A couple of interesting stories to touch on before we wrap up the short Thanksgiving week:
Kevin pointed out the absurdity of Whirlpool being proclaimed 'lean' by Assembly Magazine. Their Mr Sprovieri acknowledges that "The economics, the wisdom and even the ethics of Whirlpool’s decision to move some production from the United States to Mexico are certainly debatable," and he asks, "Are lean and outsourcing separate issues?" He takes Kevin to task for not acknowledging the facts. His evidence of Whirlpool's 'leanness' is their winning a Shingo Prize.
My dear Mr Spieri, first let's be clear that the first time we all had a good hoot at Whirlpool's self-proclaimed lean wizard status was my post in 2006, in which I pointed out that Whirlpool was closing a factory while having committees study lean. Kevin was merely rehashing a fact that is pretty well established. One of us or the other hauls out Whirlpool every year or so just for the comic value of listening to their inane proclamations of lean prowess. Assembly Magazine seems to be about the last ones to figure them out.
But facts you want? How about this one: Lean is fundamentally about flow. Whirlpool's rate of flow went from a mediocre 7.8 inventory turns in 2009 to a downright pathetic 6.6 last year. This year is not in the books yet, but Whirlpool's CEO is bracing Wall Street for even worse flow. Inventory doesn't turn at Whirlpool because their flow is a non-issue. Instead, their 'assets' meander from China in slow boats and ooze through their factories like so much primordial sludge.
How about this fact: Respect for people and commitment to them is fundamental to lean. The blathering of Whirlpool's Chielf Innovation Officer notwithstanding, Whirlpool did not only close its Evansville plant, it closed factories in Newton, Iowa; Searcy, Arkansas; Herrin, Illinois; La Vergne, Tenn; and Oxford, Miss; and they are warming up to lower the boom on Fort Smith, Arkansas. Just for laughs, it is interesting to point out that while Whirlpool was busy closing the Evansville plant, their Mr Egerton was putting on seminars in Shanghai on how to buy more stuff in China. I suggest the average Whirlpool employee would appreciate involving them in a paycheck a whole lot more than involving them in Whirlpool's innovation strategy.
So let's recap, Mr Spieri: Laying off employees by the bus load, shutting down entire towns in the process in pursuit of cheap labor, extending supply chains by 8,000 miles and months of cycle time, and you are offended that Kevin thinks they are not lean? As for the Shingo Prize, you ought to check the records. You will find that Delphi won better than a dozen of them … right before they went bankrupt. The Shingo Prize measures how lean a company looks – not how lean they are. And as for your question, are lean and outsourcing seperate issues … if you have to ask then you don't really understand lean.
The Gang of Six
The political pundits were stunned that the goofy 'Gang of Six' was unable to find a way to cut 3% from the federal deficit. The most inept manufacturing manager on the planet can cut 3% when pushed to do so, but not these clowns. But no one should have been surprised. A quick check of the resumes of this gang shows an average age of 63, which leaves about 45 years of grown-up experience. The average of the gang mebers shows 20 years of elected office. Before that, they average 12 years of civil service and other government related work (mostly lobbying). So 32 years ago before they began gorging themselves on the public trough, what did they do? 10 years of hanging around academia either teaching or attending. In total, they average 3 years of honest work over a 45 year adult life. Is it any wonder that these folks cannot acomplish that which is routinely done by the average American adult?
There is Good News
Times are tough and the St Vincent DePaul Society's annual Thanksgiving food handout program in Cincinnat's west end was getting overwhelmed. It took 8 hours to pass out the food, and mistakes were common. "Part of the problem is that most of the food is donated to the pantry in the day or so before the distribution, leaving no time to pre-pack baskets with donated stuffing mix, fresh potatoes, canned vegetables and fruit. 'Some people would get two or three boxes of stuffing, for example, and others wouldn't get any,' pantry coordinator Mike Voegele says. Some food ended up being handled two or three times before it ever got to people who needed it."
Lucky for them a guy named Kevin Thornberry was one of their volunteers – and Kevin works for Toyota's TPS Support Center across the river in Kentucky. The Toyota folks came in and overhauled the process. Delivery time cut in half and errors gone.
Turns out that Toyota has done the same for the St. Bernard Project rebuilding homes destroyed by Hurricane Katrina in New Orleans and the Community Kitchen & Food Pantry in Harlem.
I wouldn't be surprised if a few former Whirlpool employees from nearby Evansville are in line for the food handouts. If so, it will be the first time they have seen what lean is really all about.
Have a very happy Thanksgiving!
Steve H says
I love everytime I hear stories of the one like Kevin Thornberry. Its nice when a company throws money around, but its even nicer when they throw knowledge around. Kevin helping overhaul the process didn’t just help the operation run better (and more people get their food) but I’m sure it sparked a curiosity and interest in learning from everyone who worked there. It’s nice that a company encourages their employees to apply what they’ve learned at work to help the community. Good for them and TMC.
Happy Thanksgiving friends to the south!
Joe Molesky says
Great Post! Your point about the Shingo prize is spot on. It is because of people like Mr. Spieri and the fine management team at Whirpool that those of us truly practicing lean end up defending our craft tirelessly. Again Bill, great job.
Jim Fernandez says
Divide the Toyota folks into two teams. Send one team to Whirlpool and one team to Washington.
Rick Bohan says
Yeah, but the most inept plant manager doesn’t risk getting voted out of his or her position by folks whose oxen get gored by the budget cutting process. In fact, one of the problems is that he or she can whack away almost wherever he or she wants to without regard to organizational performance but the analysts will love it. For example…Whirlpool.
Jim Troeger says
I enjoyed this post so much that I have now become a subscriber to this blog. The only point in this post that I would contend is that the term “outsourcing” has seemingly been used as though synonymous with “off-shoring.” These terms are something quite different.
Depending on a company’s strengths and needs, outsourcing can indeed be a part of their lean strategy and in many cases, not only can they save resources and costs, they can actually increase the level of service (or value) they receive for the outsourced product vs. what they could provide on their own. In these cases (e.g. payroll services, benefits administration, corporate recruiting, marketing, etc.), the prospect of outsourcing can help a company become much more lean.
Off-shoring, on the other hand, generally only reduces labor costs. Rarely does it improve the level of service or (true) value vs. what could have accomplished in-house. As Mr. Waddell already pointed out, this type of outsourcing (specifically off-shoring), hardly equates to lean principles.