Stability Versus Volatility
Smart Data Collective
It embraced the now famed plan-do-check-act (PDCA) iterative cycle espoused by the quality management guru W. Edwards Deming. Toyota's objective was steady ...
Federal Heath recognized by state
Jacksonville Daily Progress
American statistician William Edwards Deming is accredited with first applying the lean concept to Japanese industry after World War II. ...
這篇的Deming 是引向Wikipedia 中的
Stability Versus Volatilitycomments Posted February 1, 2011 by Gary Cokins
Chinese dynasties lasted centuries. Investments in companies by Silicon Valley California venture capitalists may last only months.
Which is best? A controlled growth approach or grab it all while the going is good?
The tortoise or the hare. Which one won the race?
Japanese firms like Toyota and Honda have historically been controlled growth firms. They want their amount of management competencies to parallel their size and evolving complexity. I am old enough to remember when Honda only sold lawn mowers with exceptional engines. Then they produced a low end 90cc motorcycle. Then a car. It was their plan.
The famous Toyota Production System (TPS) and its “one piece flow” just-in-time manufacturing approach was based on continuous learning and discovery. It is a management philosophy. It embraced the now famed plan-do-check-act (PDCA) iterative cycle espoused by the quality management guru W. Edwards Deming. Toyota’s objective was steady growth to build its managerial talent somewhat independent of global economic cycles. When global economies boomed, Toyota raised prices to dampen accelerating production volume. When global economies declined toward recession levels, they lowered prices to maintain existing or modestly growing production volume levels. Maximizing short-term profits was back seat to long term success.
Tortoise or hare?
Was the recent Toyota auto safety problems and resulting recalls caused by a departure of stability toward opportunistic growth motivated in part to replace General Motors as the world’s leading auto manufacturer? I do not think so. My guess is Toyota’s snafu will be viewed years from now as a minor temporary blip to their long term approach to stable growth.
But the world seems to be in an increasing speed-up mode with more volatility and accelerating change. Is it possible this is a false read, and big fluctuating swings and unexpected events just appear that way because of CNN-like 24 hour news coverage collected from all corners of the earth? Are there really more earthquakes and floods? Or do global media simply report what was not in prior decades quickly communicated as news?
Or is my observation of faster change correct? Is increased volatility the real deal? Examples of volatility include changes in consumer preferences, foreign currency exchange rates, and commodity prices, just to name a few. Trends can develop quickly such as oil dependence, emergence of country economies (e.g., India and Brazil), and instantaneous Internet-based global communications. Unanticipated shocks can come from occurrences like the Asian tsunami, H1N1 flu, the global economy crisis, Euro currency shocks, and now the crisis in Egypt. Has the Internet, global communications, and relaxation of international country trade barriers introduced big sin wave vibrations and turbulence compared to past decades’ rock-a-bye baby smooth rises and falls?
For the sake of argument, let us assume that economic volatility is escalating to become the new normal. How does this affect managerial styles and approaches? An obvious change might be that five year detailed line-item strategic plans are out the window. A long term vision and mission direction setting is acceptable, but not the detailed financial projections that go with them.
Organizational agility and speed to change is replacing the fixed straight line cruise control momentum that may have worked for Toyota but may simply not be an appropriate management style when the highway ahead is full of twists and turns.
So where is the tie-in with enterprise performance management, business intelligence and business analytics (especially predictive analytics)? I always connect my writings to these.
Where is the tie-in? Re-read a prior key sentence: “Agility and speed to change replaces momentum.” Without strategy maps and their derived key performance indicators (KPIs), then employee alignment is too loosely connected with the executive team’s strategy – misalignment. Without insights to customer micro-segment preferences and their associated profitability to offer products and services to them, then long term sustaining profits are jeopardized. Without demand forecasting, then an organization will be endlessly reactive, not pro-active.
I can offer more examples of performance management methodologies that are essential to be competent in such that without them there are adverse consequences. The message here is that maybe long-term controlled growth is not the wisest approach.
Tortoise or hare? Maybe the rabbit is the one to place your bet on.
January 31, 2011
“All of these people have a job because this company is here. That’s what matters to me — is job creation and retention right here in Jacksonville,” Haberle said, “so our economy can continue to thrive. They make a difference in our economy by keeping all of these people at work.”
Federal Heath has four manufacturing facilities in Jacksonville; Euless; Denmark, Ohio; and Oceanside, Calif. The Jacksonville facility was awarded the Customer Performance Award for Lean Enterprise Excellence on Monday.
“We’ve had a problem in the U.S. with shrinking manufacturing jobs and we can’t compete in the labor costs with places like China and Vietnam so we have to be innovative,” said TMAC Customer Relations Manager Deborreh Wallace. “Lean is the process of reducing or eliminating waste — waste of motion, waste of processes, waste of raw materials, people’s time, all the things customers will not pay for.”
American statistician William Edwards Deming is accredited with first applying the lean concept to Japanese industry after World War II. The lean concept was made famous in the manufacturing world by Toyota, Wallace said, but American companies quickly caught on.
“The first cars that Henry Ford made were all black because black paint dried the fastest,” she said.
The Federal Heath facility in Jacksonville makes about 8,000 signs per year for several petroleum companies including Shell, Valero, and Conoco, and restaurants such as Burger King and Chili’s. Signs made in Jacksonville are distributed throughout the nation and internationally.
The facility was recognized for several improvements: Inventory turns doubled, 65-percent reduction in perpetual inventory, 67-percent reduction in days to complete physical inventory, 14-percent improvement in on-time complete manufacturing date, 24.4-percent improvement in on-time customer agreed date, 20-percent overrun improvement, 62-percent scrap reduction, 55-percent reduction in warranty claims, 50-percent reduction in utility costs, higher customer satisfaction and 55-percent equipment set-up efficiencies.
The Jacksonville facility is the second Federal Heath manufacturing plant to receive TMAC recognition. The Euless plant was awarded for its lean efforts last year.
“I’m extremely proud of all the employees here at this operation,” said Federal Heath CEO and President Kevin Stotmeister. “It was only five years ago that this location became a part of the federal heath family through an acquisition and that acquisition was after some pretty difficult business years.”
Before the facility was bought by Federal Heath in 2005, it was Zimmerman Sign Co. and was on the brink of bankruptcy, said Neil Sanford, operations manger who started at the facility in 1981 when it was still under the Zimmerman name.
“The way we run the business today is completely 360 (degrees) from the way we did it back then,” Sanford said. “When we were Zimmerman we believed in having a lot of everything so if someone ordered it, and through lean we’ve learned that it truly is just the other way — (make it) just in time. You don’t want it sitting around, dollars tied up. Lean has been the driving force of the success we’re having right now.”
Since being bought by Federal Heath and adopting the lean program, the facility has improved every year. The facility began making a profit last year, said Bob Halfpenny, supply chain research and development manger for the Jacksonville branch.
“(Ken Hendrix, former owner of Federal Heath) believed in America and he liked to make jobs. He liked to take companies that were out of business and he would buy them and he would work to turn them into a profitable company,” Halfpenny said. “In 2009, the company had less revenue overall than the year before and more profit. We made more on less business because we became way more efficient and that added security to all these people’s jobs.”
Two employees have worked at the facility for 40 years, Sanford said.
“Average employment here is 10 years,” he said.
Texas House Senate District 3 Director Wyma Green, on behalf of Sen. Robert Nichols, presented Sanford with the award and a Texas flag.
“The presentation and acceptance of this award has been made possible by the hard work and dedication of each member of our team,” Sanford said.
Representatives from Shell Oil, Austin Bank, the Bank of Texas and the CEO of Trinity Mother Francis Hospital, Tom Cammack, were in attendance.