I hope this will help you.
My company implemented Lean manufacturing with the help of University of Tennessee one year ago, the result is beyond our expectation. It will take a total commitment for upper management and across-the-board training. Every one in your company should buy into it. Believe me it will work.
The following article was written by Jim Womack.
I recently had a request from a Detroit newspaper to write a brief piece for
the Motor Show on how American car companies can get turned in the right direction.
In reading it over, I realized that my advice would be the same for any company
in any industry in any country, so I thought I would pass it along. If you are
not in automotive, just substitute your industry and product whenever you see
"automotive", "cars", etc.
We're Back to Basics. So...What Are the Basics?
In every economic boom, American car companies forget what they really
are and start to think they are something else, seemingly much more exciting.
In recent booms, these dreams have included financial institutions (The Associates),
data systems providers (EDS), airplane makers (Gulfstream), high-tech electronics
outfits (Hughes), car dealers (Auto Collection), and "e"ntrepreneurs (FordDirect.com).
Then the boom ends and they discover that they are really just...car companies.
So, as we slug through the 2002 recession, everyone agrees that the American
companies should get back to basics. But what are the basics?
Here's my short list, based on the thought process of my ideal company. (You
guessed right. It's Toyota.)
- Focus on the product by installing a real chief engineer for every platform.
Even when Toyota publicly advertises the role of their chief engineers - like
Kosaku Yamada for the new Camry/ES300 - no one in Detroit seems to get it: Put
someone permanently in charge of making money and growing share for each product,
make sure that person knows a lot about cars, give that person lots of responsibility
but little staff, and have the CEO tell all of the functions to get behind the
chief engineers or else.
- Rethink purchasing to focus on the actual process of engineering and making
components, and look at the entire value stream of activities running from raw
materials to complete vehicles. Then jointly remove the wasted steps and co-locate
the remaining value creating steps to pursue big cost-downs (rather than margin
shifting) and make-to-order vehicles.
- Rethink assembly to make it much more flexible and ask why OEMs should even
do assembly. Toyota has always outsourced up to half of its assembly in Japan,
and its specialist assemblers are also experts in body and manufacturing engineering.
As a result, the chief engineer often has a choice in who is best suited and
most eager to assemble the product.
- Rethink the links between the factory and the customer to find a constructive
role for dealers. As we get serious about build-to-order, there shouldn't be
any metal on car lots for dealers to move. What dealers should be doing instead
is helping customers solve their mobility problems by delivering, maintaining,
repairing, and recycling vehicles as needed, using brilliant processes. This
can be a win-win-win for driver, dealer, and manufacturer.
- Rethink the location of production and engineering for price-sensitive products
to co-locate most steps in low-cost locations that are still close enough to
customers to permit build-to-order. This means Mexico for North America, Eastern
Europe for Western Europe, China for Japan.
Note that this list does not include firing all the deadwood at every company,
eliminating the union, getting rid of fuel economy regulations, terminating the
dealers, squeezing the suppliers, or convincing Wall Street to cut the car companies
a break for a few quarters. It does include the central task of converting the
value creating steps in product development, production, purchasing, and sales
into a consistent, rigorous process.
And this is where Detroit falls down. In the most striking recent example,
Jac Nasser expended his best energies on finding brilliant outsiders to manage
broken processes at Ford, while average insiders got brilliant performance from
bullet-proof processes at Toyota.
So, as the economy begins to turn the corner, let's unleash our chief engineers,
focus on the key processes, and get creative about the fundamental value-creating
relationships. And, for a change, let's stick with these basics through the
next cycle and far beyond.
Jim
Jim Womack
President and Founder
Lean Enterprise Institute, Inc.
P.S. We get back to basics every month in our LEI workshops, which are offered
next in Seattle, WA, on April 17-19. Just go to
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