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Old-School Vertical Hierarchies

By: Michael Lombard

As the saying goes, I wasn’t born in Texas, but I ran here as fast as I could. When I arrived, I found that the Lone Star State produces some fine beer, specifically, Shiner beer…

While I could go on all day about the merits of Shiner Hefeweizen compared to the original Shiner Bock, that’s not really the point of this photo.

What I want to discuss is how folks on large-scale construction jobs view the relationships between the prime contractors, secondary contractors, sub-contractors, and so on.

Typical Construction Industry Approach

In case you haven’t figured it out yet, the construction industry typically views sub-contractor relations like this photo… with each contractor dominating the one below it and being subservient to the one above it.

An old-school rigid, vertical hierarchy. This is based on standard construction practice, which typically involves a contractor doling out aspects of the work to sub-contractors. In this arrangement, the contractor is viewed as the customer and the sub-contractor is viewed as the provider of the product or service.

This is an external customer relationship, and it’s repeated over and over again at each level of the hierarchy, so you can have dozens of external customer relationships on a job site. How fun! A bunch of people showing “respect” for their boss man above them. Old school mentality.

The Lean Approach

From a Lean perspective, I would say a collaborative model would be more effective than a rigid vertical hierarchy.

If you’ve read Gemba Kaizen, then you know about the inverted pyramid that places management below the gemba (the place where the real work is done) in a support role. Essentially, the gemba is viewed as the internal customer of management, and I would say that prime contractors should view their sub-contractors as their internal customers.

They should support them, not threaten them with punitive actions. They should identify and solve problems, not pass the buck just because the contract says they can.

Your thoughts?

I’d be interested in learning if other traditional industries are as “old-school” in their relationships with vendors/suppliers. How would you rank your industry’s level of collaboration on a scale of 1 to 10, with 1 being a rigid, vertical arrangement and 10 being a progressive, Gemba Kaizen-like approach?

All I know is that until the construction industry embraces Lean thinking and begins working more collaboratively, we’ll be doomed to mindless obedience and endless frustration. Thank goodness we have beer.

About the author: Michael Lombard is a Lean advocate and project manager at Palm Harbor Homes, Inc., based in the Dallas-Ft. Worth metroplex. He’s currently working on large-scale military construction projects, studying his master’s in project management at UT Dallas, and blogging about Lean construction management. You can view Michael’s profile here and e-mail him at mlombardjr at gmail dot com.

The Critical Difference Between Defects and Defectives

Today I submit a quick, but extremely important post if you produce a product of any kind.

There are two different ways your product can be “bad.”

It’s defective

First, said product can be defective. This is to say something is wrong with it. It doesn’t work like it’s supposed to. It doesn’t look like it’s supposed to. The customer, who pays you good money, ain’t gonna be happy with said product.

It has multiple defects

Second, the aforementioned defective product might have multiple defects. This is to say there are many things ‘wrong’ with the product. It has 103 different scratches all over it, 14 surface mount components are not soldered correctly, and the text on the label is incorrect in 3 different places.

Manage the defects

In summary, it only takes one defect to create a defective product. But a single defective product can have a zillion defects.

What does this me to you, maker of said product? You need to stop focusing on how many defective units you produce… instead you should be laser focused on the number of defects you’ve created the past month.

Do you agree? Is this how you manage your business?

Knowledge and Thinking

“Knowledge is what keeps the momentum going between dreams and reality.” -Author Unknown

I am a firm believer that the “thinking” that occurs while practicing lean manufacturing and six sigma is extremely important.

I was reminded of this by, well, myself when I re-read an answer I gave Kevin Meyer a month or so ago for a blog series he’s running.

And I won’t back away from this since I truly believe that learning how to think is far more important than any single “tool” or “technique” one can learn.

But does this mean the tools and techniques of continuous improvement aren’t important? Of course not.

In fact, I’d be willing to wager that the more tools and techniques you know the better you’ll be able to think and solve problems. Allow me to explain.

Continuous Improvement Snobs

There are some folks so in love with either lean or six sigma they snub their nose at the other.

Some ‘lean purists’ will attempt to say, for example, how six sigma is no good and that they wouldn’t be caught dead using “it” as if it (six sigma) were some type of disease.

Likewise there are ‘six sigma purists’ who think lean is a second class continuous improvement citizen due to what they feel to be a simple set of tools.

With all due respect, I find both sets of people highly ignorant… but that’s just me.

Learn it all

My approach has always been to learn as much as I can about all facets of continuous improvement. You see, I could really care less if something is labeled lean, six sigma, lean six sigma, TOC, etc.

All I want to know is how to solve problems no matter the situation. And time has taught me that sometimes a so-called six sigma toolset might be of better use than a so-called lean toolset.

For example, I am not sure I’ve ever read Dr. James Womack or Dr. Jeffrey Liker (two leading ‘lean’ experts) ever write about the benefits or importance of a repeatable and reproducible measurement system.

Likewise, I am not sure I’ve ever read George Box (a leading statistical expert) write about the greatness of an andon system. But does this mean six sigma ‘belts’ should not learn about what an andon system is? Of course not.

Morale of the story

So, the morale of my rant is this. I truly believe the more you learn the more you’ll be able to think. And the more you’re able to think the better you’ll be at solving problems. And, in the end, isn’t that what continuous improvement is really about?

Do you agree with me? Have you ever heard a ‘lean’ guru bash six sigma or perhaps a ‘six sigma’ guru bash lean? What is your response when they do?

Bill Waddell on American Manufacturing

I don’t pretend to be an “economic guru” by any means… honestly it all makes my head hurt a bit.

I did, however, thoroughly enjoy reading Bill Waddell’s thoughts on the state of manufacturing in America – and really the West in general.

Bill, for those that don’t know, may have forgotten more about manufacturing than many of us will ever know.  He also writes over at Evolving Excellence and is, um, passionate.  Yeah, passionate is a good word.

I’ll also warn you ahead of time, Bill is an opinionated fellow… but seems to have a tremendous amount of wisdom that I, for one, have personally learned from.

If you’d like to download and read Bill’s rant, I mean thoughts, visit his website and download the Word document titled “The Hollow American Economy.”

After you read – or at least skim the paper – I’d be interested in your thoughts.  Specifically, do you agree with Bill?  Or do you think he may be missing the mark?

Toyota Stock Watch: Edition 1

John Hunter recently commented that he owns some Toyota stock. And since I value John’s wisdom I decided to take a look at the TM chart to see what it looked like.

Now, before I go any further, let me be crystal clear… I am not offering any financial advice and, at least for now, I am not an owner of Toyota stock. I do own two Toyota vehicles though… and LOVE them but I digress. Oh, and Toyota also has a rocking production system but, again, I’m digressing!

Fun with Technical Analysis

Anyhow, I used to mess around trading stocks. And since I’ve studied things like technical analysis I thought it might be kind of fun to track Toyota’s stock from a technical perspective.

Let me also say that I am far from an expert at this and would love nothing more than to hear your opinions of what you see and what you think will happen.

My Take on the TM Stock

Anyhow, here is my first take on what I see… keeping it real simple for now. In the future I may pull out some fun stuff like Fibonacci retracements and MACD crossovers… but for today’s lesson we’ll look at some simple support and resistance lines.

If you click on the chart you’ll notice that this stock had been on a steady downward trend bouncing between a nice little “channel” that I’ve manually drawn in.

Then, the stock was crushed in early October of 2008 as Toyota failed to impress the street with their FY 2009 Guidance.

After this beating the stock gyrated sideways finding support around $60 (point A). It also, interestingly enough, found resistance at what used to be a support line (point B). Isn’t this stuff intriguing?

Anyhow, in April of this year the stock finally managed to bust back into the channel only to meet the same downward trending resistance (point C) which forced it back down.

What’s Next?

From a purely technical perspective the biggest question mark I have is whether or not the stock will find support at around $68 (point D). If it does, it could possibly see a bullish bounce up… but, AGAIN, I am not offering any financial advice here. I’m just a nerd who loves to look at charts.

What do you think?

What do you think? Are you bullish or bearish on Toyota’s stock? Do you see anything else on their chart I might be missing?

I am sorry

I am sorry.

These three words have been ringing about in my mind for the past week or so. No, I didn’t do anything terrible… in other words I am not personally sorry for anything.

The reason these words have been stuck in mind is because current Toyota President Katsuaki Watanabe, in response to the news that Toyota expects to lose $8.6 billion during this fiscal year, recently stated:

“Of course the external environment doesn’t help, but we were lacking in the scope and speed of dealing with various problems and issues, and for that I am sorry.”

Initially I was taken aback by Mr. Watanabe’s humility and courage for taking personal responsibility

Then I struggled with the idea that perhaps it’s easy, and dare I say convenient, to say you’re sorry when things go wrong.

My children often reply with these same three words when they’ve made a mistake. And if I sense they are truly contrite I may go easier on them.

So, I’m curious, what are your initial thoughts when you read Mr. Watanabe’s words?

Are you more willing to give him a pass since he says he’s sorry and they are, after all, the mighty Toyota?

Or do your eyes roll back in your head as you think to yourself… sorry doesn’t pay the bills, pal.

What do you think?

Leadership & Standard Work

By Jeff Hajek, author of Whaddaya Mean I Gotta Be Lean?

A while back, Ron asked a question about how standard work is applied to leadership.

Think of it like this. You wouldn’t create standard work for ‘manufacturing.’ You’d create it for the assembly of the WidgetMax3000, designed based on the voice of the customer and produced at a rate to match customer demand. You have to know your customer.

Know the Purpose

Likewise, you have to know the purpose of your leadership. What are you trying to accomplish? Without having clear objectives, it doesn’t matter what you standardize. You won’t get good results if you don’t define the results you want.

Once you see the big picture, learn to recognize the processes that you do in support of your goals. Keep this in mind. You don’t do ‘Leadership’. You do a series of smaller tasks. Everything is a process. You inspect equipment. You set expectations. You audit performance. You improve processes. You do the coaching process.

Some of these things can be more easily standardized than others.

Standardization in the Army

I’ve got a military background. The Army is really good at standardizing repetitive tasks so people can do them in harsh environments with little sleep. We had standard reports for many of these common tasks—for example, a sitrep (situation report) came in a specific format. We had structured procedures for maintaining equipment. We even had ‘battle drills’ that we practiced in case of specific enemy ‘inputs.’

What about you?

The leadership processes in a manufacturing plant, in a hospital, or a customer call center can all be standardized as well. Do you have a standard way you:

  • Prepare for the day? Make sure your staff is present and your equipment is functional at the start of the shift?
  • Create a production plan? How do you determine the takt time for each production area today, based on current customer demand? How do you adjust?
  • Inspect your areas of responsibility so you don’t miss anything important?
  • Evaluate your team? Do you record information throughout the year so you are not scrambling at evaluation time? More importantly, how do you make sure people know where they stand on a daily basis?
  • Keep your desk clean? Far too many leaders fail to set a high standard of 5S yet ask their teams to do it.

What do you think?

The more you can standardize the routine processes of leadership, the more you can use your time for the high impact things leaders want to do.  Do you agree?

Line Balancing at McDonald’s

I was recently going through the drive through at McDonald’s and saw something very peculiar.

The line was quite long but I decided to stick it out.  As I sat waiting to get to the board where you speak your order I noticed a McDonald’s worker holding some electronic clip board thingy.

A few minutes later she was at my window to take my order.  Of course I knew what I wanted (I’m a Big Mac meal guy all the way) so I was able to tell her without reading their menu.

It worked out, I guess?

A few minutes later I was at the window to pay and then shortly thereafter I had my food.

I’m thinking this added process may have actually improved my overall experience… but I’m really torn as to whether this is the best way to go about things.  I mean they’re obviously addressing some “line balancing” issues by sending this poor lady out with her electronic clip board, right?

What would you do?

What do you think?  What should they do to address the root cause?

Visual Controls at DFW Airport

Allow me to set the scene.

It’s been a long week on the road… your flight home was delayed 2 hours and you miss your significant other and children more than words can explain.  Finally, after what feels like an eternity you land. Your home.  Well, almost.

Get to the car

After finally getting off the plane you collect your bags.  Now all you have to do is get to your car and head home.

There is just one small issue.  You can’t find the piece of paper that contains your parking location.  No worries… you’re pretty sure you remember where you parked so you head that way.

With sweat dripping down your back and arms tired of dragging your bags you finally find it – 49 minutes later.

Visuals at DFW Airport

Over the years I’ve traveled a lot (100,000+ miles in 2008) so have dealt with issues like this.  And while I’ve definitely come up with my own techniques to avoid situations like this… some airports are doing their best to help us travelers.

Case in point – DFW airport (my home airport).  The picture shown here (click to enlarge) was taken from the parking garage in Terminal D.  As you can see there are some excellent visual controls in place.

For example, I was parked on the “yellow sunflower” level or whatever it is.  If I forget the actual number chances are I won’t forget the yellow sunflower.  Additionally, they offer a piece of paper you can take with you to write your exact location on.

What about you?

What do you think of these visual controls?  Do you feel they are good, bad, or so so?  And when you travel what methods do you use to keep track of where you parked?

Me, I use a combination of analog (write parking location on paper) and electronic (note location on memo pad of my Crackberry).  What about you?