From the Editor

Welcome to the Superfactory Newsletter!

Those of you that have visited the Superfactory website over the last couple weeks have noticed some changes. We've added a much more robust infrastructure, which has allowed for some new content and functionality:

• All of the topics areas, such as 5S, are now in "wiki" format. This means that the community can continually update each topic with new information and resources.
• We have added a series of discussion forums.
• We added a survey capability, with this month's survey topic being the types of training desired by your organization.
• Visitors can now upload their own articles, after our review and approval, into the Document Archive. This should increase the depth of our resources.

The Superfactory website is operated by our partnership, Superfactory Ventures LLC. We are adding new services to the company, therefore we have changed our name to Factory Strategies Group. The Superfactory website will stay the same and continue to be a free resource. Learn more about the services offered by Factory Strategies Group here.

And don't forget two important events coming up over the next couple 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 1,350 people have already registered. I hope to see you at both events!

- Kevin Meyer

Manufacturing Excellence News

Stories of interest to the lean community.

• Boeing’s Outsourcing Woes Illustrate Importance of Strategy
  IT Business Edge, KY - Aug 5, 2008
• Now is the time for lean management
  Economic Times, India - Jul 28, 2008
• Tempted to move from Woodinville to China ...
  Puget Sound Business Journal, WA - Jul 28, 2008
• Lean played role in Cessna's move to new plant
  Reliable Plant Magazine, OK - Jul 30, 2008
• The seven deadly muda of pitching
  Bizcommunity.com, South Africa - Jul 31, 2008
• Leaner and meaner - the way forward?
  nebusiness.co.uk, UK - Aug 4, 2008
• Herman Miller Sees 32% ROI in Energy Efficiency Investments
  Environmental Leader, CO - Aug 5, 2008
• Batesville Casket: Case closed
  Reliable Plant Magazine, OK - Aug 6, 2008
• HAL plans lean heirarchy after cutting flab in manufacturing
  Economic Times, India - Aug 6, 2008
• Innovation is the key to recovering from a recession
  Telegraph.co.uk, United Kingdom - Aug 7, 2008
• Award honors Quest Aircraft
  Bonner County Daily Bee, ID - Aug 8, 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:

• Climate Change Chain - Taking environmental factors into account when optimizing supply chains makes lean sense.
• The Arbitrary Calendar Year - How do your metrics fare if the time frame is shifted? You might be surprised.
• What is a Windfall? - Exactly what is a windfall? Profit? Margin? Change in profitability? The oil companies want to know.
• Four Hours of Lean - When Lean meets Tim Ferriss' Four Hour Work Week.
• Beware the Prism - What causes normally intelligent people to ignore the facts?
• Sloan Tackles Lean Accounting - The academes are beginning to understand, thanks this time to Brian Maskell.
• Southwest's Colleen Barrett, Servant - The brains behind Southwest's employee-centric vision.
• The Sense of Manufacturing - Do you and your employees have a gut feel for good manufacturing, or do you rely on computers?
• A United Pilot Remembers the Customer - Some people still remember what a business is all about.

Upcoming Events

Featured Book

Lean Hospitals

by Mark Graban

Drawing on his years of working with hospitals, Mark Graban explains why and how lean can be used to improve safety, quality, and efficiency in a healthcare setting. After highlighting the benefits of lean methods for patients, employees, physicians, and the hospital itself, he explains how lean manufacturing staples such as Value Stream Mapping and process observation can help hospital personnel identify and eliminate waste in their own processes, effectively preventing delays for patients, reducing wasted motion for caregivers, and improving the quality of care.

Featured Article

Attention: We Can Stop Making the Same Mistake Now

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?

Wouldn’t it be great if top managers could easily see the wide-ranging benefits of Lean management and the vast array of improvements and human and organizational capability-building that are possible? If they could see it, then you would think that they would rush to change their leadership behaviors in order to secure the gains for the business and its stakeholders as soon as possible. But as we all know, this rarely happens. The usual outcome is for executives to take the business down the Lean path with little or no change in their leadership behaviors.

Trainers, consultants, and other interested parties focus their efforts on trying to change leadership behaviors because such changes are essential to correctly practice Lean management. However, their record of success is poor. Changing the leadership behaviors of successful people with big egos is a quest whose probability for success is very low. You can be sure there have been and will continue to be a few isolated examples of leaders who have successfully changed some of their behaviors, but there will not be much more than that.

It is erroneous to think that the answer lies in changing executives’ leadership behaviors. This critical error was been made repeatedly in the past [1] with the antecedent to Lean management, Scientific Management [2,3], again in the last 35 years with Lean, and also with the scores of narrowly-focused management fads that have come and gone over the years.

I have been hot on the trail of leadership behaviors as the key to Lean success since the 1995. I even wrote one half-dozen scholarly (yet always practical) papers that made important new contributions to our understanding of Lean leadership behaviors. However, it turns out that I made the same mistake that so many people made before me, and that leaders of the Lean management movement are again making today.

Featured Blog Post

Get Small. Get Lean.
by Dan Markovitz, Time Back Management

An article in last Sunday's NYTimes addressed the value of corporations staying small. In contrast to the early days of the internet when "get big, fast" was the mantra for all firms (especially internet startups), there's a growing recognition that there are real benefits to thinking small.

Although the article doesn't address Lean, the message is familiar to any student of lean processes. For example,

Decentralizing the hierarchy opens the door to creativity, giving workers the leeway they need to make significant decisions without first jumping through executive management hoops. “The idea,” says [Philip Rosedale, founder and chairman of Linden Lab, the company that built Second Life], “is to enable a creative environment where there’s a good degree of experimentation.”

And experimentation, after all, is what Toyota is all about: running controlled experiments in an effort to continually improve the production process.

The article goes on to argue that one of the major advantages of thinking small is the increased opportunity for small group collaboration. Although the author doesn't recognize the key features of a value stream management approach, one of the companies she profiles clearly does:

At Avocent, an information technology management company based in Huntsville, Ala., customers, product developers and testers had gotten to the point that they rarely interacted. Each group felt that it lost control of a project too early in its progress. So, in March 2007, the company revamped development so that members of all three groups would work on the same team, following a project from start to finish and making changes as needed. With customers, programmers and testers working virtually side by side, Avocent tripled production without adding workers.

The focus on the customer hasn't just increased production, either. It's reduced the waste of rework:

By making sure products in development meet customer needs each step of the way, Avocent has been able to avoid spending weeks correcting errors in the final product, says Ben Grimes, chief technology officer.

I don't think that a company has to be small to orient itself around the value stream and focus on the customer. There are plenty of large customers that manage the same trick. But if thinking small is a more palatable way for companies to give up command and control management techniques in favor of a lean respect for people, so be it. As Seth Godin says, "small is the new big."