Shook_Lean enterprise.pdf

Manufacturing’s Next
Chapter…
at GE Appliances
John Shook
Lean Enterprise Institute
Jan 15, 2013

Manufacturing’s Next Chapter
and GE Appliances…

The story of GE Appliance in 2013
is the story of the future of
American manufacturing. It is the
concluding chapter of the story of
American manufacturing of the past
50 years.

• Remember this from the ‘70s…?

• Back to the future…
• New frontiers, new technology are great
• But, they work best when they stand on
the shoulders of strong foundations:
– We often throw out babies with bath water
– We lose expertise, know-how, critical skills
– So those new technologies often don’t work
as well as we expect

• What happens when we decide to reshore
operations that we had offshored? When
operations go far away, capabilities go
with them.
• How does an organization identify needed
skills? How does it go about reacquire
those needed skills?

Re-Shoring?
• Outsourcing  Insourcing
• Offshoring  Reshoring
• Reshoring  Rightshoring
• Rightshoring  Leanshoring

• For example, healthcare
• The past decade has seen a remarkable “lean
healthcare” movement in the US and other
countries
– “lean healthcare” means mostly applying Toyota
Production System practices to healthcare delivery.
• The three biggest “innovations” of that
movement are:
– Huddles
– White boards
– Checklists

• Similarly, the reshoring movement relies on “advances”
in manufacturing that are less matters of technology and
more matters of pragmatic management practices
– Huddles
– White boards
– Checklists
• At GE, building on its foundation of skill in Six
Sigma
– Mission One rooms
– Front Line Management
– Standardized Work

A Very Important Factory:
Ford Highland Park 1913

A Supply Chain as One Giant Conveyor
Running Through the Country

River Rouge
Giant Conveyors for
“Ore to Assembly”

15 million sq. ft.
100,000 workers
100 miles of railroad track
15 miles of roads
And, of course, conveyors. 120 miles worth.
And 6000 suppliers

A Supply Chain as One
Giant Conveyor
Running Through…the
World

The Rouge 1932 - Choked by Complexity

Important Factories…
New United Motor Manufacturing, Inc. –
NUMMI – built its first car in December 1984
and its last on April 1, 2010.

NUMMI
Lean Success in the USA
Agreement between Toyota and GM:
Toyota manages the plant via
the Toyota Production System
GM’s “worst” (certified worst) plant:
Quality
Workforce
Former GM workers offered jobs:
Including the old “troublemakers”

NUMMI
Employee development:
Some Classroom
Mostly OJT or OJD
TPS established:
Technical - Physicals, “hard” technology
- Product, plant layout, etc.
Social - “Soft” technologies
- Management/people systems
(Note: “soft” doesn’t mean “easy”!)

NUMMI
Results
In about one year…
Quality Best ever in GM
Equal to Takaoka Japan
Productivity Best in GM
Close to Takaoka Japan

• “Establish mutual trust”
• “Lead as if you have no power”
• “No problem is a problem”
• “Build people before cars”
“Develop people through the work…”
Four Lessons
in Management
from NUMMI:

Kan Higashi to Gary Convis…
(NUMMI’s senior Japanese and American leaders)
“Lead the organization as if you have no
power."

No Problem is a Problem,
Build People Before Product
john shook
28

Training Within Industry
1.7 million Americans
Trained over five year period.
This training was forgotten in
the US (but, now making a
comeback!)
It formed the basis of Toyota’s
core training. Toyota still uses
much of it to this day!
TWI - The training program instituted to support the
U.S. war production effort from 1941 – 1945

Model T Plaza
Highland
Park
Today

• “An assembly line is a way of putting parts
together.
• Lean Production is a way of putting the
assembly line itself together. So the work
is as easy and efficient as possible.”
The Atlantic - Charles Fishman

Every Organization Must Address
• Purpose – Provide value to customers
(cost-effectively to prosper, etc.).
• Process – Through value streams that
are designed, operated, improved.
• People – By engaging and respecting
employees and other stakeholders.
 Aligning purpose, process, and
people is the central task of
management.
john shook
40

Lean Transformation
41
Social and Technical

Lean Transformation
Technical
42

Lean Transformation
Technical
44

Process and People
• We have to teach the art & craft of
science.
• Science will give us the technical answer.
But…
• being technically “right” is only half the
“battle”.

People & Process
Balanced by Management
47

Another Famous (or
infamous) Factory

One way to manage a factory…

• “An assembly line is a way of putting parts
together.
• Lean Production is a way of putting the
assembly line itself together. So the work is a
easy and efficient as possible.”
The production system as science, as
something to improve, just like an
individual job.
Beginning with each individual job.

Innovation Continues: Toyota in NE Japan

The Future of Appliance Park
From reshoring to
Rightshoring and leanshoring

The Story of the
Disappearing Screws
• Original design: visible screws 
• Marketing: “Want a sleek look with no
visible screws.”
• Production: “Shooting screws is a lot of
work.”
• Designers elegant solution…
one hidden screw and a rod!

The Story of the
Disappearing Screws
• “If the people who design dishwashers sit at
their desks in one building, and the people who
sell them sit in another building, and the
people who make them are in another country
and speak a different language – you never
realize that the screws should disappear, let
alone come up with a way they can.”
- Charles Fishman, The Atlantic

• “Establish mutual trust”
• “Lead as if you have no power”
• “No problem is problem”
• “Develop people through the work…”
All actualized at the gemba
Four Lessons
in Management
from NUMMI:

“GEMBA” is not just a
Japanese concept…
“If you want to know about something
you ask the people who know; the collier,
the countryman, you ask the fellows who
cut the hay.”
- George Ewart Evans

Management Essentials
• Lead without power
• Make direction and responsibility clear
• Encourage individuals and teams to solve
problems and continuously improve
– Provide process and skill
– Ask five whys, not five whos
• In other words:
Continuous Improvement and
Respect for People

Respect for People
Focus on the front line worker
• Enable the worker
– To work safely
– To know his/her customer
– To be involved, engaged
– To be successful
• Worker-out or the Front Lines-back principle
• Build your operating system from the operator out
• Remove wasteful steps from his work,
• Giving it to support people: isolate the waste!
• Until nothing is left but value-creating steps.
Never waste any human’s time and effort!

Great
care for
the
design
of each
job
Simple
Easy to
do right
Hard to
do wrong
Easy to
spot
problems

Simple
Easy to do
right
Hard to do
wrong
Easy to
spot
problems
Then…
Support to
solve
problems
Support to
make
continuous
improvements

Lean Management: Aligning
People – Process – Purpose

LEAN – and Six Sigma and
“Process Improvement”
Whether or not it’s all a waste of time is a
question of “purpose”…

Matt Long of Herman Miller:
“We aren’t just solving problems…
We are developing problem solvers.”
The Key Factor:
Developing Problem Solvers
68

Where Do You Start - From Top or Bottom?
Change Culture
First
(Conventional way)
Change System
First
(Lean Way)
70
john shook
70
Lean Transformation

Anti-lean is avoiding real
problems in real time…
GEMBA
Data Analysis Room
DEFECT!!
TOOLS
“No Problem” is BIG Problem
Don’t Mess With It!
YES NO
YES
YOU IDIOT!
NO
Will it Blow Up
In Your Hands?
NO
Look The Other Way
Anyone Else
Knows?
You’re SCREWED!
YES
YES
NO
Hide It
Can You Blame
Someone Else?
NO
NO PROBLEM!
Yes
Is It Working?
Did You Mess
With It?
Sitting away from the gemba

It’s easier to act
your way to a new
way of thinking
than to think your
way to a new way
of acting.
73
john shook
Lean Transformation

Learn to do the work and improve the work
…at the same time

You can apply the thinking anywhere…
john shook
75

Stop! to Achieve Purpose, Solve Problems and
Develop Capability
•Design a routine – provide training
–Make success understandable and do-able
•Make it easy to see problems
–Anything that interrupts the routine
•Make it clear what to do for problems
–Contain and notify (“neither accept nor pass on…”)
•Make it clear what will happen after notification
–Help will come within the cycle of work
•Ensure problem-solving and learning
–Through structured routines for problem-solving and
rapid cycles of learning

john shook
77
“Do not interrupt
while I am running this play.”
This enables me to perform with
Less chance of error.
AND:
We can do PDSA by identifying
normal from abnormal!

People & Process
Balanced by Management
78
john shook

Lean Transformation Model
PROCESS
IMPROVEMENT
Continuous,
real, practical
changes to
improve the way
the work is done
CAPABILITY
DEVELOPMENT
Sustainable
improvement
capability
in all people
at all levels
SITUATIONAL APPROACH
- Value-Driven Purpose -
“WHAT PROBLEM ARE WE TRYING TO SOLVE?”
Lean Thinking and Practice
Clear Roles and
Responsibilities
LEADERSHIP
MANAGEMENT

Transformation Questions
1. What is the purpose of this transformation?
– at all levels, macro and micro?
– What problem are we trying to solve?

2. What specific process improvements are required and how are they
being implemented?
– How is the actual work being improved?

being implemented?
3. What capability enhancements are required and how are they
being achieved?

being implemented?
being achieved?
4. What management system is required and how is it being
achieved?
– What role should leadership take; what role are leaders taking?
– Is ownership clear, at all levels, all functions?

2. What specific process improvements are required and how are they being
implemented?
3. What capability enhancements are required and how are they being
achieved?
4. What management system is required and how is it being achieved?
5. What basic philosophy or thinking underlies this transformation?

being implemented?
being achieved?
4. What management system is required and how is it being
achieved?
5. What basic philosophy or thinking underlies this transformation?

Plan-Do-Check-Act Improvement Cycle

Plan-Do-Check-Act
LOOK at
RESULTS
DATA
Give up and/or get
another new idea
Get an IDEA
Give it a go
Work around
what didn’t work
Aban-
don

Plan-Do-Check-Act Learning Cycle
Study
Adapt
Fast
Cycles
P
D
C
A
P
D
C
A
P
D
C
A
P
D
C
A
ADJUST/
ADAPT
REFLECT TRIAL
HYPOTHESIS

Teach the Art & Craft of Science
from “scientific management”
to “management by science”
•Each leader’s job is to teach:
•What is the real problem? What is the
root cause? Ask “Why?”
•PDCA, DMAIC, Kaizen, Continuous
Improvement -- all are essentially
approaches to scientific thinking.
john shook
90

Developing Capability at NUMMI - 1984

Shook_Lean enterprise.pdf

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