• From the Editor
• Manufacturing Excellence News
• In the Blog
• Upcoming Events
• Featured Book - Value Acceleration
• Article - Lean Problem Solving and Continuous Improvement
• Featured Blog Post - Costco versus the Lean Corner Store

The AME San Diego regional conference is early next month and promises to be a great event! 13 tours, 32 best practice presentations, 18 world class workshops. For practitioners by practitioners. I strongly recommend checking it out!

A bright young guy that interned with me a year or two ago is running a survey for his masters thesis on Lean and ERP. Many of you know my feelings on the subject so I'll remain quiet, but if you are interested in participating in the survey click here. The user/pw is "user" and "leanerp". You will get a copy of the results.

Stay tuned for an announcement next month on our new book, to be published at the end of the year!

As always we appreciate your support for our mission to spread manufacturing excellence knowledge. Take a look at our sponsorship and advertising opportunities here.

- Kevin Meyer

• Understanding overall equipment effectiveness
  Reliable Plant Magazine, OK - May 6, 2008
• AMD Improves Chip Manufacturing Efficiency
  X-bit Labs, CA - May 6, 2008
  
• One year on: the story of the 787
  Flight International - May 5, 2008
  
• Esterline: Flying Under the Radar
  Washington Post, United States - May 5, 2008
  
• Flex Craft seeing dramatic growth
  Post-Bulletin, MN - May 4, 2008
  
• Honda extends jet sales beyond US
  Aviation International News, NJ - May 1, 2008
  
• Derailed From The Lean Track
  IndustryWeek - Apr 29, 2008
  
• 390 JOBS TO GO AT DESSERT FACTORY
  South Devon Herald Express, UK - Apr 29, 2008
  
• 'Toyota way' inspires lean practices
  The Daily Yomiuri, Japan - Apr 28, 2008
  
• Productivity on the up as manufacturing rises from dead
  Crain's Manchester Business, UK - Apr 27, 2008
  
• ASML makes lean compute
  Connecticut Post, CT - Apr 26, 2008
  
• Will China try to muzzle US companies?
  MLive.com, MI - Apr 24, 2008
  

Join the other 3,000 readers who get their daily dose of blunt manufacturing reality by subscribing to the Evolving Excellence blog!

Recent posts in the Evolving Excellence blog include:

• Message to Hillary: We Still Make Stuff - Another politician gets caught saying manufacturing is going off a cliff.
• TPS in Semiconductors - Applying lean to high capital factories with short life spans.
• Ghost Kanban - How some companies delude themselves into thinking they have applied kanban and just in time.
• Fun With Statistics: Percentile Problems - A common misperception about families versus percentiles also applies to the product management world.
• Fujio Cho Reminds Us About People - Once again, lean is about people. How often we forget.
• Does Kerkorian Read Evolving Excellence? - Kerkorian take a significant stake in Ford... as an investment.
• Getting Paid Not To Work - Are you incenting your employees the right way?
• Costco versus the Lean Corner Store - Can the "buy in bulk" mentality be lean?
• Nike - Lean in China? - Nike cleans up its act in China, and reaps the rewards.

Visit the Superfactory Events Calendar for the full list of events.

  Value Acceleration: The Secrets to Building an Unbeatable
  Competitive Advantage
  by Mitchell Gooze & Ralph Mroz

Value Acceleration teaches top level executives how to leverage 20th century accomplishments into 21st century competitive advantage. This book shows where the source of competitive advantage now lies, and how you can achieve it in your company. 'Value Acceleration' reveals the ideas that now underline competitive advantage, and how to use them to your advantage. This book discusses three central ideas: The crucial need for process management in marketing; The first comprehensive, over-arching, and hierarchical process model of the entire marketing function; Specific and time-proven principles by which your marketing process is best managed for effectiveness and efficiency.

More Information

Lean Problem Solving and Continuous Improvement of
Accounting Processes
by Brian Maskell and the BMA Inc. Team

This article is the second in a series about lean accounting methods. The series will be based on the newest book, published in October 2007, The Lean Business Management System; Lean Accounting Principles & Practices Toolkit.

In our practice at BMA Inc., when we first introduce lean accounting to companies, questions always arise, something along the lines of: "Well, that all makes sense, but how do you do it?" or "How do you get this past your auditors?" or "Is this really GAAP compliant?" and the like. This series of articles will examine details or "how to's" of this evolving discipline and show you how to put it to work in your company as a business management system that supports your lean manufacturing efforts seamlessly.

One key motivation for making the transition away from traditional cost accounting is to enable the accountants to support the lean manufacturing culture by providing information that is relevant and actionable so that lean continuous improvement is empowered at every level of the organization.

Lean accounting seeks to apply lean to the company’s accounting processes; and to create accounting, control, and measurement systems that support lean. In this article, we will address the first of these themes and will tackle questions like: “How do we make our accounting processes truly flow?” Or, “How do we eliminate waste from the accounting processes?” And “How do we make our accounting processes self-improving?”

The simple answer is that lean thinking and methods are applied to accounting processes in the same way they are applied to other processes; whether manufacturing, engineering, sales and marketing, healthcare, retail, banking, or industrial. But, not so fast. First, we have to see the waste. For this we need to map the processes. Second we must have standard methods for creating lean improvement. And third we must build a culture of continuous improvement leading to non-stop improvement.

The starting point for lean accounting is to recognize that all accounting, control, and measurement is 100% waste. There is nothing we do as accountants and controllers that adds value for the customers. This does not mean that our processes are unimportant – indeed many of them are vital to the company’s success. But it does mean that we need to work relentlessly to make these processes as little work as possible.

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Costco versus the Lean Corner Store
By Kevin Meyer

A while back I somehow ended up with a Costco card, but I have never used it. I don't necessarily have anything against the store, it's just that I don't need to buy in bulk. In fact, I rarely have to buy, period. My wife and I have pretty busy schedules, and often meet for dinner out. In an effort to reduce a ridiculous amount of eating out, we've recently begun to have some meals brought in. A small luxury perhaps, but it saves a lot of time. When I do cook it usually takes about six trips to the store just to obtain all the ingredients to grill a slab of salmon.

Although overall I'd say we tend more toward the frugal side, I realize we're in the minority with regards to meal habits. In fact, as gas prices go up, trips to the store are going down.

Until two years ago, Natalie Stone paid twice-a-month visits to her local BJ's Wholesale Club in Greenville, S.C., to buy paper towels and toilet paper for her home, meat for the dinner table, and diapers for her son. Often, during the week, she would also swing by her local supermarket for items she'd forgotten. But rising gas prices and other budgetary constraints have killed off such side trips. "Now I go to BJ's just once a month," says the 29-year-old homemaker.

This change is becoming more prevalent.

The confluence of high food and gas prices, slumping real estate, and the credit crunch has left the Stones and millions of other middle-class families feeling pinched. That has major implications for the nation's retailers. As consumers get more anxious and more organized about where and when they shop, they're drawn to Wal-Mart Stores, Costco Wholesale, and the like. "We're seeing some clear changes in consumer behavior," says A.G. Lafley, CEO of Procter & Gamble.

So much for demand-flow, pulling from the customer just the amount needed. So much for one piece flow in the pantry. So much for lean grocery shopping. Where do people store a month's worth of food for an entire family? Our pantry isn't that large, or at least it wasn't the last time I checked. But we've done quite a bit of remodeling since then, so perhaps it has changed.

Earlier this century when I started my own contract manufacturing company I wanted to drive home that lean manufacturing isn't just for the shop floor. So I enforced rules for the purchase of shop supplies, office supplies, and equipment just when they were needed, in the exact quantity needed. Everything was kanban'd. Including toilet paper. I thought it was brilliant... if the extra roll was still on the shelf, all was good. If not, time to go buy another. My administrative assistant was not impressed. As you may imagine, an exception to the rule was created the next day, although I guess we could have just increased the size of the TP kanban.

However I believe there could still be hope for the lean pantry. Instead of making once monstrous trip to the local Costco, how about looking for alternatives? Not the overproduction of leftovers or multiple runs to the large big box store. Although large stores are becoming more prevalent, much of the rest of the world enjoys a luxury we don't have in North America: the tiny local store on the corner of seemingly every block. Just the staples... a short distance away in just the quantities needed. Go and get just what you need for the day. For some reason those stores just never took off in modern America. So much for the lean pantry.

I think I'll stick with eating out. It's much easier.

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