lean manufacturing

According to non-partisan PolitiFact, economists estimate that American household costs will rise by $1,700 - $4,300 per year if Trump acts on his tariff promises. That will raise inflation, which in turn will keep interests rates high, resulting in more costly mortgages and more expensive cars. Our last round of inflation, caused by the pandemic and nearly over now, has caused so much pain. For people voting on the economy, I hope you're paying attention to the economic costs of radical policies like this one.

I am a strong proponent of bringing American manufacturing back (I'm not just a fan... this is the focus of much of my work... I put in the effort). But it could take decades to build back American manufacturing jobs lost since the 1980s to low-cost manufacturing countries like China. So the impact of dramatic tariffs will increase household costs instantly and unavoidably, and will not be offset quickly by increased manufacturing at home.

So... are tariffs necessary to bring American manufacturing back?

Tariffs can be part of the answer, but certainly not at 60% (or even 20%) - not without hurting American families.

What WILL work? INVESTMENT. Since 2020, over $1.5 TRILLION dollars in incentives have been put in place to promote American manufacturing. 

Under the Biden administration billions of dollars have been allocated to reinvest in American manufacturing:

• The Chips & Science Act (2022) allocated $52 billion to promote semiconductor manufacturing in the US. That's a lot of manufacturing jobs.
• The Infrastructure Investment and Jobs Act (2021) authorizes $1.2 trillion for transportation and infrastructure spending, with $550 billion of that going to new investments and programs - money that fuels manufacturing jobs.
• The Inflaction Reduction Act (2022) offers massive tax incentives - estimated to create $370 billion in manufacturing sector investments over a decade - to boost domestic production (manufacturing) of clean energy systems.

In addition, the State Small Business Credit Initiative (SSBCI) is a nearly $10 billion program that supports small businesses across the United States by providing capital and technical assistance... all of which is available to support small manufacturers. That's a lot of money... and I still think we can do more.

But there is a lot of misinformation out there about these programs, and people mistakenly believe that these dollars are just for building electric cars and electric car infrastructure! So incorrect. 

The Chips act has little to do with electric vehicles .. other than the fact that ALL vehicles need computer chips today and we are almost entirely dependent on China for them - and chips needed for every other electronic Americans buy, from laptop computers to smart home devices to mobile phones.

The Infrastructure Investment and Jobs Act is for bridges, roads, public transit, railroads, airports, and ports, upgrading the power grid, internet accessibility... and yes, EV infrastructure. This year I took road trips across Wisconsin, Iowa, Illinois, Indiana, Ohio, Pennsylvania, New Jersey, and Kentucky. My travels via airplane took me to California, Nevada, New Mexico, Georgia, Arizona, Colorado, and Texas. Everywhere I saw infrastructure work going on. Infrastructure work creates American jobs to not only do the infrastructure work, but to produce the cement, steel, aggregates (sand, gravel, crushed stone) asphalt, pipes, electrical conduits, and pre-cast concrete components. It also causes American manufacturers to order other American-manufactured equipment like excavators, bulldozers, cranes, and other heavy equipment, buses, rail cars, switchgear... etc. This Act is a huge boon to all American manufacturing.

I was recently in Washington DC for a major conference that brought the manufacturing sector, US Military, and politicians together to talk about how critical manufacturing is to our national security.  And every politician, both Democratic and Republican alike, spoke to how much work HAS BEEN DONE and still needs to be done to keep manufacturing jobs in the US.

When the politicians are out stumping, the Republican politicans keep blaming Democrats for losing manufacturing jobs. In fact, both parties, over time, were responsible for that. But when they come together for important meetings right now, the Republicans in that conference were very clear that a lot has been done the past four years - and that we need to maintain these investments.

Please take a look at what Trump plans to do with these investments. Because he is already on the record that he will pull back on them, and US manufacturing progress will be lost. The Republicans in the room at that conference I was at? They know it, and they're worried about it.

INVESTING in our own manufacturing is the only road to bringing back American manufacturing. INVESTING in our children by providing education to work in manufacturing (our trade schools have been gutted in the past 30 years) is critical to bringing back American manufacturing. INVESTING in existing manufacturing operations to upgrade their business operations so they can afford to compete with foreign manufacturers who rely on cheap labor is critical to bringing back manufacturing. INVESTING in our workforce and communities by creating competitive businesses that can afford to pay good wages is critical to our future. The path to a healthy middle class and a healthy country won't come from just cutting off foreign imports.

We must keep INVESTING in America.

Using Poka Yoke, you can eliminate most of those head-smacking, why-did-we-make-that-mistake process problems.

Let’s face it. Work is often full of busy-work, sometimes it’s monotonous, and there are occasionally days when you head for home and you realize that you just went through the motions all day long (hopefully, you don’t have a lot of those days). Many of the errors in the workplace occur when people are, well, spacing off a little! How can we account for the occasional human lack-of-attention? With a Lean method called Poka Yoke.

Poka Yoke means designing systems to prevent human error, and it can be implemented at any step in any process where errors are likely to be made. A few good examples of Poka Yoke everyone understands include:

Automobile Gas Caps

There are two Poka Yoke applications in most modern gas caps. First, there is a plastic cord that connects the gas cover to the automobile. This prevents those little caps from getting lost. Second, the hole for the gas tank (filling pipe insert) is sized to fit the filling handle of the proper type of fuel  (diesel, leaded, unleaded).

Saving Electricity

Most people remember to turn off lights, turn down the A/C, and otherwise save energy in their own homes. After all, electricity is expensive! But hotels have long known that people do not bring the same conservations to their travel accommodations. So, they poka-yoked a solution.

In many hotels around the world, the hotel room is equipped with a room key holder. If you put your room key in the holder, the lights go on! When you take your room key out and leave the room, the electricity is turned off. Simple solution that prevents the error of wasted energy!

Poka Yoke at Work

At its best, Poka Yoke is the elegant work of process ninjas, anticipating the most peripheral of problems and solving them in simple, elegant ways. But we all have to start somewhere, and we don’t need to be ninjas right away. So here are the three basic approaches of Poka Yoke, as defined by Shigeo Shingo of Lean fame.

• • The Contact Method. This is the simplest approach. It is about taking a good look at a product or process and identifying its defects or faults.

• • The Fixed Value Method. Also known as the “Constant Number” method, this method is used when there are a known number of steps that must be done to complete a process. If the person doing the process does not complete the full number of steps, they are alerted that they have missed a step. You encounter examples of the Fixed Value Method when you complete online forms. If you miss a required field, the system refuses to take your submission and highlights the fields that still require information.

• • The Motion Step Method. Also known as the “Sequence Method,” this method is simply about making sure that the process was done correctly. When you document a process, and then use a checklist to ensure that each step of the process is completed, you are using the Motion Step Method.

How to Start Using Poka Yoke

You can break all Poka Yoke solutions down into two categories: prevention and detection.  Prevention devices keep a non-conformance from happening, and detection devices alert an operator that a non-conformance has occurred.

A good Poka Yoke device is always simple, and cheap. If they are too complicated, they are not cost-effective and they introduce the possibility of additional non-conformance. Poka Yoke devices should also be completely integrated into the process, and close to where the process occurs. Think about that online form again for a moment. When you complete an online form, you see indications of what fields are required. There may be an asterisk in the box, or the box may be outlined in a different color. This is what we mean by engineering the expectations into the process – the “prevention” form of Poka Yoke. Then, if someone skips a required field, the form may refuse to submit until the field is completed. This is the “detection” form of Poka Yoke. And each of these steps are completely integrated in the process, as well as simple, and cheap.

The 5 Stages of Poka Yoke

Step 1: Remember that everyone makes mistakes. So our job as managers is to create  systems where those mistakes can’t be made.

Any time I hear a senior executive complaining about how people should “just remember” not to make mistakes, I assume a certain lack of self-awareness. We all make mistakes. So the goal isn’t to stop being human, nor is it to only hire people with eidetic memories. People who accept this first concept become the most effective practitioners of Poka Yoke.

Step 2: Find the Root Cause. If we don’t find the root cause, we’ll end up focusing all our energy on symptoms, and implementing several – possibly competing - solutions where only one would do. If you want to learn more about Root Cause Analysis (RCA), check out this article on Root Cause Analysis.

Step 3: Think in terms of Standard Operating Procedures. Every procedure should have a standard operation, it should be documented, and the operators should be trained to it. As long as there is variance in a process, you can’t control for errors.

Step 4: Brainstorm “What Could Go Wrong” for Every Process. This is where the real work of Poka Yoke occurs. When you start thinking about what could go wrong, you start to anticipate – and prevent – the errors.

Step 5: Keep it Simple! When you come up with a way to error proof a process, challenge its complexity. The goal is to use extremely simple, dummy-proof solutions. If you introduce complex ideas, then you are also introducing more opportunities for human error!

Some of the most common Poka Yoke tools and techniques include:

• Checklists
• Form/Field Validations
• Vision Systems (visuals that reinforce the proper result or technique)
• Blocks, Barrier, and other Safety Features
• Counters
• Sensors
• Alarms
• Changes in Fixture Designs
• Changes in Die Designs

First You Solve the Process . . .

People problems are often process problems. What does that mean? It means that we humans are not endowed with perfect memories or perfect consistency. That’s why we must create processes that offset those human characteristics.

There is also a tremendous upside to this. We may not be perfectly consistent or have perfect memories, but we humans are wildly creative, and creativity is the ingredient that brings real value to a company. So, instead of spending our time solving problems and re-doing work, let’s make more time for being creative and bringing value! By using Poka Yoke, we introduce the possibility of more time for more innovation. And that’s exciting, because when we are innovating, the work is never dull, and we never feel the need to go on autopilot.

or . . . The Shin Bone's Connected to the Thigh Bone

Getting to the root cause of problems can speed up the solutions. Even better - it can keep those problems from spring up somewhere else!

It’s Monday. You’ve poured your first cup of office coffee, you’re sitting at your desk with the steaming mug in your hands, ready to face the week. You open your email and . . .

The email bomb. Your boss, demanding to know why production has stalled on your main product line. AGAIN. You sit there and sweat as your coffee goes cold and your week begins to look bleak.

Nothing is more upsetting – to bosses or managers – than problems that repeat themselves. The first time a problem occurs, reasonable people are accepting about it. After all, sh*t happens. But when problems reoccur, patience runs out. And it should, because errors are costly and keep us from focusing on creating new value for the company.

Typically, when the same problem occurs over and over again, it’s for one of these reasons:

1. The root cause was never identified, so each time we solve the problem we are actually only solving a symptom of the problem.
2. The root cause was identified, but we failed to do the 2^nd step of problem solving, which is error-proofing the process from that time forward.

Lean Manufacturing offers two excellent tools to avoid that Monday-morning, coffee-cooling, temper-raising situation. Root Cause Analysis, and Poka Yoke.

Root Cause Analysis

Root Cause Analysis (often called RCA in Lean) is one of the pillars of a quality system. A commitment to RCA can help a company quickly reduce errors and introduce more quality throughout its supply chain. There are four basic steps in RCA:

1. Collecting all the information about the problem (which we will refer to as a non-conformance). Every little detail – even the details that seem inconsequential!
2. Creating a visual map of the causal factors – the steps, missed steps, and errors that led to the non-conformance.
3. Accurately identifying the root cause or causes (sometimes there is more than one factor at the root – but rarely more than three).
4. Creating a solution that solves the root cause, and developing a corrective action plan.

Collecting the Information

5 Whys

The simplest way to collect information about the causes of a problem is to ask questions. But these questions should be structured as a true interrogative technique – and not just a random set of questions. In fact, when you ask questions in this way, it can be diagrammed.

To do a 5-Whys approach (and the result may be achieved in 3 Whys, or 10 Whys – the approach is named 5 Whys because the theory is that most root causes can be uncovered in 5 or less), start with the most obvious problem.

• We are scrapping a lot of engravings due to poor quality. Why?
• The patterns are too deep in some areas and too shallow in other areas. Why?
• The mirrors are not in perfect alignment. Why?
• We did not do proactive maintenance when we moved the engraver to a new workspace. Why?
• Nobody thought of it, because there is no process in place to ensure machines are maintained after being moved.

Solution: Any time an engraving machine is moved, there must be a process in place to ensure that maintenance is done. Further discussion of the topic would probably led the group to decide that the machine merited regular preventive maintenance – perhaps quarterly.

How do you diagram this?

Why Do You Need Visual Maps?

Before we go on to the next RCA tool, let’s talk about visual maps. Visual maps are an important element of problem solving. When we represent information in a visual manner, we engage more of our brains in understanding the issue. Visual maps require us to structure information, which helps us to better comprehend, synthesize, and remember the information, which leads to generating more and better new ideas. In other words, making mental information visual helps our brains do a better job!

Fishbone Diagram

Another very useful RCA tool is called the Fishbone Diagram (trivia: This was originally called an Ishikawa Diagram). This is sometimes referred to as a Cause-and-Effect Diagram. The Fishbone is more useful than 5 Whys when you are dealing with more complex problems. As you will see, it can take into consideration many more variables than the 5 Whys approach.

When you first look at a Fishbone Diagram, it may seem complicated. But it’s actually very simple!

As with the 5 Whys, you begin by asking, “what is the problem?” Then, you diagram it like this:

The next step is to categorize the causes. For example, missing customer deadlines can involve a lot of different areas, including:

• Sales Process
• Production Process
• Purchasing Process
• Warehouse (pick/pack/ship) Process

Place these different cause categories on the Fishbone Diagram like this:

Obviously, we don’t have enough detail yet to solve the problem. So the next step is to brainstorm the contributors to the problem. This part of the Fishbone will likely look like this:

The team should continue to brainstorm the problems, until all the possible causes have been identified. Very complex problems may go to several levels of hierarchy. You can use different shapes and colors for the different levels to make the diagram easier to read.

Once the diagram is complete, it will be much easier for the group to identify all root causes and brainstorm solutions for them.

 Conclusion

Getting to the root of problems is the only way to cure them. Consider the ramifications for your health. If you suddenly experience pain on the left side of your chest and numbness in your left arm, you don’t try to stretch it out or lay down and take a nap! You already know that these are signs of a heart attack, and you go straight to addressing the core issue (call 911!). You don’t spend time worrying about your sore arm. But what about medical emergencies you don’t already know about? The difference between a good medical outcome and a sad outcome is often based on getting to the right doctor who can quickly diagnose the core issue and treat it.

This is also important in business. Use these Lean tools to get to the root causes of problems. You’ll be solving another medical problem as well . . . the anxiety attacks that occur when you hear a dreaded problem has occurred again.

In next week’s Lean article we’ll discuss Poka Yoke, or how to make problems stay away.

This is a situation we encounter too often in our work at the WeRx Brands. I've turned it into a fictionalized account to protect the perpetrators...

An employee (let's call her Lisa) gets hired by a reputable company following her completion of a degree in computer sciences. She's thrilled, and can't wait to start applying her education to real-world projects. Her new boss (let's call him Bill) has been with the company for 19 years. He's the Operations Manager, a truly nice person, and excited to welcome Lisa to the world of work.

In her first few weeks, Lisa notices that Bill does everything manually. Inventory? Updated in Excel by hand. Reports? Compiled from printed logs. When Lisa mentions a tool that could automate half of this, Bill nods and says, "I've heard of that. Just haven't had time to look into it." A few more times Lisa mentions other processes that could be automated with simple, inexpensive solutions. Each time Bill says, "That's great stuff. Maybe down the road."

Lisa finds herself getting really good at... Excel. She can VLOOKUP with the best of them. But her skills, the ones she's worked so hard to develop, start to atrophy.

She applies for a different job at another company, and gets it. When she gives her notice, Bill is really surprised. He says, "I thought you were happy! We were grooming you for leadership." And Lisa responds, "I just didn't feel like I could grow here."

We see this same story play out across many roles:

• The IT/Sys Admin stuck maintaining legacy systems, or helping an outdated ERP system limp along, and not updating or adopting new technology.
• The marketing generalist stuck with traditional campaign methods and management, and working in a first generation CRM without access to automation, personalization, testing technology, or analytics tools.
• The accounting admin stuck in a bookkeeping mindset, faced with slow closes, no use of forecasting or financial modeling tools, and no automation.
• The sales person stuck with rudimentary CRM (or no CRM at all), not exposed to modern selling methods like data-driven selling and account-based management, and not able to benefit from extensive sales automations and support.
• The HR person stuck in transactional HR, without focus on strategic talent development or employee experience.
  The Customer Service rep stuck in basic problem-solving, rudimentary ticketing, not viewed as a revenue driver, not using chat, knowledge bases, or leading CRM tools.
• Manufacturing supervisors stuck in manual scheduling with low tech-adoption, no automation, no use of lean practices.

I could go on, but you get the picture.

When it comes to people development, we set the pace. When leaders stop learning, the whole team slows down. Technology changes how work is done, and staying current isn't just good for business... it's a signal to employees that their growth matters.

For those of us in leadership roles, our learning curve doesn't end. We're not just responsible for delivering results (though that's reason enough). We're also responsible for creating an environment where people can grow. Falling behind doesn't just limit ourselves — it limits everyone who's counting on us to lead the way. Want to retain good people? Keep learning, and stay worth following.

If you go back only 100 years, to the turn of the 20^th century, there were very few big institutions. The Roman Catholic Church, the governments of a few large nations, and the militaries of several wealthy nations were our best models. So it’s no surprise that as industry began to expand – and rapidly! – the model it used was the hierarchical model of militaries and dynasties.

At the time, this model made sense:

• Education among working class people was generally very low.
• Only elite members of society had the training or background to lead.
• Productivity and Standardization required constant  supervision.

Unfortunately, this hierarchical model of management has inefficiency baked into it. It results in top-heavy management and inefficient allocation of labor dollars. It also creates functional silos that result in poor communication, limited collaboration, and delays in decision-making.

Today, We Have the Tools for Change

The education gap was solved over 50 years ago. And since that time, two other areas have rapidly evolved: Quality Systems and Technology. This means it is now possible to structure businesses around team-based business models. And, I would argue, it's also essential.

Quality Systems – like Lean Manufacturing, Six Sigma, and ISO – have created process standardization strategies that do not rely on a manager or supervisor to be successful. Technology has evolved to the point where much of what once had to be monitored and controlled by a manager can now be monitored and controlled by systems.

Motivation and Innovation Are Keys to Competitiveness

When Henry Ford started his manufacturing operations, his main objective was to control the workforce. But today’s intensely competitive, responsive business environment means business must move beyond control. The key to competitiveness today is talent acquisition, talent retention, and innovation. But today’s highly mobile workforce does not respond well to command-and-control environments.  Unless you are running an organization that is dedicated to being the cheapest and fastest in its market space (think Walmart), you need a new management structure.

Team-Based Business Models Are the Answer

A team-based management structure can solve for many of the limitations of command-and-control structures. When structured properly and supported with strategic alignment and KPI tools (think Balanced Scorecard), team-based management can be extremely nimble and creative. Moreover, younger generations (from young Gen X to the emerging Millennial workforce) are attracted to companies that use this management approach. What does this look like?

How do Teams Work?

A team-based structure starts with the expectation that “Leadership establishes the ‘what’, and teams establish the ‘how’.” This approach is at the heart of quality systems like Lean Manufacturing. It draws all the workers in the organization into the important work of process design and quality, which improves process outcomes. It also leads to increased commitment and motivation on the part of employees, as they are trusted with and engaged in contributing to improvements in their work.

The traditional middle-management layer is replaced by coordination, in the form of Team Leaders, Team Coordinators, Coaches . . . whatever a business wants to call them. Instead of having authority over a vertical silo of workers, Team Coordinators know their responsibility is to train team members, lead team members in improving processes and quality outcomes, assist with the work of the team, and collaborate with other Team Coordinators.

By implementing tools like the problem-solving tools of Lean Manufacturing, Six Sigma, or Theory of Constraints (TOC), teams can bring their practical knowledge to the table and ensure they participate in creating quality outcomes. By implementing strategic tools like Balance Scorecard (which makes corporate strategy visible and measurable to the entire company, and distills strategy to what is important at each team level), teams align with one another across the organization to pursue shared goals.

The Results

Just implementing teams is not enough to guarantee success. It is essential to also implement quality assurance strategies (Lean, Six Sigma, TOC) and a system to codify strategy and KPIs (Balanced Scorecard). But when these elements come together, the results include:

• Faster decision-making and problem-solving.
• Much higher levels of process standardization and quality.
• Process innovation.
• Change-orientation and faster implementation of change.
• Higher levels of employee morale and motivation.
• Higher levels of employee commitment.
• Shift in labor cost from “supervision” roles to value-add roles.

If you have been looking for a way to help your organization move faster, get ahead of your competition, and produce higher quality, a team-based structure could be the approach you’ve been searching for.

Download a template for a team-based business model here, and see how it would look in your organization.