Schonberger & Associates Visual Management: What’s Effective? Most effective: • Kanban (visual-flow management) – big thing • 5S – Visual management of thousands of small things that add up to big things • Visual recording of every glitch; organizing same via Pareto, fishbone, etc. Effective: In workplace, visual plots of process trends; displays of employee cross-skilling Less effective: Management metrics on display (highly aggregated, tend to trigger “tampering” with in-control processes) (Slide added—not in evening presentation)
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Schonberger & Associates
Visual Management: What’s Effective?
Most effective: • Kanban (visual-flow management) – big thing• 5S – Visual management of thousands of
small things that add up to big things• Visual recording of every glitch; organizing
same via Pareto, fishbone, etc.
Effective: In workplace, visual plots of process trends; displays of employee cross-skilling
Less effective: Management metrics on display (highly aggregated, tend to trigger “tampering” with in-control processes)
The Confused State of Lean: Comparing Regions, Industries,
Companies
PDM, Puget Sound APICSWednesday, Dec. 12, 2007
Presenter
Richard J. Schonberger
177 107th Ave., N.E., #2101
Bellevue, WA 98004 USA – Tel/Fax +425-467-1143
This presentation includes research and topical materials incorporated into a forthcoming Richard Schonberger
book (John Wiley & Sons):
Best Practices in Lean Six Sigma Process Improvement:
A Deeper Look
. . . with Telling Evidence from the Leanness Studies
Schonberger & Associates
Topics and Tendencies• Birthplace of lean has grown fat• U.S., hotbed of lean sliding; Europe doing better• Lean bureaucratized: Fat on administration• Long-term lean: Good in A-D OEM’s, not suppliers;
good in automotive suppliers, not OEM customers• Long-term lean: Cash & customer allegiance at
compound interest• Lean can do worthy service even if firm going
bankrupt• Several ways to get lean, not just the “lean core”• Internal lean getting the attention; external lean
promises much more• Inability to keep lean going, hold lean gains. Why?
Schonberger & Associates
Sustainable Lean – Best to Worst, by Region#
Sample Recent
Sectors Score Size Trend 1 Nordic countries .79 66 2 United Kingdom .67 80 3 Southern Europe .66 72 4 Brazil/Canada/Mexico/Israel .66 92 5 United States .59 566 6 Asiana/South Africa .58 106
Global Average .58 1,269 7 Germany/Austria .55 62 8 Benelux/Ireland .49 34 9 Japan .37 191
As of 9/18/07
#Positive 10-to-50 year trend, 2 points; same but lapse last 5-7 years, 1 point; negative 10-or-more-year trend, minus ½; 5-or-more-year reversal of long negative trend, plus ½
*Includes companies acquired/merged/dissolved/privatized in last 5 years
Schonberger & Associates
The “Leanness Studies”: 1260+ global companies rated on long-term (at least 10
years) inventory turnover
Points & Grades:
2 points (10 or more years up) = A
1 point (Same but flat or down past 5-7 years) = B
Zero points (No pattern, 10 or more years) = C
- 1/2 point (Down 10 or more years) = D or F
+ 1/2 point (Good up recovery, 5 or more years = B+, C+, D+, F+
Schonberger & Associates
Lean/Six Sigma: Bureaucratized
Elevated to management programs, lots of . . .• Planning• Organization (e.g., Widget University, Deere
Production System)• Projects run by professional staff• Name-dropping, jargon, puffery, foreign terms• Management (high-level) goals & metrics• Numerical benchmarks• Follow the leader the fads• All lead to high cost administration (SG&A)
Schonberger & Associates
Lean/Six Sigma: Bureaucratized (continued)
Less . . .• Work-force involvement & process ownership• Work-force knowledge & commitment• Continuous process data collection• Quick, low-level, low-cost implementations• Innovative approaches• Global best-practice benchmarking (beyond
your industry, country)• External (supply/customer pipelines) activity• Results?
1 Harley Up 3.9%, 20 years 3 Honda Up 2.1%, 27 years10 Ford Up 1.9%, 32 years (down sharply last 4 yrs.)13 Tata Up 5.5%, 13 years (slump ’98-’03)17 Nissan Up 2.8%, 11 years (after 20 years down)23 Isuzu Flat erratically 28 years (up last few years)26 Volvo Flat 12 years (after 10 bad yrs.; better last 6)32 Scania Flat 11 years (after 6 good years)36 Millat Tr. Flat very erratically, 17 years40 Deere Down 2.8%, 13 years (up last few years)42 BMW Down 3.4%, 18 years (less decline last 14)51 VW Down 3.8%, 10 years (after good 16 years)52 Toyota Down 4.0%, 13 years (after 6 flat years)
As of 5-3-07
Schonberger & Associates
Unsung Stars of Lean – A Few ExamplesAmerican Greetings (greeting cards, etc.) Up 3.2% per yr. for 20 yrs.Andrew Corp. (satellite telecom equipment) Up 2.6%, 24 yrs.Applera (life-science instruments, consumables) Up 4.0%, 18 yrs.CCL Industries, Canada (aerosol containers, labels) Up 2.4%, 20 yrs.Cleveland: Brush Engineered Products (2.9, 20); Eaton (2.1, 30); Nordson (3.8, 17); Parker Hannifin (3.4, 17)Gunnebo, Sweden (cash/personal security equipt.) Up 3.1%, 24 yrs.Hitachi Cable, Japan (wire & cable) Up 1.8%, 26 yrs.Illinois Tool Works (diverse industrial products) Up 3.2%, 20 yrs.Kulicke & Soffa (wafer saws, die bonders, etc.) Up 4.4%, 20 yrs.L.S. Starrett (coordinate measuring machines, tools) Up 1.7%, 35 yrs.Messer Griesheim, Germany (metalworking, other) Up 1.9%, 32 yrs.Rolm & Haas (chemicals) Up 1.8%, 20 yrs.SKF, Sweden (bearings) Up 2.5%, 29 yrs.Thomas & Betts (electric connectors, steel towers) Up 2.5%, 30 yrs.Woolworths, Australia (supermarkets, other retail) Up 2.3%, 20 yrs.Xerox (copiers) Up 2.0%, 40 yrs.
Phase 1. Became among world’s best in “lean core”Phase 2. Closed many branch warehouses• Benefits (expected): large inventory reductions• Greater benefits (unexpected):
1. Relying on Graco’s quick response (same-day ship for orders in by noon), distributors slashed their inventories
2. Frequent orders smoothed/leaned out Graco’s production, purchasing, administration, etc.
Schonberger & Associates
Why Does Lean Fade?
Are There Antidotes?
Schonberger & Associates
Lean’s Soft Underbelly
• Many smallish practices; no “Big Idea”: Hard to keep all up-and-running; easy to cherry-pick
• Focused on wastes: Doesn’t resonate with sales/marketing, finance, senior execs, owners/investors, the public, customers
• Needs rivers of process data: Gets trickling streams
• Easily bogged down: In analysis (and popular analysis tools) with over-reliance on projects
• Re-focus: On universal customer wants/ deliverables: ever better quality, quicker response, greater flexibility, higher value
• Data recording: Of every process glitch or hiccup—job of all employees
• Workteam-based continuous improvement: In parity with dis-continuous project-team improvement
• Look outside your industry: E.g., leading-edge retailers, and 3P distributors
• Highest-potential gains: External pipelines
Schonberger & Associates
“Big-Idea” Business Models Highly Favorable to Lean
• Dell-Direct: Spawned many innovations for synchronization of suppliers, customers, Dell
• Every-day low prices (EDLP): In its cause, Wal-Mart became global innovator in logistics, IT
• 80-20 in all things: ITW cuts to good customers, suppliers, products, parts, plants, machines . . .
• Unique business models (easy to understand, hard to deny, flywheel-like momentum, all-stakeholder beneficiaries): They crown Dell, Wal-Mart, ITW as new, global kings of lean
#Positive 10-to-50 year trend, 2 points; same but lapse last 5-7 years, 1 point; negative 10-or-more-year trend, minus ½; 5-or-more-year reversal of negative trend, plus ½
*Includes companies acquired/merged/dissolved/privatized in last 5 years
Schonberger & Associates
Related Articles by Schonberger“Faltering Lean,” Industrial Engineer, Nov. 2007, p. 22.“Doing Off-Shore Assembly Right, Industrial Engineer, Aug. 2007, p. 26.“Japanese Production Management: An Evolution—With Mixed Success,” Journal of Operations
Management, 25, Issue 2, March 2007, pp. 403-419.“Supply Chains: Tightening the Links,” Manufacturing Engineering, Sept. 2006, pp. 77-92.“Lean Extended: It’s Much More (and Less) than You Think,” Industrial Engr., Dec. 2005, pp.26-31.“Lean så in i Norden,” (“The Nordic Countries: Lean Leaders”) Verkstäderna (Sweden), No. 5, May
2005, pp. 46-50 (co-author).“U.K.: Less Keen on Lean?” The Manufacturer (U.K.), Special Issue, 2005 Lean Manufacturing
Report, April, 2005, pp. 5-9. “Quadrant Homes Applies Lean Concepts in Project Environment, Interfaces, Nov.-Dec. ‘04, 442-
450.“Make Work Cells Work for You,” Quality Progress, April 2004, pp. 58-63.“Mandate to Grow,” Cost Management, March-April 2004, pp. 43-44.“Is South African Manufacturing Lean?” Management Today (S. Af.), Feb., 2004.“The Right Stuff, Revisited,” Manufacturing Systems, Sept. 2003, pp. 26-30.“Canada Needs to Go on a Lean Diet,” Advanced Manufacturing, July-Aug 2003.“How Lean/TQ Helps Deter Cooking the Books,” Cost Mgmt., lead article, May-June 2003, pp. 5-14.“Your Lean Team: Use It or Lose It,” Target, cover-story article, 1st qtr., 2003. “Kanban at the Nexus,” lead article, Production & Inventory Mgmt. Journal, 3rd-4th qtrs., ‘02, pp. 1-12.“Jack Spratt Diet: Schonberger Talks Lean with the Likes of Toyota,” cover story article, The
Manufacturer (U.K. edition), Nov. 2002, pp. 34-37.“Lean and Fat Factories,” cover article, The Manufacturer (U.S. ed.), Nov. 2002, pp. 16-19.“Leaning the Wrong Way,” Decision Line, Sept.-Oct. 2002, pp. 15-17.“The Lean League,” in White Paper: “The Road to World Class Manufacturing 2000,” The
Manufacturer (U.K.), 2002, pp. 26-31.“Lean Is as Lean Does,” Manufacturing Engineering, June 2002, p. 104.