From time to time, a journalist writes a really insightful article about recent development, and we all take pause and reflect. Charles Fishman did just this. If you haven't read The Insourcing Boom on The Atlantic, it is worth 10-15 min of your time. This excellent article analyzes the nascent trend called "reshoring" (bringing production back from China to the country where the goods are sold): For years, too many American companies have treated the actual manufacturing of their … [Read more...]
Ensuring product traceability through China production
Traceability is like genealogy, but for production. It allows you to know the origins of each batch of finished products. It is very useful when a few products are found to have serious problems: You can investigate, try to find the root cause, and (hopefully) fix the problem at the level of the faulty process. In case you need to recall products that are already on the market, a good traceability system allows you to reduce the number of products to recall. Challenges in China If … [Read more...]
Conducting factory audits for continuous improvement
Factory audits are a very standard service offered by all third-party quality control agencies. They are typically used by buyers who want an evaluation of a manufacturer, before they start a business relationship. Different aspects of a manufacturer's operations can be evaluated. Here are the most common: Reliability (is there a good quality management system?) Processes (how well do they perform certain key processes?) Capacity (how many pieces can they produce in a … [Read more...]
A good review of Deming’s teachings
I have been reading the blog written by Michel Baudin for a few months. It is a source of great information for those with an interest in lean principles (derived from the Toyota Production System). He started examining in depth each of the 14 points from Deming's book Out of the Crisis. For those who don't know Deming, he is "the American expert who went to Japan in 1950, and started the revolution that turned 'Made in Japan' from a label for cheap, shoddy goods into a mark of … [Read more...]
Why semi-automation is better than full automation
As everybody knows by now, in China labor costs have been rising quite fast over the last few years, and this trend is here to stay. What is the typical Chinese response to higher labor costs? Hire less employees, of course. And how to hire less workers? By automating factory operations. Unfortunately, by pursuing full automation, they do not address the most important opportunity for savings – the optimization of the whole system. I already wrote on this subject two years ago. David Levy … [Read more...]
Creating a pull system in a service business
I guess most of my readers work in a service business (importing company, trading company...). Did you know that service activities tend to be more inefficient than manufacturing activities, for the simple reasons that (1) one doesn't easily follow the flow of information, (2) one doesn't always see work-in-process piling up, and (3) defects are seldom counted. If you want to work more efficiently, I suggest to read Lean Six Sigma for Service : How to Use Lean Speed and Six Sigma Quality … [Read more...]
Different types of production organization
All factories are not organized the same way. I have explained this concept to tens (hundreds?) of buyers. It is absolutely fundamental if you want to understand how production works. Organization in lines In most Chinese factories that export products to other countries, several operations are performed -- often final assembly and packing. Most people imagine that production is organized this way: If one line counts 25 workers, and there are 20 lines, there is a total of 500 workers … [Read more...]
5 steps for a Chinese factory to improve its efficiency
The attitude of many Chinese manufacturers can be very frustrating. The boss is usually focused on negotiating favorable prices and pushing production out the door. Not on learning from mistakes and looking for solutions. I explained all this in Why few Chinese factories are adopting lean principles. I am reading a practical guide called Becoming Lean: Inside Stories of U.S. Manufacturers (a set of essays gathered and edited by Jeff Liker). It lists five improvement stages for a factory … [Read more...]
Why few Chinese factories are adopting lean principles
A few days ago, I wrote that yes, lean production IS possible in China... But it will take a long time to become as widespread as in Japan. In the 1970s, everyone in the Japanese car industry was wondering what allowed Toyota to resist downturns so well. And they started to take inspiration from the Toyota Production System's principles and the tools. One would think that in the current environment, where most Chinese manufacturers make less than 2% of profit on their sales (and many … [Read more...]
Yes, lean production is possible in China
The Supply Chain Management Review just published a really lame article (Why China Is Not Ready for Lean Projects). The author is Rosemary Coates, an American consultant. I gave only 2 stars out of 5 to her book about China sourcing (see my review here). Let's go through some excerpts from her article. First nonsense: lean manufacturing is a set of techniques When product quality at one of these [Chinese manufacturers] was not achieving the company’s standards, the VP of Supply Chain [of … [Read more...]