 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The Superfactory Newsletter is published monthly to over 50,000 subscribers. Inside Superfactory About -
Articles  PowerPoint Presentations Lean Manufacturing Lean Overview - 3P - 5S - Jidoka - Kaizen - Value Streams - Visual Factory - Pull - JIT - Kanban - Quick Changeover - Cellular Manufacturing - Standard Work - Theory of Constraints - TPM - TWI Lean Enterprise Quality Business Safety  DVD Videos Training and information videos on a wide variety of lean manufacturing topics. Life in a Workcell - Batchin' - What Lean Means - Kaizen Blitz - Shigeo Shingo - Lean Accounting - ESD - 5S - Quick and Easy Kaizen - Customer Satisfaction - Work Teams - Velocity at Dell - Strategic Planning  Factory Toolbox Over 500 forms, procedure templates, and tools for download. Lean Toolkit - Procedures Toolkit - Quality Toolkit - Tools and Forms Toolkit - Engineering Toolkit - Materials Toolkit - Safety Toolkit - HR Toolkit - Six Sigma Toolkit - Finance Tookit Sponsors
Join the Superfactory LinkedIn group! |
Volume 10 Issue 4 | April 2009 | www.superfactory.com |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From the Editor
Last month we told you about the launch of Gemba Academy, which provides HD-quality online interactive training. With HD quality you can train individuals at a PC or project the video into a large auditorium for a single low charge per site - no per-user or per-seat charges. This month we added a seven module series on 5S to the School of Lean.. Check out Gemba Academy, including the four free video modules on Introduction to Lean, The Ten Commandments of Continuous Improvement, VSM Overview, and 5S Overview. This month regular contributor Bob Emiliani has another meticulously-researched article looking at the British influence on Toyota. The Superfactory LinkedIn group has just reached - Kevin Meyer |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manufacturing Excellence NewsStories of interest to the lean community.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In the BlogJoin over 5,000 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:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Upcoming Events
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Featured Book
By Stephen Rogers It's not enough for companies to simply try to find ways to save money through suppliers. If suppliers aren't fully integrated into their corporate strategy, there's no way for companies to ensure that they will continue to save money...and that their supply decisions will fit with changing organizational goals. Blending theory, best practices, and relevant examples, "The Supply-Based Advantage" reveals how to design, build, maintain, and 'remodel' an organization's supply base to support its total business strategy and operations. Filled with enlightening examples from companies including Mars, Procter & Gamble, Intel, and Wal-Mart, this book shows how any organization can transform their supply function into a key driver of profit. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Featured Article
By Bob Emiliani, The CLBM LLC Unaware of the details of Toyota’s history, it’s easy to think that Toyota managers and workers were the originators of all the important ideas. In fact, they were the originators of some important ideas and adopters of ideas from many others†– most good, but a few not so good. This article highlights one idea that originated in the U.K. and which Toyota senior managers have for decades found very useful for determining the size and output of their automobile plants, and for informing them when to develop new models. For many years I have been interested in the origins and evolution of Lean management and have recently written book chapters and papers on the topic [1-4]. During the course of my studies I have periodically come across reference made by Toyota executives and others to the Maxcy-Silberston production cost curve, invariably without attribution or with erroneous attribution. As a result, the original source for the curve had long been difficult to locate. The curve appeared in the 1959 book The Motor Industry, a landmark study of the British automotive industry from the early 1900s to 1957, written by economists George Maxcy and Aubrey Silberston [5]. Importantly, the book also included a description of how the cost curve was derived [6], which I will discuss later. Figure 1 shows the elusive Maxcy-Silberston cost curve (also known as an “experience curve”). Figure 1
This curve describes a quasi-empirical relationship between the total cost per unit and annual production volume for a hypothetical “unit” consisting of a mix of different models of mass-market cars, vans, and trucks, “with varying degrees of interchangeability between them,” in the U.K. in the early- to mid-1950s (a high growth period). The shape of the curve suggests there is little in the way of economies of scale beyond a cumulative output of about 200,000 to 250,000 units per year. Since the late 1950s, Toyota senior executives have viewed this cost curve as helpful in guiding their thinking and decision-making with respect to the size and output of new automobile plants [7]. Taiichi Ohno accepted the Maxcy-Silberston cost curve for about 15 years during Toyota’s high-growth (sellers’ market) period, from about 1958 to 1973. The Maxcy-Silberston cost curve loses relevance in slow growth (buyers’ market) periods, such as what Toyota started to experience after the 1973 oil shock, according to Ohno [8]. While Ohno thought that Toyota’s Production System invalidated or greatly undercut economy of scale effects and the Maxcy-Silberston cost curve, the Maxcy-Silberston curve seems to be relevant even today to Toyota senior management’s thinking in terms of annual factory production output. The question is, why? |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Featured Blog Post
Pop Goes China It may have passed under your radar in the global economic hubub, but Chinese manufacturing is in the tank and sinking deeper. While the economic meltdown threw a fair amount of gasoline on the fire, Chinese manufacturing was heading in the wrong direction well before the credit and capital markets went haywire. The cost of labor in China is going up fast, fueled by inflation (before the economic debacle) and by Chinese government actions. The goal of Chinese economic policy is twofold: first to draw in vast amounts of foreign - mostly American - cash. They have obviously met that goal very well. They also look to create jobs; after all they have 1 point 3 billion mouths to feed. Here they have come up short - about 300 million mouths short. To correct this the Chinese toughened the minimum wage and overtime laws at the beginning of '08. The idea was to cut back on hours worked so manufacturers would hire more people. The result has been about a 20-30% increase in labor costs, which was China's stock in trade. Absent cheap labor, China is just a very, very far away place that manufactures stuff with dubious quality and absurd lead times. Compound all of that with their lead-in-the-toys and toxins-in-the-milk-and-baby-formula fiascos, which led to tighter regulation and enforcement, which resulted in even more cost increases. Then throw in a taste of just how expensive Chinese logistics can be when oil is selling for over a hundred bucks a barrel, and the net result is 70,000 Chinese factories closing over the course of the last 12 months and more than 20 million more unemployed Chinese wrokers. It will get worse for China before it gets better. In the long haul, China knows that their 'One Child Policy' presents a huge problem. As a Chinese friend told me recently, "Our family trees are all upside-down". By that, he means that as long as there are >2 children per family there will be more young people working than old folks sitting on rocking chairs. One child per two parents, however, violates that basic law of math. It is driving China to a population aging condition that makes the retirement of the baby boomers look like a minor blip. Who is going to pay for the growing hordes of Chinese Geezers? Add it all up and China's days as a low labor country are rapidly winding down. This should come as no big surprise. As I have often written, no country can build a long range economy on the principle of low labor costs. It simply cannot sustain. India and Malaysia are already better deals, and Mexico is creeping back into the game. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
© 2009 Superfactory by Factory Strategies Group LLC. All Rights Reserved |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Welcome to the Superfactory Newsletter!
The Supply-Based Advantage
Toyota's British Influence