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Volume 10 Issue 12 | December 2009 | www.superfactory.com |
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From the Editor
Now is the time to invest in lean improvements. Superfactory has added a new series of PowerPoint presentations on Lean Leadership, including the Gemba Walk, Leader Standard Work, Lean Culture, Lean Organizational Structures, Accountability and Visual Controls, Hoshin Kanri, and Servant Leadership. More information. We have also just re-launched our .am morning news aggregators, adding more
- Kevin Meyer |
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Manufacturing Excellence NewsStories of interest to the lean community.
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In the Evolving Excellence BlogJoin over 5,000 readers who get their daily dose of blunt manufacturing and business reality by subscribing to the Evolving Excellence blog!
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Upcoming Events
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Featured Book
By Keith McFarland Why do many people and companies crumble in the face of difficulty, while others use adversity to bounce back even stronger? Here from New York Times bestselling author Keith McFarland is a leadership fable for those wary of fables, a story that rejects pat, heard-it-before advice and shows–in a startlingly fresh way–how to use challenges to make both yourself and your organization stronger. Drawing inspiration from such sources as the work of M.I.T. social scientist Ed Schein, the film Saving Private Ryan, and his own experiences as a CEO leading companies, McFarland cleverly weaves a story whose practical insights can be put to use immediately. Bounce may be the most indispensable guide to facing challenges ever written. |
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Featured Article
By Michael Ballé, Excellence Systems Group What would Peter Drucker have to say about this? This is a question I have asked myself often, particularly when stumped with a situation that didn’t fit anyone’s expectations. I remember reading Post-Capitalist Society fifteen years ago, just as I was completing my first business book, Managing With Systems Thinking, and I remain, to this day, in awe of Drucker’s insight into the transformation of our capital driven society into a knowledge society. At the time, I had the opportunity to study something Peter Drucker mentioned several times in passing: kaizen (continuous step-by-step improvement of working practices). As part of my research on mental models, I observed how Toyota taught one of its suppliers the techniques of what is now called lean management. I was incredibly fortunate to discover a management practice focused entirely (and explicitly) on developing knowledge. Indeed Toyota’s approach to improving operations was very different than what I expected, and it took me quite a while to even recognize how it did what it did. I was looking for superior organizational know-how: the OEM teaching its best practices to its supplier. What I saw was the Toyota consultant teaching problem-framing and problem-solving skills to the suppliers engineers. They taught method, not solutions. In doing so, they consistently developed the supplier’s knowledge, whilst instigating more effective practices on the shop floor in local conditions. As a result, the supplier delivered better parts at lower cost not because they complied better, but because they knew more about both the parts and the processes. Even today, Peter Drucker remains the management thinker par excellence. He created the genre and has never been equaled, neither in the depth of his insights, nor the attractiveness of his broad-ranging style. Even when he turns out to have been wrong, Drucker makes you think like no other management writer does. Drucker’s thought has always been complex and multi-faceted. Having defined the professional manager from his early studies of large corporations, he later turned towards describing what a knowledge worker would be in a knowledge society. In his terms, a manager was no longer simply someone who is responsible for the performance of people but became someone who is responsible for the application and performance of knowledge. In this shift, Drucker realized that creating the new has to be built into the organization through three basic practices. First, continual improvement of everything it does through kaizen, which he defines as organized, continuous self-improvement. And here Drucker sees very clearly what has hitherto escaped many commentators in the lean field: one aim of kaizen is to improve products or services so that they become truly different two or three years down the line. Second, organizations need to learn how to develop new applications from their own successes. Third, organizations have to learn to organize innovation as a systematic process. |
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Featured Evolving Excellence Blog Post
The Lean Ratio I get lots of questions about metrics. We seem to be a culture obsessed with measuring things, and the idiotic notion that we can't manage anything we can't measure seems to be a hard one to shake. Far better would be to embrace the wisdom in the adage that hung on Einstein's wall: "Not everything that counts can be counted; and not everything that can be counted counts." Nevertheless, there is one number - a percentage really - that goes a long way toward quantifying whether the business is getting leaner or not. It is the measure of value added expenses to total expenses. If the business spent $20,000, for instance, and $12,000 of it was on value adding things while the rest was on management, supervision, material handling, inspection and generally pushing paper around, the Lean Ratio would be 60%; or it could be expressed as 3:2 if you like looking at numbers that way better. I like the percentage approach better because it is easy to graph and track month to month and year to year to see if the business is actually making progress toward the elimination of waste. Note that it is a useless benchmarking tool. The fact that one company may have a 60% ratio while another has a 45% is meaningless. All that matters is that the 60% company become a 61% company then a 62% and so forth. It seems pretty straightforward. The objective is to continually improve the percentage of money spent on useful endeavors - making sure more of it is gong to things customers perceive to be of value and worth paying for, and less of it to waste. The rub is that very few companies really know what adds value and what does not, as important as it is to know. One of the most important, interesting, and probably contentious discussions you and your management team can have is the one needed to build consensus on defining value adding. The big problem with defining value adding versus non-value adding seems to be psychological, rather tha intellectual. The CFO of a big publicly traded manufacturer recently told me they had defined all payroll expenses as 'value adding' because they did not want anyone to be upset with the implication that they were not valuable. An admirable sentiment, perhaps, but it utterly destroys the purpose. That seems to the common theme that everyone runs into. Everyone in every department is convinced that they are the ones really adding value. If you are going to have any chance of getting it right, everyone needs to know that all people are valuable, but much of the work is not in the eyes of the customers. Read the rest and comment (15 comments so far)... Follow up post: Value or Not to Value - That is the Question |
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© 2009 Superfactory by Factory Strategies Group LLC. All Rights Reserved |
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Bounce: The Art of Turning Tough Times Into Triumph
Lean Leadership: Knowledge Productivity for the 21st Century