks the next logical step in the evolution of A3s?

Lean... For the Beginning of the New

Last week, the New York Times published this great article detailing a fresh approach to creating new companies dubbed "Lean start-up." The companies that have initially embraced the method are Internet based -- "Free open-source programming tools and easily distributed Web-based software drive down the cost of developing new products and services."

Although the "Lean start-up" concept applies to both both product design and market penetration, the most important benefit is its early emphasis "and constant focus on customers." Eric Ries, who is credited in the article with coining the term Lean start-up, believes that the traditional start-up model can lead companies to invest too much in "one technology path and one business plan" -- thus, losing their ability to change and adapt to the market. Steven Blank, cited in the article as "serial entrepreneur," adds this very interesting definition: "A start-up is a temporary organization designed to discover a profitable, scalable business model."

I would surely appreciate hearing the reactions of Lean advocates and those involved in Lean initiatives to the points raised in this article.

Lean in Higher Education

Many initiatives and interventions in higher education have met with mixed success --The objective to dramatically improve colleges and universities has often plateaued after intial benefits or outright failed. I asked William K. Balzer (author of Lean Higher Education: Increasing the Value and Performance of University Processes), "Why would the results be any different after the application of Lean in a higher education environment?" His response makes some strong arguments in regard to the benefits:

"Lean Higher Education (LHE) is different in many important ways and can result in significant improvements in the critical services and processes that are central to colleges and universities. First, LHE is a comprehensive approach to institutional change and improvement based on an established set of principles and practices, increasing the likelihood of a long-term impact on faculty and staff attitudes and behaviors.

Second, LHE strikes a balance between the long-term needs of the institution and its employees. The elimination of unnecessary steps and activities that add expense and no value to the university saves resources, and it also allows overburdened employees to redesign their work so that it is more meaningful and satisfying.

Third, LHE offers an established set of practical tools for implementing change and improvement. LHE provides an established set of steps to understand, diagnose, and improve college and university services and processes with confidence.

Finally, there is considerable evidence of support for the effectiveness of LHE principles and practices. More than 50 years of use in a broad variety of organizations, business sectors, and cultures provides strong support for the 'transportability' of Lean principles and practices to higher education. In fact, a growing number of applications of LHE demonstrate significant improvements in college and university processes that result in better service to students, reduced costs for the institution, and greater employee ownership over how their work is done. Overall, LHE holds great promise for improvements in higher education at a time where resources are declining, greater accountability is expected, and higher education’s role in economic development and quality of life is increasingly important."