Chapter 16 – Page 2 – The OM Blog by Heizer, Render, & Munson

OM in the News: Lean Production and the New York Times

Many of the instructors following our OM blog are looking for interesting articles in the press that they can share with their students. I like this particular piece in the New York Times (Oct. 11, 2018) that provides several interesting examples of lean operations (the topic of Chapter 16). The article traces back to the roots of lean in the vaunted Toyota Production System developed in Japan in the late 1940s, which was aimed at streamlining processes to eliminate waste, improve productivity and, ultimately, grow profits.

Roughly 40 years later the term lean production was coined by John Krafcik, CEO of Waymo, the autonomous driving car company. Krafcik was part of a team led by the research scientist James Womack, who became founder of the Lean Enterprise Institute. The Institute’s approach, which differs in some ways, focuses on eliminating waste, rethinking work flow and improving productivity, from entry-level employees to high-level executives. “When we came up with the name lean production, what we meant was the complete system,” Dr. Womack said. “What the world heard was factories. But the frontier has been outside of the factory world for the last 20 years.”

Sometimes, seemingly tiny changes exemplify the lean approach. The president of Cambridge Engineering, a manufacturer of industrial heating and ventilation technologies said a new entry-level line employee, Justin Meade, realized he was wasting time each hour just to discard trash. Meade, who had little technical training, came up with the idea of attaching a trash can to a chair to cut 15 steps. Over the next 6 months he continued to make more revisions to devise an even better version. The result: shaving an estimated 70 minutes from a 90-minute job.

About 20 years ago, Toyota set up the T.P.S Support Center, a nonprofit that aims to help businesses and nonprofits, like the New York Food Bank. The beneficiaries need not be in Toyota’s supply chain. Instead, the company hopes to help smaller North American companies streamline their operations.

Classroom discussion questions:

Provide examples of lean from the NYT article.
What is the history of lean?

OM in the News: Tesla’s Lean Problems

A recent report in Industry Week (Sept. 12, 2018) suggests that Tesla, like a lot of facilities, has trouble being lean. Here are a few observations from industry experts who visited the Fremont manufacturing plant.

From a Lean Enterprise Institute advisor: “High, leaning stacks of cardboard boxes and other items make it difficult to see. There was stuff piled up on the floor, and the stuff was dirty. There were fork lifts—I haven’t seen these in an assembly floor in a long time. Most of the AGVs were empty. The aisles were narrow and crowded, and some of the stuff, piled up, was leaning into the aisle. Rear doors are on the Model 3 body going down the main assembly line, while the front doors aren’t. In most of the plants I’ve been in, all four doors are off while it’s going through the main interior assembly so the workers can get better access, and the doors don’t get damaged.”

From the CEO of the Center for Automotive Research: “The low production numbers, with the number of workers and the size of the facility, indicates inefficiencies where the manufacturing team is doing a lot of manual work instead of optimizing the production process. The fact that the entire outdoor area—a collection of tents—is set up for rework says they’re having fundamental issues with quality.”

From a manufacturing technology consultant: “They first focused very much on high levels of robotics and automation, only to realize how difficult it was, and now they’re scaling back. So they wasted time ramping up and going back so they could get to the levels of automation that they thought they could. It’s very likely that someone with real, deep manufacturing experience could have realized it early enough.”

Classroom discussion questions:

Why do you think Tesla is facing such production problems?
There have also been reports of multiple paint room fires and a higher than average number of safety incidents. How can OM help resolve such issues?

OM in the News: Japan’s Manufacturing Crisis

Hiroya Kawasaki, CEO of Kobe Steel, bowed as he left a news conference in Tokyo

Japan’s reputation for flawless manufacturing quality and efficiency transformed the country’s postwar economy, changed business practices world-wide and spawned a library’s worth of management manuals and business advice books. “Now, the model is cracking,” writes The Wall Street Journal (Feb. 5, 2018).

Kobe Steel, Mitsubishi Materials, and Subaru have all just admitted to manipulating quality inspections. Takata declared bankruptcy last year after supplying 50 million defective vehicle air bags in the U.S. Mitsubishi Motors has admitted covering up vehicle faults and falsifying fuel-economy data. Nissan says its Japanese factories let unqualified employees perform final quality inspections. Indeed, Japanese brands have been bested by U.S. car makers in the past 2 years.

The scandals call into question one of the world’s most influential theories of management and manufacturing. Japan’s model, celebrated in publications such as HBR, hinges largely on the concept of kaizen, or “continuous improvement.” Kaizen means eliminating unnecessary activity, reducing excess inventory and using teamwork to fix problems when they arise. It also places enormous responsibility on the line workers (called genba) at the factory-floor level to manage daily operations and generate innovation. The genba have traditionally been guaranteed jobs for life in return for dedication. But many Japanese companies can no longer afford the luxury of lifetime employment for factory craftsmen.

At Kobe Steel, quality-checking staffers became the first targets of layoffs because they didn’t appear as busy as production-line workers. Line workers were told to make quality checks themselves, and some checks were outsourced after the company suspended hiring. Workers involved in data falsification felt they had no choice because they needed to keep production moving.

(Japan, nonetheless, remains a manufacturing powerhouse, ranking 3rd in manufacturing output, behind China and the U.S. and just ahead of Germany).

Classroom discussion questions:

Explain the concept of kaizen.
Why is the Japanese system facing a crisis?

OM in the News: How to Fix the Emergency Room Using OM Tools

Armed with new strategies borrowed from OM, The Wall Street Journal (Sept. 13, 2017) writes that “hospitals are making a push to fix one of the most irritating issues in health care: the emergency room.” Not only are wait times long, but they’re not improving. The median length of stay for patients treated in the ER and then discharged was 138 minutes in 2015-16, the same as a decade earlier. Crowded ERs and long wait times have bad effects for patient outcomes and satisfaction. I suspect that many of your students have had some ER experiences, and will have their own ideas to complement these found in the article:

Eliminate triage. One of the biggest frustrations people encounter in the ER is registration and triage. After signing in and giving information, patients see a nurse who asks questions to judge how urgently they need care and the amount they’ll need, on a 5-point scale. Then patients wait to see a doctor who may ask them the same things all over again. A patient seldom sees an MD in less than 30 minutes, even if the ER is empty.

Eliminate details that waste time using lean management. Use lean (Ch. 16) to look at all steps in the ER processes and figure out how to improve them, cutting out as much waste as possible. For example, one hospital saw nurses were taking time to escort patients to other areas of the hospital for X-rays, so it put up colored tape that patients could follow to where they needed to go.

Quickly help patients with minor complaints and those who probably just need tests. Give people with small complaints, or who need diagnostic tests their own spot in the ER–and not a bed. Redesign the ER to include an area where patients in need of a medication refill or with mild complaints can be seen right away by a professional dedicated to only such patients. Seeing low-acuity patients quickly means there’s not a huge pileup of people in the waiting area.

Classroom discussion questions:

How could software help?
What other stumbling blocks slow down the ER process (eg, prescheduled surgeries or admissions to the hospital, which are also mentioned in the article)?

OM in the News: Andons Move to the Office?

“Interruptions are the bane of workers in open-plan offices,” writes The Wall Street Journal (May 20-21, 2017), “with some resorting to headphones, busy lights and other paraphernalia to ward off chatty co-workers.” At the engineering giant ABB, a few have even set out small orange road cones to keep visitors at bay. But deciding when to put up a “Do Not Disturb” sign can itself amount to an interruption. People may be reluctant to appear unhelpful, uncollegial or unfriendly.

So ABB developed an automated solution: an andon light that turns red, green or yellow to indicate when interruptions are OK and when they aren’t. The system, known as FlowLight, reduced interruptions by 46%. In general, employees reported becoming more conscious of how disruptive interruptions can be and more motivated to focus.

FlowLight is modeled on Skype’s user-status indicators and consists of a light mounted on a cubicle wall or outside an office. If the light is green, a worker is available. A red light means busy, suggesting that interrupters stay away. A more intimidating, pulsing red means, essentially: Do not disturb except for something crucial. Yellow means that the staffer is away.

The lights are triggered by a worker’s sustained computer activity, based on software that tracks typing and mousing. Algorithms smooth out the data to avoid turning on a red light during a brief burst of feverish activity. For those who want it, the system includes a switch to turn the different lights on manually. But to avoid making red lights into status symbols, they are limited to going on for 9% of the workday, since research suggests that most workers are only truly productive for some fraction of the day.

Classroom discussion questions:

Compare these lights to the andons used in manufacturing and described in Chapter 16.
Do you think ABB’s system will spread to other firms? Why?

Video Tip: Using Our Five Alaska Airlines Video Case Studies

Barry and Jay filming in an Alaska Airlines cockpit — Barry and Jay filming the videos in an Alaska Airlines cockpit

The Wall Street Journal‘s annual scorecard of U.S. airline performance (Jan. 12, 2017), which ranks major carriers on 7 different measures important to travelers, has just been released. We note that the company we prominently feature in our latest edition, Alaska Airlines, topped the scorecard as the best overall performer for the 4th-straight year, edging out Delta. Alaska also scored 1st in: on-time arrivals, least extreme delays, least 2-hour tarmac delays, and in least number of complaints. It was 3rd in cancelled flights and involuntary bumping, and 4th in mishandled bags.

The Seattle-based airline says its poor baggage showing in the 2016 scorecard drove a deep study of which flights were causing the most mishandled bags. Alaska began bar-code scanning of every bag going on and off planes. It also figured out which cities, which shifts and which flights had the most problems and found delays with bags transferring from other airlines. So instead of waiting for bags to come through an airport sorting system, Alaska now takes carts to other airlines in Seattle and waits for connecting bags at the tails of arriving airplanes.

Here are the 5 short videos we provide free to adopters:

Quality Counts at Alaska Airlines (Ch.6): “If it is not measured, it is not managed,” says one Alaska exec in this case that provides explicit performance metrics.

Alaska Airlines: 20-Minute Baggage Process–Guaranteed! (Ch.7): Students can flowchart the process a bag follows from kiosk to destination carousel after watching this video.

The People Focus: Human Resources at Alaska Airlines (Ch.10): The employee “Empowerment Toolkit” reminds us of Ritz Carlton’s famous customer service philosophy.

Lean Operations at Alaska Airlines (Ch.16): The company’s aggressive implementation of Lean includes its 6-sigma Green Belt training, Kaizen events, Gemba Walks, and 5S applications.

Scheduling Challenges at Alaska Airlines (Module B and Ch.15): Good scheduling of crews and planes means optimization–the perfect fit for our coverage of LP and scheduling.

OM is indeed a centerpiece of Alaska’s success and we think your students will enjoy these videos.

OM in the News: Earthquakes in Japan Expose Supply Chain Fraility

Toyota is halting vehicle assembly across Japan due to earthquake disruptions at an auto-parts supplier, a move that recalls prior supply-chain interruptions — Toyota is halting vehicle assembly across Japan due to earthquake disruptions at an auto-parts supplier

“The vulnerabilities of the tight production supply chains at Japanese companies including Toyota, are back in the spotlight after earthquakes in Japan forced several to curtail output this week”, writes The Wall Street Journal (April 19, 2016). Toyota’s decision to shut 26 car assembly lines this week nationwide due to production halts by a supplier shows how the auto maker’s lean manufacturing system, often viewed as a model of efficiency, can be impacted by disasters. The latest shutdowns drew parallels to the aftermath of Japan’s 2011 earthquake and tsunami.

This is the second time in 3 months that Toyota has had to stop production in its Japanese plants after supplier troubles. The earthquake-affected supplier, Aisin Seiki, made door and engine components, and Toyota has yet to decide when it would resume operations. In February, Toyota lost production of 80,000-90,000 vehicles over a week-long halt after an explosion at a steel supplier. That shutdown weighed on Japan’s industrial output, which fell 6.2% that month.

Shutdowns occur largely because of Toyota’s JIT inventory system, a philosophy at the core of its efficient production method. By keeping as little inventory on site as possible, storage costs can be cut and component quality can be consistent. Toyota plants hold several hours worth of inventory for many parts, relying on a steady feed from suppliers. If suppliers suffer a disaster, Toyota can quickly run out of components.

After 2011, Toyota ensured that multiple suppliers are manufacturing each component. To assess risks, it built a database on suppliers, including on companies down the supplier chain. It also pushed suppliers to diversify production, and compiled scenarios on how parts production could be shifted to different locations in case of emergency.

Classroom discussion questions:

What are the advantages and disadvantages of Toyota’s JIT system?
Do U.S. firms face the same challenges? How?

OM in the News: Dr Pepper’s Move to Kaizen

At its Plano, Texas, HQ and in manufacturing plants in the U.S. and Mexico, Dr Pepper’s mantra is RCI, or rapid continuous improvement (although some executives there use the Japanese word for improvement, kaizen). At “kaizen events,” teams of Dr Pepper employees spend several days dissecting every step of their work flow in search of waste.

Here are some details, based on a Wall Street Journal (Feb. 22, 2016) interview with Dr. Pepper’s CFO: “We’ve done 575 kaizen events. RCI is about taking the existing baseline and improving it by finding the waste. It starts with walking the entire process. We call it “going to gemba.” The goal is always to shorten cycle times. You would be surprised. You put a bunch of people in a room to describe how a process works, and they don’t all agree with each other—and they all work on the same process.

We have 32 people in the RCI group. They aren’t there to make improvements themselves but to facilitate teams. We’ve issued 6,500 certificates for participating in kaizen events. Through a number of projects, we improved inventory turnover by 35%, or 1.5 million square feet. We’ve also learned how to create flexibility, including setup reduction in our fountain-syrup line. Sanitizing lines to take the next flavor used to take an average of 32 minutes. We figured out we could do it in 13. Some of the changes are as simple as: He walked from the machine to get a tool. Why is the tool not at the machine?

We walk by waste every day. A team watched the process of fountain-syrup bags being assembled and packed into the cardboard boxes used to ship the bags. Somebody asked, “Why does that box have the maroon Dr Pepper logo on it when the box isn’t a consumer package?” You call on the box supplier and ask, if we took that off, how much could we save a year? They said $60,000, and we said great.”

Classroom discussion questions:

What is RCI and why is it important?
Explain the concept of inventory turnover (see Ch.11).

OM in the News: Business Students Find Real World Applications for OM Topics

Crime-scene DNA is processed three weeks faster at a state forensic laboratory thanks to internship work by recent Washington State University graduate Kristina Hoffman, writes WSU News (Feb. 3, 2016). A forensic scientist with the Washington State Patrol, she applied “lean” business management practices that resulted in a 26% increase in productivity, $5,200 savings on overtime pay, and reduction in the average turnaround time for processing DNA samples from 93 days to 71.

“The importance and impact are immediately translatable to the public at large,” said the director of the WSU degree program. A DNA sample could help identify a serial criminal who would be arrested 3 weeks sooner, thus making communities safer. Alternately, if you were a suspect in jail awaiting DNA analysis, you time in jail would be shortened by 3 weeks,” she said.

For her internship, Hoffman sought to reduce the delay in DNA sample processing by applying the principles of lean management, the topic of Chapter 16, which systematically seeks to achieve small, incremental changes in processes in order to improve efficiency and quality. She enrolled in Lean Agility, one of the WSU professional science master’s courses. At the State Patrol, she incorporated lean principles into various aspects of the workflow, from DNA case assignment to sample analysis to sample result reporting.

In the Lean Agility class, adds our new coauthor, Chuck Munson at WSU, students learn how to minimize problems and maximize productivity. They use statistical and logical techniques to identify and deliver improvements in production and operations management.

Classroom discussion questions:

Ask students for ideas as to how lean could be used in companies they know.
What are some areas in which lean could be applied at your college?

OM in the News: Lean Also Works in the Mining Industry

Mines are borrowing cost saving ideas from other industries

Global mining companies have scoured deserts, mountains and jungles for resources to rev up their profits, writes The Wall Street Journal (July 28, 2014). More recently, the search has taken them to a different environment: the factory floor. “We’re certainly looking outside of our own industry, and shamelessly stealing and implementing ideas where it is possible,” said Lucas Dow, head of a coal alliance in Australia. He said he’s taking on many ideas from Toyota, the company that rewrote the book on lean manufacturing with techniques like JIT inventory, designed to wring out efficiencies. He wants to run mines using simple, repeatable processes that can flow without hitting bottlenecks, like a car assembly line.

At one large coal mine, an employee recently suggested setting up several Formula One-style pit stops around the more than 12-mile-long mine site to improve refueling of dump trucks, which haul some 300 tons of raw material at a time. That change came after Mr. Dow, praising the open communication between workers and management at Toyota, asked staff to provide feedback at the end of every shift.

Mines are also using “big data” to fine-tune maintenance schedules so that the engines in their $5 million trucks can be replaced just in time, rather than as prescribed by the manufacturers. And they increased output by as much as 13% through improving productivity—managers say a modular building style traditionally used in the oil-and-gas sector saved time and money in the construction of the company’s latest processing plant.

Food-processing technology, such as machines that sort rice, are also a big help. Equipment that uses color sensors to sort rice into white and nonwhite grains, before pressurized air is fired at unwanted grains to get rid of them is being adapted to sort rocks containing iron or copper from barren material.

Classroom discussion questions:

1. Why are mines looking to lean factories for ideas?

2. Is lean only useful in manufacturing and mining?

OM in the News: Lean Experiences at the University of Dayton

OM tactics to improve efficiency and work quality with roots on shop floors and assembly lines are paying dividends on the business side of serving students, writes the University of Dayton News (Dec.16, 2013). For example, using Lean Six Sigma activities, the bookstore reduced the number of new textbook returns by 5%, freeing staff to focus more on customers. Dining services consolidated salad prep and now is able to serve more locations. Other areas around campus have saved on printing costs by using reusable printer cartridges and consolidating printers and copiers. “Our students are at the heart of what we do. We want to relentlessly focus on improving their experiences,” says UD’s Finance VP.

“Lean Six Sigma is a never-ending process of improvement activities within an organization,” adds the director of UD’s School of Engineering’s Center for Competitive Change. “Through Lean Six Sigma activities, organizations adopt a philosophy of engaging employees and using data to solve problems. The entire focus is on customers. This can be used in our business operations.” There are more areas for improvement, he points out. “For example, how can we make better use of our time? Can we cut down on the number of forms we can use for hiring? Do we need 18 local access networks for computers systems? If we can use 2 people for a job, instead of 4, how do we better use the other 2 to be more productive in another area?”

The University rolled out the initiative in the bookstore, dining services and facilities management in July. It hopes to expand into 40 areas this semester and to reach a total of 200, with UD students working with each area. Through the projects and completion of the UD’s Six Sigma green belt class, they will earn their industry Six Sigma certification. The overall goal is a 10% improvement in the quality of delivering products and services to students.

Examples of lean in academic settings are not common, and this is one worth sharing with your students.

Classroom discussion questions:

1. What ideas do you have for improving processes on your campus?

2. Why aren’t lean concepts more widely applied on campus?

OM in the News: Kaizen at San Francisco General Hospital

Kaizen team leader at SF General Hospital

At San Francisco General Hospital, clinicians, executives and staff are peppering their conversations with Japanese words like kaizen and muda. This “Toyota Way”, writes the San Francisco Chronicle (Oct. 14, 2013), is an effort to infuse the Japanese automaker’s management philosophy and practices into the way the hospital delivers medicine to its patients.

To make the system work, a team of employees is assigned to analyze a particular area targeted for improvement. The group immerses itself in a weeklong, hands-on session, and emerges with a plan to make specific changes designed to have a big impact on costs or the patient’s experience. One recent kaizen focused on the number of minutes it takes from the moment a patient is wheeled into the operating room to when the first incision is made. A team spent a week trying to come up with ways to whittle 10 minutes off the hospital’s average “wheels in” to incision time of 40 minutes. Another targeted the Urgent Care Center and dropped the average wait from 5 hours down to 2.5 by adding an on-site X-ray machine–instead of forcing patients to endure a 15 min. walk to the main radiology department.

Toyota’s production system has been increasingly adopted by hospitals trying to improve medical quality and increase patient satisfaction. Here are some of its Japanese terms, many of which do not have a direct English translation: Gemba: the place where work is performed. Hansei: a period of critical self reflection. Heijunka: a level production schedule that provides balance and smooths day-to-day variation. Jidoka: using both human intelligence and technology to stop a process at the first sign of a potential problem. Kaizen: continuous improvement. Kanban: a visual card or signal used to trigger the fulfillment of need, such as restocking supplies. Muda: anything that consumes resources but provides no value. Poke-yoke: a mistake-proofing device that prevents errors.

(Ironically, the day before this flattering article about quality appeared, NBC News reported that SF General lost a 57-year old female patient for 2 weeks–she was just found dead in a hospital stairway.)

Classroom discussion questions:

1. Why are hospitals adopting the “Toyota Way”?

2. Which of the many Japanese terms above could have prevented the lost patient?

OM in the News: Eiji Toyoda’s Death at Age 100

Eiji Toyoda at NUMMI California plant in 1985

Eiji Toyoda, a member of Toyota Motor’s founding family and architect of its “lean manufacturing” method that helped turn the automaker into a global powerhouse, died this week in Toyota City, at age 100. “Toyoda,” writes The New York Times (Sept. 18, 2013), “changed the face of modern manufacturing.”

Toyoda is said to have developed an uncanny ability to spot waste. “Problems are rolling all around in front of your eyes,” Mr. Toyoda once said. “Whether you pick them up and treat them as problems is a matter of habit. If you have the habit, then you can do whatever you have a mind to.”

In 1950, he set out on a 3-month tour to survey Ford’s plant in Detroit, then the largest and most efficient factory in the world. That year, Toyota had produced just 2,685 automobiles, compared with the 7,000 vehicles the Ford plant was rolling out in a single day. Mr. Toyoda was unfazed, bringing back a thick booklet that outlined some of Ford’s quality-control methods; the company translated it into Japanese, changing “Ford” to “Toyota” in all references.

Even as he aggressively expanded production at Toyota, Mr. Toyoda applied a manufacturing culture based on concepts like “kaizen,” a commitment to continuous improvements suggested by the workers themselves, and JIT production, a tireless effort to eliminate waste. Those ideas became a core part of what came to be called the Toyota Production System. “One of the features of the Japanese workers is that they use their brains as well as their hands,” he said in 1986. “Our workers provide 1.5 million suggestions a year, and 95% of them are put to practical use. There is an almost tangible concern for improvement in the air at Toyota.”

The methods Mr. Toyoda nurtured have had global influence, and Toyoda pushed expansion overseas, establishing the company’s joint factory with GM, called NUMMI. There he introduced his lean-production methods as part of a migration of Japanese auto manufacturing the US.

Classroom discussion questions:

1. Summarize the principles of TPS (see Ch.16).

2. What was Eiji Toyoda’s major contribution to manufacturing?

OM in the News: Sweden’s Lean Hospital

St. Goran’s Hospital is one of the glories of the Swedish welfare state, writes The Economist. Doctors talk enthusiastically about “the Toyota model of production” and “harnessing innovation” to cut costs. Yet, from the patient’s point of view, St. Goran’s is no different from any other public hospital. Treatment is free, after a nominal charge which is universal in Sweden. St. Goran’s gets nearly all its money from the state.

A temple to “lean management,” the hospital today is organized on the twin lean principles of “flow” and “quality.” Doctors and nurses used to keep a professional distance from each other. Now they work (and sit) together in teams.

One innovation involved buying a roll of yellow tape. Staff used to waste precious time looking for defibrillator machines. Then someone suggested marking a spot on the floor with yellow tape and insisting that the machines were always kept there. Other ideas are equally low-tech. Teams use a series of magnetic dots to keep track of each patient’s progress and which beds are free. They discharge patients throughout the day rather than in one batch, so that they can easily find a taxi.

The medical equivalent of a budget airline, there are 4-6 patients to a room (unlike our American system of private and semi-private rooms). The decor is institutional. Everything is done to “maximize throughput.” The aim is to give taxpayers value for money and not pretend that hospitals are hotels. St. Goran’s has reduced waiting times by increasing throughput. It has also reduced each patient’s likelihood of picking up an infection. Scrimping on hotel services means the hospital could instead invest in preparing patients for admission and providing support after they are released.

The average length of a hospital stay in Sweden is 4.5 days, compared with 5.2 days in France and 7.5 days in Germany. Sweden has 2.8 hospital beds per 1,000 citizens. France has 6.6; Germany, 8.2. Yet Swedes live slightly longer.

Discussion questions:

1. How does lean help St. Goran’s improve its performance?

2. Why don’t all hospitals use lean approaches?

OM in the News: Honeywell and the Seven Deadly Wastes

Managers at the 1,000 worker Honeywell factory in St. Charles, Illinois wear credit-card-size badges warning colleagues of the “seven deadly wastes,” reports The Wall Street Journal (June 30, 2013). The list of costly problems to avoid is a reminder of past problems at the plant, which makes smoke and carbon-monoxide detectors. The plant pumps out 4 million devices a year, and its efficiency gains in recent years have been achieved with a workforce that has been cut in half—illustrating the shop-floor improvements that academics have dubbed a U.S. manufacturing renaissance.

The St. Charles facility had often produced too much, anticipating demand that didn’t materialize. Overproduction and excess inventory are 2 of the 7 deadly wastes. “You couldn’t see the plant floor because there was so much inventory stacked up,” says the director of manufacturing.

Honeywell bet that St. Charles and its other US plants could be transformed into more efficient operations when other U.S. companies were fleeing for low-cost locations overseas. St. Charles assembly lines were replaced with 7 production cells where teams could build different detectors simultaneously. More of the production systems were automated to detect worker errors. The overhaul also solicited ideas for improvement from employees, a reason for maintaining the U.S. workforce. “We’re paying for people’s brains and their hands. If I just wanted hands, I could find them cheaper elsewhere,” says one exec.

St. Charles’ defect rate has fallen 80% under the improvement plan. Automation allowed one worker from each of the work cells to be reassigned. The plant now can start production of any product in the catalog within 3 minutes. Orders typically are filled within 4 days, down from 10 days. Meanwhile, the time needed to develop new detectors has shrunk to about 18 months from 3 years, as the company uses its newfound efficiency to match products from rivals.

Discussion questions:

1. Describe the “seven deadly wastes”. (See the first page of chapter 16 in the text).

2. What changes did Honeywell make to improve productivity?