IIE Blogs

By Kevin Meyer

Believe it or not, it's actually been a couple months since we've gone into battle with the false gods of the almighty algorithm.  Perhaps they've been smitten a bit.  But this week one of their brave princes dared to show his face.  Yes, someone trying again to convince us that ERP is compatible with lean. 

The competitive environment that both Manufacturers and Distributors alike have experienced in recent years in the era of Globalization, Currency Fluctuation, and Market Pressures has given rise to the business impetus to run a leaner operation to remain competitive.

That's a helluva mouthful.  Even more obliquely verbose that we can be at times.

An ERP project is an ideal area to utilize lean concepts to further understand how this can be achieved, but we must first understand the basic principles of lean and how they relate to an ERP project implementation.

Oboy... here we go.  ERP and lean.  This should be interesting...read more

Last year I wrote about my experience with driving in Italy. 

When most Americans visit Europe, and especially Italy, one of their first observations is the  traffic. Cars and mopeds everywhere, often traveling at high speed, without much rhyme or reason. This seems like pure mayhem and insanity to visitors from the U.S. with our highly disciplined traffic control... until you start to realize something:  Traffic flows continuously, everywhere.

Those of us in the lean manufacturing world recognize what is going on...read more 

Mark Graban, one of IIE’s lean bloggers, sent me an article that I've been noodling for several days, describing how Cessna (a unit of Textron) has decided to build one of its planes exclusively in China. As an aside, one aspect of blogging I have really come to enjoy is how the various lean bloggers are collaborative as opposed to adversarial, and I think together we're really creating a learning community that is furthering knowledge of lean.

Cessna's new 162 SkyCatcher light sport aircraft will be assembled by China's Shenyang Aircraft Corp., Textron said in a statement. The $109,500 plane, which has 900 orders, will be made in the northeastern city of Shenyang, said Chen Yongman, senior vice president of the Chinese company.

The Cessna article is interesting as there are many aspects of outsourcing discussed, so it's not possible to directly compliment or condemn the overall viewpoint... it's a mishmash. Or perhaps balanced? But let's start with the comment that Mark was originally interested in.

Lewis Campbell, Textron's chairman and chief executive, said in an interview that lower manufacturing costs in China would allow Cessna to sell the airplane for $71,000 less than it would if it had built the plane at its factories in Wichita, Kan. The move also positions Cessna to play a larger role in the developing private- and corporate-aviation market in China.

As Mark pointed out, that isn't what a shareholder would necessarily want to hear. Nor does it fall in line with the Toyota concept that price is determined purely by the market, and profit is based on how much waste (and cost) you can take out of the equation. That's different than the "price = cost + profit" concept that traditional manufacturers use.

But there are several other angles to this story. For one, personal aircraft have always been out of reach of the common person. I've been taking [occasional] flying lessons, but haven't been overly aggressive as the logistics and cost of renting, since I couldn't afford to outright buy, and aircraft was a large downside. $109k now makes it less expensive than buying a vacation home. In effect Cessna has opened up a new market...read more

Over the past couple years we've been doing battle with the false god of the almighty algorithm. This initially stemmed from a conversation with the owner of a small manufacturing company that insisted he needed to implement a complex MRP system in order to be successful. As we demonstrated, after using lean manufacturing methods to dry up inventory and reduce cycle times, running down to Staples to get a visual MRP system... a whiteboard... can be the best solution.  Not convinced?  I can point you to many small companies and even a couple in the $100 million range that use it for all shop floor management.
Well after many months of retreat, and even battling among themselves, the false gods have opened a new front: document and compliance management software.

Many of us have worked in companies with huge documentation and compliance management infrastructures. Whole departments of people doing nothing except processing SOP changes, fixing typos, and revving drawings. Then those documents need to be printed, distributed, and especially in regulated environments the down-rev documents must be collected and destroyed. Some larger companies should probably invest in forests in order to maintain a stable supply of paper. How many times have we had to wait weeks for something like "watter bath" to be corrected to "water bath" and how much time, effort, and reduction of value to the customer was involved?...read more 

Those of us that have gone through a lean transformation or two know that it is hard, very hard. Probably the most difficult aspect is learning what you didn't know... those surprises that throw all the planning out the window. The good news is that you're still on the right track, and poised for success if you can weather the intervening storm.

That storm can be pretty intense, especially in public companies that come under the scrutiny of lean-ignorant analysts. Which is what gun maker Ruger is experiencing. Last year they knew they had to make some changes to remain competitive...read more 

Imagine there was a major, global company; a company that used to make virtually all of their subassemblies within twenty miles of the final assembly factory, and workers with incredible depth of knowledge and experience. Problems could be managed by taking a quick drive over to a factory, the time it took to deliver parts was measured in minutes, and the work force could be flexed across multiple nearby facilities.

Then, they decided to improve by laying off tens of thousands of those experienced workers and move subassembly production to third party suppliers around the globe. Behemoth transportation devices were developed just to move large parts, knowledge was transfered to a factory in a country that was on a hyper evolution curve that would make it a major competitor in a decade or two, and a whole new level of coordination was required to oversee a plethora of new parts management systems operating in different languages and different time zones. This additional complexity, coupled with a shortage of a tiny fastener, led to the delayed launch of the company's most critical product by three and then another six months.

What would you do?...read more 

In an op-ed in The New York Times this morning, Thomas Friedman derides Toyota for not supporting tougher mileage standards for autos.

Assisting Detroit’s suicide seems to be contagious. Everyone wants to get in on it, including Toyota. Toyota, which pioneered the industry-leading, 50-miles-per-gallon Prius hybrid, has joined with the Big Three U.S. automakers in lobbying against the tougher mileage standards in the Senate version of the draft energy bill.

Friedman believes that the lack of small, fuel-efficient cars is what is causing the ongoing decline of the "Detroit Three."
Michigan lawmakers year after year shield Detroit from pressure to innovate on higher mileage standards, even though Detroit’s failure to sell more energy-efficient vehicles has clearly contributed to its brush with bankruptcy, its loss of market share to Toyota and Honda — whose fleets beat all U.S. automakers in fuel economy in 2007 — and its loss of jobs. GM today has 73,000 working UAW members, compared with 225,000 a decade ago. Last year, Toyota overtook GM as the world’s biggest automaker, which is fundamentally flawed...read more