Staying Lean (and Beautiful) While Outsourcing

In the June 2010 issue of GCI magazine, David Becker, in an article titled Speed to Market: Becoming Lean Through Outsourcing, contends that although outsourcing is usually incorporated to just save costs, it actually can save time, foster creativity, and improve quality and flexibility. Becker focuses on the beauty-products industry in which "taking a product from trial to mass production" can be the most wasteful and time-consuming task in product development. As in most industries, full supply-chain development and partnership, which should be based on constant communication and realistic expectations, is crucial to any product.

An interesting quote comes from Justin Ames, director of custom manufacturing at Neways Inc. (a company that focuses on the research and development, manufacture, and fulfillment of personal care products): "Look for companies on a continuous cycle of implementing initiatives. Neways Inc. is obsessed with quality and on-time deliveries. If one of our initiatives positively affects this measurement, then we build on it. If it doesn’t, we review it, change it, or throw it out and try something else." Essentially, Lean customers can foster Lean suppliers and Lean Suppliers can enhance Lean customers.

Please feel free to comment or cite examples in which a supplier has hastened or energized a customer's Lean initiative.

Manufacturing Today... In a Nutshell

I recently browsed across this clear and concise article by Stephen Jannise titled "A Plain English Guide to Modern Manufacturing Methods" on the Manufacturing Software Advice website. Stephen maintains that modern manufacturing should comprise three main concepts:

1. Reducing waste.
2. Maintaining quality.
3. Accelerating production.

The reduction of waste focuses on seven methodologies: Just-in-Time (JIT), Kanban, Just-in-Sequence (JIS), Total Productive Maintenance (TPM), Quick Response Manufacturing (QRM), Cellular Manufacturing, and Single-Minute Exchange of Die (SMED).

For maintaining quality, the concepts that enhance Six Sigma are listed: Define, Measure, Analyze, Improve, Control (DMAIC); Define, Measure, Analyze, Design, Verify (DMADV); Critical to Quality (CTQ); Quality Function Deployment (QFD); and Suppliers, Inputs, Process, Outputs, Customers (SIPOC).

Accelerating production is crucial because of the customized needs of the modern consumer. To maintain flexibility, manufacturers embrace: Machine Flexibility, Routing Flexibility, Computer-aided Design (CAD) and Computer-aided Manufacturing (CAM), Computer-integrated Manufacturing (CIM), and Taguchi Loss Function.

Stephen essentially contends that for a current manufacturing operation to remain successful, it must embrace an initiative that combines both Lean and Six Sigma. I found this article a great primer on the targets and techniques all manufacturers should be incorporating into their respective business strategies. What are your thoughts? Do you think Stephen has has overlooked any important areas?

The Seattle Children's Hospital Improves Its Own Health

On Friday, July 9, The New York Times published a revealing article about the continuous performance improvement initiative (C.P.I.) at the Seattle Children's Hospital. Not only has this initiative dramatically improved patient care, but it helped cut costs per patient by 3.7 percent, which resulted in a saving of $23 million.

The article interviews Patrick Hagan, the hospital's president (as well as co-author of the forthcoming book Leading the Lean Healthcare Journey: Driving Culture Change to Increase Value), about the use of tools used most notably at Toyota such as kaizen. Hagan believes that "the highest-quality care also is the most cost-effective because we make fewer mistakes and create better outcomes."

An interesting part of the article deals with initial resistance to C.P.I. from doctors because many thought some patient-care decisions would be removed from the physicians. Dr. John Waldhausen, the division chief of pediatric general and thoracic surgery at the Seattle Children's Hospital, changed his mind as the initiative developed. He states that "C.P.I. is the same scientific method we learned in medical school, including hypotheses, data collection and analysis. It is not opinion and conjecture — it is data-driven."

Customization Versus Price

Do you think the buying habits of online shoppers are changing rapidly? According to this revealing article by Peter Crawfurd published on the Huffington Post site, the habit of conveniently purchasing a variety of standard items quickly and cheaply from one online retailer might be evolving into a different buying pattern: customers are seeking more personalized and customized products at affordable prices with quicker delivery times.

One of the goals of Lean production is dynamic flexibility -- to efficiently produce customized products in the smallest lot sizes possible while satisfying customer demand and clearing a reasonable profit. Crawfurd cites some companies that are currently striving to follow this model (including his own ShirtsMyWay.com), but do you think customization at this very individual level will ultimately survive and overcome the expense? Is this the model that most online retailers will soon be adapting?

Lean and Theory of Constraints

The article titled Lean: One Size Does Not Fit All, authored by Tim Sramcik and recently published on the SearchAutoParts.com site, raises many important points. Sramcik believes there are five crucial myths that often derail leaders at the outset of a Lean implementation in an auto repair shop:

1. There's a single lean model shops can adopt.
2. Lean, by itself, can supply you with answers.
3. The lean journey is predictable and affordable.
4. You can count on your staff to buy in.
5. Lean is the only way.

I was particularly intrigued by his discussion of myth #5 in which he describes some shops using other methodologies such as Theory of Constraints (TOC) to remove bottlenecks and increase productivity. He states that "TOC stands in contrast to Lean because its intent is using existing resources to spur substantial growth. Instead of doing more with less, shops maintain reserve sources... to handle spikes in work, thereby expanding the customer base."

Sramcik goes on to quote John Fagan -- the manager of Smail Collision Centers in Greensberg, Pennsylvania -- "With lean, your capacity is limited. You can only do so many jobs a day, and the only way to grow is to open a new location." Do you agree with this statement? Is Lean really relegated to increasing flow and reducing waste but not for spurring growth and increasing market share? Please post your thoughts.

Improving Healthcare in the Lehigh Valley

I recently read this interesting white paper titled Using Lean Management to Improve Access to Both Psychiatric and Medical Care, authored by Dr. Michael W. Kaufmann, the chairperson of the department of psychiatry at the Lehigh Valley Health Network. He documents four quality improvement projects using Lean methodology. The four projects focused on: a collaboration plan for medical floor transfers, inpatient psychiatry units, an ancillary reduction project, and an emergency department LOS (length of stay) reduction project.

The most revealing section explains the two main reasons for the success of the projects: 1. A collaborative, interdisciplinary approach, which ultimately results in a “peaceful, silo-busting approach." 2. Buy-in from key stakeholders.

What are your reactions to the results and the lessons learned?

Lean Logistics Meets Zero Emissions

The future design of ocean cargo marine terminals, specifically, and the efficiency of global supply chains, in general, may defined by a concept unveiled by Wallenius Wilhelmsen Logistics. According to this article, the "Castor Green Terminal" will be powered solely by the sun and the wind -- By using no fossil fuels, these groundbreaking terminals will release no harmful emissions into the atmosphere.

Although the wind turbines and solar photovoltaic roof panels will provide the main source of power, these terminals will also harness their own water supplies. Rain water will be collected from the roofs and then stored in underground tanks.

Complementing the intelligent design of these terminals will be the processes by which they will run -- Lean production techniques "focusing on the elimination of waste and adding value" will be applied during each stage of the cargo’s movement through the terminal. In addition, all waste from such facilities as workshops and paint shops will be considered "a resource to be recycled used for heating or properly transferred."

Can the future of global supply chains and logistics really be imagined without "Lean, green, and clean" sensibility?

The 2010 Lean Logistics Summit

From Tuesday, June 22 through Wednesday, June 23, the leading authorities -- authors, researchers, and company representatives -- on the subject of lean logistics will gather at the 2010 Lean Logistics Summit in Cincinnati to discuss experiences and share insights. This conference is the newest addition to the series of fine targeted summits, which include the Lean Accounting Summit, the TWI Summit, and the Lean and Green Summit. Like these other Summits, the Lean Logistics Summit will take a focused look at a specific aspect of the Lean enterprise. This year's agenda of speakers and presenters is quite impressive.

To read a very helpful article on mapping a Lean supply chain authored by Robert Martichenko, one of the keynote speakers at this summit, click here.

Traditional Change Models and Lean and Six Sigma Implementation

I recently posed the question -- Do traditional change models help or hinder Lean and Six Sigma implementation? -- to Larry Solow and Brenda Fake (authors of What Works for GE May Not Work for You: Using Human Systems Dynamics to Build a Culture of Process Improvement) and I've decided to post their reply here:

"We believe the answer is 'yes!' While we are glad many Lean/Six Sigma leaders and project managers attempt to address organizational change at some level... it is not nearly enough. Change today can no longer depend on a linear six or seven step model that is easy to follow in 'the change plan' or project charter. Those models fail because linear plans fail to address the complexity of the problem itself and the larger systems in which they are embedded.

We as Lean and Six Sigma leaders owe it to ourselves, the projects, the employees, and the customers to look at business improvement change through the lens of complexity. This requires today’s successful Lean/Six Sigma professionals to understand the initial conditions for why a change is needed, and the many moving parts that are impacted by the improvement. It is not enough to analyze the problem in a vacuum. It is critical to be able to see and influence the patterns of the relationships to the business improvement, set the initial conditions, and implement improvements that can adapt to rapid and unpredictable changes in order to sustain themselves beyond the initial implementation."

Feel free to post your thoughts or comments.

William Balzer Makes the College Connection

William K. Balzer (author of Lean Higher Education: Increasing the Value and Performance of University Processes) will appear on the College Connection radio show discussing the implementation of Lean in a university administration environment.

College Connection is the public’s radio link to information about Oklahoma’s colleges and universities and the importance of college degrees for individuals and for the state. On the air since 2004, the state-wide, weekly program targets a general audience and features news on higher education issues and interviews with education experts and newsmakers from around the state and nation.

Here are the air times and radio stations:

Saturday 10:00 a.m. & Sunday 10:30 p.m.
KOKC- AM 1520 Oklahoma City

Sunday 6:00 a.m.
KOCU-FM 90.1 Altus
KLCU-FM 90.3 Ardmore
KYCU-FM 89.1 Clinton/Weatherford/Elk City
KCCU-FM 89.3&102.9 Lawton/Ft. Sill/Duncan
KMCU-FM 88.7 Wichita Falls, TX.

Sunday 6:30 p.m.
KOSU-FM 101.9 Okmulgee
KOSU-FM 107.5 Stillwater
KOSU-FM 91.7 Tulsa/Bartlesville

Monday & Wednesday 4 p.m.
KSSU-FM 91.9 Durant

The show will also be archived on the College Connection web site.