The Non-value of Telemarketers

The feds launched the National Do Not Call List Friday (register here. I just did, it is quite easy.). Response nearly clogged the phone lines and website within hours of it coming up on Friday. Why?

Telemarketers are intrusive. Even if they are polite on the phone (like the earnest young folks calling me for money from my undergraduate and graduate universities), intrusions add no value.

Put in Lean terms, intrusions are "push" marketing. It feels offensive, if not downright oppressive. Especially at dinner time.

Lean is built on "pull". In marketing terms, that means letting the customer selelct when he/she wants to learn more. It is about gaining invitations to tell a story of one's product. It is certainly about thinking far more creatively about how to get customers.

Value. Pull. Two central concepts in Lean. Look for new ways to use them both today. I hope this is helpful and nonintrusive for you. Thank you for listening.

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Another great description of Lean

For an entirely different description of Lean excellence, check out my friend Hal Macomber's recent summary of his visit to Toyota's Georgetown Kentucky plant.

How can a car plant be sparklingly clean? These people know something and make it so.

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How to describe Lean

I struggle at times to explain just what Lean is to those unfamiliar with it. I find that stories tend to connect better than long lists of bullet points. So, I was very pleased to hear from Claude Emond today with the following summary from the European management school, INSEAD. This is a great summary of Lean. Enjoy.

Organic Production Systems

What can cell behavior teach us about manufacturing processes? According to Lieven Demeester, Assistant Professor of Operations Management, Christoph Loch, Professor of Operations Management, and Luk Van Wassenhove, The Henry Ford Chaired Professor of Manufacturing, all from INSEAD, the cell is not such a far stretch as a manufacturing model. It mirrors a number of production control principles already in use in modern factories. In cells, for example, production occurs only when triggered by a downstream shortage of end products, thus avoiding the accumulation of inventories. Additionally, cells use sophisticated quality control techniques such as 100% inspection, quality assurance, and fool proofing (i.e., using molecules with geometric shapes such that only the correct reactions are possible).

Beyond these similarities, the cell has advanced to create systems that are radically different, and significantly more efficient, than those found in today's manufacturing models. Cells constantly experiment in order to be prepared for change. The cell has multiple "backup" plans, and continuously experiments with new plans through mutation and genetic recombination. In addition, building materials circulate in closed recycling loops. No material is ever completely wasted, what is one organism's waste gets reprocessed by another organism. Finally, cells use a small set of common building blocks to create "products."

These features are the point of interest for the authors, who have developed a new vision for manufacturing, which they call an "organic production system."

Such a system would differ from traditional mass-production systems on a number of levels. Instead of large, centralized plants, an organic system would have numerous small-scale production sites closer to the customer, allowing the sites to be more responsive to the local market. Organic systems would use fewer and more basic production materials that could combine to serve many purposes and allow for a higher level of material reuse.

Some manufacturers are already moving in this direction. Norway's Hydro Norsk is building a geographically distributed network of aluminum re-melting plants, close to customer sites and with local collection of scrap aluminum. Similarly, Regale, a California company that produces molded fiber packaging made entirely from post-consumer waste paper, is following a "one packaging plant per township" vision, allowing the company to quickly respond to packaging needs of local manufacturers. These companies also illustrate the move toward fewer, more basic "modular" materials.

Looking ahead, it is clear that some industrial processes are more likely to transform to organic production systems than others, say the authors. Companies that can most benefit from this shift include those where:

Customers need to replace the product rather frequently, either because it wears out or because it becomes dated.

Transportation costs are high compared to the production cost of the product and where small-scale production methods are feasible.

The product comes in a variety of sizes and forms and fit is an important value component for customers.

Multiple, face-to-face interactions with the customer during the life of the product are required or beneficial.

I hope this is both organic for you, as well as helpful. Feel free to forward to a friend. Email me

Jury Duty

Jury Duty

Last Tuesday, June 17, something that many of us dread interrupted my life at a most inconvenient time. Yep, I was not only in the jury pool for our county, not only did the trial actually take place, but I was also selected to serve in a six person jury on a criminal case. And, perhaps amazingly, I learned some very valuable lessons.

• The jury system will find thinking people. I met five new friends on the jury and was impressed. Two women, four men. Age range from mid-twenties to mid-sixties. A production worker. A nurse. An insurance agent. A housewife. A retired grain elevator worker. Me. Blue collar. White collar. No collar. A genuine cross section of our community. And every one took the task seriously, despite the hassle it was for each of us to be there. Not a hint of flippancy or boredom with the issues at hand.
• My expectations were jolted. The attorneys, the defendant, the victim all put the outcome, willingly, to the collective judgment of the six of us. This somehow amazed me. Perhaps I’ve been too jaded by media coverage of high-profile cases in which everyone seemed to be an actor. In this local case, it was a genuine dependence on the assessment of six virtually anonymous people.
• "Why didn’t the dog bark?" Our case centered on two different stories of the same event. Was it or wasn’t it a crime? Which story would we believe? It came down to the classic logic of the old Sherlock Holmes story; Holmes looked at what didn’t happen, not only what did happen. Our decision hinged on one such "non action".
• A court doing plus/delta? At about 5:15pm, after a full day in court, we delivered our verdict. The judge thanked us, dismissed us and invited the six jurors to his chamber. We were kind of amazed, but went to his office, where he came in shortly and asked us "What went well? What can we improve for you as jurors?" He listened, asked good questions, made notes, explained issues. He explained earlier changes they had made. We had a 45 minute rehash of the day. Fascinating. Yes, a county court system can do continuous improvement, too.
• Visual systems work. One improvement the judge told us about was the mandate by the Indiana State Supreme Court that jurors now receive written preliminary and final instructions. It seems that until earlier this year, the jury only received oral instructions. Tuesday, we each received photocopies of the instructions as well as oral statements. It was critical for us to have such "standard work instructions" as we deliberated in private. The documentation was crucial to get it right.
• The system works. Justice was served. The verdict was right and fair.

You might look at jury duty differently if you are called to serve. It is a key part of democracy. And you might learn a lot, too.

I hope this is helpful.
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Rigid Flexibility

We ran a kaizen event earlier this week (though we use the term “blitz” rather than kaizen, it seems to be a less distracting name to our folks) and I saw something really fascinating, so much so it is worth telling you about.

My colleague Dave led the event, the first time he had done this. I sat in as an observer and facilitator. Dave is a respected leader in our company and was well suited for the goal of the kaizen; finalizing a set of specifications for a new product development. But, what he did with a tough situation showed me even more, both about him and the kaizen process.

About an hour into the event, a problem cropped up. As we poked around it, the problem grew. Dave asked some very perceptive questions and realized that if we did not solve this problem, right then and there, the rest of the kaizen was doomed.

I watched Dave assess the situation and then calmly made a clear proposal. Four of the eight participants in the kaizen were essential to solving the problem at hand. The other four, however, had no way to contribute until the thorny issue was solved. Dave therefore proposed that the other four go back to their regular jobs until such a time that we could fix the tough problem. The other four would remain and attack the critical problem, head on.

Amazingly (though really not all that amazing), the four problem solvers buckled down and, in two hours, worked through a problem that had vexed us for several months. They made the necessary drawings, phoned and FAXed suppliers, and dealt with all contingencies. Two hours later, Dave reconvened the larger group to carry on.

Dave injected some good humor as he restarted the larger group. He took a large marker and put a big “X” through our previously well-planned schedule. By so doing, he said, in effect, “Yeah, our schedule is blown but we can still achieve our goal.” And the group rallied. The remaining tasks all got done, accelerated by the key breakthrough of the smaller group. The event concluded almost on time and the management presentation went on as originally scheduled.

Spear and Bowen observed the following in their 1999 Harvard Business Review article on the Toyota Production System:

To understand Toyota’s success, you have to unravel the paradox – you have to see that the rigid specification is the very thing that makes the flexibility and creativity possible.

They went on to describe how it was the rigid process of standard work that allows such rapid change to happen in a Lean system.

Later, Dave remarked that having a very clear map for how to do the kaizen event gave him rails to run on. From that, he knew he was OK to shift gears and change the plan to fix the key problem, before moving on.

We have a very, very long way to go. But this was a glimpse of what it could be. And it was an exciting vision.

I hope this story is helpful.

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Keep your head up

My youngest son, Matt, age 15, has a great summer job. Along with his friend, Seth, he is the groundskeeper, scoreboard operator and announcer at our local Little League baseball field. At $9 per game, I’ve pointed out to him he’s already making a lot more money at baseball than I ever did.

A couple weeks ago, Matt noted that when Seth put down the first base line with the chalk machine that it was a lot straighter than when he did it. When Matt asked about this, Seth, a soft-spoken and wise kid, shrugged his shoulders and simply commented “I don’t watch the ground in front of the machine; I look at the right-field foul pole.”

Wow. Keep your eyes on the goal, not only on what is around you. It keeps the lines straight.

I hope this is helpful...and may all your baselines be wiggle-free

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Why Suppliers Need to be Profitable

I talked with a good friend a couple days ago who was scrambling like crazy. Her company had ordered some parts from a distributor with a three-week lead time. No parts arrived and the 3 week window came and passed. She phoned the distributor to query and, unlike her usual conversations with them, found their answers very evasive, vague and uncomfortable.

Suspicious, she immediately phoned the manufacturer of the parts. The problem? The distributor was not paying its bills; the manufacturer was not shipping to them. In the process, her company missed commitments and had a dissatisfied customer.

Lessons abound here. I highlight two.

First, my friend practiced autonomation in an office setting. Yeah, that’s an awkward word, but it, along with "just in time" forms one of the twin pillars of lean. We need to understand it. In short, any system should be set up to do these four things:

1. Detect the abnormality. By her experienced sense of timing, my friend knew something was wrong.
2. Stop. She did not go the next step after learning that no parts were coming. She didn’t do something else. She stopped. Literally.
3. Take countermeasures to fix the immediate problem. In this case, she got the name of another distributor which handled the same part. She called and ordered it. They had it and would ship. The current problem was sorted out.
4. Correct the root cause. She noted that she’d not order again from the first distributor.

The second lesson here is that supplier profitability is critical in a Lean Supply Chain. Classic views of suppliers say "Shoot, I don’t care about their financial health...that’s their business. Just ship me the stuff and don’t be late." Adversarial statements are commonplace. And what happens? You don’t find out till it’s too late that the distributor isn’t paying the manufacturer and your stuff isn’t shipped.

Lean systems become a Lean enterprise when extended to the supply chain. It’s a radically different way of doing business. And one that’s crucial.

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On Arrogance

I don't often find repeated illustrations in the world of sports for Lean but I have another one today, after my comments on Sammy Sosa last week.

Steve Wilstein of the Associated Press produced an excellent article recently, titled "Folly, arrogance put million-dollar jobs in jeopardy". He lists the recent sports figures like Rick Neuheisel at Washington, Mike Price at Alabama, Larry Eustachy at Iowa State, Jim Harrick at Georgia, as well as Sosa, as examples of highly visible, highly paid leaders who have damaged their institutions and their own reputations by very poor choices. Wilstein labels the root as "arrogance" and I think he is right.

When I read Wilstein's article, my mind raced, in contrast to the excellent book by Jim Collins Good to Great. A core feature of that book is the discussion of what Collins calls "Level 5 Leaders." (Chapter 2, p 17, if you have the book) In his research (very well documented) Collins found the following patterns of leadership evident in truly great companies:

• Leaders have both professional will and personal humility.
• They are compelled to produce business results.
• They have genuine personal modesty and seldom boast.
• They build an enduring company that will outlast them.
• They channel personal ambition into the company, not the self.

Read more in Collins' own description of Level 5 here.

Clearly, none of these highly visible sports figures had the same attitude that Collins describes. Equally clearly, none of our companies will achieve the type of customer satisfaction that flows from waste-free, innovative systems apart from such leadership. I challenge myself with this. And you.

I hope this his helpful.

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Why Metrics? They Spread Joy, That’s Why.

I got a one-line email late Friday afternoon with a spreadsheet attached. It gave me great joy.

It was from our customer service rep at a major vendor. The email text simply said "Joe, here’s six weeks in a row of 100% on-time delivery." The attached spreadsheet had all the data.

I’d suggested several months ago we chart the amount of orders we received on the ship date requested in our weekly deliveries. A simple Pareto chart, it showed the proportion of deliveries on time and the reasons for late deliveries when they occurred. In the matter of a few weeks, a clear pattern emerged; a problem with on-time deliveries from one of their vendors. So, they put their efforts into that vendor, rather than merely expediting, more furiously, the orders through their shop.

This is why the short email brought such joy to our rep and to me. This simple pattern worked. And, now, six straight weeks of perfect order fulfillment.

Lean systems are built on simple metrics. A simple chart, with straightforward counts. No significant technology required. Careful thought and a commitment to take action on what it tells you is required however. And, when the results show, they are clear and unambiguous. And that brings joy.

I hope you can establish some clear simple metrics today. And I hope those metrics are helpful.

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To my Bloglet subscribers:

If you receive this via Bloglet, you may wonder where I’ve been. There seems to have been some technical snafoos that have messed up the subscriptions. I’m sorry about that...and I’m still stumped as to why they are happening.

Feel free to bookmark my blog in your web browser and check in from time to time if you don’t get this via email. I am writing and learning about lean. All the way from book reviews to Sammy Sosa’s corked bat. I hope you find it helpful.

Thanks so much for subscribing.

Joe