In Philly They're Partying Like It's 1979
Yesterday Irish reader Simon Cunnane fired up his DeLorean, cranked it up to 88 miles an hour and took me back in time about thirty five years to the Akers ship building company in Philadelphia. It was 1975 all over again at Akers where they believe "Labor is your company's biggest cost, and it's also your biggest opportunity for improvement. Getting the right setup in place can provide major benefits". The "right setup" apparently is to have as many temps and contract folks as employees, and to lay off 150 of them to get the huge cost down. I would have guessed that steel was the bigger cost of building a ship, but maybe Akers has other ways of going about it. Just like in those pre-Ronald Reagan days, the folks at Akers are prolific MRP users and take pride in being particularly adept at tracking variances from standard costs.
But here's the good part: Akers is flat broke– busted – and groveling around every politician they can find looking for handouts in order to stay alive. I can sympathize with them – I'm sure getting orders for tankers is tough in this economy. So what do they do? Why they declare themselves to be lean and stage a webinar on Industry Week to share the secrets of their success, of course. "Best In Breed Strategy", they call it. "Lean Labor Results". I think I'll pass on that webinar. It took me a long time to undo the management lessons I learned back in the day, and I don't need to get dragged back into it.
The Jill and Art Show
While the Akers webinar raises some good questions about Industry Week's editorial standards, there's no questioning whether senior Editor Jill Jusko knows lean. She wrote a great article on the confusion surrounding lean, and had the wisdom to rely heavily on Art Smalley for input. The piece is well worth the read. For those who don't know Art, he was the first American manager to work for Toyota in Japan. He goes back to the early days and learned from the founders. Nobody knows lean manufacturing better than Art, so when Jill does the writing and Art does the thinking the result has to be great.
Why The Good Get Better
A week ago I announced we are selling a Lean Assessment Tool to raise a few bucks for Special excellence. The response has been great – thanks to everyone who wrote in for it. Last night I had my first chance to look at the list of buyers and could not help but notice that it is by and large a who's who of very lean companies. For instance, while reasonable people can disagree over which is the leanest auto maker in the world, they same three or four names would be on everyone's list. They all bought it. While I don't divulge the identities of companies I do anything with unless they put it into the public domain first, I am under no such obligation to those i don't work with. So I am free to tell you that no one at GM or Chrysler thought the tool was worth $35 dollars (more likely, no one at those companies reads Evolving Excellence). Now I am not saying that you have to buy the tool to be lean, but I am saying that it is noteworthy that companies that are already very, very lean in anyone's book are always on the prowl for anything to make them even better, while those floundering about in their ivory cubicles never give self-assessment a thought. Their woes are always caused by someone else.
What Goes Around Comes Around
In what has to come as a jolt to all of the financial wizards who have cranked out detailed economic rationalizations for why work is better done in countries where people will work for pocket change, Walgreen made an outsourcing announcement this week. They are "Rewiring For Growth" and the starting point is to send 150 accounting jobs to India.
The Culture Clash
I wrote a few days ago about the culture of corruption in the cheap labor countries, and my contention that the lean fundamental of 'respect for people', and all stakeholders for that matter, and rampant corruption are fundamentally incompatible. A couple of interesting updates on the topic:
in China, an American college that had been running an MBA program uncovered such rampant cheating they had to take drastic action. They tossed out the grades of the 400 students and made them an offer – they could ether sit for an honest, comprehensive exam and get their degree, or they could have their tuition refunded and leave the program. 398 students took the money rather than sit for an honest exam. Centenary College has pulled the plug on their Chinese MBA program.
In the Philippines (number 139 on the least corrupted list) the furniture manufacturers are losing export business to Europe at a serious rate. It seems they need to have their furniture certified by an independent body that it came from the right sorts of forests – no endangered animals fell out of the trees when they cut them down for chairs, I suppose. They can't get anyone to do the certifying. Europe won't let the Philippine government do the certifying (says quite a bit about their credibility), and no private sector outfit is willing to put their name on a certification that the Filipinos followed the rules.
But the best tale – worst really – comes from Brazil. The BBC reports that a Brazilian court has upheld a $2.8 million fine levied against an outfit called Lima Araujo Agropecuaria for holding workers as slaves – you read that right – slaves. It was the fifth time they got caught and the government has decided enough is enough. I can't even wrap my mind around that. If you get caught one time holding one person in slavery for one day you should be horsewhipped, tarred and feathered, and tossed into the deepest dungeon in the land for a very, very long time. A civil penalty – a fine – for getting caught five times describes a culture I cannot even conceive.
Have a great weekend!