Lean Accounting

Here is a link to a really good book on lean accounting:
http://www.amazon.com/Real-Numbers-Management-Accounting-Organization/dp/0972809902 

One of the major take-aways for me is that in a low inventory business, you are not required by the Generally Accepted Accounting Practices (GAAP) to add labor cost to inventory valuation. It is this practice that is generally regarded by lean practitioners as a bad thing, because it encourages you to build inventory you can't sell as it makes the business appear profitable (at least in the short run). The book is written by two CFO's, so the ideas are quite credible. 

Advantages of Push-Pull Boundary

Push, or build to stock 
- Advantage: lower lead time
- Disadvantage: higher inventory

Pull, or build to order:
- Advantage: lower inventory
- Disadvantage: higher lead time

Having a push-pull boundary is a hybrid approach. Operations prior to the boundary are pushing and operations after it are pulling.
- Advantage: Can trade lower lead times for lower inventory by moving boundary closer to last operation. Or vice versa.

Note that each component part in a product can have a different push-pull boundary.
- Manufacturing parts with expensive raw materials and/or high labor costs should be pulling more than pushing, to reduce cash tied up in inventory
- Manufacturing parts with long lead raw materials should be pushing more than pulling, so supplier's lead time doesn't affect your lead time to your customers.

New Landing Page for Manufacturing Simulation site

I re-did the landing page at www.manufacturingsimulation.org to include a screen shot of the software.  It is also less verbose.  Please check it out and let me know what you think.

Soggy Sandwich Update

In December I wrote a post on soggy sandwiches and the 5 Why's.  One of my daughter's classmates threw away her soggy sandwich every day because it was soggy.  You can read about it here:

http://motivationovermethod.blogspot.com/2011/12/soggy-sandwiches-and-five-whys.html

Well, now my daughter reports that her friend no longer throws away her soggy turkey sandwiches because they're no longer soggy.  In fact, they're no longer sandwiches, because there's no bread.  Just turkey.

So I guess the girls' parents figured it out.  Not sure how.  But the process is improved and the world is a slightly better place for it.  So we'll count that as a victory!

Meetings and SMED

SMED, or Single Minute Exchange of Dies, is a lean manufacturing methodology for driving down set-up times.

The first step in SMED is to classify all set-up actions as either 'internal' (requiring the machine to be off) or 'external' (which can be done while the machine is still processing the last batch).

The next step is to change internal set-up steps to external set-up steps.  The more stuff you can do while the previous batch is running, the less time the machine has to be down for set-up.

So what's that got to do with meetings?  Well, think of the meeting room as the machine.  The meeting scheduled before yours is the current batch.  Your meeting is the next batch.

The stuff you do to prepare for the meeting (opening the meeting notice in Outlook, calling the dial-in number, hooking up video, power, and ethernet to your laptop, starting live meeting, etc. ) is set-up for your batch (your meeting).

Normally, people running meetings do all these steps after the previous batch (meeting) is done and everyone's left.  By the time you're ready to show your slides, 10 minutes of your meeting time is wasted!  This is particularly annoying if the previous meeting runs late.

Well, a lot of these set-up steps can be done before you even show up to the meeting room.  By converting internal set-up (set-up while you're in the meeting room) to external set-up (before you go to the meeting room) you can start the meeting much earlier.

Last time I ran our weekly SCCB meeting, I tried this.  Not only did I start within a minute or two of the scheduled start time, but the entire meeting was over in just 20 minutes - a record.

GranMail

I've begun limited beta testing for an email program I wrote for my 96 Granny. She has macular degeneration and can now read and write email after being unable to for two years. So I named the software GranMail in honor of her. Besides her, there are two people beta-testing it.

If you know anyone with low vision (aka visually impaired), please direct them to my website:

www.lowvisionapps.com

The Door of Change and "A Factory of One"

One aspect of process improvement efforts that’s long bothered me is the focus on telling other people how to do their jobs better. It troubles me because my own experience is that you cannot change other people.

As Terry Neil said, “change is a door that can only be opened from the inside.” As hard as you knock or beat on someone else’s door, you cannot force it open. Often, just trying has the opposite effect: the person bolts his door so that it's even more securely shut.

Even when someone asks me for advice, which is rare, they usually don’t follow it. What more if I offer advice that wasn’t solicited?

The only door of change you can open is your own. And as I’ve also discovered, even that is hard – but not impossible.

And as so many Saints throughout the ages have discovered, you must lead by example: “Preach the Gospel always,” St. Francis of Assisi used to say. “If necessary use words.”

Even secular songs, sucha as "The Man in the Mirror" express this truth:

I'm starting with the man in the mirror

I'm asking him to change his ways

And no message could have been any clearer

If you want to make the world a better place

Take a look at yourself and then make that

Change!

This is why I like “A Factory of One” so much (which I hope to cover in greater detail in a future post): It teaches you how to start a lean transformation with the only person you can truly transform: yourself.

Once you've begun, those around you will take notice. If they like what they see, they will follow; whether they formally report to you or not.

Techodevolution:The Dolphin Dash

Stanford University's Paul Ehrlich isn't the best at predicting the future; but one thing he said is certainly true:

“To err is human, but to really foul things up you need a computer.”

In my younger years, I participated in a charity run called the Dolphin Dash. Before the race started, we were told there would be water stations along the route, so I didn't bother to bring a water bottle. Since I wasn't particularly fit, it wasn't long before I was thirsty.

I straggled along for several minutes more. And then I saw it! Just ahead, I spotted the first water station! But alas, the route turned left about a 100 yards before it got there.

"No matter," I told myself. "I can wait until the route winds back to the water station."

After several turns in the route and what seemed like an eternity, I noticed the same water station off down the road to the right. But the route didn't turn toward it; it kept going straight. Nor were there runners stopping for a drink there. Nor were there runners even near it.

The route never did pass that water station; nor any of the others for that matter.

Tired and thirsty, I eventually dragged myself across the finish line, where the event volunteers recorded my time and the number from my shirt into a laptop. As I passed, I overheard them say that they weren't going to wait to record the times for all the stragglers.

Once inside, we waited so long before they started announcing the winners, that even the stragglers had all shown up. When they started handing out prizes, I saw looks of surprise by the winners, who made comments such as, "Wow, I had no idea that I did so well!" But I saw looks of indignation in still others, who had clearly thought that they should have gotten at least 3rd or 4th place.

Curious, I stepped outside the room and saw a computer print-out of runners, neatly sorted by time, posted near the door. I noticed that the top ranked runners had a zero time. Wondering what that was all about, I went back inside just as they announced that there had been a mistake in giving out the prizes. But it was too late, as many of the prize-winners had already left the event.

I didn't hang out long enough to see how (or if) they sorted things out, because I had other things to do that day. But I started thinking about how things got so fouled up.

I thought about the computer program they were using to keep track of the runners' times and wondered about that zero time. Perhaps zero was the default time for runners before they crossed the finish line. Then I thought back to the event volunteers' comment about not waiting for all the stragglers. Perhaps, I thought, the prize winners were those very stragglers that never had their time recorded. Perhaps the winners were the slowest runners of all. After all, no matter how quickly you finish the race, a zero time beats it!

It was then that I came up with the term "Techo-devolution" to describe using high technology to solve problems that are better solved by lower technology tools. For example, they could have simply placed the numbers off the runners' shirts on a metal spike (the ones you can buy to hold receipts) as people crossed the finish line. That would have been cheaper and worked much better, as long as they remembered to flip the stack over before announcing the prizes!

I never found out whether the location of the water stations was planned by a computer too, but I wouldn't be surprised. After all, that was really fouled up too.