Patterson Alliances, LLC

A former coworker, Mark Rosenthal on his blog, theLeanThinker, weighed in about the Toyota situation and its impact on Lean and TPS. Mark has some excellent insights. A few people have asked me, what I thought of the Toyota situation, 1) being a Toyota Prius owner and 2) my own experiences with Lean. For group 1) my answer is simple, good product, great reputation and I'd buy again; 2) Lean is suppose to be about continuous improvement, which implies that no one is perfect, there isn't a process that can't be improved. So much of the Toyota situation has been observation and opinion from afar. Some pretty good technical analysis here and there, but for the majority of us we are merely outside observers to the whole situation. An article referenced by Mark, Anatomy of Toyota Accelerator Pedal, was a post by Popular Mechanics which went into greater analysis of the problem. This article correctly stated that 1) there is much more root cause analysis needed, 2) that separating out fact from fiction has been difficult and my personal opinion is 3) thus far Toyota's response has been inadequate to calm the feeding frenzy and at times has added to it. The discussions in the Manufacturing community about how Toyota's problems reflect upon Lean and TPS, at times seems more disappointment by devotees or competitors piling on. Many have and will continue to idolize Toyota as the ideal we should all aspire to. Toyota has been and is a great example of continuous improvement in Manufacturing and the Enterprise and there is the rub, instead of holding up Toyota as the ideal to emulate we should be holding up the goal of continuous improvement everyday. As humans we often idolize individuals who represent the ideal, and in Toyota's case the industry, TPS, that has been developed around a company. We are better served as Manufacturers:

• by focusing our teams on what we need to do in our own organizations and functions to improve.
• by recognizing again that Lean, TPS, is a path not the end goal.
• by understanding at the top of the enterprise, that no reported problem however seemingly insignificant does warrant further investigation.
• by giving our customers an andon, to alert us that there may be a problem which may warrant shutting down the line until the problem is fixed.

When Mark Rosenthal first taught myself and my team, he always made sure we were observant. He'd also ask what did we see? What did we observe on the gemba, in photos, from the perspective of the workers adding that value to the products. He'd ask what did we hear? What were people (employees, customers and potential customers) saying about our products or services. If Toyota and we are to learn anything from this situation I think Mark said it concisely:

...those who are grounded are going to have to get more grounded. Stay focused on the process, the objectives, what is happening right in front of you. Ask the same questions. Tighten up on your teaching skills because the concepts are going to have to make sense in the here and now. No longer will they be blindly accepted because “That is how Toyota does it.”

Change doesn't come easy to most people, we fight it for any number of reasons. Not the least of which is loss, we feel we are losing something and perhaps we are actually losing something. Perhaps it is a connection to the feeling or people that came before us, be they family or friends or a way of life. It is like the process of managing grief: 1. Denial, 2. Anger, 3. Bargaining, 4. Depression, and 5. Acceptance.

I was reading a recent article in Consulting Magazine (Dec 2009) the starting point was the following statement:

two-thirds of senior executives say the current global economic crisis was a catalyst for driving change across organizations ...

The questions that have been in my mind since reading the article are: "Why does it take a crisis to drive change?"

At times a business must create a crisis to drive change in an organization. By that I don't mean manufacturer a crisis, but rather frame a problem the busines is having into a crisis that has bad or dire consequences if things don't improve. Sometimes our people don't see a reason to change even if you know that there is. When I was a Plant Manager and I was privy to the knowledge that our business was being sold and one of our sister plants was to close, some in their management chose to single someone else another plant should be closed. I created a different crisis, I chose to point out how much our process and quality mistakes were costing our business. I pointed out that for the company to make future investments in us we'd need to improve and quickly for the next year's budget was fast approaching.

"Why focus on short-term objectives instead of long-term overhaul?"

If you work long enough and in enough companies and businesses you see quite a bit of what can go wrong when focused too much on the short-term versus the long-term strategy. Only focusing on the short-term objectives is like fighting the crisis of the day, and moving from one fire to another. This type of focus means you may miss the fact that a competitor has being pouring fuel into your back door, while walking away your customers out the front. It may mean that you miss that a longtime supplier is sorting parts to get you parts for your new product or new design. Try as they might some bad parts are slipping in. A long-term view might have had you engage that supplier years before to get them ready for the change in your products and designs.

How do you move from short-term objectives to long-term changes? What are you doing to grow your business?

What do you think, do you need to change? Should you create a crisis?

The January monthly educational program sponsored by Manufacturer's Alliance. Leveraging Product Development Resources, a well presented program (Manufacturers Educational Program). The speakers were:

• ACIST Medical Systems Inc.- Karen Kensok,
• Shock Doctor-Jay Turkbas & Bill Best
• Tennant Company- Evan Graham

In many ways the program was a recommendation for outsourcing, close partnership with suppliers and the need for new skills sets in our teams, namely the ability to work effectively with external resources.

Shock Doctor's prototyping process (Foam, to Carbon Parts: to final Plastic Injection Molded Parts) and the close relationship with their manufacturing (Long Way: http://www.longway.com) and design partners (Tac Tix: http://www.tactix.com) by all accounts has led to great success, faster to market, and designs that work for the market.

The only topic not covered was what PLM & Collaboration tools each company was using to manage the ever increasing global development teams with resources both Internal & External to the Company. How these companies manage the various cultural and logistics barriers to get things done. This might make a good selection for a "Beyond The Meeting™" Map.

There were two very timely and interesting broadcasts on the MPR Mid-Morning program: Made In America 2.0 and Daniel Pink debunks the carrot and stick approach. First the Made In America 2.0, the guests were Harold Meyerson and Scott Paul the host Kerri Miller. This was an excellent presentation of the loss of America as a Manufacturer and the hope of a renaissance in Manufacturing due to Green Energy.

Take a listen to the entire program, but I found this quote telling:

... time was GM was the largest private sector employer, who paid their workers sufficiently high enough salaries that they could afford to buy their products. Now the largest private sector employer is Walmart, who pays their workers at levels that the only place they can afford to purchase products is at Walmart and/or to go into significant debt.

Part of the American Economic Recovery will require: "An American Renaissance in Manufacturing".

During the question and answer period we also heard from the listeners and guests about incentives, subsidies being given by China and other countries to bring jobs to their shores. I've seen in my career where the many companies outsource their jobs, but leave their overhead costs in the US, creating corporate subsidies for their Overseas operations and a heavier weight for their US Operations to overcome.

Another point that I think gets missed is as Manufacturing goes, so goes Engineering and R&D. Many companies that move their Manufuacturing offshore find that they no longer have the opportunities.

The hosts and speakers never say the word Lean, but one way American Manufacturers continue to be competitive is by implement Lean practices and reducing the costs (inventory, transportation, etc.) and wastes ingrained in moving products manufactured in China back to the US stores.