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Subject

Richard J. Schonberger :
New Schonberger "Best Practices" book


Article:

Richard J. Schonberger :
It is my pleasure to let you know of my just-released new, broadly researched book, Best Practices in Lean Six Sigma Process Improvement: A Deeper Look . . . with Telling Evidence from the Leanness Studies (John Wiley, 2007). It reports on eye-opening, often out-of-the-mainstream deductions on what it takes to sustain a strong lean/process-improvement effort over the long term—and why so many companies fall well short in that quest. A few of the prominent findings follow.
1. Tarnished origins. The birthplace of lean (Japan—Toyota included) has grown fat.

2. Erosion—a regional phenomenon. The hotbed of lean (U.S., where the term was coined and massively promoted) is sliding, while late-to-the-lean-party Europe, is looking fairly good—though most regions have lost leanness in the past 3 to 5 years.

3. Erosion—prestigious companies not immune. Many of the world’s best-known—and one would expect, best managed—companies are unable to keep lean going or hold their lean gains. Many others, and some whole sectors (e.g., wire & cable, textiles, pharmaceuticals), have long-term trends opposite to lean.

4. Inventory metric. Inventory--a widely-used, eminently researchable measure of lean, allowing comparative analysis over time and among companies--backfires when applied as a goal.

5. The new achievers. By the inventory measuring stick, viewed as long-term trends, a variety of unsung stars of lean emerge, including: Heinz in foods; Kulicke & Soffa in semiconductor production equipment; Rohm & Haas in chemicals (a lean rarity in that sector); Sweden’s SKF in bearings; and the U.K.’s Reckitt Benckiser in consumer goods—all with outstanding trends.

6. Multiple pathways. Some of the most impressive long-term lean trends are in companies not notably proficient in the Toyota-based “lean core.” Rather, their leanness (quick, flexible response with less inventory) comes in various other ways, especially, deep-seated collaborative activities with suppliers and customers. Also, culling lesser, capacity-gobbling products, customers, and suppliers; simplified product design; mining process-improvement experience and talent from acquired/merged companies; contracting with 3PLs, specialists in streamlined logistics; and unique business plans (e.g., Dell-direct) that are win-win for all stakeholders. The best--to stay the best--need to know and pursue lean via multiple routes.

7. Fast-flow the pipelines. The giant inventory gluts in the supply and customer pipelines are a “hot potato,” neither party wanting it on its books. Gamesmanship rules. Joint inventory, an innovative metric, to the rescue.

8. Building on a “lean core” foundation. Lean efforts in the logistics pipelines benefit greatly when piggy-backed upon strong lean achievements inside; that is, lean inside provides an anchor of demand predictability and stability for pursuit of lean outside.

9. “Tough love” with suppliers. Supplier partnership as developed in Japan has often propped up the weak; in today’s hypercompetitive world a Western, tough-love form of collaboration with suppliers is superior.

10. Ultimate pull—learning from the retail sector. In lean’s early (JIT) days, best manufacturers were driving pull systems downstream to retailers. Now leading retailers are the innovators, prodding upstream producers toward an ultimate form of pull system: continuous replenishment.

11. Manage more with process data, less with goals and metrics. Continuous-improvement, requiring front-line associates to constantly collect process data, has faded in preference for (a) discontinuous projects dominated by professionals and technicians and (b) excess reliance on goals, metrics, and reports. World-class rates of improvement require rivers of process data—on everything that goes wrong.

12. Production moving to where it can be done best. Long-term trends in leanness are positively affected by a convergence of strong strategic shifts: (a) Away from vertical integration. (b) Toward modularity in product design/sourcing/production/delivery. (c) Ownership of production and design moving from end-product producers to CMS (contract manufacturing services) companies—a trend entrenched in electronics, fast-moving (after a late start) in aerospace/defense, and growing haltingly in medical devices and motor vehicles.

13. Finding and upgrading weakest links. The locus of lean success varies from industry to industry. For example, in long-term lean, motor-vehicle suppliers outdo their OEM customers; in aerospace-defense it’s the opposite.

14. Applying best practices overseas. In their home-based plants, Western companies widely employ cells, job rotation, etc., but in shifting assembly to developing countries those best practices are all but forgotten—though they are equally effective anywhere.

15. Compounded lean benefits. Long-term lean has compound interest effects, both as to cash and to customer allegiance. Flash-in-the-pan or erratic lean loses out.

16. Assessing success. Companies can have “world-class” lean even as they slide into bankruptcy, but lean limits the damage and slows the financial decline. Thus, judging lean by survival is sometimes more relevant than by financial success.

17. Retaining and deepening the talent pool. Lean companies that fail to grow are likely to lose their best people, then their leanness, for lack of continuing challenges and financial rewards. Non-growing companies can stave off this fate by systematically driving lean and the competitiveness message deeply into the organization.

18. Thriving in uncertainty. Under globalization with unpredictable, high risks: (a) Sourcing teams need to assess potential suppliers’ excess reliance on inventory and inspection. (b) Supply-chain collaborations seeking tight synchronization need the security of rarely-used off-line buffer stock.

The book´s research foundation includes tracking 15 or more years of inventory trends from 1,200+ companies in 37 countries grouped into 33 industrial sectors and nine global regions. From that, a large number of standout companies (some for poor results) emerged and were more deeply studied, including many company interviews. I think the ideas in the book will challenge many people´s--and companies´--mindsets and practices,

























































































































































































































































































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