May 30, 2007

Can he do it?

As many of my blogging pals are likely to report, Ford’s Alan Mulally appeared in an article on msnbc Tuesday. David Kiley of Business Week was lukewarm about Ford’s prospects, but he revealed a few actions Mulally had taken to push Ford’s culture in the right direction. Gestures do not a transformation make, but they are encouraging to me. Resident household technician and troubadour, Mike, is depending on a Ford pension to keep us solvent in our golden years, and I’d like to be able to count on some healthcare insurance too.

So what do I like about some of the things Mulally has done recently? Here’s a sampling:

Asked by one of his inherited top people how he thought he’d understand the car business with no experience, his response was, "An automobile has about 10,000 moving parts, right? An airplane has two million, and it has to stay up in the air."

He didn’t say it, but Boeing has some of the toughest customers imaginable, so he’s not in the habit of ignoring them. Mulally and two senior engineers recently went to the Consumer Reports automobile testing facility to visit the publication's staff and get their evaluations of all Ford’s products. The testers didn’t sugarcoat their responses. Ford's engineers got defensive, and started arguing. Mulally reportedly said to them, "You know what? Let's just listen and take notes."

When Mulally was reviewing the company's 2008 product line last September, he was told that Ford loses $3,000 on every Focus sold. He asked, "Why haven't you figured out a way to make a profit?" Getting the usual excuses about the company’s CAFÉ average and that the Focus plant is a high-cost UAW factory, he said, "That's not what I asked. I want to know why no one figured out a way to build this car at a profit, whether it has to be built in Michigan or China or India."

After giving lip service to commonizing parts and sharing platforms around the world, Ford still has 30 platforms, with no common mirrors, headlamps, or even springs and hood hinges. Mullaly has told Ford executives that there’s no way the company can succeed with that sort of complexity.

He’s challenging fiefdoms by forcing every operating group to share all its financial data with every other group. Kiley says Mulally believes you can't manage a secret.

The monthly meeting of division chiefs is now weekly and every executive has to attend in person or by videoconference. BlackBerrys are banned, as are side conversations. And the big shots are “encouraged” to bring a different subordinate to every meeting. Imagine -- underlings learning what’s going on.

Executives used to come to the meetings lugging thick background binders so they could answer each and every question that arose. (Presumably attacking each other with attempts to find weaknesses.) Mulally’s not too concerned about people saying, “I don’t know.” If they don’t have the answer one week, they’ll bring it the next one.

He is also attacking the white-collar/blue-collar caste system by seeing that shop floor workers get bonuses based on the same formula as the guys with the fancy degrees. Will that forestall some tricky issues at union talks later this year? There’s no way to gloss over years of disdain or the critical problems that will affect union members, but at least he’s not joining in the typical blaming of the workers.

So far, he doesn’t seem to have replaced any of his top guys, as a former Ford manager told me he would, but it’s obvious that business as usual ain’t going to work. Kiley said Bill Ford hired Mulally because he couldn’t see anyone in the car business seeing its culture for what it is. Can Mulally budge people mired in their layers of clay? I’m going to stay tuned.

Side note: Ford people nickname the local buildings they inhabit HQ is the “glass house,”
a building in the ring around the Fairlane shopping mall is the “pink palace,” another one is “the blue lagoon.” A pair of buildings is called the “salt and pepper shakers” or, as I think Henry II called it, the “washer and dryer.” .
A low-lying one is called the “Darth Vader.” I call the new I-TEK center the “prison.” Seriously, that’s what it looks like. Do any of those sound like places full of energy and a sense of direction? Mulally’s got a lot of work to do.

May 24, 2007

Certified lean practitioner could help fix your aching back

If you have back surgery because of aging or ruptured disks, chances are that the surgeon would pack the site with bone shavings that will fuse with your spine and help you stand tall. The material would be the gift of someone who died. Think of all the things that have to go right - it has to be processed fast. It has to be clean and safe. It has to be compatible with your own tissue. All the labeling and transportation steps have to go right.

If you're getting the bone material from Dayton, OH, you'd be glad that Donna Hoying of Sinclair Community College's Advanced Integrated Manufacturing (AIM) center had been teaching people at Community Blood Center/Community Tissue Services how to apply lean.

The Tissue Services company is a manufacturing site. CNC machines shave bone to harvest the fragments that are going to be used in your surgery. Demand was exceeding supply. With Donna's help, people like Rob Carpenter, the center's tissue processing director, are going to fix that problem.

Lots of you are doing good work in the healthcare field, which we baby boomers are going to be grateful for. I mention Donna because she's been a leader in the Lean Certification developed by SME, AME and the Shingo Prize. She's given countless hours to make sure the body of knowledge, the exam process and the portfolio process are valid and worth paying attention to. Donna's one of the first to be qualified as a review workshop leader. If you were hiring Donna to help out on improving processes at the tissue center, the fact that she holds this rigorous lean certification would be a pretty good indication that she knows what she's doing.

If you're in the Detroit area, you should know that our local SME chapters are joining together to help members achieve their Bronze Lean Certification. Truth be told, our chapters aren't much to be proud of. Only a few members show up for technical presentations, which are actually pretty good. I'm sure I'll get comments on why that is so - nothing wrong with hearing the voice of the customer. I brought up the idea of the Lean Certification Iniative with the leaders of Chapter One, with the ulterior motive of giving me a deadline to read the books and sit down for the exam.

But think about going after your lean certification with us. The exam will be in October, with a review workshop led by Linda Kelsey, another architect of the certification. I'll be leading four study group sessions in September, accompanied by Howard Weston, one of the founders of AME. That's so someone who has done more than read the books can keep us based in reality.

So come on, give it a shot. Let me know if you'll go along with us on our member-helping-member jaunt. Can't call it a journey, but it's a way to get a few steps farther down the road.

May 15, 2007

My message to Barack Obama

I've been thinking about our future as a country (not that I'm excluding the rest of the world), and like Barack Obama. But I don't think he has any inkling that lean exists. Today I finally put my thoughts into words and submitted the following comments via his website. Maybe nothing will happen, but you gotta try.

"Having read your books, I feel confident in your character and your message of hope. I did note, however, a certain naivete about business. In manufacturing, in particular, there is a singular message of hope that all the candidates are missing. There’s an opportunity to take advantage of it, rather than bemoaning the loss of jobs to low-wage countries or fear of the Halliburtons and Enrons of the world.

"This message is the growing application of what is called “lean” to manufacturing production, as well as services, healthcare and government. Lean is not mean, and, contrary to what most journalists write, is not about getting rid of people. It is about getting rid of the waste of materials, time, and human creativity. It comes down to freeing the ability of people at all levels to think of better ways to do things, supported by training and resources. The philosophy is exemplified by Toyota, whose leaders based it on the writings of Henry Ford, among other Americans. In fact, the manner of training Toyota employees all over the world is a method called “Training within Industry,” developed in America during World War II to rapidly train inexperienced workers to do complex jobs effectively.

"Using the lean philosophy is not confined to Toyota by any means. Boeing, ITT, and Raytheon have been very successful. Why did Bill Ford hire Alan Mullally from Boeing? Because of his success in applying lean. (Boeing is not soaring on the basis of defense orders – it is Boeing Commercial Airplanes raking in orders for the new 787.)

"The reason the American auto companies are struggling is not overpaid factory workers. American plants in the auto industry are among the best in the world. One GM plant, NUMMI, in California, is a 20-some year old joint venture between GM and Toyota that has employed the same union workforce that GM had thought was its most troublesome and turned it into a world-class factory. That GM management ranks have been unable to assimilate the philosophy they’ve had long access to is nothing short of tragedy.

"Perhaps the most remarkable story is in small- to medium-sized business in across the range of manufacturing industries. Using the philosophy of lean and statistical quality management, they have competed effectively against offshore competitors. They have grown, and often have in-sourced work that had previously been done outside. This is the most moving story of hope.

"Even the military has embraced what they are calling “Lean Six Sigma,” with varying degrees of understanding and results. Operations like Warner-Robins Air Force Depot have stood at the top of the class.

"I know you are a student and gifted at reaching out and learning from others, so I will give you a few sources. Not far from Washington is the Northrop Grumman Newport News shipbuilding facility. They have formed ties with community colleges, NIST Manufacturing Extension Partnership sites, other local businesses and agencies, to transform what is happening there in Virginia. They would certainly welcome a visit and an interest in their lean transformation.

"Iowa being a key state politically, it is interesting that Governor Vilsack helped support lean implementation all over the state and within the government itself. It’s not clear what the present governor will do with that, but the state is full of good stories.

"Fort Wayne Indiana is a stone’s throw from Chicago, and the home of Mayor Graham Richard, a former manufacturer who had made the city function amazingly well. In fact, all of Indiana has become a region of hope, with Rolls Royce aircraft engines, Toyota, and other major corporations moving in to take advantage of a highly-skilled workforce.

"In Chicago itself is the headquarters of the Association for Manufacturing Excellence, which has fostered many individuals and companies to achieve great progress in retaining and growing our manufacturing businesses in the US. Ralph Keller is the head of the organization, and could point you to hundreds of people who have created hope in the communities where they live and work. The AME national conference is in Chicago at the end of October. It draws over 1,000 people from all over the world to share their knowledge – consultants are rarely allowed to be speakers, so you hear from the real people implementing lean principles. Even if you can’t go to hear for yourself, I highly recommend sending some aides.

"My point is that you can learn what business can do for Americans, and that all of these companies – especially the smaller ones – can afford you opportunities to present your ideas in key states as you conduct your campaign.

"Of course I, along with better people who I could point to, stand ready to share what we have learned with you or your aides. There’s a huge list of readings I could recommend, but will spare you from in this message.

"I believe you can do much for this country, and even more if you investigate how business can be conducted to create an even stronger message of hope for Americans."

May 13, 2007

Managing demand

Like many of you, I decided to send my mom flowers for Mother's Day. She lives 500 miles away, so I've found a florist near her with an online ordering system. They make it easy by retaining her name and address on file, along with all my ordering information. And they send me an e-mail before her birthday and Mother's Day. Good, but unremarkable so far.

You can imagine the disruption to their workflow caused by a holiday like Mother's Day. It's not like you can stack up a big inventory of flower arrangements weeks in advance. You've got only days to get all your orders completed and delivered. So how do you manage demand? (Jim Womack and Dan Jones had some good thoughts on this in their book "Lean Solutions.")

When they send customers the Mother's Day e-mail, they offer a discount for ordering early. That adds information to their production schedule -- they know what flowers, vases, cards and accessories to order, plus they can begin to sketch out the route for the delivery trucks.

Then, when you place your order, they offer you a $6.00 discount if you schedule delivery on Thursday instead of Friday or Saturday. I don't know if I'm typical, but I thought, "Why not?" and put Mom's flowers on the schedule for Thursday. She won't mind. In fact, it might be better because in a big family, everyone else is going to bring flowers on Sunday or have them delivered on Saturday.

So now the florist knows what to order and can move some of the production a day or two earlier than it could have been started sooner. You've lowered the demand peak and spread it out over a longer period of time.

May 1, 2007

Dr. Deming still inspires

I spent a couple of days last week at a seminar called “How to create unethical, ineffective organizations that go out of business…many organizations do it, but do you know how you do it?”

Most of us have extensive experience in managing poorly, so learning more about doing it wasn’t really at the top of my list…but you get it, they were being provocative.

The Deming Institute, through the graciousness of Joyce Orsini of Fordham University and the help of John Hunter, one of the instructors (better known to many as Curious Cat, allowed me to attend as a guest.

Like everyone else, I have known who Dr. Deming was and had imbibed a few sips of his philosophy over the years, but had never spent that much time really trying to understand.
The Deming Institute has had time to distill the most enduring and cohesive of his teachings, saving the rest of us the trouble of figuring out what best stands the test of time. I’m one of those people who, when someone talks about the red bead game, nods her head and pretends she knows what they’re talking about. I took a year of statistics in college – what else is there to know? And I’ve seen control charts before. But in my heart, I knew I was faking it, thus my gratitude at being able to go to the seminar.

An aside – when I said I was retired, someone asked, “Then why would you want to be here?” Well, I don’t play golf. If you don’t keep learning, you might as well reserve your rocking chair at the old folks home right now. I love my new career as an editor, mostly because I get to learn all kinds of cool stuff.

We all got copies of Dr. Deming’s books, “Out of the Crisis” and “The New Economics.” The seminar is largely based on the latter. Yes, you could get the book and sit by the pool this summer and read it, but a formal presentation with discussion and questions is a much more satisfactory way to learn. Plus, you get to meet a lot of people.

Our class included several guys from Peaker Industries, a company managed in concert with Deming’s principles, who still regarded themselves as learners. Dick Steele was one of them. Dick’s been a member of a local Deming Study Group, as is my friend Terry Begnoche. These folks have been meeting regularly for umpteen years just to talk about how Deming’s thoughts affect the world – I think. I’m counting on an invitation to one of their meetings so I can find out for sure.

Dick and his colleagues at Peaker have been pondering compensation policies – if Deming says no incentive pay, how do you pay top managers in the real world? (Peaker refers to “peaker” generators, used to meet peak energy demands, like the hottest day of the summer. The company repairs and rebuilds those, plus locomotive engines and other gigantic stuff.)

On the second day of the seminar, we were joined by a delegation from China. They had missed the first day because the notorious airline system couldn’t reliably meet its schedule. All were officials of the China Quality Certification Center in various cities around the country. Although they had some difficulty with spoken English, they were obviously well versed in Deming’s teachings. Their study tour was going to hit several world-class companies.

If you’ve been complacent about the Chinese being able to meet high quality standards, you better start thinking again. The AIAG (Automotive Industry Action Group) is on the job – their CEO just paid a visit to the CQC’s main office in China. Here’s an example of just how serious the CQC is, in their own words:

September 11 to 15, 2006, with the invitation of United States UL safety-testing laboratory, China Quality Certification Center (CQC) and China Certification and Accreditation Association (CCAA) formed a coalition delegation, went to Chicago of United States to hold the training course of factory inspector of outside compulsory product certification and the registration examination. And at the same time, they will discuss the training cooperation with U.S. UL security testing laboratory.

The Manager of UL Americas area Leon participated in the opening ceremony. At the opening ceremony, he urged the UL participants to study seriously and master the related inspection requirements of the using of compulsory product certification in factories, in order to lay foundation for the future commitment to the supervision and inspection commission and ensure the smooth implementation of the 3C factory inspection of CQC. 22 participants from UL safe testing laboratories company of United States attended the training and registration examination.

This training course is aim at the regular supervised and inspection content which implemented annually to the enterprises abroad which have gotten the certification. It focus on the introduction of China Quality Certification Center, China's compulsory product certification system, the understanding of the requirements of factory quality insurance capacity, the implementation requirements of overseas entrusted the supervision and inspection and the contents of the guide book about related operations of factories inspection which was established by China Quality Certification Center. The training courses used interactive teaching method, teachers teach in the classroom, and the teachers and students ask questions alternately, so the course is rich in content, and had a lively atmosphere. To promote a deeper understanding, this course has also increased the case practice courses, and combining the cases to explain particularly.

With the accompany of chief engineer James of UL safety testing laboratories in the United States, the delegation visited the headquarters of the UL lab. Mr. James highly evaluated and appreciated the success of the CQC course. He also talks the training cooperation in the field of product certification with the delegation. Both sides of CQC and UL have expressed the willingness to co-develop a broader product certification market and will further strengthen the cooperation on training.

Besides UL compliance, the CQC is able to help companies comply with ISO 9000, QS 9000, CE product certification and a raft of other standards. Although the English version of the website is a bit sparse compared to the Chinese, you can tell that this is serious. So were our delegates, and they were great guys.

Another node of interest at the seminar was the CQI (Capital Quality Initiative), an organization based at Lansing Community College. CQI puts on executive breakfasts and lunches with speakers about quality, offer scholarships, and other good things. Maybe their theme for the year says it best, "Challenging assumptions, one mind at a time.”

One of Dr. Deming’s contributions is his “system of profound knowledge.” Our class had a gadfly who landed on this one – he asked whether calling it “profound” wasn’t a bit pretentious. This is a reminder that when we encounter words used in the past – and Deming’s manner of speech was closer to the 1920s than the 1990s – we have to allow for the way language changes. Right after “profligately,” in my dictionary is “profound.” It means “deep,” it doesn’t mean “the most astonishing revelation ever.” In fact, “pro” is related to “forward” and “fundus” is “bottom.” Think “foundation.” Let’s get to the bottom of this. We’re going forward, we haven’t arrived.

With this four-part system of thinking, Dr. Deming has absolved me of some of my greatest sins. He says the person who understands the system will, among other things, “help people pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past.” And I really have been feeling guilt as I have reflected on my practices back when I was a manager. They affected people negatively and didn’t work. Seriously, sometimes I feel miserable when I think about it or read about how it ought to be and I have to go read British mystery novels to take my mind off it. Even if you allow for “a bad system beating a good person every time” a lot of us have had some pretty miserable experiences.

So the good news is, we can stop feeling guilty, and start doing better. Even if our management careers are in the past, and we can’t actively practice Deming management, we can still “help people understand.” If we keep learning, that is.
Pictures courtesy of the Deming Institute
Copyright @ 2005-2014 by Karen Wilhelm