From the Editor

Welcome to the Superfactory Newsletter! I hope you find our updated newsletter design easier to read.

The AME San Diego regional conference is early this 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!

- Kevin Meyer

Manufacturing Excellence News

Stories of interest to the lean community.

• Manufacturers to put emphasis on costs
  Reuters - May 28, 2008
• Lean manufacturing hikes efficiency
  MLive.com, MI - 5 hours ago
• Problem-Solving Through the Lean Lens
  IndustryWeek - May 20, 2008
• GE Reports On Progress Of Ecomagination
  Environmental Leader, CO - May 29, 2008
• Innovation ensures easy ride
  Materials Handling, UK - May 30, 2008
• Lean times are over after flood
  The Star, UK - May 30, 2008
• Toolmakers find strength as teams
  Crain's Detroit Business, MI - May 26, 2008
• It's All About The Execution
  Worcester Business, MA - May 25, 2008
• Dell proved assembly-line approach is not needed in manufacturing
  Lake Forester, IL - May 22, 2008
• Lean haulage can save you a fortune
  Road Transport, UK - May 21, 2008
• Turning the ship around
  Milwaukee Journal Sentinel, WI - May 20, 2008
• All coming together
  Minneapolis Star Tribune, MN - May 20, 2008

In the Blog

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

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Recent posts in the Evolving Excellence blog include:

• SF20 Goes Positive in May - The Superfactory 20 Index of lean companies continues to outperform the S&P 500.
• Productivity: Eliminate Before You Optimize - Four Hour Work Week versus Getting Things Done: Lean versus Six Sigma
• Dell Cookie Dough - Dell continues to move away from lean manufacturing... and struggles.
• Different Approaches to a Truck Slowdown - Chrysler, Ford, and GM deal with the slowdown in truck sales. One doesn't get it.
• Evolutionary Economics: Focus on the Customer - Why free markets are not zero sum systems... thanks to the customer.
• Dov's Short Elevator Trip - American Apparel demonstrates again why domestic lean manufacturing can beat overseas sweat shops.
• Motorola Kills the Future - The once king of six sigma stumbles and falls... thanks to its CEO.
• A Lean Approach to Poverty - Lean helps explain why massive government relief programs aren't the most effective poverty fighter.
• Self-Segregating People Flow - The TSA experiments with visual controls to speed up airport security checks.

Upcoming Events

Featured Book

Extreme Toyota

by Emi Osono

To an outsider, Toyota is hard to understand. The company moves forward gradually while also advancing in big leaps. It is frugal with its resources while spending extravagantly on people and projects. It is both efficient and redundant; it cultivates an environment of stability and paranoia; it is hierarchical and bureaucratic, but encourages dissent; it demands that communication be simplified while building complex communication networks. These contradictions are rampant at Toyota because its culture and managers intentionally embrace contradiction, opposites, and paradox.

Granted unprecedented access to the inner workings of Toyota, the authors spent six years researching the company and performing more than 220 interviews with Toyota employees, distributors, and car dealers in order to determine what makes Toyota one of the world's best companies. Extreme Toyota offers an inside look at the radical contradictions within the company, created by its own management, and how these help Toyota outperform its competition. By putting a premium on creativity and paradoxical thinking as a corporate resource, Toyota has become the best car manufacturer and one of the most successful companies on earth. This book takes a fascinating inside look at what makes Toyota tick.

Featured Article

Dark Days for Lean Management

by Bob Emiliani, The CLBM LLC

When do top executives adopt Lean management? Usually, it’s when times are tough. Why do top executives adopt Lean management? To reduce costs, improve profitability, and increase the stock price. This reasoning is totally incorrect and contributes to the many failed Lean transformations that we have witnessed over the last 30 years. So when should management adopt Lean management and what is the right reason for doing so?

Executives should adopt Lean when times are good and not when times are bad, as they normally do. Adopting Lean management when times are bad is like cramming for a test in school the night before the test. You should have been studying all along, but instead procrastinated and failed to manage your responsibilities and meet your commitments.

We all know that cramming for tests yields poor results. Likewise, cramming to adopt Lean management in a year or two because business conditions have deteriorated is not going to succeed. But that won’t stop executives from trying to lessen the impact of the 2008 recession. Truly, I wish them well, but they should not have waited until circumstances became dire.

The odds are against executives who adopt Lean when the economy is poor. In fact, the failure rate is nearly one hundred percent. The reason is that Lean management is not a simple addition of new Lean knowledge to executive’s existing base of conventional management knowledge. Adopting Lean means that conventional management knowledge and practices must be removed and replaced with Lean principles and practices. This replacement process requires learning new things over an extended period of time, just as it takes an extended period of time to learn conventional management.

Featured Blog Post

Different Approaches to a Truck Slowdown

Truck sales are plummeting thanks to rising gas costs.  What are the major automakers doing about it?  First, let's recall our post last month on Nissan and Chrysler.

The column goes on to discuss how Chrysler will build large vehicles for Nissan and Nissan will supply or co-manufacture small vehicles for Chrysler.  This will help reduce the multiple architecture or platform problem that Mr. Phelan believes is critical to Chrysler's long term viability.

So if sales of large vehicles are decreasing, who got the better end of that deal?  If fuel costs continue to rise, will Chrysler be manufacturing... anything?

Now let's move on to Ford.

Ford Motor Co. will halt more pickup-truck and sport-utility vehicle production over the next two months, a sign that falling U.S. consumer demand for the vehicles still hasn't bottomed out.  The auto maker's Wayne, Mich., truck-assembly plant, home to the Expedition and Navigator SUVs, will be shut from June ...

Sounds prudent.  Painful, but prudent.  Better to reduce the top line than to keep on manufacturing products that aren't going to be purchased any time soon.

And then there's GM.  I guess you could say they're lucky... they have idle truck plants thanks to a strike, so they aren't incurring major shutdown costs like Ford while still drying up excess supply.  Or so you would think.

In a regulatory filing, GM said the 11-week strike at American Axle & Manufacturing Holdings Inc. cut GM's truck production by 230,000 vehicles in the second quarter. GM estimated that drop would lower its pretax earnings by $1.8 billion, and warned it won't be able to make up that lost production later in the year because of slack truck demand.

Uhh... wait a minute.  If demand is slack, why would you want to make up production?  So the trucks can sit and tie up cash while depreciating and waiting for a fire sale?  Yep, that's a good strategy.

GM has more than a simple production demand problem.  They just don't realize what it is.