NOTES

Introduction

1. Paul Davidson, “Lean Manufacturing Helps Companies Survive Recession,” USA Today, November 6, 2009, quotes Jeffrey Liker, bestselling author on lean methods, who states that “many manufacturers lose their lean-manufacturing gains after a few years because managers fail to monitor their viability as sales volumes or other conditions change.”

2. James Womack, Daniel Jones, and Daniel Roos, The Machine That Changed the World, New York: Harper, 1991, 27–29, describes how Ford progressively advanced his system of high-volume, low-cost production, slashing assembly time from 514 to 2.3 minutes. Because he was able to manage for scale and stability, he was able to dramatically cut costs: “By the time Ford reached peak production volume of 2 million identical vehicles a year in the early 1920s, he had cut the real cost to the customer by an additional two-thirds.”

3. In order to shift to produce the Model A, Ford had to discontinue his operations, opening the doors for competitors to take over the market. Alfred P. Sloan, Jr., My Years with General Motors (New York: Macfadden Books, Macfadden-Bartell Corporation, 1963, 1965), 162, discusses how “not many observers expected so catastrophic and almost whimsical a fall Mr. Ford chose to take in May 1927 when he shut down his great River Rouge plant completely and kept it shut down for nearly a year to retool.”

4. Womack, Jones, and Roos, The Machine That Changed the World, 53–54, describes the labor settlement that set the stage for Toyota’s new way of doing business.

Chapter 1

1. David M. Herszenhorn and Bill Vlasic, “Auto Executives Still Find Skeptics,” New York Times, December 5, 2008, A1. The article quotes CEO Rick Wagoner as stating, “We’re here today because we made mistakes, which we are learning from, and because some forces beyond our control have pushed us to the brink.”

2. Alfred P. Sloan, Jr., My Years with General Motors, (New York: Mcfadden Books, Mcfadden-Bartell Corporation, 1963, 1965), 150, describes Sloan’s innovation of the “mass-class market.”

3. Ibid., 139.

4. This section’s discussion of “standard volume” draws on the descriptions from Sloan, My Years with General Motors, 142–148.

5. This chart was first presented by Stephen A. Ruffa, Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits, (New York: AMACOM, 2008), 36, but has been updated to include data up to 2008, further making the point that industry’s operating environment is anything but predictable (this plot is intended to depict an overall trend and should be considered approximate).

6. Kiyoshi Suzaki, The New Manufacturing Challenge: Techniques for Continuous Improvement (New York: Free Press, 1987), 15, describes the seven forms of waste.

7. Peter M. Senge, The Fifth Discipline: The Art & Practice of the Learning Organization (New York: Doubleday, 1990), 89–91.

8. Jody Hoffer Gittell, The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance (New York: McGraw-Hill, 2003), 236–239. Gittell describes the airline industry’s response to September 11, comparing this with Southwest Airlines’ no-layoff approach (p. 242).

9. Herb Kelleher’s quote can be found in Kevin Freiberg and Jackie Freiberg, Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success (New York: Broadway Books, 1996), 49.

10. These commonalities were first presented by this author in Going Lean, 65–76.

11. J. Welch and J. A. Byrne, Jack: Straight from the Gut (New York: Warner Books, 2001), 128.

Chapter 2

1. I am grateful to Susan Ganz and her team at Lion Brothers for the information they provided and access they granted for the description and insights on this company contained in this chapter.

2. Jeffrey K. Liker, The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer (New York: McGraw-Hill, 2003), 150, explains the techniques of “5S” (which stands for seiri, seiton, seiso, seiketsu, and shitsuke in Japanese, or in English, sort, straighten, shine, standardize, and sustain), which today have become widely implemented as a beginning point for lean. A key problem is that, as Liker describes, companies can confuse this as being what lean production is all about; people rationalize that correcting the most visible challenges (such as creating structure, standardization, and cleanliness) is the best path to the result of reducing waste. But doing so can lead them to the same result as a company described by Liker’s example: “We ended up right back where we started.” This same hazard comes from most lean techniques; it is important to understand that seeing the problem is the starting point, but the solution does not necessarily follow the problem.

3. This chart was introduced by Stephen A. Ruffa, Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits (New York: AMACOM, 2008), 49. The data to support this figure were derived from the table in Alfred P. Sloan, Jr., My Years with General Motors (New York: Mcfadden Books, Mcfadden-Bartell Corporation, 1963, 1965), 214–215.

4. This chart was introduced in Ruffa, Going Lean, 58. The supporting data were obtained from these companies’ annual reports.

Chapter 3

1. I am grateful to Cessna Aircraft Company for the information it provided me to gain these insights. This background on how Cessna began its lean and Six Sigma journey was given during an interview with Mr. Tim Williams, Cessna’s VP for Lean Six Sigma.

2. Cessna’s business was hard hit during the 2008–2009 recession. However, even Toyota seems to have built its capabilities more for upside variation than such a sudden and dramatic drop in demand. As Ray Tanguay, Toyota’s executive vice president of North American production, put it, “In the past our flexibility was only upward. … To manage downward flexibility is obviously more challenging.” This quote is contained in Alan Ohnsman, “Toyota May Cut US Payrolls as Unsold Autos Pile Up,” Bloomberg.com, December 23, 2008.

3. Tim Williams, Cessna’s VP for Six Sigma, made this statement and provided the insights on Cessna’s lean effort in the preceding and subsequent paragraphs during an interview with this author.

4. This dichotomy in the aerospace industry was pointed out in Stephen A. Ruffa and Michael J. Perozziello, Breaking the Cost Barrier: A Proven Approach to Managing and Implementing Lean Manufacturing (New York: John Wiley & Sons, 2000); the scheduling challenge this causes is highlighted by this statement from Hectore Donald MacKinnon, Jr., Aircraft Production Planning and Control (New York/Chicago: Pittman, 1943), 55.

5. Brent Edmisten, Cessna’s director of strategic sourcing and ISC strategies, made this statement and provided the information on Cessna’s Center of Excellence program, describing its four-phase approach for deliberately planning its supply base: Rationalize the best suppliers, align long-term agreements to grow their support, improve performance by collaborating with them, and integrate suppliers as a key part of its business.

6. I am grateful to Brent Edmisten for providing the information in this paragraph.

7. Tim Williams, Cessna’s VP for Six Sigma, provided this information.

8. This concern was identified to the author by Dr. Michael Galiazzo, president of the Regional Manufacturing Institute of Maryland, based on his observations during decades of work with higher-institutions of learning.

Chapter 4

1. Frederick Winslow Taylor, The Principles of Scientific Management (New York: W.W. Norton & Company, 1967, first copyrighted in 1911) is perhaps the best known source; his principles were published in Shop Management: The Principles of Scientific Management by the American Society of Mechanical Engineers in 1903.

2. A description of Starbucks’ lean approach is contained in Julie Jargon, “Recession Forces Starbucks to Think ‘Lean,’” Wall Street Journal, August 6, 2009.

3. Ibid., quotes a barista’s concerns.

4. James P. Womack and Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (New York: Simon & Schuster, 1996), 38–44, describes the value stream of a cola can and presents this data on waste.

5. Stephen A. Ruffa and Michael J. Perozziello, Breaking the Cost Barrier: A Proven Approach to Managing and Implementing Lean Manufacturing (New York: John Wiley & Sons, 2000), 209, described that attempting to overcome visible waste in just a single step by eliminating inventories proved to be too much; a greater understanding of the underlying reasons for its existence was first needed.

6. Kiyoshi Suzaki, The New Manufacturing Challenge: Techniques for Continuous Improvement (New York: Free Press, 1987), 116, describes the “5 Whys.” As Taiichi Ohno of Toyota comments, “If we ask ‘why’ five times, we may be able to capture the true cause of a problem.”

7. Mike Rother, who coauthored with John Shook the book Learning to See: Value Stream Mapping to Add Value and Eliminate Muda (Cambridge, MA: The Lean Enterprise Institute, 1999), which introduced the concept of the value stream map, seems to support this with his statement in Toyota Kata: Managing People for Improvement, Adaptiveness, and Superior Results (New York: McGraw-Hill, 2010), 27: “A value stream map can reveal so many improvement potentials at so many places that it is hard to know what needs to be done. Attacking problems here and there in the value stream, rather than focusing on and improving specific process-level target conditions, dilutes our improvement capacity by scattering it piecemeal across the value stream.”

8. Don Jones and Jim Womack, Seeing the Whole (Cambridge, MA: The Lean Enterprise Institute, 2002) describes this approach of narrowing down the span of focus for mapping value streams across different organizations within an extended value stream.

9. Rother and Shook, Learning to See, state in the introduction that value stream mapping is intended to help people learn to see the problem. The point made in this paragraph is that, while this is a critical goal, more is needed to create solutions, particularly within complex environments, where the best starting point for such an analysis is not intuitive.

10. This was a key finding documented in this study of aerospace manufacturing in The Manufacturing Affordability Development Program: A Structured Approach to Rapidly Improved Affordability, Final Report, Washington, DC: The Naval Air Systems Command and The Joint Strike Fighter Program Office, July 1996. Firms that did not maintain accurate BOMs were among those that did not realize the most significant savings even when they had substantially reduced visible waste.

11. This figure was introduced in Going Lean.

12. Richard Schonberger, World Class Manufacturing (New York: Free Press, 1986), 111, provides this description of characteristics that support grouping into product families (and therefore manufacturing cells).

13. Ruffa and Perozziello, Breaking the Cost Barrier, 153–154, identifies how variation smoothing effect can be calculated, showing substantial gains with just a handful of items.

14. I am grateful to DLA for providing this background on these efforts.

15. DLA indicated that the results of follow-on efforts were mixed.

16. DLA provided the author with an update on this project, pointing out that initial results were “not duplicated on the subsequent phases of the project that included sheet metal and machine parts. In these cases the vendor’s response did not show significant improvements. The scalability of this approach was affected by the vendor’s internal champion and the vendor’s ability to manage sub-tier suppliers to align their operations to the part family manufacturing processes.” However, firms like Cessna apply what appear to be similar aggregation methods to attain benefits much like DLA’s initial results, demonstrating its broad applicability to an ever-increasing range of businesses.

17. Thanks go to Cessna for providing this description and information on the powerful results that this approach has had in promoting substantial gains within its Supply Chain Integration activities.

Chapter 5

1. Alfred P. Sloan, Jr., My Years with General Motors (New York: Mcfadden Books, Mcfadden-Bartell Corporation, 1963, 1965), 138, makes this statement. It further explains that his structure did not support varying production to meet changing demands, a core tenet of lean production: “Such a practice would have reduced the risk of obsolescence and the cost of storing finished products for both dealer and manufacturer. On the other hand, absolutely level production—or the nearest to it that could be attained—was ideal from the standpoint of efficient utilization of plant and labor.”

2. Stephen A. Ruffa, Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits (New York: AMACOM, 2008), 104–107, describes the need to address lag to mitigate the supply chain effect—a key source of operational disruption—which can be amplified by implementing supplier agreements. Josh Cable, “What You Can’t See Can Hurt You,” Industry Week, December 16, 2009, describes how these risks were becoming real during the 2008–2009 recession.

3. Jody Hoffer Gittell, The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance (New York: McGraw-Hill, 2003), 31–33, contains this description of a discussion with Southwest employees.

4. L. Kohn, J. Corrigan, and M. Donaldson, To Err Is Human: Building a Safer Health System (Washington, DC: Institute of Medicine, National Academy Press, 2000), 1, states that “total national costs … of preventable adverse effects (medical errors resulting in injury) are estimated to be between $17 billion and $29 billion” and provides data on the number of deaths per year as compared to motor vehicle accidents, AIDS, and breast cancer.

5. Dr. Karen Wolk Feinstein, president and CEO of the Pittsburgh Regional Health Initiative (PRHI), described this focus on “a clinical objective” in an interview with the author. Naida Grunden, The Pittsburgh Way to Efficient Healthcare (Boca Raton, FL: CRC Press, 2008) documents these improvements, stating that “the work against infection that PRHI helped develop at the WPAHS was recently adopted nationwide.”

6. Dr. Karen Wolk Feinstein made this statement in an interview with the author and described the cross-organizational challenges covered in subsequent paragraphs.

7. This information is contained in “Pharmacy Agents for Change: Wrong Medication, Bad Chemistry,” Roots, Pittsburgh, PA: Jewish Healthcare Foundation, 2009.

8. Mike Rother and John Shook, Learning to See: Value Stream Mapping to Add Value and Eliminate Muda (Cambridge, MA: Lean Enterprise Institute, 1999), describe in the introduction this third major form of flow: “Toyota people learn about three flows in manufacturing: the flows of material, information, and people/process.” The flow of people/process is what this concept of operational flow represents, which this book shows is a critical enabler for fostering the other forms of flow.

9. Shigeo Shingo, A Study of the Toyota Production System from an Industrial Engineering Standpoint (Portland, OR: Productivity Press, 1989), 155, states, “‘The flow of people,’ however, is entirely independent of machines and need not adhere to the product flow.” He further states, “The system requires each worker to learn the operations performed at the two processes adjacent to her own.”

10. Robert Slater, Jack Welch and the GE Way: Management Insights and Leadership Secrets of the Legendary CEO (New York: McGraw-Hill), 233.

11. Peter Senge, The Fifth Discipline: The Art & Practice of The Learning Organization (New York: Doubleday, 1990), 23.

12. Stephen A. Ruffa and Michael J. Perozziello, Breaking the Cost Barrier: A Proven Approach to Managing and Implementing Lean Manufacturing (New York: John Wiley & Sons, 2000), 120–121.

Chapter 6

1. The Shingo Prize, named in honor of Dr. Shigeo Shingo, is administered by the Jon M. Huntsman School of Business at Utah State University.

2. For instance, Kiyoshi Suzaki, The New Manufacturing Challenge: Techniques for Continuous Improvement (New York: Free Press, 1987), 34, describes how Toyota divides setups into internal and external setups (those done when operations are stopped, and those that can occur even when the equipment is running), an approach that is not very different from how Southwest Airlines manages its fast gate turnarounds. While seemingly a simple solution, it requires substantial innovation in working out the details.

3. James Womack, Daniel Jones, and Daniel Roos, in The Machine That Changed the World, New York: Harper, 1991, 53, states, “By the late 1950’s, [Toyota] had reduced the time required to change dies from a day to an astonishing three minutes and eliminated the need for die-change specialists.”

4. This was a key finding documented in this study of aerospace manufacturing in The Manufacturing Affordability Development Program: A Structured Approach to Rapidly Improved Affordability, Final Report, Washington, DC: The Naval Air Systems Command and The Joint Strike Fighter Program Office, July 1996.

5. This chart was first depicted in The Manufacturing Affordability Development Program.

6. I am pleased to see that today, nearly a decade after my coauthor and I described this phenomenon in our Shingo Prize–winning book, Breaking the Cost Barrier, it seems to be catching on in the broader lean movement. Mike Rother, Toyota Kata: Managing People for Improvement, Adaptiveness, and Superior Results (New York: McGraw-Hill, 2009), 80–82, for instance, described the need for lean practitioners to focus attention on tracking and mitigating the degree of fluctuation from cycle to cycle in a process (what amounts to the cycle time variation), a serious condition that is common and damaging, creating the tremendous uncertainty and disruption that, for many corporations, are at the root of much of their waste.

7. This was a key finding documented in this study of aerospace manufacturing in The Manufacturing Affordability Development Program.

8. This chart was first depicted in The Manufacturing Affordability Development Program.

9. Suzaki, The New Manufacturing Challenge, 237, describes that as part of getting started, firms might want to reconsider “the structure of a company’s organization in the future so that job responsibility, information linkages, and reporting relationships will not hamper its progress.”

Chapter 7

1. Mike Rother, Toyota Kata: Managing People for Improvement, Adaptiveness, and Superior Results (New York: McGraw-Hill, 2009), 75, describes Toyota’s application of an iterative cycle for improvement. This, however, is applied within its system marked by lean maturity; a similar but transformational approach is needed for firms less advanced in their applications. The iterative cycle identified in Figure 7-1 is envisioned to support this intent.

2. I am grateful to the Defense Logistics Agency for providing this background on these efforts.

3. The U.S. General Accountability Office praised key attributes of the WICAP system in Defense Inventory: Improved Industrial Base Assessments for Army War Reserve Spares Could Save Money (The United States General Accountability Office, GAO-02-650, July 2002), 9.

4. Womack, Jones, and Roos, in The Machine That Changed the World, 36, make this statement.

5. James P. Womack and Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (New York: Simon & Schuster, 1996), 22–23, describes Ford’s example as a “special case” condition.

6. This was also proven by the Manufacturing Affordability Development Program: A Structured Approach to Rapidly Improved Affordability, Final Report, Washington, DC: The Naval Air Systems Command and The Joint Strike Fighter Program Office, July 1996, showing for the aerospace industry that even substantial waste reduction did not necessarily translate to the expected degree of bottom-line savings.

7. I am grateful to Don Garrity, president of Garrity Tool Company, for providing this information during an interview.

8. Jody Hoffer Gittell, The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance (New York: McGraw-Hill, 2003), 233, makes this statement. Despite these limitations, the author explains that the company has faced significant challenges in recruiting personnel to support its rapidly growing needs at stations like Baltimore. The trust and sense of ownership it has created over time with its staff seems to have been critical to carrying the company through its more difficult challenges.

9. This statement by Jerry Grinstein, chief executive of Delta Air Lines, is contained in Bill Brubaker, “Low-Fare and Hoping: Delta’s Pricing Move Simplifies Rates but Leads Carriers in a Risky Direction,” Washington Post (January 9, 2005): F1, F8. Gittell, in The Southwest Airlines Way, 7, discusses the effect Southwest’s pricing has on creating passenger volume.

Chapter 8

1. A. G. Lafley and Ram Charan, The Game Changer: How You Can Drive Revenue and Profit Growth with Innovation (New York: Crown Business, 2008). A. G. Lafley, the former CEO of Procter & Gamble, distinguished innovation from inventions, defining innovation as “the conversion of a new idea into revenues and profits.” He and his coauthor further conveyed the enormity of the challenge of creating new products, which goes far beyond what most people likely understand.

2. Michael L. Dertouzos, Richard K. Lester, and Robert M. Solow, Made in America: Regaining the Productive Edge (Cambridge, MA: MIT Press, 1989), 121, describes the aerospace approach of introducing new technology as “buy its way onto the plane.”

3. Brian Hindle, “At 3M, a Struggle Between Efficiency and Creativity,” Business Week (June 11, 2007), provides this information.

4. Peter Viemeister, Start All Over: An American Experience: People, Places, and Lessons Learned (Bedford, VA: Hamilton’s, 1995), 187.

5. Stephen A. Ruffa and Michael J. Perozziello, Breaking the Cost Barrier: A Proven Approach to Managing and Implementing Lean Manufacturing (New York: John Wiley & Sons, 2000), 176–180, describes this phenomenon and provides examples of advances in lean design capabilities.

6. Richard Schonberger, World Class Manufacturing (New York: Free Press, 1986), 111, presents this characterization of product family composition.

7. A. G. Lafley and Ram Charan, The Game Changer, 5, makes this statement.

8. Ibid., The authors state: “Innovation enables expansion into new categories, allows us to refine businesses considered mature and transform them into profitable lines.”

9. James M. Morgan and Jeffrey K. Liker, The Toyota Product Development System: Integrating People, Process, and Technology (New York: Productivity Press, 2006), 168–172, describes the training and development required for Toyota engineers, for which focusing on manufacturing the product is central to the culture.

10. Morgan and Liker, The Toyota Product Development System, 153, 154, describes Toyota’s application of Simultaneous Engineering (or SE) and the reasons for it and describes the Obeya and other methods to increase collaboration among designers, even employing IT for the first time to better share information among the team. The intent was to optimize labor utilization to compete with the low rates in China (p. 155). Jody Hoffer Gittell, The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance (New York: McGraw-Hill, 2003), 132–136, describes Southwest Airlines’ similar approach of using “boundary spanners” and provides examples of how its operations agents perform in this manner.

11. Morgan and Liker, The Toyota Product Development System, 45, makes this statement.

12. Ibid., 155, states that “Toyota wanted to improve its manufacturing efficiency to a level that would allow the company to compete with the low labor rates in China. Company leaders recognized less labor in manufacturing depended on products designed to optimize labor utilization.”

13. This was a key finding documented in this study of aerospace manufacturing in The Manufacturing Affordability Development Program: A Structured Approach to Rapidly Improved Affordability, Final Report, Washington, DC: The Naval Air Systems Command and The Joint Strike Fighter Program Office, July 1996. It describes that contrary to common belief, leaning the factory should precede major efforts for leaning product development because it points the way to creating leaner designs.

Chapter 9

1. A. G. Lafley and Ram Charan, The Game Changer: How You Can Drive Revenue and Profit Growth with Innovation (New York: Crown Business, 2008), 45, makes this statement. While P&G’s wide product mix makes it difficult to map its value curve at a corporate level (product-level assessment would be more revealing), it displays many of the characteristics of the advanced levels of lean maturity.

2. Ibid., 38, describes the “Living It” program, as well as an example of a lost market segment that was discovered and filled through its efforts. Page 48 describes this in more detail, along with the companion “Working It” program, which offers a similar immersion opportunity from working at a small retailer. Roger O. Crockett, “Lafley Leaves Big Shoes to Fill at P&G,” Business Week, June 8, 2009, describes Lafley’s shift from innovating as an internal process to one of collaborations even with other companies. It identifies the Swiffer as an innovation that came from its efforts of learning by going to customers’ homes.

3. Eric Almquist, David Bovet, and Carla J. Heaton, Collaborative Customer Relationship Management: Taking CRM to the Next Level (New York: Springer-Verlag, 2004), 8, provides survey results showing that only 16 percent report that CRM exceeded their expectations, and 41 percent say that it fell short. It continues (p. 12) to state that getting a “360 degree view” of the customer “is limited by static, often outdated information about current customers gathered through current touch points, and fails to illuminate the value of prospective customers and changing market dynamics.”

4. Jeffrey K. Liker, The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer (New York: McGraw-Hill, 2003), 162, describes an encounter when an IT person shared a system design flowchart with Mikio Kitano, the head of Toyota’s largest industrial complex. His response was, “At Toyota we do not make information systems. We make cars. Show me the process of making cars and how the information system supports that.”

5. Steve Lohr, “Little Benefit Seen So Far in Electronic Patient Records,” New York Times, November 15, 2009, reported that a new study of thousands of hospitals to understand the impact of electronic medical records in such key areas as length of stay showed differences that were “really, really marginal,” as stated by Dr. Ashish K. Jha, an assistant professor at the Harvard School of Public Health, who headed the study. David U. Himmelstein, The American Journal of Medicine, November 20, 2009, studied 4,000 hospitals over five years and states that such bureaucratic actions as “coding and other reimbursement-driven documentation might take precedence over efficiency and the encouragement of clinical parsimony.”

6. The same has traditionally applied to Toyota. Liker, The Toyota Way, 5. Matthew E. May and Kevin Roberts, The Elegant Solution: Toyota’s Formula for Mastering Innovation (New York: Free Press, 2006), 88, describes three parts of Toyota’s “field approach” to learning to see what the customer values, based on genchi genbutsu (or “go and see”): “Observe—watch the customer,” “Infiltrate—become the customer,” and “Collaborate—involve the customer.” The authors explain, using examples, how these are increasingly applied by a range of other companies.

7. Sam Walton and John Huey, Sam Walton: Made in America (New York: Doubleday, 1992), 128.

8. Bill Brubaker, “Low-Fare and Hoping: Delta’s Pricing Move Simplifies Rates but Leads Carriers in a Risky Direction,” Washington Post (January 9, 2005): F1, F8.

9. I am grateful to Don Garrity, president and founder of the Garrity Tool Company, for providing this statement and the information in this and the subsequent paragraph about his company’s approach and performance during the downturn.

10. Almquist, Bovet, and Heaton, Collaborative Customer Relationship Management, 120, draws on research in explaining that “trust can have positive results on customer loyalty.”

11. Susan Ganz, CEO of Lion Brothers, provided this information and made this statement during an interview with the author and provided this insight into the company’s lean innovation efforts.

12. Drew Greenblatt, CEO of Marlin Wire, made these statements during an interview with the author.

13. Drew Greenblatt provided this information, including the products it creates for companies like Caterpillar, Boeing, or Toyota that support this smoother, leaner way of operating that reduces waste and helps to mitigate sources of lag. He explained that repeat customers are not nearly as concerned about the price of his products after becoming familiar with the great savings they will help create.

14. Almquist, Bovet, and Heaton, Collaborative Customer Relationship Management, 120, supports this premise that more innovative solutions will require a progressive track record of collaborative success, stating that “individualism also demands more trust by customers due to the higher risk for an individual when buying a customized product as compared to buying a proven standard solution.”

15. Lindsay Chappell, “Toyota Forgoes Layoffs Despite Plant Closings,” Financial Week, September 8, 2008, provides information on Toyota’s approach to keeping workers on the job despite its plant shutdown.

16. Stephen A. Ruffa, Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits (New York: AMACOM, 2008), 58.

17. Drew Greenblatt, CEO of Marlin Wire, made these statements in this and the subsequent paragraph during an interview with the author.

18. Hanah Cho, “Productivity Rises,” Chicago Tribune, November 6, 2009, provides these figures.

19. Joe Barrett, “Manufacturers Get Top Talent for Hard-to-Fill Jobs,” Wall Street Journal, May 30, 2009, describes how companies like Marlin Wire were able to take advantage of the recession and hire top talent.

20. I am grateful to Brent Edmisten at Cessna for providing this information on Cessna’s expansion of COEs during the downturn.

21. Womack, Jones, and Roos, The Machine That Changed the World, 30, provides insights on repairs drivers could do themselves.

Chapter 10

1. Lindsay Chappell, “Toyota Forgoes Layoffs Despite Plant Closings,” Financial Week, September 8, 2008.

2. Frank Ahrens and Peter Whoriskey, “Toyota President Apologizes Under Fire of US Officials,” Washington Post, February 25, 2010, quotes Akio Toyoda, president of Toyota, describing the reason for its massive recall, stating that “Toyota has, for the past few years, been expanding its business rapidly.” He further stated, “Quite frankly, I fear the pace at which we have grown may have been too quick.”

3. This quote is contained in Alan Ohnsman, “Toyota May Cut US Payrolls as Unsold Autos Pile Up,” Bloomberg.com, December 23, 2008. Firms like Southwest Airlines, Walmart, and others seem to have done well at building in capabilities and strategies that respond to both upward and downward shifts; each continued to advance even in these severe conditions.

4. These concerns were raised to the author by Dr. Michael Galiazzo, president of Maryland’s Regional Manufacturing Institute, who has decades of experience in community college leadership. He further noted that “lean dynamics applied to learning organizations would produce greater value for students at a lower cost. Public policymakers should rally for this. … If I were a college or university president, I would call up 20 manufacturers who have embraced competitive principles and practices and invite them to systemically change the way we create value for the student. I would also have them endorse such radical change. Finally, I would schedule time with legislators to report on the results.”

5. L. Kohn, J. Corrigan, and M. Donaldson, To Err Is Human: Building a Safer Health System (Washington, DC: Institute of Medicine, National Academy Press, 2000), 1, details the extent and impact of medical errors and provides data on the number of deaths per year.

Appendix A

1. This figure was first introduced in The Manufacturing Affordability Development Program: A Structured Approach to Rapidly Improved Affordability, Final Report, Washington, DC: The Naval Air Systems Command and The Joint Strike Fighter Program Office, July 1996; the categories identified to the right of the figure are some examples of the focus areas identified within this report; therefore, they logically might be seen as potential focal points.

Appendix B

1. Taiichi Ohno, The Toyota Production System, (Portland, Productivity Press, 1988), 8–9, makes this statement and describes this different way of looking at profit.

2. This chart was first displayed in Stephen A. Ruffa, Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits (New York: AMACOM, 2008), 216. The supporting data comes from Alfred Sloan, My Years with General Motors, 214.

3. This chart was first displayed in Ruffa, Going Lean, 217, in which the data calculations are included. The supporting data comes from Alfred Sloan, My Years with General Motors, 214.