matt hrivnak . com

How to calculate OEE: 

OEE stands for Overall Equipment Effectiveness and is the most comprehensive calculation used to determine how effectively you are utilizing your equipment.  It is an important part of total productive maintenance, can help better calculate efficiency losses, and is useful when incorporated into the cycle time calculations.

In order to calculate OEE, you will need to collect some data:

1. PERFORMANCE RATE – The Performance Rate is calculated by looking at the actual operating speeds of your machines in comparison to the operating speeds that they were originally designed for those machines or the products being run on them.
   • Product A was designed to run on Machine 1 at speed setting 10, the highest speed possible.  Due to the machine’s old age and fragile state, it can only run safely and produce good versions of Product A at a speed setting of 6.  The Performance Rate would then be 60% (i.e. 6 / 10
2. AVAILABILITY RATE – The Availability Rate is calculated by measuring any production losses due to downtime from equipment failing, breaking down, etc. as a portion of scheduled manufacturing time.
   • Machine 1 runs 36 hours for every 40 available manufacturing hours due to breakdowns.  The Availability Rate is then 90% (i.e. 36 / 40).
3. QUALITY RATE – The Quality Rate is calculated by determining the amount of losses due to quality issues like scrap and rework as compared to the total parts processed.
   • Machine 1 ran 100 pieces of Product A, but only 98 met the quality specifications.  The Quality Rate would then be 98% (i.e. 98 / 100).

 Now, once you have these 3 important measures, the calculation of OEE is very simple:

          PERFORMANCE RATE  x  AVAILABILITY RATE  x  QUALITY RATE

Using the examples from above (Performance Rate = 60%, Availability Rate = 90%, Quality Rate = 98%):

          60%  x  90%  x  98% = 52.9%

 Essentially, the OVERALL EQUIPMENT EFFECTIVENESS (OEE) is the % of effective use that you are getting out of your piece of equipment.  It is a compounding, thorough look at your true equipment uptime as a percentage of your total available manufacturing time.  This metric is important for loading workcenters and determining capacities because you are completely aware of a particular machine’s (or machine type) total ‘real’ uptime.

‘Lean Lexicon, a graphical glossary for Lean Thinkers’

Compiled by the Lean Enterprise Institute

While this is not your traditional style of book, the ‘Lean Lexicon‘ contains so much great material that I just had to post it in a book review.  This book is just what it says it is, ‘a glossary for Lean Thinkers.’  Whether you are new to Lean Manufacturing or consider yourself an expert, this would should be in your Lean library.  The book is sorted in alphabetical order, and setup so that related topics point to one another, which makes for easy connections between lean tools and applications.  Also, another benefit is the inclusion of historical figures such as the Kiichiro Toyoda, Sakichi Toyoda, Shigeo Shingo, and Taiichi Ohno.  It lists everything you could ever want to know about Lean (at least from a basic definition basis), including some lesser known topics like A-B Control, Chaku-Chaku, Demand Amplification, Kaikaku, and Capital Linearity.  These are the types of topics that hold Lean together and are known to Lean experts, but often overlooked by rookie Lean implementors who stick to the mainstream tools like 5S and SMED.

 Overall, there is very little that this book could be accoused of lacking, and I can’t think of anything off the top of my head.  Add this book to your Lean library and pick up a copy for your coworkers or employees so that you, and they, can reference topics in the midst of a Lean transformation!

What is Kaizen?  Many people that are new to Lean Manufacturing will at some point end up saying, “Kaizen?  What is Kaizen?  What do you mean by Kaizen?  What does Kaizen do?”  Several terms and definitions come to mind when talking about Kaizen.

On page 24 of The Toyota Way, Liker comments, “Kaizen is a total philosophy that strives for perfection and sustains TPS on a daily basis.”

Kaizen is a Japanese term meaning “Change for the better” or “improvement”.  It is most commonly translated into English as “Continuous Improvement”.  Kaizen is one of the forerunners in Lean thinking and requires discipline and constant re-evaluation.  It works on the basis that nothing can ever become perfect.  There is always something that can be improved.

Kaizen on a company scale can mean several things.  As part of a continuous improvement culture, most companies hold what are called Kaizen Events.  These are generally an activity that remove people from their daily tasks and place them on a team, to accomplish a goal within three to five days.  These are highly targeted projects with achievable results, such as moving machines so that they can work closer to one another for continuous flow, or designing and implementing a new queuing system for a specific purpose, or a SMED event (What is SMED?), etc.  No matter what the goal is, the process is relatively the same:  Plan, Do, Check, Act.

Plan, Do, Check, Act (PDCA) was developed by W. Edwards Deming and introduced in Japan in the 1950s.  It is based on the Scientific Method and is a precursor to Six Sigma’s DMAIC process (Define, Measure, Analyze, Improve, & Control).  This is how PDCA breaks down:

• Plan – Develop a sound, well thought out goal (that can be achieved with moderate effort) and how to achieve it.
• Do – Implement the ideas and/or changes needed to achieve the goal, including training.
• Check – Review what you’ve done; be critical, but not negative.
• Act – Depending on how the Check step went, sustain these results or perform the whole PDCA cycle over again.

You can see that this is pure continuous improvement as the cycle can be completed over and over again.  In the Toyota Production System, they have slightly changed this language to be Plan, Try, Reflect, and Standardize.  Different verbiage, but same expectations of process and results.

Typically, most Lean training and resources define two types of Kaizen:  System or Flow Kaizen and Process Kaizen. 

A System or Flow Kaizen deals with an entire value stream being evaluated for opportunities of improvements and will usually include action from several levels of management. 

A Process Kaizen is a concentrated improvement of a single process (or groups of the same type of process).  This type of Kaizen will usually include a cross functional team dedicated to improving that individual process.

Both of these types of Kaizen are abundant in any successful Lean enterprise, and are at the very heart of those organizations.  Working within a company that needs help implementing Lean can begin to wear on your mind, especially if you are the agent of change.  For my entire professional career I’ve had to take on this role.  You push and push everyday for changes because you can see the waste sitting all around the plant and office; in stacks of wasted inventory and DMR’d materials to frivolous steps in product development processes.  It’s tough to keep a positive attitude. 

Over time I’ve learned to incorporate the idea of Kaizen into everything that I do.  I make it a habit to say this word to myself over and over again at different times during the day.  While at work, it keeps me in the moment and opens my mind to thinking that everything can be made better if we just apply ourselves a little bit more.  Now, I tend to Implement Then Perfect which is a good, offset definition (sort of) of Kaizen, where as early on in my career I would spend too much time pondering possibilities instead of just doing.  This creates better outcomes and makes you think on a Results Driven basis, which is really the way you want to think – you will constantly grow and improve – just like a company that is maintaining a strong Kaizen mentality.

On a personal level, use Kaizen to improve you life and it will work its way into your professional career.  Incorporate it into your daily life with exercise, eating habits, vices, etc.  If you want to start working out, start small and build from there – add a little bit everyday.  That’s small, incremental improvements that work.  If you eat too much, try to eat 1 less bite at 1 meal every other day, and eventually move up to 1 bite for every meal, everyday.  If you smoke and want to quit, cut back slowly and your body will respond favorably.  These methods work for you and the same type of stepwise improvements drive positive changes in your company.

If you know someone who claims to be perfect – they’re not.  Even a lot of the most successful people will tell you that they are not perfect and that that belief is what got them to where they are today – and it keeps them there.  You maybe thinking:  “Won’t that thinking just make me depressed?”  The truth is, no, it won’t.  Once you allow yourself to see the flaws that are holding you back, you will be much more likely to overcome them.  A good motto that I try to live by is:  Always be happy, but never be satisfied.  That is the essence of Kaizen.  That will bring continuous improvement to your life.  That is Kaizen.

While working in a textile factory in the early 1900s, Sakichi Toyoda saw a problem with the way the textile looms ran:  if one of the threads broke, the machine would continue to produce bad product until an operator noticed that the break had occurred.  Improving upon this, he developed a self-monitoring device that stopped the loom when one of the threads broke.  This produced dramatic improvements in quality, as well as freed up operators that had previously spent much of their workday watching looms for quality.  That particular invention is still used in many textile operations around the world, as well as in most manufacturing processes in general.  It wasn’t the particular application that was important; it was the overall idea.  This idea was later termed Jidoka, and when translated into English, literally means “automation with human intelligence”.  This idea would become one of the two main pillars of the Toyota Production System (TPS), and is still in use in every Toyota operation and process.

The second pillar of TPS was developed by Sakichi Toyoda’s son, Kiichiro, and is called Just-In-Time.  In the 1930s, Kiichiro, the founder of the automotive branch of the Toyota group, theorized that he could keep the entire production process stocked with needed goods if the previous operation would respond to the precise needs of the downstream process.  This thinking dramatically reduced the amount of time operators spent waiting for parts to work on, while limiting the amount of the waste in the process.  He would continue this idea by working closely with suppliers to level production and ultimately, reduce all excess inventory levels.  Jidoka and Just-In-Time were both developed before the start of World War II.

After the war, one of Toyota’s executives continued the development of TPS and is credited as the chief architect of the system that is still in use today.  As chief of production, Taiichi Ohno developed TPS into a company wide cultural experience which required each associate to participate.  In many American factories, then and now, operators were reluctant to add their input and often feared change.  Conversely, Ohno praised change and suggestions from everyone.  During his tenure (and with the assistance of the famed consultant Shigeo Shingo), Toyota invented many “tools” which would come to encompass much of Lean Production.  Two such tools, 5 S and Single Minute Exchange of Dies (SMED), have been written about extensively, and are often some of the first steps a company will take while trying to implement the system.  Over the years this developed into the idea known as Kaizen, which when translated means “continuous improvement”.  This idea still stands as the overall image of Toyota, as they are always re-evaluating every process, from order taking to final inspection.

After the publication of The Machine That Changed the World, companies began to familiarize themselves with Lean Production and the toolset became common knowledge.  The overall concept of Lean is what prompted this blog.  As you will read throughout this site, Lean is not an idea, it’s a way of life.  It is about embracing change and being able to look inward and realize that there are always improvements that can be made.  Once a company adapts this kind of thinking, they are consistently able to find themselves improving in all areas, from on-time delivery to quality!

Lean works.  Lean is right.  Lean is good.  Lean consistently proves its worth through continuous, stepwise gains for companies brave enough to take on the challenge of looking within themselves to correct deep founded issues with their status quo and historical patterns of behaviors.  So, why doesn’t Lean help every company that implements it?

The truth is, Lean doesn’t work for some companies because THEY (i.e. the companies it doesn’t work for) don’t allow it to work for them.  And that is why Lean fails.

Recently, something caught my eye that I’ve known for quite a few years now.  It was refreshing to see, but only because misery loves company and in terms of Lean, is still rather unfortunate news.  The annual survey from Lean.org read like this (July 2007):

IMMEDIATE RELEASE

New Survey: Middle Managers Are Biggest Obstacle to Lean Enterprise

Cambridge, Mass., July 18 — Middle management resistance to change is now the number one obstacle to implementing the innovative business system known as lean production, according to a new survey completed by nearly 2,500 businesspeople and conducted by the Lean Enterprise Institute, a nonprofit management research center.

Middle management resistance was cited by 36.1 percent of respondents in LEI’s annual survey about lean business system implementation in the U.S. The top three obstacles to implementation were middle management resistance (36.1 percent), Lack of implementation know-how (31 percent), and employee resistance (27.7 percent).

Last year, backsliding to the old ways of working was the primary obstacle to introducing lean management principles, followed by lack of implementation know-how and middle management resistance. Backsliding dropped to sixth place in this year’s survey.

“Applying lean management principles exposes problems in traditional business systems, which often is threatening to middle managers in the problem areas,” said Chet Marchwinski, LEI communication director. “To get middle managers on board with the lean transformation, organizations must transform the metrics and behaviors for judging their performances.”

For instance, traditional financial metrics often need to be removed from day-to-day management decisions about key processes. Instead, operating managers have to learn to help employees look for waste and remove it.

Since 2003, LEI has surveyed managers and executives annually about the key obstacles they face in transforming their companies from mass production to lean. The latest results are based on 2,444 responses to an opinion survey distributed electronically to the 77,200 subscribers to LEI’s monthly e-letter. Respondents were asked to select all applicable obstacles from a list of 12 possibilities. Members also were polled on industry trends and the implementation level of their lean transformations.

I guess there is an obvious sense of naivety on my side for thinking that Middle Management Resistance would eventually go away, but that would be assuming that there isn’t a general ignorance and lack of a kazien mentality (i.e. betterment, continuous improvement mentality) exhibited by most managers.  Managers do things because they believe that they know what is best.  “It’s always worked that way, so why try to change it.” 

There is comfort in familiarization and docile activities that typically bog down managers.  Lean requires a huge, cultural change that breaks down the barriers of the common ways of looking at things.  It also requires a great deal of involvement from everyone within an organization.  This is especially true for the CEO (or senior staff entirely) AND the lowest ranking members of the company.  Middle managers are the glue that holds these groups of people together.

I could go on forever on this topic and describe to you how this all ties into the Theory of Constraints and The Goal, departmentalizaiton vs. cellularization, etc., but I’ll just give you a few sentences.

Middle managers have their hands tied.  Too often, they are bound to their traditional metrics and methods of thinking.  This leads to production managers and supervisors pushing for their employees and workcenters to be producing at 100% capacity just for the sake of running production and keep uptime on par with traditional company goals.  This just creates over production, mismanaged inventories, misinformed operators, and in the end, a complete resistance to Lean Thinking.  In the end, for too many middle managers, production trumps Lean and Six Sigma because it’s all “ship, ship, ship….this product is a rush….ship, ship, ship”.  It’s rather ironic that all of these managers’ practices are the very nature and source of their need to have a always rushing mentality.

 An open message to all managers:  Study Lean, sign up for seminars or conferences, make an effort to earn that paycheck you receive for your work.  Ignorance is bliss, right?  WRONG.  In manufacturing, ignorance is a sin.  It represents the cognitive acceptance of absolute failure and is ultimately detrimental to your organizations’ success and continued growth.  It’s time for you to quit calling Lean a fad or referring to Lean tools as buzzwords because you are too lazy to better your thinking, better yourselves, better the people that work above and below you, and most importantly, to better your company. 

Lean works.  Lean is right.  Lean is good.

What is SMED?

If you are like the thousands of people working for a company that is moving towards implementing Lean Manufacturing then I am sure that you’ve heard some very unique terms and acronyms being thrown around.  The most common of these are probably 5S (Five S), Kaizen, J.I.T. (Just-In-Time), Poka-yoke and SMED.

In this post I am going to talk about SMED.  What is SMED?

Well, SMED or S.M.E.D. stands for Single Minute Exchange of Dies.  During the formative years of the Toyota Production System, Shigeo Shingo was determined to reduce the setup time associated with the car body molding process.  (Like many manufacturers, Toyota had traditionally been in the trap associated with Economic Batch Quantities, and originally would produce enough to justify the setup cost).  After some initial trial runs, he was able to create a process that could be incorporated by all operations.  This led to more and more setup reduction events that were eventually cataloged and rolled into SMED.

To fully understand and utilize SMED, one needs to be aware of the entire process related to changeovers and setups.  The classic definition of changeover (from so many sources, over so many years, I don’t know who to give the most credit to, but mostly Womack, Jones or professors of mine from some time ago):  The process of switching from the production of one product to another on a machine by changing parts, dies, etc. measured as the time elapsed between the last GOOD piece of the previous production run and the first GOOD piece from the production run after the changeover.

Notice that the word good is capitalized.  Most people I have worked with and around will, from time to time, negate this fact and try to remove it from the equation.  This is a sin as, depending on the process, adjustments and teardown times can amount to a large portion of a changeover.  Below is the typical breakdown of a changeover/setup by time spent on specific tasks:

Typically, a SMED is a planned Kaizen event that lasts for several days (usually no more than five) concluding in a presentation to senior management officials.  The team that is compiled to perform a SMED should be associates pulled from all aspects of the company.  For example, one of the SMED’s that I was involved with included the plant manager, two supervisors, two operators from the process (from 1^st and 3^rd shifts as selected by their supervisors), an operator from another area, a sales/marketing person, and myself, representing engineering and facilitating the event as the team leader.  That number of team members is right around the maximum that you should have working on one event.

The targeted area or type of machine group should be video taped ahead of time by the facilitator of the event.  This is an essential part of the SMED and will be used throughout the process as well as in the final presentation to show the results.

I typically take the first day of the SMED and use it to introduce the team to some of the concepts of Lean and drive home the SMED process and all of its elements.  The most essential part of this training is defining the two aspects of a changeover:  Internal and External setups.

Internal setups are any aspects of a changeover that MUST be completed while the machinery is stopped.  In most cases, these things will be process steps like installing a die, changing gears, flushing/purging a hopper, lubricating interior moving parts, etc.  Notice the keyword in this sentence is MUST (hold that thought for a second).

External setups are just the opposite, anything that MAY be performed or changed while the machine is running.  These are all of the things that should be done prior to the actual changeover and include arranging required raw materials (hopefully from a supermarket or Point-Of-Use (POU) inventory and not a warehouse across town), notifying a material handler to take away the completed product, loading payoffs or racks that feed into the machine, etc. 

As I said before, notice the MUST statement regarding Internal and the MAY statement regarding External.  How often do you think people will do something when you give the option of MAY? 

A lot of the time, operators will know that these types of things should be done before the machine stops running, but they don’t do them because there is no attention paid to have long it takes them to changeover.  Once it is brought to their attention and made part of the process (everyday) and most importantly, measured, they will start to make much more of an effort.

During the training, I will go over the SMED process with the entire team and answer any questions that each team member might ask.  The process, once understood, is very straight forward.  Actually, like a lot of the practices built into Lean, if you look at changes made during a SMED you should always be able to say to yourself, “Well yeah, that’s what I would have done because that’s common sense; get the materials while the previous job is running, do this and that, etc.” 

While we’re on the subject, the SMED process is as follows:

1) Record current state setup conditions and practices

2) Separate internal and external setups

3) Convert internal setups to external setups

4) Streamline the entire setup process

Now, when I have my team there and have gone through with them, all of the training necessary, we start by watching the actual process.  We always start by taking a walk out to the operation, looking at all aspects of the operation and paying close attention to operator movements, physical space limitations, raw material stores, etc.  After which we return to the SMED team area (usually a dedicated conference room for the week) and watch the entire changeover process that was videotaped earlier in the week.

To be cont’d….

“The most dangerous kind of waste is the waste we do not recognize.”

- Shigeo Shingo (Toyota)

I’ve decided to start posting some of my favorite Lean related quotes to help pass the message on.  Now, some of these are from recent years while others go back to the golden age of Mass-Production-Only manufacturing, i.e. the Before Lean or Old Testament of manufacturing. This one is from the man, the myth, the legend Shigeo Shingo. 

For those of who are unfamiliar with him, he’s the famous Industrial Engineer brought into Toyota in the 1950s by the great Mr. Taiichi Ohno who had heard of Mr. Shingo’s influential and successful seminars on methods of manufacturing.  In the years following, Mr. Shingo introduced the ideas behind such great concepts as Single Minute Exchange of Dies (SMED) and Poka-yoke (i.e., mistake proofing).

What can I say? He was right.  Whether you look at this from a manufacturing perspective or even a lifestyle perspective, eventually you have to recognize that he was spot on.  This quote is very straight forward, but carries a significant message.

I often refer to this quote to point out that this is really the 8^th type of waste left out by Ohno’s 7 Wastes (Overproduction, Defects, Transportation, Waiting, Inventory, Unnecessary Motion, Overprocessing/rework).  Waste that goes unnoticed can quickly multiply into bigger problems that manifest themselves at inopportune times; often, this occurs months or years after the birth date of this unseen waste.  Waste is like a cancer.  It’s there the whole time, but sometimes just can’t seem to notice it. Imagine an ultra high yield savings account with $100 in it.  Slowly the interest begins to build and within a few years you’ve doubled your money.  Now, imagine that you go to withdraw your money from that account and you get slapped with fees that are $1,000.  That puts you $800 in the hole!!  How could you let this happen? These fees were stated in the fine print so you had to have known they were there, right?

Now think about that in a manufacturing setting.  No matter how you slice it, waste is waste.  Many a times, before a company is exposed to Lean the waste is rampant and the chief officials have no idea of all the money they are letting waste away (no pun intended).  This also means that the majority of the people working under these officials can’t see the waste either.In the end, this simple idea of hidden waste evolves into a much deeper issue for me.  The more and more I think about it, the more my mind moves towards striving for continuous and sustainable improvement.  What wastes do I see at work everyday?  What wastes do I see in my life everyday?  Moreover, how can I get rid of these wastes and make everything perform better? So, look around you.  Find those wastes.  Eliminate them.

The United States is in trouble.  Being a relatively young nation, it is still developing its own identity; which to this point has been one of adventurers and risk takers.  This is something that one would expect from a nation made up almost entirely of immigrants, as leaving one’s home country requires those types of traits to allow for such thoughts.  This frontier’s man type of attitude is one characteristic that has always led to great accomplishments as a result of such verifiable risk taking.  However, with all of this success comes arrogance, expectation, gluttony, and worst of all, lackadaisical-ness.

It wasn’t always this way.  After the World War I, the United Stateswas riding the victory bus all the way to Prosperville, but then the wheels fell off and we were stuck in the middle of the Great Depression.  That should have been the first sign that our independently spirited behavior was leading us in the wrong direction.  This fact was forgotten, however, on December 7, 1941 when warplanes from Japan performed a devious preemptive strike on our naval base at Pearl Harbor.  The following years led to the country coming together to fight the Axis of Evil, and along with that came production on a scale that had never been seen at any point in history.  Because of this, the United States went onto success, not only in the war, but also inside of its own borders. 

The Great Depression had ended.  No more soup lines and government cheese.  It was time to go to college on the G.I. Bill, and have some kids.  We had survived the biggest threat to the known world in recent history.  Let the party begin.

The 1950s and 1960s saw the rise of television, the space program, and most of all civil rights.  Within this time, Americans familiarized themselves with many comforts developed from technology discovered during World War II.  One such invention was the use of microwave ovens in the home.  No longer would the family cook have to slave over a hot oven all day.  We could cook our meals in minutes and eat them while enjoying our favorite television program which showcased people that were just like our closest friends and neighbors.  Everyone was becoming identifiable.  Celebrities were becoming more iconic, and so, the great American ideal of merchandising was born.  More and more regular citizens began to purchase products not simply on the fact that they needed them for some common use, but more because their favorite celebrity supposedly swore by it.  This generated a feeling of belonging for some, but for others, a feeling of envy.

With such a huge rise in home ownership, Americans were living side by side in a manner never that was never really developed before.  Homes were now being built and setup in curving neighborhoods with every other house looking the same.  And once again, the American people’s ability to take a common characteristic and turn it into something completely over the top had succeeded:  If your neighbor had it, you had to have it.  Of course this envious character has existed in human nature since the beginning of things, but nothing had been developed into such a hate machine as this.  And so the American spirit worsened, and we turned from a nation of “I need” to a nation of “I want”.

This all continued to worsen during the 1970s.  The Great American Consumption Machine rolled on and on.  Automobile manufacturers started developing cars that were no longer to get you from point A to point B with a few creature comforts included.  You could now get a car with an engine big enough that you could out race anyone in your neighborhood.  Americans were becoming increasingly more self centered, and the “gimme gimme gimme” attitude continued from infancy into young adulthood.

This was the crucial point in American society when certain individuals began to realize the downward spiral we were taking.  Since the end of War World II, Japan had been rebuilding, and in their traditional way, rethinking and continuously improving their ways.  The American unions, along with the Great American Consumption Machine, were causing increasing prices for consumers, which affected everything from food to automobiles.  Like Japan, other countries were taking notice.

The formation of the Organization of Petroleum Exporting Countries (OPEC) in 1960, allowed those countries to establish exporting policies as well as oil prices.  The United States never really a felt a serious pinch from this until 1973, when during the Yom Kippur War, the Organization of Arab Petroleum Exporting Countries (OAPEC) decided that they would no longer export petroleum to countries that supported Israel.  Coupled with that threat was that at the same time, OPEC decided to quadruple the price of oil.  All of the highly industrialized nations, including the United States, attempted to put forth measures to prevent future shortages and price run ups.  This held over the American people until the early 1980s.

Seeing an open market and piles of money awaiting them, Asian manufacturers began to increase their exports to the United States.  Along with their pennies-per-hour-manufacturing-costs and significantly lower prices, they brought their compact automobiles.  Since the oil crunch of the 70s, several groups within the U.S. were pushing the idea of smaller, more fuel efficient automobiles with a higher regard for the environment.  So, as Americans do, we followed the head lemming and moved towards the Asian edge of the manufacturing cliff.  While the quality was not great from American manufacturers, it was even worse from most Asian companies.  One of the few exceptions was the Japanese automobile giant Toyota.  However, the quality aspect of things never seemed to matter to the American society as a whole.  True to form, they were consistent with their previous trends of purchasing and went with what was of lower cost.  And so, many more Americans began losing their jobs, as companies that were started and grown in the U.S. decided the only way to compete was to move operations off shore.  After all, wasn’t it the American labor policies and rights protections that had led to this run up in wages and costs?  Apparently, most of American companies felt this way, and the life of the ordinary American worsened.

It was during this time that two of the most significant publications in American history were released.  First, starting in 1984, people were introduced to Eliyahu M. Goldratt’s book The Goal:  Excellence in Manufacturing (later called The Goal:  A Process of Ongoing Improvement).  The book, a work of fiction, led readers into the concept of the Theory of Constraints through an easy to read novel setting.  While this book has had great impact and has sold millions of copies (over 3 Million in fact) worldwide, it is virtually unknown outside of the manufacturing world.  This sadly rings true for the second publication, especially since it had a far greater message.

After a five year, five million dollar study, Massachusetts Institute of Technology associates Daniel Roos, James P. Womack, and Daniel T. Jones released their groundbreaking work The Machine That Changed the World:  The story of Lean Production.  Between the covers of this book, they explained much of the same message I am trying to convey with this site, but strictly towards manufacturing.  Most importantly, they detailed how Toyota could produce cars with a third of the defects of American cars, using half of the factory space, half the operator and production time, and consequently, about half the cost.  While recording their findings, they coined the term Lean Production, which is still used today when discussing the topic.  Again, just like The Goal, this book gained much acclaim from the business and manufacturing world, but received very little coverage in the American mainstream which was centered around soap operas, game shows, and “Who shot J.R.?”  The one good thing that has materialized from these two books is the acceptance that as Americans, we need to change our ways if we wish to continue our lavish lifestyles.

Around the same time, as previously mentioned, American companies were not only losing ground on the fact of cost, but their quality was driving consumers to move towards lower priced goods produced offshore.  At Motorola, Bill Smith was pioneering a new quality initiative to reduce defects that would later become known as Six Sigma.  The name is derived from a statistical metric that measures defects as a percentage of total production.  It states that when a company is operating at a Six Sigma level, it will produce no more than 3.4 defects for every 1,000,000 parts produced.  Just like Lean Production has done for manufacturing, Six Sigma is still increasing quality of American products as more and more companies familiarize themselves with the program.  Because of this, Americans slowly became more and more comfortable with American products; technology continued to advance.

With the rapid movement of technology resulting from the unparalleled advancements of the computerized age we currently live in, Americans have become lazier and lazier.  When you thought about dinner in the past, you’d expect to eat a couple hours later.  Now, it’s almost unthinkable to have to wait that long.  If you want a hamburger, you’re in and out in five minutes at your favorite drive-thru window at the local fast food restaurant.  Or if you’re looking for some pampering, you can go to any of the thousands of chain restaurants and dish out some extra cash to have your food and drink brought to your table.

Along with the growth of fast food is the growth of the American Value System.  I will touch more on this in later, but here’s a preview.  We, as the American culture, have for some reason come to the conclusion that more is always better, especially when it has a cheaper per unit cost than buying what we will actually consume.  One of the sources for this thinking comes out of marketing and getting people to buy as much as possible.  Another source is most likely the rise of “discount” clubs which allow consumers to purchase large quantities of goods at a lower per unit cost, if the consumer is willing to pay an upfront cost as well as purchase in quantities greater than those normally found at regular retail outlets.  For Americans, this is true for almost anything, from underwear to food to toiletries. 

The same idea can be said of our lives today.  With so many advancements and creature comforts, why do so many Americans say they don’t have enough time for things?  Yes, people have children and jobs and responsibilities, but then again, so did our parents, and all of our ancestors.  We have built ourselves up so much that our quality of life has decreased.  Television and other people’s affairs take up more of our lives than what is actually important.  Cell phones are literally almost a dime a dozen, children don’t even know the history of their own country, and most adults find refuge in some sort of drug, whether it’s been prescribed for them or it’s been purchased from a liquor store or the corner drug dealer.  And as is our tradition, we cover the problems up instead of actually confronting them.

So, as technology is improving our lives in many ways, it is ultimately moving the American consumer further and further away from what is really needed.  At this point in time, American manufacturing is swaying from stable to unstable and back again as companies shift operations from Asia to China to the U.S. and abroad.  Gas prices have never been higher, causing other basic costs to rise, and how are the American people responding?  Not by solving the problem, but by name calling and the pointing of fingers.  On this blog, I offer simple solutions to help relegate a small portion of the overall problem by making Americans understand that we are the cause of many of our problems based off of the way we live and how we consume.