Seek Out Inspirations for Flow

Sometimes we find inspiration for flow in places we wouldn't otherwise look. Over the years, I've tried to apply lean thinking, elimination of waste, simplification, respect for individuals, etc. to my political thinking. The short story is - I can't subscribe to U.S. political thinking anymore, in almost every instance of political creation in world history, the result is a path towards destructive win-lose thinking. Fredric Bastiat says it best:

Life, faculties, production—in other words, individuality, liberty, property—this is man. Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place. 

When under the pretext of fraternity, the legal code imposes mutual sacrifices on the citizens, human nature is not thereby abrogated. Everyone will then direct his efforts toward contributing little to, and taking much from, the common fund of sacrifices. Now, is it the most unfortunate who gains from this struggle? Certainly not, but rather the most influential and calculating.

Government is the great fiction through which everybody endeavors to live at the expense of everybody else. 

People are beginning to realize that the apparatus of government is costly. But what they do not know is that the burden falls inevitably on them. 

Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. 

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Bastiat described this French political climate in early 19th century in , The Law. This win-lose, zero sum game of destruction doesn't sit well with me, not at all.

Enough doom and gloom. There is a silver lining...the concept of the flow of ideas, information and things will lead to the betterment of society. Constructive win-win thinking comes from respect for individuals, sharing your views with others and mentoring those that are willing to adopt and adapt to their own personal situation. This is what lean is about for me, and lean thinking has changed the lens I use for looking at the purpose of government beyond the local level.

Pleased to share with you, if you are open to the idea - The Foundation for Economic Education. Not Economics in the sense you hear about on Fox or MSNBC, where Statist Capitalists are pitted against Statist Socialists, essentially yelling at each other how they should go about their legal plunder. Nope, we are talking economics in the sense of what individuals do, making choices, humans taking action. The materials and philosophy here may not sit well with your current political paradigm, but I challenge you to take it in and process without prejudice, like you say you do when you are problem solving.

The current issue of The Freeman is all about FLOW...put your lean thinking cap on and use it!

Capitalism, Lean Production and a Political Quiz

WARNING: Non-TWI post....

With all the garbage coming from the mouths of our politicians in recent years, (o.k., 100 years) I've been looking for alternative points of view on economics, politics and just stuff in general. You know, the stuff you won't hear on MSNBC, CBS, CNN - you know, thoughtful stuff.

Whether you agree or disagree with alternative viewpoints, they are worth a look so you can exercise your head muscle. Many people are out there waiting for you to discover them so that you may discover holes in your liberal and conservative views.

Kevin Carson is a research associate for the Center for a Stateless Society. He is a bit of a homebrew industrialist, a small lot advocate if you will, drawing lessons from the individuals point of view on the devastating effects corporate capitalism has on the individual. Interestingly enough, Carson seems to be a bit of a Leanster, you can check out this article here.

You can also check out other articles by Carson and other like minded individuals at the following websites:

Molinari Institute
Center for a Stateless Society
Ludvig Von Mises Institute

At the CSS website, I encourage you to take this Political Quiz. You may be surprised at the results! And I would encourage you to study more about the history of government and its role in the fall of societies, its lack of a role in societies that thrived, politics and really dig into some of the philosophies that may run contrary to popular political and economic thought.

Aravind on TED - World Class Eyecare in India

As a follow up to my last blogpost, "Healthcare Modeled after McDonald's," TWI Blog reader Jason Yip provides this link to the fantastic website TED - Ideas Worth Spreading. The "talk" is by Thulasiraj Ravilla and the title of his talk is: How low-cost eye care can be world-class


Several clips in the talk feature the creator of the AES, or Aravined Eyecare System, by Dr. Venkataswamy. Yes, I just acronym-ed that! - Now, there were three things that struck me as significant about Dr. V's comments:

Dr. Venkataswamy: "I used to sit with the ordinary village man because I am from a village and suddenly you turn around and seem to contact his inner being, you seem to be one with him. Here is a soul which has got all the simplicity of confidence. Doctor, whatever you say, I accept it. An implicit faith in you and then you respond to it. Here is an old lady who has got so much faith in me, I must do my best for her."

Dr. V has been to genba and he knows what it will take to solve the problems of blindness, and he knows how to do it.

"See, McDonald's' concept is simple. They feel they can train people all over the world, irrespective of different religions, cultures, all those things, to produce a product in the same way and deliver it in the same manner in hundreds of places."

His dilemma was not necessarily the problem of blindness, he knew how to treat that. His problem was how to deliver high quality, consistent treatment to the people who needed it. He saw the problem of making burgers in the same light. Just about anyone can make a killer burger if they try hard enough, but how many can do it consistently, in quantities of billions?

"Supposing I'm able to produce eye care, techniques, methods, all in the same way, and make it available in every corner of the world. The problem of blindness is gone."

He adapted the concept of McDonald's efficency and production concepts to eyecare and saw that as the means to tackle the problem of blindness. Admittedly, he is doing many things differently than McDonalds would, like giving away services for free and still making a profit.

I think there is a lot to be learned from this organization, but I have a lot of questions. For one, are the costs kept down mostly through volunteerism? When Ravilla says they are comparing apples to apples with the U.K. system, the element of volunteerism is overlooked by the laughing audience. I don't know anything about Indian government or politics - how much of this organization's services are subsidized by the government, if any at all? This would be another point of comparison that can not be lost as Mr. Ravilla suggests we desire seeing "Obama's ratings go up again." Answers to these questions may reveal that the Aravind Eyecare System is an orange to our apple.

TWI Blog - 2009 Year in Review

Following are the top ten most viewed blogposts for 2009. Interesting…50% of them are from 2007 and 2008!? Merry Christmas and Happy New Year to everyone and God Bless!

Job Breakdown Sheet Vs. Work Instruction

Genba, Genbutsu, Genjitsu in Plain English

Life After Death by Powerpoint

Lean Jargon Part II - Muda, Muri, Mura

Lean Jargon Part III - Gemba, Genba?

Job Breakdown Sheet Example

5S, Poka Yoke and Visual Controls

Lean Manufacturing Book Review - Managing to Learn by John Shook

How to Compress a Truckload of Digital Photos in 60 Seconds - JBS Example

Obama's Lean Government?

Leaning Out Africa

A great, short article by Jim Huntzinger in Lean Accounting News about the universal nature of people and waste. Most intriguing though, are the hints that Jim throws around at other things we do not like to talk about as professionals; as Leansters, we should.

I'm talking about the devestating effects of government, coupled with a lack of religious values, on nations, states, communities, organizations, families and finally - the individual. Why should we talk about these things? Because government policy and religious values can shape how we behave - the presence or lack of these two may often be at the root cause of our actions and decisions we make.

What are some examples of poor decisions or actions in your organization? Can you share any examples with TWI Blog readers - any problems that may be caused by government policy or lack of religious values?

Canadian War Production and Job Safety Manual

After being trained by the U.S. TWI Service during WWII, the Canadian Ministry of Labour adapted Job Instruction to the narrow field of safety, yielding an impressive J-skill program to the TWI world - simply called Job Safety. You can download a copy of the Canadian manual here or go to the Job Safety page at TWI Service.

Canada is a small country, but quite resourceful. This link will load a PDF with a quick fact sheet on the Canadian contribution to the WWII production effort.

Message to Gov't: What the...?

Simplicity not in Gov'ts Vocabulary

As TWI blog readers have probably gathered, I’m a pretty simple guy. The J-skills are oozing with simplicity, so I naturally gravitate in their direction. Give me Job Relations any day and keep your fancy systems; good ole’ fashion common sense usually does the trick. Job Instruction is so much more effective than a video, webcast, presentation or anything else I’ve seen. Ask Toyota, they haven’t changed JI for many decades and it seems to be working for them in building stability in the workplace. Yet, I see over and over again, managers yielding to the onslaught of “the newest technology” or tool that is being peddled in their direction.

So, imagine many Americans disbelief, dismay and finally, bewilderment at a major breach of security that occurred two evenings ago. Apparently a TSA manual was posted online as part of a contract solicitation:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/12/09/MNLR1B1B55.DTL&tsp=1

The problem is that although secure sections of the manual were redacted electronically, the redacted graphics were soon removed by hackers, bloggers or somebody with more time on their hands then you and I.

What was redacted? Oh you know, small, incidental details like: security features (and photos) of government ids, who is exempt from screening, list of countries for profiling foreign nationals, you know - little things. How could this have been prevented? Well, lets start with a simple $1.39 Black Sharpie from Staples. But that would have been: well, simple. What's that, you say? 'This is the government of the United States, the most advanced country in the world? We have to do better than a sharpie?' Oh I'm sorry, I didn't know that...our government, comprised of the greatest leaders on earth have to do this right. In short, we need to use T-E-C-H-N-O-L-O-G-Y.

And in the face of a problem...what is the most logical thing to do: lie. "The agency said the posted manual, dated May 2008, was outdated and was never implemented. Six more recent versions have been issued since that one, a TSA official said."

So, the government was using an outdated manual from six versions past to solicit contractors in current work? I'm sure there is a very logical reason for this. Are you feeling secure yet?

How much time and money was spent on solicitation? Screening contractors? Hiring? Training? How much money was spent on the redaction software? How many people were required to redact this 93 page manual using the latest-and-greatest-I-can't-believe-everybody-isn't-using-this-21st-century-sophisticated-software? How much time was spent proofing the redacted document and how much blind faith was put in the technology? Was it field tested?

Yes kids, technology brings about all sorts of innovations and productivity to the world! And don't worry, the government is creating jobs! Things like id recalls, more contracting, more solicitation, re-contracting and re-solicitation because of new manual revisions, increased airport screenings, longer wait times, reissue of ids, repairing foreign diplomatic relations.....YES, America's youth! There is a job waiting for you in the government, right now! Come and share in the wonders and pleasure of transferring the wealth of your neighbors to a government that creates no wealth!

Mark Warren and I have spent hundreds of hours (maybe thousands, Mark?) going through thousands of pages of TWI materials in the past few years. Dear Homeland Security, I would have charged you only $20,000 to sit down with a sharpie and redact the manual. That would probably have been a savings of hundreds of thousands of dollars for me and my fellow taxpaying citizens. Give me a call, we can talk about the wonderful things we can do with office supplies.

What is the cost of security now? People wonder why anything associated with the government costs more in the long run. Here is a great example. Governors wonders why the governed holds them in low regard when stupid things like this happen. Hmm. Maybe they don't wonder at all.

Hey, here is a great idea...let's trust these yoyo's to manage my kids' health care!

Judge and Blame

Naturally, the media and officials are looking for “underlings” to hang.

http://www.nydailynews.com/news/national/2009/12/10/2009-12-10_5_put_on_leave_after_airport_screening_files_posted_online.html


Haven't you heard? The government is getting smarter, lean and mean!

Eliminate Waste in Government - Abolish the Fed

A NY Times article points out a surprisingly somewhat neutral story about the Federal Reserve, and a plan from the administration to expand its market smothering powers.

"The administration is proposing to make the Fed responsible for identifying “systemic risks,” like the bubble in housing prices and the explosion of reckless mortgage lending that started the worst financial crisis since the Great Derpression."

Actually, this is misleading. It is the largest one year drop in the market since the great depression. It is the largest drop in GDP since the recession of the early eighties, hardly comparable to the Great Depression. I digress...but sometimes facts are funny things...especially to the NY Times.

So, who here didn't see the housing bubble coming? Raise your hand...go ahead. O.k., now ask yourself this very important question: why does the Fed need to be given this power? What does this new power really mean?

“I do not know of any clear examples in which the Federal Reserve acted in advance to head off a crisis or a series of banking or financial failures,” said Allan H. Meltzer, professor of economics at Carnegie-Mellon University and author of a comprehensive history of the Fed.

Mr. Meltzer ticked off a long list of financial collapses — the Latin American debt crisis of the 1980s, the savings-and loan collapse of the early 1990s, the collapse of the dot-com bubble and the recent binge in reckless mortgages — and argued that the Fed had either failed to take preventive action or made things worse.

“We all know that the Federal Reserve did nothing to prevent the current credit crisis” Mr. Meltzer said. “It has not recognized that its actions promoted moral hazard and encouraged incentives to take risk.”

The Times stops short of suggesting the Fed was actually part of the problem, bringing interest rates so artificially low that anyone was encouraged to purchase a home. Couple that with other regulatory agencies and committees, who manipulated market forces for political reasons and one has to ask if the Fed might have a little too much power. Let's not get started on the bailouts, strongarming banks into acquiring toxic banks, inflating the monetary supply etc.

One has to wonder if this activity is just simply wasteful. Instead of granting the Fed more power, how about abolishing the Fed? What value does the Federal Reserve provide in our daily lives? Can anyone put this in plain terms for me? Otherwise I'm going to wake up tomorrow and not wonder: "Geez, I hope the Fed is looking out for me and my family's future today!"

Kaizen in Ohio Government?

There is a lot of talk about the need for kaizen in the government. But, like anything, it isn't what you do - its HOW you do it that matters. Governor Ted Strickland of Ohio recently proposed that government offices be allowed to create a non-profit arm that will take in donations that will be used to train state workers in the "kaizen process".

But there are all sorts of contradictions that go along with Kaizen and Government:

1) Government is supposed to be big, slow and dumb. This is designed in by our founders so that power is limited to any one person or group. Power that is concentrated within a small, nimble and 'smart' government may move too quickly for us as normally distracted citizens to scrutinize our representatives motives and actions. This alone invites criticism:

Critics of the already house-passed bill say that this bill has ethical problems. For one, can the Highway Dep't step up ticketing if solicitations and quotas for their non-profit are not met by the publics 'voluntary' donations?

What about business donations? Can businesses win favor from say, the local environmental protection agency?

2) Kaizen is supposed to be fast and cheap. Government is slow and expensive, partly for the reasons stated above.

However, there is no reason why government cannot be efficient. With that said, why can't government leaders form their own kaizen teams today, without additional funding?

3) Non-profits are under fierce competition already. Kaizen can help companies become more competitive, often by reducing cost, under normal market conditions. When the government gets involved, it can become the monopoly player in that market. Just look at disaster insurance for example. Any right-minded citizen would be furious to learn that taxpayer dollars fund poor decisions made by homeowners who rebuild in hurricane coastlines - incentivized by the artificially low government insurance programs. The result is higher costs for Americans. Could government drive local food shelfs, fuel assistance and other non-government non-profits out of the local Cleveland market? Coupling the voluntary non-profit tax with existing taxes simply means the possibility for more government involvement in our lives is likely.

From a local Cleveland radio show, Lanigan and Malone offer up their thoughts on Strickland's Kaizen process...again, they don't seem to object to Ohio stateworkers improving their processes, the question is, what is stopping you today?

FPS - Fighter Production System

Lockheed says it will emulate the Toyota Production System because of its inherent advantages in "eliminating waste and integrating just-in-time logistics." This makes sense at many levels, given the ramp up details provided in this article at FlightGlobal.com

In fact, Lockheed's goal is to have "branded its own manufacturing style the 'Fighter Production System', to be emulated by other producers", within the next ten years.

This all sounds good, but once again, management-speak is taking over and unfortunately at our [taxpayers] expense. It seems two things are in play here:

1) Given the current tax-pillaging-climate we live in today, may I humbly suggest to our government and all contractors that we utilize said production system to focus on reducing cost and worrying about OUR money THEY are spending, not whether or not they can leverage OUR money to brand "their" production system - no doubt for consulting opportunities.

2) Is this the right goal: "emulating the Toyota Production System" so that the Lockheed system can be branded and emulated (i.e., sold)?? I wonder if a better goal should be along the lines of one fighter produced per day with zero defects, for example. Instead, this article reads like Lockheed has fallen for the old trap of managing to an ill-conceived end goal while hoping the solution will fix their actual problem.

Kaizen in Government

Is kaizen possible in government such as our republic? I've been thinking about this lately, and the best I can come up with for a foundation of how kaizen would work in government starts with the following: how to involve people. In this case, how to involve the the citizens of the government.

So, to the best of my knowledge, kaizen comes in two very high level forms - 1) small, daily incremental improvements and 2) radical, large improvements.

We are seeing small daily changes happen before our eyes; it is debatable if the changes are improvements. That is a matter of opinion. Regardless of your political leanings, most, if not all of these changes do not involve us as decision makers, unless we are lobbyists. No, our "small" kaizen involvement happens in the voting booth. But that doesn't happen every four years now does it? No, it happens everyday around the country: at the state, county, city, town and village level. You CAN be involved if you want to.

What about the "big" kaizen involvement for citizens? I'm afraid we weren't invited to that meeting. In fact, the last time we crashed that party was around the late 1700s, right?

"Ignore Lean - Perfect the Product"

Here is some advice offered by Lord Bhattacharyya, founder of the Warwick Manufacturing Group (WMG) and a government advisor on engineering policy in the UK.

Much of Bhattacharyya's stance is aligned with the challenge of facing climate change, quoting research from the Tyndall Centre that claims UK government targets fall short of keeping global temperature rise below 2◦C by 2020.

Never mind that over 30,000 American scientists warn (15x more scientists than associated with the U.N. IPCC) that it is dangerous to make policy with science that is assumed to be "an inconvenient truth"...Bhattacharyya's claim goes on to state that we need to "ignore Lean and process innovation" until our products are perfected for dealing with climate change, among other things. I suppose this means everything should be green. Great idea...I'm all for it.

But, Bhattacharyya gives us the typical desk/academic engineering solution to our world's problems: perfection and innovation is an engineering thing, keep your process improvement arse out of it! Now that we have seen the light, what are the rest of us supposed to do? I suppose we, the "process innovators", should just run the machines and put green parts together as the engineers designed them, which of course, are perfect and incidentally meet market needs perfectly as well since the government, who makes the green policy, is so in touch with consumers.

O.k., I'm game. Let's assume we have perfect green products. Now what? Be afraid, be very afraid. Because without the pursuit of management innovations (e.g., LEAN) your perfect green world is is subject to a certain law of nature that trumps all government policy, scientific petitions, and activism: entropy and human nature - things fall apart if we don't have processes in place to maintain and improve. Management innovation can never be at its best without product and process innovation. We are talking about three legged stools here folks. To say that one trumps the other two is simply foolish. If we do not nurture this arrangement and keep it in balance, through management innovations, the result is pure chaos.

CEO Obama

So, the White House asked Rick Wagoner to step aside. O.k., fine. Probably needed to happen, right? Here is a link to William Holstein's op-ed contribution on this matter, published in the 3/30/09 edition of the NY Times:

http://www.nytimes.com/2009/03/31/opinion/31holstein.html?_r=1

I agree with Holstein on one issue: President Obama made this move for political expediency. Has Obama run a company? Does he know what this looks like to the rest of us out here? Is he really this detached from what is happening in the genba? Of course the answer is, yes! He spends no time in genba but in a conference room trying to solve problems! Oh, populist politics, you are so comforting and irresistible!

I confess, you are right. None of my rhetoric is the point here. Well, here it is: overall, Holstein completely misses the point. TENS of BILLIONS of OUR hard earned money (well, actually an IOU to ourselves and the Chinese) have been thrown at GM and the end result is probably going to be bankruptcy anyway! This fate is due GM, despite matching Toyota in quality and narrowing the cost gap. We must admit - GM is a big money sucking machine and it MUST shed amounts of overhead that will make this country shudder. Would we NOT do the same thing in our own household if facing foreclosure? I think I would at least try.

GM IS too big for the current market situation. But it MUST fail in order for something that emerges to be competitive in the future. Despite its past successes (the first electric car [EVO, remember that? ] ! ) and next year the Chevy Volt will be the first extended range ELECTRIC (not hybrid) car to hit the market. Some people will buy it. Does Toyota have one of these? Nope. And we don't see Toyota in front of Congress? What is happening here?

It is time to stop the finger pointing and blame game, but nobody would know this if you watch TV, listen to the radio or read the garbage in our newspapers.

Nope, none of us would know this watching the "critical thinking" in the media, but we all know in our gut that GM should have been facing bankruptcy back in the fall of 2008, and the taxpayers' money could have been used more wisely - that is - keep the company afloat while new PRIVATE concerns figure out what to do with it, with THEIR money, not mine and yours. Now, it looks like we may be stuck with this mess for twice the amount that we involuntarily signed up for.

Yes, Wagoner is 15 years too late on his restructuring. If you have read Factory Man, by Jim Harbour, you get a sense of the chronology that has led up to the current GM and Chrysler mess. But Wagoner didn't cause ANY of this on his own. One person can't stop the inertia behind decades of successes and failures. All of us in industry KNOW that inertia is as an axiom that one person cannot overcome alone. Yet we all asked Wagoner to do this. And now we honestly think that Congress can do it with a few words from the teleprompter and legislation that costs us more money than we can afford. Change as most of us have experienced, doesn't match even .001% of the furious change that GM MUST face in the coming year. Yet, we rejoice in the public blame of one man. The finger pointing continues, when it really needs to stop so GM can face their problems head on. Unfortunately for the employees of GM, the next "burning platform" they will be asked to tackle will be under the smothering blanket of bankruptcy.

Most laughable out of all this and Holstein probably missed another matter before press time: according to the intermin GM CEO, Barack Obama, the Government is going to guarantee warranty on GM vehicles? Ha! Has anyone seen what the most efficient operation the government is operating has been up to lately: the U.S. Postal Service? This is getting more entertaining by the day!

Am I a Big Three apologist? No. Far from it. If GM fails, well, o.k. then, they fail. We will cross that bridge when we get to it, but know that it is coming and we need to plan for the worst case scenario. In lean, we talk a lot about people embracing problems and not sweeping them under the rug. Once we are there, failure is something that any American can muster up courage to face.

Big Three: "From Kings of the Road to Roadkill"

Link is to a speech made at Hillsdale College on January 26, 2009.

Joseph B. White writes for the WSJ. I think what he says is probably the most complete and accurate synopsis of what we can expect from the mainstream media on this matter.

I'm not an expert on the matter, but I think we don't necessarily give the Big Three a fair and balanced shake. For example, White (as well as most Leansters) portrays Japanese quality as being rock solid as soon as they rolled off the boat. This simply wasn't true. Toyota themselves early on found that their engines weren't up to the endurance Americans subjected them to on our long distance highways. And I don't know about you, but the one thing that sticks out in my mind about early Toyotas are the pickup beds that COMPLETELY rusted out. Owners replaced their beds with pressure treated lumber rather than risk another shakedown through several Vermont winters with a metal one. It was kind of an underground aftermarket product up here in New England for many years! See craftsmanship above!

Anyway, the point isn't that White missed some of these low points in Toyota's entry into the U.S. market. He simply made the standard declaration that by some magic of Japanese management principles, imports were of better quality because they were better engineers.

I believe this is only (sort of) half true. What I understand is that companies like Toyota, LEARN HOW TO LEARN from their mistakes. For a few years pre-2000, there were some really bad paint problems with Ford products. I can't remember the model line, but certain Ford paint products were peeling off. Just recently, I saw another Ford car with the same problem, nearly ten years later. Why hasn't this problem been eliminated? Has Ford learned from their mistake?

It seems that they may be, but I'm not convinced (again, chronic quality problems are perceived to be only with Big Three). As Jim Harbour points out in his new book, Factory Man, the Big Three have closed the productivity gap. A lot of those gains came from better quality design. But the Big Three have a long way to go regarding quality in other aspects of their business.

White makes a strong case for how this quality mindset is still lacking in Detroit. He quotes Rick Wagoner to set up his premsie, recently in front of Congress, as he reflected on what GM could have done differently instead of paying off UAW concessions:

"Obviously, if we had the $103 billion and could use it for other things, it would enable us to be even farther ahead on technology or newer equipment in our plants, or whatever."

This 'whatever' is the sticking point of course. Wagoner's acknowledgment of 'whatever' either illustrates that he was too exacerbated to explain 'whatever' to Congress (can't say I blame him) or perhaps he doesn't have a good grasp of whatever 'whatever' really is. Leansters have an idea, (of course!), but the thought of dragging a company as big as GM out of 'whatever' and into a different level of thinking is overwhelming to say the least and beyond the grasp of any one lean thinking individual.

White uses Wagoner's Cognressional testimony of whatever as a launching point to paint a picture of the overall problem: quality. The cost, level and perception of quality is strongly tied to inventory, technology, employee involvement and hundreds of other business concepts; a holistic approach that requires lean thinking. White does a fantastic job of tying together the labor relations, overproduction of fleet inventory to make up the Japanese-American cost gap and its devestating impact on value, quality perceptions and how all of that currently put GM in its dire situation.

Lean Book Review: Factory Man by James Harbour

Book Title - Factory Man

Author - Jim Harbour with James Higgins

President Obama's pseudo-car czar advisor, Steven Rattner, has quite a task ahead of him. He will serve as a senior advisor under Timothy Geithner and Lawrence Summers, the dynamic duo in charge of the auto bailouts. Robin Hood and his band of merry men may determine the fate of GM and Chrysler within the next four years - turnaround or bankruptcy; yet there is zero industry experience between the three of them – only experience in spending taxpayers’ money. There is another, longer lasting and prosperous option: industry needs to adapt to the economic situation and help itself, or die. All parties would be well served to consult with Jim Harbour, the "Factory Man", on this matter.

As Harbour puts it, he has "spent nearly 60 years thinking about the factory floor, and here's how I believe it should be run." We should heed Harbour's advice. The auto industry, media and markets have looked to The Harbour Report for many years as the benchmark study largely responsible for opening the eyes of the Big Three regarding the U.S.-Japanese productivity gap. Now that gap is paper thin in the passenger car segment. The Japanese are not much more productive or in some cases, such as the truck and SUV segment, are less productive than the Big Three. Harbour’s conclusion is that the next step for the Big Three is the need to go beyond productivity gains. This is something the bailout is NOT going to fix, it can only be fixed from within. That means to continue the reorganization efforts started by GM’s Rick Wagoner in the mid-nineties in order to compete with the Japanese as an organization, not just at the assembly line level. It means tough talks with the unions and with politicians. And it also means a reduction of model lines and mass standardization. But do not think this book is a manifesto to fix Detroit’s manufacturing problems. Harbour’s plan goes beyond the auto industry and to the heart of the problem – the demise of manufacturing’s importance in American society, economics and the middle class. Factory Man clearly defines the "common" strawman that ALL of industry, i.e. Americans, can adopt and adapt if we are only willing.

What’s New?

Harbour has a reputation for his no-nonsense, straightforward approach. Incidentally, this may be the first Lean book with expletives. That approach isn't new for Harbour, but for Lean practitioners - this book should serve as the start of growing trend of U.S. born Lean books: a take no prisoners message that drives a stake in the heart of the problem in U.S. manufacturing - 1) lack of respect for people and 2) lack of a basic understanding in how our economy and industry works to create lasting wealth. Harbour uses facts and his experiences to illustrate how we got in the current auto bailout situation - and it isn't a pretty picture. He lays blame at the feet of the senior leadership of the Big Three AND Congress - and if his facts are correct, he is more than justified to do so. There is no good reason to doubt his facts; yet I don't get the impression that he wrote this book to make any new friends. Harbour’s message is born from the bitter experience of watching something he loved dearly, die a slow death.

However, in the spirit of kaizen, Harbour lays out a plan for the rebirth of auto manufacturers - which could be applied to any business strategy in these tough economic times. Here you will find many firsthand examples of how U.S. companies in pharmaceuticals, consumer goods and heavy industry are applying Harbour’s "3C" plan and are winning at it. These stories will sound familiar to lean practitioners involved with transformations, turnarounds and such. However, the big unanswered question is: how to make it last? This is one criticism readers will have of Harbour’s story, yet in this economy how can we expect 90% of industry to grow unless they are somehow affiliated with infrastructure, health care or government? Even the best Lean company in the world is at the mercy of an economic downturn. As of this writing, Toyota reports February 2009 sales are down 37% and are requesting a loan from the Japanese government. The ultimate answer to, “how to build it to last?” of course lies with us, and Harbour surprisingly alludes to this plain fact in a kind and helpful manner, sans expletives.

How many Gold Rivets, Rosie? 5/5

Factory Man is a gift to Americans. If you are in manufacturing, you will find yourself nodding in agreement through many parts of this book - and will want to use its message to inspire the same passion for manufacturing in others. Anyone have any contacts in the Treasury Dep't? I have three copies ready to ship!

Job Economics Training – What, How and Why?

A recent Personal Liberty poll suggests people don’t want the economic bailout, but don’t understand why.

The poll had over 130,000 online respondents. I personally took five minutes to participate in this poll through a Congress.org portal after writing to my Vermont leaders. I can’t speak for the demographic makeup of those polled – I wasn’t required to furnish any of that personal information.

81% agree that a government bailout is NOT the answer to America’s financial crisis.

77% believe the American taxpayers should NOT have to foot the bailout bill, because America “is too far in debt already.”

In addition to that, 14% do NOT favor the bailout because they do not feel taxpayers should be accountable for the private sector.

This is an overwhelming majority of sentiment. Yet, the bailout and stimulus packages will likely go through against the will of the governed.

What I found most interesting in this poll is that for all of the conviction against the bailout – a majority of these same respondents (63%) are “undecided” on whether or not the bailout will “ultimately rescue our country's financial system.”

I’ve observed this phenomenon throughout all of this bailout talk: people are against the bailout and government stimulus – but they don’t quite understand why.

This country has been through this scenario before. We keep hearing that this is the worst economic period since the Great Depression. Has anyone stopped to do a quick fact check? Did you know that in 2008 the GDP contracted by 3.8%?

When was there a worse contraction than this other than the Great Depression? It’s never been this bad, you say?

Believe it or not, 1982. That’s right, only less than thirty years ago we faced a contraction of 6.4% of GDP. Further history lessons of this period will reveal that a bailout did not help America recover from that situation.

Of course, that bit of GDP information is not the whole story, yet it serves as an example that helps us get to the heart of the matter: Americans don’t take the time to gather the facts and understand the situation when it comes to the economy. We tend to jump to irrational conclusions. This was a critical problem in the eyes of those who, after the war, founded the TWI Foundation. A problem so profound that TWIF felt its role was to ensure that every American understood, at a minimum, what the role of every individual actually is in the American economy. They did this by creating a Job Economics Training program, patterned after the other J-skill programs. Here is the link to a retyped version of the manual. I’ve recreated the manual in its original content. Nothing has changed. Pun intended.

Job Economics Training Manual

Whether you agree or disagree with the role each and every one of us must have in our economy, I encourage you to read through this manual and try to understand the basics of how our economy is designed to work – and how we are currently going down a road we know will lead us nowhere, but we just don’t quite understand why.

Research Note: I had originally found this manual in archives of Lowell Mellon (founder of TWI, Inc.) at the Western Reserve Library at Case Western University. Unfortunately, I wasn’t able to get copies of this at that time and have been wondering what little tidbits lie in that manual.

Thankfully, Mark Warren of Tesla2 spent much time and energy at the National Archives and struck gold. A very special thanks to Mark Warren for going above and beyond the call of duty and bringing this extraordinary manual to the public!

Justice Roberts could use some JIT

The post title above links to Mark Graban's LeanBlog - where he asks, "is it confidence or arrogance" that leads to Justice John Roberts thinking he could make it through the inauguration oath without a problem? If you haven't seen it, he switched some words around, making for an awkward moment - until he corrected himself. The next day, Justice Roberts and President Obama had a do-over of the oath in the White House. So, was Justice Roberts confident or arrogant?

I think the answer is: neither confident or arrogant. I’m going to hazard a guess and say that Justice Roberts put in many hours rehearsing this moment and had the oath down cold. The problem is, we forget that we forget things! And that gets worse when the pressure is on. It's so easy to forget where you were for a multitude of reasons.

A checklist or cue card would have been most helpful, and by making it through the inauguration without a problem would have built up Justice Roberts confidence ( "whew! I did it!") without increasing his arrogance ( "I did it with good preparation and with the help of this aid!" )

The same thing is true with a Job Breakdown Sheet. Trainers, even the most experienced trainers, forget things. Unfortunately, most trainers are the most experienced person in the genba. That fact, however, doesn’t make them good trainers. So, they need an aid to remind them about all the steps, the order and the keypoints for each step – so that they don’t forget.

I’ll wager that if Justice Roberts had been through a Job Instruction session – we would have seen an index card in his hand.

Obama's Lean Government?

Obama appointed a Chief Performance Officer to the White House staff. Nancy Killefer comes from McKinsey & Co. Upon her appointment, Mrs. Killefer said, "Most of the operational issues that the government faces today have developed over decades and will take time to address," she told the news conference. "But there is an urgency to begin now."

It's never too late to start the learning journey.

Personally, I'm a bit skeptical about this appointment. This is like hiring a Lean consultant and expecting them to solve other peoples' problems, it just doesn't work well in the long term. Obama would be well served to follow the lead of some state and local leaders in government:

This link brings you to an article about Lean in Government.

Here are some links to State offices related to improvement.

• Iowa Office of Lean Enterprise: http://lean.iowa.gov/
• Ohio Government Accountability Plan: http://results.ohio.gov/
• Maine Bend the Curve: http://www.maine.gov/dhhs/btc/

Kaizen 2009 and Beyond: How to Make Things Better?

Kevin Meyer over at Evolving Excellence brought a Factory Tour to our attention: Leatherman Tools.

These are really great, high quality products, although I've always wondered why these things were so darn expensive. Some may say price gouging for desirable products, or greed, etc.

It is clear from this video that the incredible overhead needed to support the current business plan is huge!

I have to say that the coolest thing I saw was the "finger socks" on the woman's fingers as she sorted out parts. While sorting and inspecting after parts are made is a waste, I'm sure the relief a worker gets by not having sweaty gloves on all day is much appreciated. I think Mr. Leatherman could start there on his continuous improvement journey. The first improvement was making the job more tolerable. Now we have to ask if the worker "likes" sorting parts, what is the purpose of sorting parts, etc.

According to Mr. Leatherman, in his 25th anniversary letter, Leatherman Co. sold 1,000,000 units in 1993. I didn't catch the amount on the YouTube video, but on an updated video at the Leatherman website, 12,000 units are hand assembled per day. That is roughly 2.5M units per year. I don't know about you, but I wouldn't want my employees going home to tell their kids that their job for 15 years is looking for blemishes and nicks on millions of can openers. And, by the way kids, you can look forward to this job when there are millions more to sort! It is no wonder kids don't want to move towards manufacturing today! Can you imagine what goes through their mind when parents tell their children about their day?

Isn't this the heart of continuous improvement? Getting people to be proud and dignified in their work? Moving forward in 2009, we need to think about how to achieve this higher level of business performance. The people working at Leatherman can't work any faster than the competition in developing Asian countries. Well maybe they can, but what is the point in that - is that a business strategy? There are a few things we can do to help the U.S. compete:

1) Move towards a consumed income tax that is one time at one rate for both individuals and businesses. This is in stark contrast to the current progressive tax. While we are at it, let's eliminate capital gains. This will provide long term financial incentives to develop people rather than hold them hostage to current business models where they are required to simply work as fast and hard as they can. We all know what this leads to - people working hard (sorry, sorting parts) everyday, paying income tax, and then paying the corporate taxes passed onto us through higher prices. A Fairtax study suggests that the average price of goods would fall by 20% if income and capital gains taxes were eliminated. In other words, more people would buy more Leathermans and their profit margin would not change. Win-win.

2) Expensing. Allow business to expense the full amount of purchases immediately vs. holding them hostage to the additional taxes incurred through depreciation. This will encourage investment in new equipment. Judging from the video, Leatherman would likely invest in metal forming and assembly technologies that free people from being bound to machinery that is over 40 years old. On the other hand, in the new video, he is paying additional tax on that nice Trumpf laser system for ten years due to depreciation rules. Again, Asian companies have the same, or more up-to-date equipment than seen in this video. From a technology perspective we are on a level playing field, so the labor and tax advantage goes to the competition.

3) Adopt and adapt continuous improvement principles to each enterprise value stream. The need here is to use the financial leverage gained through lower taxes to invest in developing people in order to make the business better. If people were developed to be their own CI consultants, the company would be better off. If there were financial incentives to develop people because the business growth demands it, this would attract better employees. Who wants to sort parts? I thought so. Who wants to think of better ways to clean the parts? That's better.

Money First - Smart Later

Regarding the Auto Bailout - The Christian Science Monitor gives us some inside scoop on what to expect...politics as usual:

Full Article

Summary:

Outgoing President "saves" them from impending doom by handing over our money...sorry, printed money we borrowed from only God knows who...three months later, Congress and presumably the incoming President will set up the heavy handed regulations on how to spend it.

So, my question is this: what does the auto industry do with this during the first quarter of the New Year? I wonder how financial analysts view this development? Does it instill any confidence that the Big Three are going to shift their thinking about how to do business?

I'm going to go out on a limb here...expect history to repeat itself.