"Living the Good Life"

David Drickhamer

Industry Week

October 2003, pp. 27-64

This article describes the winners of the 2003 Industry Week Best Plants awards. The winners are:

1. Autoliv Steering Wheel/Airbag Facility, Columbia City, IN (automobile steering wheels). This plant has a 100% on-time delivery rate, and has increased its productivity by 173%.
2. Boston Scientific, Maple Grove, MN (cardiovascular balloon catheters and coronary stents). This plant has had a 95% improvement in first-pass yield over 5 years, and has reduced costs by 20% for three consecutive years.
3. Bridgestone/Firestone South Carolina, Graniteville, SC (light truck and passenger tires). This plant has had a three-year decrease of 74% in raw materials inventory, and a three-year reduction of 72% in scrap/rework as a percentage of sales.
4. Collins & Aikman Corp., Guelph, Ontario, Canada (injection molded plastic automobile components and instrument panels). This plant has reduced its defects to 15PPM.
5. Dana Corp., Owensboro, KY (light truck frames). This plant has increased productivity by 96%, and has reduced its inventory by 50%.
6. Delphi Corp—Delphi Connection Systems' Precision Molding Plant, Cortland, OH (injection molded plastic components for electrical connection systems). This plant won a 2002 Shingo Prize for Excellence in Manufacturing.
7. General Cable—Automotive Products, Altoona, PA (ignition wire sets for the automotive aftermarket). This plant has had a 78% reduction in manufacturing cycle time, and a 30% reduction in order-to-ship time.
8. Kautex-Textron, Avilla, IN (plastic fuel tank systems). This plant has gone more than 1 million hours without a lost-time injury.
9. Kautex-Textron, Lavonia, GA (plastic windshield-washer systems and fuel tanks). This plant has cut customer rejects 99%, and reduced raw material inventory by 86%.
10. Lockheed Martin Maritime systems & Sensors, Syracuse, NY (radar systems, sonar and sensor systems). This plant has had a productivity increase of 41%, and a cycle-time reduction of 50%.

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"The Lean Service Machine"

Cynthia Swank

Harvard Business Review

October 2003, pp. 123-129

There have only been a few articles written on how Lean principles can be applied to service organizations, so this article is a welcome addition. The article explores how Jefferson Pilot Financial, a full-service life insurance and annuities company, utilized ideas from Lean manufacturing to streamline their operations.

Jefferson Pilot Financial felt that "Like an automobile on the assembly line, an insurance policy goes through a series of processes, from initial application to underwriting, or risk assessment, to policy issuance." Therefore, they felt the Lean approach would be appropriate for their situation.

Jefferson Pilot Financial started with a Model Cell, which would process policies that came through a specific group of Jefferson Pilot Financial's independent advisers. Seven different design principles of Lean manufacturing were applied simultaneously to the cell's work:

• Placing linked processes near one another—Under Jefferson Pilot Financial's old system, work groups were located by function and worked on different floors. Applying this Lean principle, people from different functions were co-located into the cell.
• Standardizing procedures—File systems which had been organized according to the idiosyncratic approaches of individuals were converted to a new standardized system. The physical work space for data entry was also standardized.
• Eliminating loop-backs—Procedures were developed so that employees did not have to process the same item twice.
• Setting a common tempo—The "takt" time was calculated for completing processing of an application. Then employees were encouraged to innovate to reduce the time needed.
• Balancing loads—A previously unbalanced system was replaced by a system that guaranteed that every team received the same number of applications to process.
• Segregating complexity—By separating out the applications that needed extra processing time, the simpler applications were processed faster than before.
• Posting performance results—Jefferson Pilot Financial prominently displayed the cell's hourly productivity rate along with the company's expectations. An area next to the display boards was set aside so employees could quickly discuss ways to solve performance problems that arose.

After significant success for the model cell, the best practices were documented and rolled out to other work cells. In spite of some initial skepticism, the performance improvements persuaded managers and employees to embrace the Lean approach.

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"The Eight Rings of Organizational Influence: How to Structure Your Organization for Successful Change"

Ron Rosenberg

Journal for Quality and Participation

Summer 2003, pp. 30-34

This article presents a model based on organizations that have successfully implemented change. The model consists of eight "rings":

1. A clear vision—This should include a clearly defined mission statement and a set of values that define behavioral guidelines for achieving the vision.
2. Patterns in the external environment that affect the organization—These include predictive, causal, and random patterns.
3. Cycles in the external environment that affect the organization—Cycles can be natural manufactured, or imposed.
4. Passion in your people—Hire for passion and do things that inspire it.
5. Focus in your people—Create an environment that allows for focus and eliminates distraction.
6. Balance in your people—Balance should be between life inside and outside work; planning and execution; improvement and application; risk and comfort; full-steam ahead and regeneration.
7. Learning process—Facilitate individual and organizational learning, and celebrate failure.
8. Support process—Identify and involve customers and suppliers; facilitate best practice exchanges; reward team efforts.

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"Dysfunctional Performance Through Dysfunctional Measures"

Andy Neely, Mike Bourne, and Mike Kennerly

Journal of Cost Management

September/October 2003, pp. 41-45

The authors of this article provide several examples of how poorly designed measures can lead to inappropriate action and behavior by employees. One example given is of an airline that measured baggage-handling performance by assessing the lapsed time between the plane landing and the time the first bag hit the conveyor belt. The employees soon learned to quickly grab a very light bag and rush it to the belt. Then they unloaded the rest at their leisure.

The article recommends that one should "deconstruct" a performance measure and think about its essential elements before trying to implement it. The components for measures to look at are:

• Title—What should the measure be called? Does the title explain what the measure is? Does it explain why the measure is important? Is it a title that everyone will understand?
• Purpose—Why is the measure being introduced? What is the aim of the measure? What behaviors should the measure encourage?
• Target—What level of performance is desirable? How long will it take to reach this level of performance? How does this level of performance compare with the competition? How good is the competition currently? How fast is the competition improving?
• Formula—How can this dimension of performance be measured? Can the formula be defined in mathematical terms? Is the formula clear? Does the formula explain exactly what is required? What behavior will the formula induce? Are there any other behaviors that the formula should induce? Is the scale being used appropriate? How accurate will the data generated be? Are the data accurate enough? If an average is used, how much data will be lost? Is the loss of data acceptable? Would it be better to measure the spread of performance?
• Who measures—Who, by name, is actually responsible for making this measure?
• Source of data—Where will the data to make this measure come from?
• Frequency of measurement—How often should this measure be made? How often should this measure be reported?
• Who owns the measure—Who should be held accountable for performance against this measure? Whose neck is on the line if performance does not improve?
• What do they do—What actions will they take to ensure that performance along this dimension improves?

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"Downsizing Outcomes: Better a Victim Than a Survivor?"

K. Devine, T. Reay, L. Stainton, and R. Collins-Nakai

Human Resource Management

Summer 2003, pp. 109-124

Earlier research on downsizing has found that "survivors" (people who keep their jobs) experience stress from additional tasks and guilt from their friends losing their jobs while they did not. The study reported in this article looked at hospital employees in Canada who had experience a severe downsizing. The employees were in a situation where they were unlikely to be able to find a similar position in their province. The employees were well-educated and averaged 15 years experience in the field. Nearly 90 percent of the employees were female. The authors were interested in seeing whether the "victims" (displaced employees) of the downsizing would fare better after six months than the employees who were not displaced. The study compared the "survivors" to "victims" who had found new jobs within six months.

The results were:

• Employees who continued to work in the downsized environment reported more stress than those who had been displaced and subsequently found new employment.
• The previously-displaced employees felt they had significantly more job control, or autonomy, than continuing employees.
• Compared to the "survivors" of the downsizing, the displaced, re-employed workers reported higher levels of job satisfaction, overall physical health, and quality of life perceptions. They also had lower levels of absenteeism and licit drug use.

The authors conclude that being laid off and having to find new work is not necessarily worse than being a "survivor."

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Five S: Top Notch Organization as a Foundation for World Class

John McNeil, GP Deltapoint

At GP Deltapoint, we describe Sorting, Simplifying, Systematic Cleaning, Standardizing, and Sustaining as Five S. We work with clients to implement Five S, either by providing materials or by leading them through the stages of Five S at their workplaces.

For each S, we describe levels of achievement: five of them. So top-notch Five S is attaining level 5 in each S. That means:

• Sorting such that cleanliness problem areas are identified and mess prevention actions are in place for them.
• Simplifying to such an extent that any needed item can be retrieved within 30 seconds using a minimum number of steps.
• Systematic cleaning so that all foreseeable potential organizing and cleanliness problems are identified and countermeasures are documented.
• Reliable methods and standardization for housekeeping, daily inspections and workplace arrangement are shared and are used throughout similar work areas.
• Sustaining behavior so that root causes are eliminated and improvement actions focus on developing preventive methods.

Is this a tall order? Hardly; but many organizations struggle to get past the ritual of annual cleaning followed by 12 months of gradual decline until the next feverish clean up and wishful thinking about standards of organization and orderliness. The root cause for this often lies in the incomplete participation of senior managers. The office and factory must be spotless, but middle managers' offices contain precarious piles of paper. The office has weekly meetings, but management won't cough up $25 for a vacuum cleaner. Worst of all, the management hierarchy does not participate in the spirit of Five S other than checking whether their direct reports checked the checks of the supervisors checking the Five S audits of the front line team.

Management must participate fully in Five S. Their offices must be clean and tidy. Their files should be ordered. They should do their part in keeping common areas organized and tidy, just as they found them. If Five S teams audit their own attainment of Five S goals, supervisors audit whether teams have the resources needed to remedy acute and chronic orderliness issues. Managers audit whether supervisors have provided common and consistent frameworks for Five S success. And senior managers should work with their reports to ensure that Five S improvement is continuous. After all, Top Notch Five S begins at the top.

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