From the Editor

Welcome to the Superfactory Newsletter!

Have you always wanted to visit Japan to see some of the best lean factories in the world? How about joining me on Gemba's Japan Kaikaku Experience trip in late October! Gemba Research has been leading these trips for many years and therefore has unique access to some incredible companies. For more information click here.

And don't forget two important events coming up over the next few months: the Lean Accounting Summit in Las Vegas in September and the AME Annual Conference in Toronto in October. The AME conference is the largest lean conference in the world, and over 1,250 people have already registered.

- Kevin Meyer

Manufacturing Excellence News

Stories of interest to the lean community.

• Lean On Me - The Reality of Domestic Manufacturing
  National Journal, DC - Jun 26, 2008
• Volkswagen India eyes 69% growth in sales
  Business Standard, India - 5 hours ago
• Surviving the Roller Coaster
  Assembly Magazine, IL - Jul 1, 2008
• Work lean to control your plant's costs
  Reliable Plant Magazine, OK - Jun 30, 2008
• Outsourcing to China not so cheap anymore
  The Gazette (Montreal), Canada - Jun 27, 2008
• Latest technology improves production
  Northern Echo, UK - Jun 17, 2008
• Businesses should teach workers about finances, state advises
  Central Penn Business Journal, PA - Jun 19, 2008
• Some home builders thrive in tough housing market
  WZZM, MI - Jun 20, 2008
• Springs maker saves £50000 by going lean
  Crain's Manchester Business, UK - Jun 23, 2008
• Purdue helps Indiana companies stay lean and clean
  Lafayette Online News, IN - Jun 23, 2008
• Streamlining builds competitive market
  Janesville Gazette, WI - Jun 25, 2008
• GM Centennial: Trendsetting Plants
  Assembly Magazine, IL - Jul 1, 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:

• Tax Sensitivity 101 - The effect of tax policy on capital investment is often underestimated, and can contribute to flights of knowledge.
• Welcome Home and Good Luck - Rising fuel costs cause outsourcers to return home... to compete with those that figured out how to stay.
• The Dreamliner Follies Continue - How Boeing and Embraer are approaching the value of knowledge workers differently.
• The Contradictions of Toyota - Short summary from the Harvard Business Review article that spawned Extreme Toyota.
• WaPo Deludes the Masses, Again - The Washington Post gets it wrong on the supposed ills of domestic manufacturing and productivity.
• The Buzzword of Customer - Are taxpayers the customer of government, or vice-versa?
• Too Bad So Sad - Rising fuel costs cause outsourcers to panic over suddenly costly supply chains.
• Small Batch Elderly Care - How lean can change the traditional approach to nursing homes.
• Toyota Puts People First - What differentiates Toyota from most other companies.

Upcoming Events

Featured Book

Real Lean - Volume 3
The Keys to Sustaining Lean Management

by Bob Emiliani

This book finally answers the question that Lean practitioners have been asking for decades: "How do you sustain Lean management?" Major obstacles are revealed, culminating in the identification of 14 key commitments that executives must make in order to sustain the Lean management system. Managers will find this book contains a wealth of practical new information and is amazingly insightful.

Featured Article

A Great Trip to Japan

by Norman Bodek

This past April, I lead an Institute for Lean Systems study mission to Japan. In the past, when I owned Productivity Inc. Press, I lead probably 30 similar study missions to Japan, all great, but none had been better then this one. In setting up these trips, I am never sure exactly what will be seen or learned from the experience. I work very hard to locate exceptional companies to visit and go over to Japan with a lot of hope that everything will prove to be beneficial to the travelers. But, I am never sure of the learning experience. Miraculously, this trip went much further then expectations and our group returned home filled with new exuberances, new content, and a new depth of knowledge to help companies outside of Japan to improve their manufacturing processes. In a “nutshell,” on this trip we discovered:

That it is possible to “Leap Frog Toyota.”

At the recent Shingo Prize conference, I asked around 500 attendees, “How many of your companies are attempting to be Lean?” Almost all hands went up. Then I asked, “How many of your companies are Lean?” Not one hand was raised. Not one. What is Toyota doing that other companies are not doing? And is it possible to catch them? Even better, is it possible to “Leap Frog Toyota?” I didn’t think so until I went to Japan and visited both Toyota and Canon.

Toyota is probably the most successful manufacturer in the world. They do many amazing things to be so productive. Recently, their chairman, Mr. Watanabe stated that Toyota will again cut their costs tremendously.

"We've started what we call "emergency value analysis activities." We've formed teams to review every single part and component over the next six months to determine how to improve designs to reduce production costs further. Some employees still lack awareness of these activities, but we plan to work on developing our human resources in tandem with this effort."

Before visiting Toyota’s Tahara plant, I read Jeffrey Liker’s and Michael Hoseus’s new book “Toyota Culture: The Heart and Soul of the Toyota Way.” An excellent read, one that excites you as to the possibilities of how to develop people to their fullest potential. As I read the book, I thought the true difference between Toyota and others was their investment in their people. In fact, Toyota calls it “Respect for People.” Then I discovered from my visit to Japan that there is a vast gap between the theoretical and the actual. Yes, Toyota does continually develop people but “takt” time, a key to Toyota’s success, also gets in the way from fully giving people opportunities to live fulfilled lives at work.

While “takt” time allows Toyota to balance their production facilities, it also gives people very limiting work lives and what I observed it is far from “Respect for People.”

As our group walked along the assembly line at Toyota, it was hard not to be impressed with their production system. It is lean and efficient and surely far beyond the other automobile companies. I had, however, never really thought deeply enough about the quality of work life for the average worker on the line. I looked at the efficiency of the production process and the beauty of the automobiles but hardly ever considered what work was it like for the average production worker. Until, I stopped and watched one young man on the assembly line installing in one minute, the takt time, around eight to ten bolts into each car. The job looked quite tedious as he had to reach overhead to install the bolts in one minute into each car and also onto 500 cars that same day, and I was told he would continue to do this job for the next three months. How could I reconcile the facts in Liker’s and Hoseus’s book about investing in each worker’s development and seeing this young man doing this tedious, repetitious and obviously boring job?

I did not think that much about this until two days later when I went to a Canon plant and was told that the worker I saw building a copier was under a 30-minute “takt” time. Now just think with me. This Canon worker could assemble the entire copier without any assistance from another worker. In fact, in this plant there are eight people, called “super meisters,” that can build an entire large copier with a four-hour takt time. They know how to assemble over 3000 parts at the highest levels of quality and productivity. To me this is a real revolution in designing work for intelligent human beings. It recognizes that people have enormous talents, if trained properly, respected deeply, and challenged by management to reach their highest levels of self-actualization.

Featured Blog Post

The Dreamliner Follies Continue
by Dan Markovitz

Today's NYTimes unknowingly threw into stark relief the consequences of the different paths taken by Boeing and Brazil's Embraer. Boeing, of course, claims that the outsourcing of the 787 Dreamliner is the epitome of lean manufacturing, even when its many problems point clearly to the folly of off creating a complex, globe-girdling supply chain. (This blog has covered the 787 fiasco many times. Read all about it here.)

The latest news, in what has become a grimly comical production saga, is the possibility of further delays due to fuselage damage:

Boeing, already facing a delay of at least 14 months on its new 787 Dreamliner aircraft, has not yet determined if damage to the fourth of six test planes will have an effect on the full program.

The midbody fuselage section built by Global Aeronautica, a Boeing venture with Alenia North America, a unit of Finmeccanica, was damaged in Charleston, S.C., “by an Alenia employee not following proper work procedures,” a Boeing spokeswoman, Yvonne Leach, said Monday night.

You can't blame Boeing for all problems, of course. They're inevitable, especially when building something as complicated as a plane with an entirely new structure. But it's significant that this particular error occurred with a part that had been outsourced to another company, not at Boeing itself. And although the NYTimes doesn't use lean terminology, "proper work procedures" sure sounds a lot like standard work to me.

Ironically, Boeing can't even determine the ramifications of the damage, because the part hadn't yet been shipped to Everett, where final assembly occurs. So in addition to the waste of rework, there's the waste of waiting, as they twiddle their thumbs before they can determine what course of action to take next.

The newspaper also ran an article on Brazil's challenge in finding enough skilled, educated workers -- particularly engineers. Embraer, which builds private and commercial jets that seat from six to 122 people, is one of the companies that has created its own specialized engineering program:

In 2001, company directors realized that with only three Brazilian universities offering courses in aeronautical engineering there would not be enough graduates available to help them design, build and sell planes in a rapidly growing market. So the company created a program that selects the country’s best engineering graduates and puts them through an 18-month specialization course.

They already have a base in disciplines like electronics, mechanics or design. In Embraer’s classrooms, overlooking a shop floor scattered with fuselages, they learn the skills that will help them become aeronautical engineers.

Júlio Franco, executive vice president for organizational development and personnel, said the company spends $45,000 training each student.

The results? Embraer has doubled in size since the start of the decade and currently has orders in excess of $20 billion. It expects to deliver nearly 200 aircraft to clients this year.

Okay, $20 billion is small potatoes compared to Boeing. But maybe some of the workers that Boeing laid off in years past, and who couldn't find work when Boeing farmed out the Dreamliner, could find some work with Embraer.