 A Quarterly International Service Newsletter |
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The Moorhill Monitor
*
Volume 15 / Issue 3 / Date 3rd Quarter 2006 *
In this
Issue:
[The Lean Way
Forward at Ford]
[Chili
Judging Contest]
[Stay Safe]
Moorhill International Group, Inc.
Fostering International Relations Through Commerce
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1.
The Lean Way Forward at Ford!
Dear John,
I’ve been reflecting on today’s remarkable headlines about the latest
retreat by the Ford Motor Company as part of its “Way Forward” campaign.
While reflecting, I have found it useful to think about the history of lean
thinking at Ford, going back nearly 100 years. I believe it offers many
useful lessons for our current-day lean journey and Ford’s immediate
choices.
The historical record is clear. Henry Ford was the world’s first systematic
lean thinker. His mind naturally focused on the value creation process
rather than assets or organizations. And he was the first to see in his
mind’s eye the flow of value from start to finish, from concept to launch
and from raw material to customer. In addition, Ford was history’s most
ferocious enemy of waste. (Except, possibly, Taiichi Ohno at Toyota who
claimed that he learned what to do from reading Henry Ford’s books.)
Ford relentlessly emphasized the need to analyze every step in every process
to see if it created value before finding a way to do it better. Otherwise
the step should be eliminated. (This was Ford’s greatest criticism of
Fredrick Taylor and Scientific Management. Why, asked Ford, was Taylor
obsessed with getting people to work harder and more efficiently to do
things that actually didn’t need to be done if the work was organized in the
right sequence and location?) Then, when the wasteful steps had been
eliminated, it was time to put the rest in continuous flow.
By 1914 at his Highland Park plant Ford had located most of the
manufacturing steps for his product – the Model T – in one building and had
created very nearly continuous flow in many parts of the operation, using
single-piece-flow fabrication cells for components in addition to the moving
final assembly line. He had even devised a very primitive pull system by
using “shortage chasers” on timed routes along the assembly line to check
inventories at every assembly point and convey the information back to the
fabrication areas. This speeded up upstream processes that had fallen behind
and slowed down those that were getting ahead.
Equally remarkable, Ford had designed his Model T in only three months in
one large room with a small group of engineers under his direct oversight.
This surely was a high point in lean practice for decades to come.
Then it gradually fell apart. Ford’s span of management control at Highland
Park had been remarkably broad because he could easily take a walk to see
the condition of every process, in design, assembly, and fabrication. And he
could train a cohort of managers to see what he was seeing and remove more
waste. No abstract measures of performance were needed.
However, as the company grew Ford’s personal management method became
impractical. But what to replace it with? Ford himself seems not to have had
an answer except to link every step by conveyors – as he attempted to do at
the massive Rouge complex completed in the late 1920s. By the 1930s the
whole Ford Motor Company was in a sense one linked process. (Ohno, of
course, realized that lengthy conveyors governed by a central schedule are a
push not a pull system, but this was much later.) Did this mean that in the
founder’s mind that the company needed only one manager -- Ford himself --
even as it became the world’s largest industrial enterprise?
In any case, the system came crashing down in the 1930s as Ford tried to
produce multiple products with multiple options in wildly gyrating markets.
Only the staggering cash reserves from retained profits during the Model T
era kept the company going until Henry Ford II was able to take over in
1945.
But what management system should he impose on the chaos? Henry Ford II read
Peter Drucker’s 1946 classic, The Concept of the Corporation, praising the
General Motors management system and quickly remade Ford in the image of GM.
What a different system it was! Henry Ford had managed by going to the gemba
to inspect the value creation process. General Motors executives managed by
analyzing financial abstractions. For example, asset utilization (normalized
for sales volume), days of inventory, cost of scrap, etc. in the factory.
Available engineering hours utilized in product design. Managers were then
rewarded for making numerical targets using methods developed by staff
experts that managers rarely understood. A good way to make many of these
numbers was to make products in large batches in order to achieve high asset
utilization and low cost per individual step. The total value creation
process from end to end -- which had been so clear to Henry Ford -- was
gradually lost from view.
Soon Ford executives using the financial measures developed by finance czar
J. Edward Lundy were even more rigorous in analyzing the performance of
their area of control than GM executives. Robert McNamara and the Whiz Kids
were the exemplars. And Ford did regain competitiveness as a GM clone,
claiming a stable second place in the auto industry.
In addition, by the late 1940s Ford was one of three U.S. auto companies
using the same management system in the same town with the same union. With
high investment barriers to entry, a remarkable era of stability was put
place, lasting nearly forty years until the transplant Japanese factories
succeeded in the U.S. in the later 1980s.
When it suddenly became apparent at that point that the leading Japanese
companies -- Toyota followed by Honda -- were using a different management
system, it was very hard for Ford to respond.
In the late 1980s, as Dan Jones, Dan Roos, and I wrote The Machine That
Changed the World, we were able to document that Ford had applied a number
of lean techniques in its assembly operations and was making dramatic
progress in manufacturing productivity. We took this to mean that at least
one American company was applying lean principles and with good results.
What we couldn’t report, because we had no way to measure it, was the status
of the management system. And this was largely unchanged. Ford managers were
still manipulating abstractions because the gemba consciousness of the early
Ford Motor Company had been lost. Even worse, in the product development and
supplier management processes, no change had occurred at all.
But Ford could still be successful in its home market for another 20 years
by developing large pickups and SUVs. These were essentially America-only
vehicles, suited to wide roads and low energy prices. They could only be
challenged by Toyota and its Japanese emulators if they were willing to
design vehicles specifically for the U.S. market and to locate production in
North America.
In 1997 I got a call from Jac Nasser, who had just taken over Ford’s North
American Automotive Operations on his way to becoming CEO of Ford. He
matter-of-factly told me that Ford’s Explorer and F100 pickup series were
the only Ford products that made serious money and that he calculated that
he had four years to become as efficient and effective as Toyota. Otherwise,
the large pickups and SUVs would be copied by foreign firms at lower cost
with higher quality and Ford would be in terminal decline. “So,” he asked,
“how can Ford become Toyota in four years?”
We sat down to talk over just what this would mean -- dramatically changing
the supplier management system, dramatically changing the product
development system, dramatically changing the production management system,
dramatically changing what managers do -- and he quickly concluded that it
was just too hard. So he changed the management metrics, purged the poorest
managers according to the metrics, and experimented with selling cars on the
web! I was not asked back and had no desire to go back.
Ford actually survived for five years beyond Nasser’s projected meltdown
date – although Nasser didn’t as CEO -- to arrive at its current crisis. But
my prescription for new Ford CEO Alan Mulally is the same: Fundamentally
rethink the supplier management system. Fundamentally rethink the product
development system. And fundamentally rethink the production system from
order to raw materials and from raw materials to delivery, with special
attention to the information management system. (Much can still be learned
from Ford’s Mazda subsidiary, which became an able pupil of Toyota after a
crisis in 1973.) Above all, fundamentally rethink what mangers do and how
they do it in order to regain the gemba consciousness that originally took
Ford to world dominance. In brief, Ford needs to remake itself once more,
this time in the image of the company that copied Ford’s original system:
Toyota.
In addition, finish rethinking the social contract as Ford becomes a normal
company (not an oligopolist) in a normal town (where labor doesn’t come from
one supplier) that must live in a global market. Finally, rethink brand
strategy to get rid of hopeless makes that can never make money – Mercury,
Jaguar, Lincoln too? -- while refocusing the remaining brands on what
customers really want -- sophisticated, hassle-free transportation in every
price range. (A hint: Rethink the vast gap between the company and the
customer to provide hassle-free mobility on a continuing basis to
user-partners rather than selling cars to strangers in one-time
transactions.)
Who knows whether this is doable in the time still available but it is the
lean way forward. It will be tragic if the originator of lean thinking is
crushed in the end by failing to learn lean lessons from its most earnest
pupil.
Best regards,
Jim
Source: Jim Womack, 09/2006
For those of you who have lived in Texas, you know how true this is. They
actually have a Chili Cook-off in the Fall. It takes up a major portion of
the parking lot at the city park. The notes are from an inexperienced Chili
taster named Frank, who was visiting from Canada. Frank: "Recently, I was
honored to be selected as a judge at a chili cook-off. The original person
called in sick at the last moment and I happened to be standing there at the
judge's table asking for directions, when the call came in. I was assured by
the other two judges (Native Texans) that the chili wouldn't be all that
spicy and, besides, they told me I could have free coke during the tasting,
so I accepted." Here are the scorecards from the event:
Chili 1 - Mike's Maniac Mobster Monster Chili
Judge 1 -- A little too heavy on the tomato. Amusing kick.
Judge 2 -- Nice, smooth tomato flavor. Very mild.
Judge 3 -- (Frank) Holy wow, what the heck is this stuff? You could remove
dried paint from your driveway. Took me two cokes to put the flames out. I
hope that's the worst one. These Texans are crazy.
Chili 2 - Arthur's Afterburner Chili
Judge 1 -- Smoky, with a hint of pork. Slight jalapeno tang.
Judge 2 -- Exciting BBQ flavor, needs more peppers to be taken seriously.
Judge 3 -- Keep this out of the reach of children. I'm not sure what I'm
supposed to taste besides pain. I had to wave off two people who wanted to
give me the Heimlich maneuver. They had to rush in more coke when they saw
the look on my face.
Chili 3 - Fred's Famous Burn Down the Barn Chili
Judge 1 -- Excellent firehouse chili. Great kick. Needs more beans.
Judge 2 -- A bean-less chili, a bit salty, good use of peppers.
Judge 3 -- Call the EPA. I've located a uranium spill. My nose feels like I
have been snorting Drano. Everyone knows the routine by now. Get me more
coke before I ignite. Waitress pounded me on the back, now my backbone is in
the front part of my chest. I'm getting bloated from all of the coke.
Chili 4 - Bubba's Black Magic
Judge 1 -- Black bean chili with almost no spice. Disappointing.
Judge 2 -- Hint of lime in the black beans. Good side dish for fish or other
mild foods, not much of a chili.
Judge 3 -- I felt something scraping across my tongue, but was unable to
taste it. Is it possible to burn out taste buds? Sally, the waitress, was
standing behind me with fresh refills.
Chili 5 - Linda's Legal Lip Remover
Judge 1 -- Meaty, strong chili. Cayenne peppers freshly ground, adding
considerable kick. Very impressive.
Judge 2 -- Chili using shredded beef, could use more tomato. Must admit the
cayenne peppers make a strong statement.
Judge 3 -- My ears are ringing, sweat is pouring off my forehead and I can
no longer focus my eyes. I farted and four people behind me needed
paramedics. The contestant seemed offended when I told her that her chili
had given me brain damage. Sally saved my tongue from bleeding by pouring
coke directly on it from the pitcher. I wonder if I'm burning my lips
off. It really upsets me off that the other judges asked me to stop
screaming.
Chili 6 - Vera's Very Vegetarian Variety
Judge 1 -- Thin yet bold vegetarian variety chili. Good balance of spices
and peppers.
Judge 2 -- The best yet. Aggressive use of peppers, onions, and garlic.
Superb.
Judge 3 -- My intestines are now a straight pipe filled with gaseous,
sulphuric flames. I soiled myself when I farted and I'm worried it will eat
through the chair. No one seems inclined to stand behind me except that
waitress Sally. Can't feel my lips anymore. I need to wipe my bottom with a
snow cone.
Chili 7 - Susan's Screaming Sensation Chili
Judge 1 -- A mediocre chili with too much reliance on canned peppers.
Judge 2 -- Ho hum, tastes as if the chef literally threw in a can of chili
peppers at the last moment. I should take note that I am worried about Judge
3. He appears to be in a bit of distress as he is cursing uncontrollably.
Judge 3 -- You could put a grenade in my mouth, pull the pin, and I wouldn't
feel a thing. I've lost sight in one eye, and the world sounds like it is
made of rushing water. My shirt is covered with chili which slid unnoticed
out of my mouth. My pants are full of lava to match my shirt. At least
during the autopsy, they'll know what killed me. I've decided to stop
breathing, it's too painful. Forget it; I'm not getting any oxygen anyway.
If I need air, I'll just suck it in through the 4-inch hole in my stomach!
Chili 8 - Tommy's Toe-Nail Curling Chili
Judge 1 -- The perfect ending, this is a nice blend chili. Not too bold but
spicy enough to declare its existence.
Judge 2 -- This final entry is a good, balance chili. Neither mild nor hot.
Sorry to see that most of it was lost when Judge 3 farted, passed out, fell
over and pulled the chili pot down on top of himself. Not sure if he's going
to make it. Poor fella, wonder how he'd have reacted to really hot chili!
Source: Joe M, 07/2006
How to stay safe in the world today:
1. Avoid riding in automobiles because they are responsible for 20% of all
fatal accidents.
2. Do not stay home because 17% of all accidents occur in the home.
3. Avoid walking on streets or sidewalks because 14% of all accidents occur
to pedestrians.
4. Avoid traveling by air, rail, or water because 16% of all accidents
involve these forms of transportation.
5. Of the remaining 33%, 32% of all deaths occur in Hospitals. Above all
else, avoid hospitals.
You will be pleased to learn that only. 001% of all deaths occur in worship
services in church, and these are usually related to previous physical
disorders. Therefore, logic tells us that the safest place for you to be at
any given point in time is at church!
Bible study is safe too. The percentage of deaths during Bible study is even
less.
FOR SAFETY'S SAKE - Attend church and read your Bible. IT COULD SAVE YOUR
LIFE!
Source: BCC, 08/2006
Military's Wit and Wisdom OR the Military's version of Murphy's Law.
"A slipping gear could let your M203 grenade launcher fire when you least
expect it. That would make you quite unpopular in what's left of your unit."
- Army's magazine of preventive maintenance.
------------------------------------------------------------------------
"Aim towards the Enemy." - Instruction printed on US Rocket Launcher
------------------------------------------------------------------------
"When the pin is pulled, Mr. Grenade is not our friend." - US Marine Corps
------------------------------------------------------------------------
"Cluster bombing from B-52s are very, very accurate. The bombs are
guaranteed to always hit the ground." - USAF Ammo Troop
------------------------------------------------------------------------
"If the enemy is in range, so are you." - Infantry Journal
------------------------------------------------------------------------
"It is generally inadvisable to eject directly y over the area you just
bombed." - US Air Force Manual
------------------------------------------------------------------------
"Whoever said the pen is mightier than the sword obviously never encountered
automatic weapons." - General Macarthur
------------------------------------------------------------------------
"Try to look unimportant; they may be low on ammo." - Infantry Journal
------------------------------------------------------------------------
"You, you, and you ... Panic. The rest of you, come with me." - US Marine
Corp Gunnery Sgt.
------------------------------------------------------------------------
"Tracers work both ways." - US Army Ordnance
------------------------------------------------------------------------
"Five second fuses only last three seconds." - Infantry Journal
------------------------------------------------------------------------
Bravery is being the only one who knows you're afraid." - David Hackworth
------------------------------------------------------------------------
"If your attack is going too well, your walking into an ambush." - Infantry
Journal
------------------------------------------------------------------------
"No combat-ready unit has ever passed inspection." - Joe Gay
------------------------------------------------------------------------
"Any ship can be a minesweeper... once." - Anonymous
------------------------------------------------------------------------
"Never tell the Platoon Sergeant you have nothing to do." - Unknown Marine
Recruit
------------------------------------------------------------------------
"Don't draw fire; it irritates the people around you." - Your Buddies
------------------------------------------------------------------------
"If you see a bomb technician running, follow him." - USAF Ammo Troop
------------------------------------------------------------------------
"Though I Fl y Through the Valley of Death ... I Shall Fear No Evil. For I
am at 80,000 Feet and Climbing." - At the entrance to the old SR-71
operating base Kadena, Japan
------------------------------------------------------------------------
"You've never been lost until you've been lost at Mach 3." - Paul F.
Crickmore (test pilot)
------------------------------------------------------------------------
"The only time you have too much fuel is when you're on fire."
------------------------------------------------------------------------
"Blue water Navy truism: There are more planes in the ocean than submarines
in the sky." --From an old carrier sailor
------------------------------------------------------------------------
"If the wings are traveling faster than the fuselage, it's probably a
helicopter -- and therefore, unsafe."
------------------------------------------------------------------------
"When one engine fails on a twin-engine airplane you always have enough
power left to get you to the scene of the crash."
------------------------------------------------------------------------
"What is the similarity between air traffic controllers and pilots? If a
pilot screws up, the pilot dies; If ATC screws up, .... the pilot dies."
------------------------------------------------------------------------
"Never trade luck for skill."
------------------------------------------------------------------------
The three most common expressions (or famous last words) in aviation are:
"Why is it doing that?", "Where are we?" and "Oh Shit!"
------------------------------------------------------------------------
"Weather forecasts are horoscopes with numbers."
------------------------------------------------------------------------
"Progress in airline flying: now a flight attendant can get a pilot
pregnant."
------------------------------------------------------------------------
"Mankind has a perfect record in aviation; we never left one up there!"
------------------------------------------------------------------------
"Flashlights are tubular metal containers kept in a flight bag for the
purpose of storing dead batteries."
------------------------------------------------------------------------
"Flying the airplane is more important than radioing your plight to a person
on the ground incapable of understanding or doing anything about it."
------------------------------------------------------------------------
"Just remember, if you crash because of weather, your funeral will be held
on a sunny day."
------------------------------------------------------------------------
Advice given to RAF pilots during WWII: "When a prang (crash) seems
inevitable, endeavor to strike the softest, cheapest object in the vicinity
as slow and gently as possible."
------------------------------------------------------------------------
"The Piper Cub is the safest airplane in the world; it can just barely kill
you." - Attributed to Max Stanley (Northrop test pilot)
------------------------------------------------------------------------
"Never fly in the same cockpit with someone braver than you."
------------------------------------------------------------------------
"There is no reason to fly through a thunderstorm in peacetime." - Sign over
squadron ops desk at Davis-Monthan AFB, AZ,
------------------------------------------------------------------------
"If something hasn't broken on your helicopter, it's about to."
------------------------------------------------------------------------
Basic Flying Rules: "Try to stay in the middle of the air. Do not go near
the edges of it. The edges of the air can be recognized by the appearance of
ground, buildings, sea, trees and interstellar space. It is much more
difficult to fly there."
---------------------------------------------------------------- --------
As the test pilot climbs out of the experimental aircraft, having torn off
the wings and tail in the crash landing, the crash truck arrives, the
rescuer sees a bloodied pilot and asks "What happened?". The pilot's reply:
"I don't know, I just got here myself!" - Attributed to Ray Crandell
(Lockheed test pilot)
Submitted: R. Crandell, 03/2006
This is an eye opener. We probably never thought about nor looked at this Psalm
in this way, even though we all know the words.
The Lord is my Shepherd...........................................That's
Relationship
I shall not want..................................................That's Supply!
He maketh me to lie down in green pastures........................That's Rest!
He leadeth me beside the still waters.............................That's
Refreshment!
He restoreth my soul..............................................That's Healing
He leadeth me in the paths of righteousness.......................That's
Guidance!
For His name sake.................................................That's
Purpose!
Yea, though I walk through the valley of the shadow of death......That's
Testing!
I will fear no evil...............................................That's
Faithfulness!
For Thou art with me..............................................That's
Protection!
Thy rod and Thy staff they comfort ...............................That's
Discipline!
Thou preparest a table before me in the presence of mine enemies. That's Hope!
Thou annointest my head with oil..................................That's
Consecration!
My cup runneth over...............................................That's
Abundance!
Surely goodness and mercy shall follow me all the days of my life. That's
Blessing!
And I will dwell in the house of the Lord.........................That's
Security!
Forever and ever AMEN.............................................That's
Eternity!
Source: Book of Psalms, Eternity
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