On Monday June 1, 2009 Continuous Improvement Practitioners (CI-P), from the State of Maine "Bend the Curve” initiative, led by Walter Lowell, conducted a study mission at Lonza in Rockland Maine. To quote from the Lonza web site, “Lonza is one of the world’s leading suppliers to the pharmaceutical, healthcare and life science industries. Its products and services span its customers’ needs from research to final product manufacture.”

Lonza recently began some Six Sigma initiatives including Value Stream mapping and specific Kaizen and Kanban analysis that have reduced waste, lowered required inventory, automated some processes, increased productivity and saved money in most every area reviewed. Jon Kirsh, formerly with MEP Maine has new VSM planned for a number of other areas and is hoping for the same results.

The most impressive changes according to Jon included a 5S review of the research and develop workshop and the incorporation of KANBAN signs in various production areas to alert staff of lowed inventory or need for other resource ordering. Six Sigma tools have made a significant difference in the work that LONZA does. I enjoyed seeing the practical and economical process changes these tools have effected at LONZA.

Saw an article this week in the Federal Computer Week emagazine about our new President making federal contracting more efficient. This is great news and about time. http://fcw.com/articles/2009/03/04/obama-reforms-contracting.aspx?s=fcwdaily_050309

This looks very promising for the Lean Government Champions. Sounds like a job for a Continuous Improvement Practitioner. Are there any CI-P's in the federal government yet?

Erie County’s Six Sigma initiative is set to save 1.5 million dollars by year end. Almost a half million more than the initial goal. Below is the news reporting the story. Interviews with Al Hammonds, Deputy County Executive and former Six Sigma Director as well as the new Six Sigma Director Bill Carey.

http://www.wgrz.com/news/local/story.aspx?storyid=61254&provider=gnews

Yet still Erie has naysayers...in bold is the nayism followed by my thoughts:

• Savings could have been found without Six Sigma: True, Al and I both agree on that. But would have the savings been found without any structure, and would have they been able to measure the savings? I think not. If they could have done it, they should have done it, but they were not doing it. Enter Six Sigma. See 1.5 million in savings.
  
  
• Wastes Employees time, taking them off the job for Six Sigma meetings: No one likes a worthless meeting, but if Six Sigma meetings contribute to the $1.5 million saved...we need to have more Six Sigma meetings. Plus for that to be a valid point we’d have to Pareto chart the actual time wasting activities employees engage in... and see where the biggest opportunities for improvement are. My educated guess is that time "wasted" in Six Sigma meetings is much smaller than say water cooler talk, late to work, sick when your actually not sick...that list is endless.
  
  
• Department heads could have found savings themselves: Refer to first bullet.
  
  
• Instead of paying Six Sigma Director’s salary of $110,000: Yes, I agree. $110,000 is not what Erie county should be paying the Six Sigma Director. According to iSixSigma’s 2008 Salary survey, the average salary for a Six Sigma deployment leader in the Northeast is $126,250. Give this guy a raise.

Erie County Says Six Sigma Has Exceeded Goals, wgrz.com, October 8, 2008

Al Hammonds has been appointed the new Deputy County Executive, which means Erie County is looking for a new Director of Six Sigma.

“A new director for the Six Sigma program will be chosen within the next three to four weeks, Collins said. The hope is that the new hire will be easier to find than Hammonds was.”

As for Al…“he’s excited about the opportunity to continue implementing Six Sigma business practices within county departments.”

“Beginning to implement Six Sigma in Erie County government has been one of the most challenging, yet rewarding jobs of my career,” said Hammonds. “I will approach my new responsibilities with the same excitement and drive.”

Anyone interested in leading the Six Sigma initiative in Erie County, get that resume in.

Collins appoints new deputy county executive, Tonowanda News, July 8, 2008

Hammonds Named Deputy County Executive, WNYmedia.net, July 7, 2008

Last Thursday, 5th June, the Malaysian Government revamped its petrol subsidy system by increasing petrol prices by a steep 41%, from USD0.58 (RM1.92) a liter to USD0.83 (RM2.70). It is low if you guys look at it in US currency, but in Malaysian Ringgit terms it’s a spike in cost of living. Public expectation here is low petrol prices because Malaysia is an oil-producing country. Petrol in Venuezela, by the way, is USD0.05 per litre.

This price hike caused the following to happen in chain-effect:

• Transportation companies announced increases of 35% in trucking and logistic fees (now it’s increased to 40-45%)
• Petronas announced gas price increase by 187%
• Electricity rates increased 18-26% for commercial and small businesses
• Kuala Lumpur stock exchange fell 27 points the next day the price hike was announced
• An island-state said that low-cost housing was no longer possible in anticipation of rising building materials cost
• Other Government-price-controlled food items such chicken had their ceiling price removed

The main argument for the fuel price increase is that the heavy government subsidies eat into the economy pie and that the Malaysian fuel subsidies flows to its neighbors Thailand and Singapore (in a limited way)- Thailand and Singaporean vehicle traffic into Malaysia is estimated to be above 200,000 vehicles a day across the Thai-Malaysian and Singapore-Malaysia borders. The Thailand and Singapore cars fill-up before leaving for home. Singaporeans are allowed only a three-quarter full gas tank as their vehicles cross the border.

Goldman Sachs estimates a 7% inflation for June while local financial institutions forecast a 5-6% inflation for the whole of 2008, a ten-year high. There are immediate mitigation steps undertaken by the government of course, such as a USD191 and USD46 per annum rebate for small car and bike owners respectively. However, there are huge gaps in the process- people who do not own vehicles are missed out in the picture, left alone to combat inflation.

The Malaysian Government is expected to realize USD12.23 (RM40) billion in the subsidy cuts this year. With the savings there promises of improving and expanding the public transport system and other public-beneficial programmes. Citizens take this fuel price hike from a political viewpoint as well as the economics of it. There is high suspicion on the utilization of subsidy savings- where is the Government channeling the additional petro-dollars from the realized savings to. Another prolonged fury- the financial statements of Petronas are not made public by law since many years back.

Public expectation is on the Malaysian Government to improve the public transport infrastructure which they have promised to do but still dragging their feet on it. Yes, the public feels left alone. Public transport is important so we can all leave our cars at home and start using a cheaper means of transport. Meantime, the Malaysian Government slashes RM2 billion of its ministers’ entertainment allowances and promises no further fuel price hikes this year. Pullback in government spending has its effects on the economy, as we know the theory of macroeconomics explains it. The first blood drawn will be on Malaysia’s retail and hotel sector because the entertainment cut affects government seminars and events … the reduction in government spending will result in a contraction and loss of jobs in both industries eventually.

But frankly everyone hopes this situation does not arrive. Being worked in the hotel industry previously- in times of falling operating profit, the only immediate controllable remedy is to cut and reduce operating expenses. However 4-5 star hotel operators know that cutting costs has a limit before it impacts on guests’ experience. I was lucky to have Six Sigma when trouble hit my hotel in 2003. That year SARs arrived and it hit the hotel industry hard (imagine a hotel having an average occupancy of 90% going down to 8% for three months)- for starters my colleagues and I (senior management) voluntered a 25% pay-cut to immediately reduce costs. Six Sigma was just launched in the Asia-Pacific region and the team quickly hit the boardroom and flipcharts to identify revenue-enhancing and cost reduction lean projects. I particularly championed a laundry project and an electricity reduction program. Six Sigma tools such as process mapping, the CTQ diagram and VOC helped identified critical process areas which mattered to our guests most. Those areas were treated with extreme care if there was a particular cost reduction. We sold our laundry services to nearby hotels; staggered group check-ins and planned chiller starts on half-hour intervals to avoid the triggering the higher band electricity rate and so on. SARs lasted till the end of the second quarter of 2003. Despite of this, the hotel went on to achieve 125% of its budgeted gross operating profit by the end of 2003; increased short term investments to USD4 million, and the paycuts never flowed down to the other managers and staff. I can frankly say that without the timely appearance of Six Sigma in Asia-Pacific at that time, the drastic cost-reduction my hotel took would have been more damaging to the business.

That’s Six Sigma for you- tested in times of financial turmoil.

Quickfacts

Currency USD1~RM3.27 at time of writing

Per capita (estimated) 2007 USA USD46,000; Malaysia USD14,400

Lean government is making public sector inroads through out the US. It is exciting to see this. But I am worried. Some managers seem to see it as a weapon, rather than a tool. “The legislature is making us more accountable so we have to do something or else”. “Do more with less”. “Cut staff so we can lower the budget”. These attitudes have nothing to do with lean government and everything to do with poor public policy.

It is important for Lean process analysis to gain some better more understandable public recognition. This needs to be done by not only the Champions, and Managers but more importantly practitioners who understand public policy language. The facts show that lean process analysis and implementation can make a difference between a well run efficient and value laden government service and a wasteful bureaucratic mess.

Are any candidates listening?

I have been re-reading Henry Fords book “My Life and Work”. I got the idea to re-read this from Walter Lowell, the Lean Initiative Director at the Maine Department of Health and Human Services. It is available as an e-book from The Project Gutenberg.(see below)

In this wonderful book Ford talks about how he developed the horseless carriage. In terms of efficiency and lean use of energy, this was one of the first innovative engineering ideas that contributed to the industrialization of America. We all know the story and how it developed including Henry’s idea of interchangeable parts and, I would argue, one of the first Value Stream Mapping demonstrations of the lean use of people using the manufacturing production line. This led me to thinking about our current manufacturing dilemma in America and how my professional training in job analysis and vocational rehabilitation could begin to create some solutions for our manufacturing industry in America. More importantly my client base everyday is growing with 50 something men and women who only know how to use their hands to make stuff. They find themselves unemployed or underemployed and worn out from $8.00 dollar an hour service jobs and in dire need of some real work and a livable wage. They have worked in construction and manufacturing and now can’t find anything reasonable to do.

All political rhetoric aside it is a real problem for many American citizens both disabled and able bodied. How can lean thinking utilized by our government and manufacturing sector begin to solve this problem. What would Henry do?

As I read Henry’s book I looked for inspiration to combine all this evolving knowledge I have recently gained with the problem of our shrinking industrial base and my charge to help individuals with disabilities and related barriers find and maintain gainful employment in an integrated and competitive employment environment. This was the first quote I decided to build upon.

“The Government is a servant and never should be anything but a servant. The moment the people become adjuncts to government, then the law of retribution begins to work, for such a relation is unnatural, and inhuman”.

I guess that means that if the government is creating useless jobs that do not grow the economy then in the end an unproductive dependency is created. But workforce development programs going back to the Conservation Corp have contributed to our economic development in this country including the development of the interstate system and many other infrastructure projects that support and sustain businesses in our country.

Lean government proponents would do well to combine value stream mapping and other LSS tools with workforce development programming and provide a boost to our manufacturing sector. What an idea… use Henry’s Fords evolved manufacturing ideas combined with job analysis and employability development models and put our citizens back to work making stuff. What stuff? Stuff that comes from natural resources found in America. This is not entitlement but rather building on our historical strengths.

Lean thinking is a transformational concept that must remain part of our entrepreneurial and public sector strategic planning. Where’s the muda?

Reference. Ford, Henry – My Life and Work, The Project Gutenberg: Release Date: January, 2005 [EBook #7213] Produced by Marvin Hodges, Tom Allen, Tonya Allen, Eric Eldred, Charles Franks, and the DP Team The Gutenberg Project

Six Sigma in Erie County is seeing setbacks as skeptic county legislators put a cap on the Six Sigma budget. The initial one million dollars planned has been slashed to $120,000.

“I’m one of the skeptics, I believe. They didn’t name me Doubting Thomas for nothing,” Legislator Thomas J. Mazur, D-Cheektowaga, said Thursday. “I am glad the control board slowed down this steamroller.”

“I’m not sure we are going to be saving these millions and millions of dollars,” Legislator Timothy M. Wroblewski”

They want to pilot the initiative first, to see what happens…If only the legislators had done their research before making such a hasty decision. iSixSigma Magazine research from Nov/Dec 2005 outlines the ins and outs of starting up a Six Sigma initiative.

Finding One: You get what you pay for.

Fifty percent of respondents (536) from companies that invested less than 500K on Six Sigma the first two years didn’t even see their investment back. Nearly 75 percent of respondents (260) from companies that invested 500K to 1 million saw an ROI of 2x or more. As the spending increased, so did the ROI. (Finding 1, Table 1.2, pg. 34)

Finding Three: Companies that begin with an enterprise-wide initiative have a higher ROI than those that start with a pilot program.

Fifty three percent of respondents from companies who did not make their initial investment back the first two years worked from companies who started with a pilot initiative. Sixty percent of respondents from companies who saw an ROI of 8x or more worked for companies who started Six Sigma enterprise-wide. (Finding 3 Table 1.2, pg. 38)

I’m afraid that unless Hammond can really focus his efforts under the budget constraint, the legislators have sowed their own seeds of mediocrity. Hammond and the Six Sigma team should still be able to save money despite the cuts. After all, this is a government organization, where like it or not, admit it or not, there are apples, oranges and mangoes just laying around for the plucking.

It’s election time again in Malaysia on 8th March 2008. I picked up this interesting story from Yahoo and wish to share it with the readers here. Held once every 5 years, this article talks about ’dead’ voters in Malaysia.

KUALA LUMPUR (Reuters) - Malaysia has found nearly 9,000 people aged more than 100 on its electoral rolls as it heads for general elections next month, raising suspicions that the books are "contaminated" with dead voters.

The Election Commission has found the names of 8,666 registered voters with birth dates from a century or more ago, the New Straits Times said on Friday, quoting commission secretary Kamaruzaman Mohd Noor.

They included two 128-year-olds, the daily said.

"As far as the commission is concerned, as of December 31 last year, these voters are still alive," Kamaruzaman said.

Opposition groups have complained for years that the rolls are outdated and vulnerable to fraud.

The Election Commission says it relies on a dead voter’s family or officials to notify it of the death and so rolls can be outdated, but it denies scope for electoral fraud whereby someone casts more than one ballot by impersonating a dead voter.

At the elections on March 8, the commission will for the first time use indelible ink to dye a voter’s finger to ensure he or she cannot attempt to cast a second ballot undetected.

"We suspect that many among them had in fact passed away but that the commission has not yet struck off their names from the rolls," said Wong Chin Huat, of electoral-reform lobby group Bersih, which includes several opposition parties.

"This suggests a high degree of contamination in the rolls, which will make it easy for people to impersonate them on polling day," Wong added.

Malaysia has 10.9 million voters and its population has a life expectancy of about 72 years for men and 76 for women.

Opposition party Parti-Islam Se-Malaysia, which first spotted the names of the two 128-year-old voters on the rolls of central Selangor state, said it was checking if they were still alive.

"We plan to apply to the Guinness Book of Records to list them as the world’s oldest voters if they truly are still alive and kicking," said party spokesman Roslan Shahir said.

I’m just wondering, what is your opinion on this from the Six Sigma point of view?

We can add one more U.S. city to the roster of those using Lean Six Sigma to better serve their citizens. Hattiesburg, Mississippi is following the Six Sigma example of Fort Wayne and Erie County.

A couple of projects are already underway…

The city sent Lowe and Lane to Pearl River Community College for the training which was done in partnership with the University of Southern Mississippi. This is a much smaller initiative than Fort Wayne or Erie County, but it’s a start – and sometimes that’s the hardest thing to do.

So the next time someone argues, “Six Sigma doesn’t apply to my industry…yada yada yada”, This may be your reply: “Did you know that there is a dog catcher in Hattiesburg, MS that is using Six Sigma? Tell me again why your business can’t be improved?”

City Adopts Lean Six Sigma, Hattiesburg American