Archive for the ‘lean’ Category

Another Vote for Habits

Posted: February 5, 2014 in lean
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IndustryWeek has many articles about lean but this week’s commentary, Lessons From the Road: Building Behaviors Bedrock of Lean Success, by James Flinchbaugh, provided good support for my hypothesis that changing behaviors and habits trumps using methods and tools. Mr. Flinchbaugh writes:

“I have never seen an organization fail because they didn’t have the right improvement tools. I have seen many organizations fail because they didn’t have the right behaviors.”

You can do hundreds of lean (and other continuous improvement) workshops but if your organization does not change its daily behaviors, you’ll keep doing big, expensive lean workshops. The key is to have people learn and see enough in a lean workshop to then start doing lean behaviors which become lean habits. Your organizational culture changes when these lean habits are the normal way to do business.

I have rarely seen this in person but when I’ve seen “everyday” employees naturally doing and saying lean things, I know that the organization’s culture will have a hard time backsliding to the good old days.

A Small, Hidden Tragedy

Posted: December 3, 2008 in lean
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The global news has been anything but good this past month. With the true human tragedy in Mumbai, India, the financial woes of the Big Three US automakers seems strangely juxtaposed on the list of recent tragedies. Yes, the decline of these companies affects millions of people, but somehow the tragedy of business failures pales against the loss of lives to terrorist actions.

For several years I’ve been discussing the general inability of US automakers to compete in a global economy and today, the CEOs of these company laid out the billions of dollars that they need in government financing to be able to survive.

Hidden in a USA Today article about the bailouts is an assessment of the GM brand, Saturn:

And Saturn, the quirky brand launched in 1990 to win sales from Asian rivals, could be on its last legs. Henderson says the company will meet with its retail network to discuss options, which could include a shutdown, such as GM did to Oldsmobile a few years ago, or selling it.

“We have to do something with the Saturn brand, because frankly, it has not been successful,” [General Motors (GM) CFO Frederick “Fritz”] Henderson says.

During Saturn’s early years it was lauded in business journals and academic case studies on how a conservative American car company, like GM, could emulate the best efforts of Toyota, Nissan, and Honda. The workers at the Saturn plant in Smyrna, Tennessee, were examples of how employee empowerment could yield benchmark levels of quality and productivity.

Unfortunately, over the years, the culture at Saturn eroded and became more and more like the rest of GM’s other brands.

So what looked like a great step forward in American industrial evolution may now end up as footnote in American automotive history.

Not Their Fault!!!???

Posted: November 16, 2008 in lean
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I have no idea how people can either lie or be so deluded that they can’t see the obvious. Among the sources reporting the UAW’s view on the crisis in the US auto industry, USA Today has this alarming quote from United Auto Workers president, Ron Gettelfinger:

“We’re here not because of what the auto industry has done,” he said. “We’re here because of what has happened to the economy.”

I’m not blaming the UAW for what’s happened to the Big Three, but they have certainly contributed to what the industry has done to itself — not what some nefarious, external action has done to it. If the global financial crisis is the key cause, then  auto makers worldwide would need government bailouts or be in similar dire straits as those in the US because the economy is global.

For instance, on October 29, 2008, The New York Times reported that:

“During the third quarter, G.M. sold 1.28 million vehicles outside of the United States, accounting for 61 percent of its total sales compared with 56 percent a year ago.”

A significant reason why GM hasn’t totally collapsed is because of its international sales.

The US economy is not in good shape but saying that GM has been doing the right things to remain competitive and needs bailouts only because of the economy sounds like “passing the buck.”  What is really frightening is the thinking, tactics, and strategies that have gotten the Big Three into such bad shape are not peculiar to the auto industry. US businesses, in general, need to re-think how they create value in a global economy.

Toyota Continues to Improve

Posted: July 25, 2008 in lean
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…and my guess is that they will do so — continually.

So the latest business news is that Toyota will probably be the #1 auto manufacturer in the world — displacing GM — at the end of this year. Now Toyota publicly states that they do not place much stock in being #1 (and I believe those statements), but there are a couple of important points related to this news. First, Toyota got the lead during a period of (arguable) global economic decline by increasing sales by 2% versus GM’s sales decline of 3% over the same period. Second, at these sales levels, Toyota continues to turn a profit while GM continues to lose money.

How much longer will GM and the other US auto manufacturers continue to do business within antiquated paradigms? They can only lose money for so long.

Toyota’s Success is No Secret

Posted: May 5, 2008 in lean
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A colleague led me to this article in the The New Yorker online. It is one of the better “general” pieces that I’ve seen on Toyota and the core reasons for its success.

So how has Toyota stayed ahead of the pack?

The answer has a lot to do with another distinctive element of Toyota’s approach: defining innovation as an incremental process, in which the goal is not to make huge, sudden leaps but, rather, to make things better on a daily basis. (The principle is often known by its Japanese name, kaizen—continuous improvement.) Instead of trying to throw long touchdown passes, as it were, Toyota moves down the field by means of short and steady gains. And so it rejects the idea that innovation is the province of an elect few; instead, it’s taken to be an everyday task and everyone contributes.

As I’ve noted before, the culture of Toyota is its obvious secret. It’s not the artifacts that we can see everyday in its factories and offices. It’s a corporate culture that works in Japan and in Toyota’s American factories.

Will we ever learn?

Posted: January 7, 2007 in lean
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Well, USA Today, published another article on Jan. 5, 2007, that shows how little we understand the competitive advantage held by Toyota. GM Chief Executive Rick Wagoner notes:

“I like being No. 1, and I think our people take pride in it,” he told a small group of reporters at GM’s headquarters. “It’s not something we’re going to sit back and let somebody else [Toyota] pass us by.”

If Toyota does pass GM, Wagoner said he would not be pleased.

“It won’t be a happy day for me, but I’ve lost basketball games before in my life. You get ready and you learn and you go back the next day, and that’s what we’ll do,” he said. “We’re going to fight to keep the position, and if one day we lose it, we’ll fight to get it back.”

Meanwhile, the Toyota spokesperson notes:

Toyota isn’t concerned about becoming No. 1 globally, said spokesman Irv Miller. The company is working to keep its quality high, focus on customers and roll out its new Tundra full-sized pickup, due next week, he said.

“A perceived sales challenge for global leadership is not something we’re even thinking about,” Miller said.

Once again, Toyota clearly tells everyone who cares to listen that they have a strategic, rather than a tactical focus. Don’t worry about the game when you can win the season. How much further will GM profits fall, just so that they can sell more cars than Toyota in 2007?

Toyota employees have the knowledge to continuously improve the quality or their cars and speed in which they produce them.

Toyota sales shake up Big Three

Posted: May 5, 2006 in lean
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The “big three” auto manufacturers have been studying Toyota and the Toyota Production System since the early 1990s. They have had 15 years to either do as well as Toyota or to figure out how to do better than Toyota and, unfortunately, neither has happened.

Once again the “experts” who get quoted in the media (money.cnn.com, May 3, 2006) think that Toyota has some kind of secret weapon or crystal ball:

“I don’t think it’s temporary,” said Dave Lucas, vice president at the auto sales tracking firm Autodata. “Toyota at this point just has the product lineup and continues to pump out the volume.”

Part of Toyota’s strength, according to Lucas, is having a line of vehicles that boast fuel efficiency, such as the Toyota Camry and the hybrid Prius, at a time when gasoline prices are flirting with record levels.

“Toyota seems to have the product available when people want them,” said Lucas.

American business leaders, automotive and other industries, need to wake up and start thinking systemically. They need to start understanding why the corporate culture of Toyota is the true advantage that will make Toyota a leader in whatever industry they choose.