Productivity is measured as GDP produced per hour worked. The government says:
Between 1999 and 2008 labour productivity in the Manufacturing sector increased 0.2% per year on average. In comparison, labour productivity for the Canadian Economy increased 2.4% per year.
That growth rate spread is widening as the recession has hit the manufacturing sector so hard that it's productivity is experiencing negative growth.
Economic growth predictions have been scaled back across the OECD from the optimistic outlook of earlier in the year. Canada's dollar is now predicted to continue to rise significantly in the next year. This harsh confluence of circumstances will pinch Canada's manufacturing base like never before. The relative strength of the dollar will ensure job losses to the US and beyond.
Now is the time to invest in some of those powerful canuck bucks in world class new equipment, and make the paradigm shift to Lean. The manufacturing productivity gap is a national crisis, and needs to be treated as such.
Is making things a thing of the past? I say that making things is critical to our economic and physical security.
Many intelligent Canadians believe we are an economy of technical knowledge and services, and the flood of jobs offshore is just a natural consequence of how smart we are, and we in the west will naturally continue to retain our rightful place on top of the heap. (Check out my last post where Andy Grove, founder of Intel describes how this is a false hope.) If you take a look at world wide economic growth rates, emerging economies are outgrowing the west and will continue to do so. Productivity means competitiveness, and right now Canada is being left behind. We need to do something better with our manpower besides dig in the ground for non-renewable resources to sell.
The stimulus budget spending has got us this far. Now leadership needs to take a long view of Canadian competitiveness and aggressively pursue improved productivity in the manufacturing sector.
Tuesday, October 12, 2010
Save Tech Jobs only with Change
Earlier this year Andy Grove, co-founder of Intel, wrote a very interesting opinion article for Bloomberg "How to make an American Job before it is too late: Andy Grove". It is a must read that puts perspective on how allowing tech manufacturing move off shore is a tactic that will be the continued undoing of job creation in America. I find Andy's perspective compelling. What do you think?
Lean Leaders Help Teams Deal WIth Distractions
"I can't get any work done with all these distractions!" All bosses hear it. Especially in creative functions like design, engineering, R&D. I imagine lawyers, writers, nurses and many other professions could also (along with the rest of us) use reasonable periods of time where they can put 100% of their concentration into their work. In these days where "multitasking" is a "skill", leaders must combat the whittling away of their employee's productivity.
I was reminded of my experience as a leader of a custom engineering/manufacturing company. Designers would complain of having no time to get into their detailed design work. Distractions and interruptions from the floor, suppliers, bosses, meetings, would fragment their time. We found that an hour a day (or less) was a common amount to be spent on a project! Since many of these were design and development projects you can imagine that productivity was not as good as we wanted. We arrived at a good solution by establishing daily "quiet hours". For a period each day the engineering department did not answer phones, emails, attend meetings or entertain other interruptions. They were declared "offline" to the rest of the organization. It turned out to be very effective and was widely respected all coworkers. Psychologically it was important that as a leader I recognized the need for the "quiet time", and by doing so I empowered the people to take charge of their working time themselves.
Google search "Managing Interruptions" and you will get a laundry list of good tips you can pick from. In the end effectively managing interruptions is something that the employee has to take on for themselves as part of their daily interactions. Learning to say "no" to interruptions is a learned communications skill for most of us. Often it is an assertiveness issue as well. It is the job of the boss to recognize what habits the worker needs to change and give them the support they need to make the changes. Empowerment can can be defined as "permission and support from the boss to practice new behaviours in the workplace".
The "One Minute Manager meets the Monkey" is a quick read that gets to the heart of the matter for those ultra-committed souls that habitually take on too much.
Ultimately the boss has to guard his people and their time so they are most productive. Controlling the frequency and length of meetings and easing the difficulty of bureacratic processes are a couple of big ones. Set a good balanced example yourself: get results and have a good life. Send the right message Boss!
Points to ponder....
“After you plant a seed in the ground, you don’t dig it up every week to see how it is doing.”
In his 1975 HBR classic “The Manager’s Job,” Henry Mintzberg wrote: “Someone, only half in jest, once defined the manager as that person who sees visitors so that everyone else can get his work done.”
“Guard against the director’s first great vice—rabbiting on, making the same point again and again, getting laughs from your inimitable (and interminable) anecdotes.”
Say to your employees: “My job is to open the umbrella when the crap rains down from above. Your job is to keep me from having to open it too often.”
"I have left orders to be awakened at any time in case of national emergency, even if I'm in a cabinet meeting." -Ronald Reagan, 40th president of US (1911 - 2004)
"There is never enough time, unless you're serving it."- Malcolm Forbes
"Noise is the most impertinent of all forms of interruption. It is not only an interruption, but is also a disruption of thought." Arthur Schopenhauer, German philosopher (1788 - 1860)
Recommended Reads
I was reminded of my experience as a leader of a custom engineering/manufacturing company. Designers would complain of having no time to get into their detailed design work. Distractions and interruptions from the floor, suppliers, bosses, meetings, would fragment their time. We found that an hour a day (or less) was a common amount to be spent on a project! Since many of these were design and development projects you can imagine that productivity was not as good as we wanted. We arrived at a good solution by establishing daily "quiet hours". For a period each day the engineering department did not answer phones, emails, attend meetings or entertain other interruptions. They were declared "offline" to the rest of the organization. It turned out to be very effective and was widely respected all coworkers. Psychologically it was important that as a leader I recognized the need for the "quiet time", and by doing so I empowered the people to take charge of their working time themselves.
Google search "Managing Interruptions" and you will get a laundry list of good tips you can pick from. In the end effectively managing interruptions is something that the employee has to take on for themselves as part of their daily interactions. Learning to say "no" to interruptions is a learned communications skill for most of us. Often it is an assertiveness issue as well. It is the job of the boss to recognize what habits the worker needs to change and give them the support they need to make the changes. Empowerment can can be defined as "permission and support from the boss to practice new behaviours in the workplace".
The "One Minute Manager meets the Monkey" is a quick read that gets to the heart of the matter for those ultra-committed souls that habitually take on too much.
Ultimately the boss has to guard his people and their time so they are most productive. Controlling the frequency and length of meetings and easing the difficulty of bureacratic processes are a couple of big ones. Set a good balanced example yourself: get results and have a good life. Send the right message Boss!
Points to ponder....
“After you plant a seed in the ground, you don’t dig it up every week to see how it is doing.”
In his 1975 HBR classic “The Manager’s Job,” Henry Mintzberg wrote: “Someone, only half in jest, once defined the manager as that person who sees visitors so that everyone else can get his work done.”
“Guard against the director’s first great vice—rabbiting on, making the same point again and again, getting laughs from your inimitable (and interminable) anecdotes.”
Say to your employees: “My job is to open the umbrella when the crap rains down from above. Your job is to keep me from having to open it too often.”
"I have left orders to be awakened at any time in case of national emergency, even if I'm in a cabinet meeting." -Ronald Reagan, 40th president of US (1911 - 2004)
"There is never enough time, unless you're serving it."- Malcolm Forbes
"Noise is the most impertinent of all forms of interruption. It is not only an interruption, but is also a disruption of thought." Arthur Schopenhauer, German philosopher (1788 - 1860)
Recommended Reads
Thursday, October 7, 2010
Canada's Stability and Oil wealth driving dollar to US$1.15?
The stability of Canada will become a safe haven for currency investors as capital flows out of the US. We are headed to $1.15 in 12 months according to economist Patricia Croft. This would represent an unprecedented high against the greenback. Whether it gets that high or not hardly matters, as the trend and fundamentals seem to be in place for the dollar taking a quick trip in the upward direction. Declining and low interest rates and looser monetary policies in the US and the industrial world, will flow investors to the C$. No surprise after our banking system came through the crash of 2008 with (relatively) flying colours. Also not surprising as energy prices and supply have made the C$ a petro-currency: no longer driven by the fundamental forces of labour productivity and value-added exports.
A high dollar is good right? Yes it is if the population is employed at something that earns more of them. A high dollar is well known to cheapen imports and push manufacturing, and even services, to off -shore competitors. If our population's productivity and ingenuity did not 'earn' the dollar's increase, and our prosperity exists only because of the world's insatiable demand for non-renewable energy and resources, then we better buckle up for higher unemployment and more McJobs.
Producers in Canada need to adjust faster than ever. In the next 12 months we could see the dollar increase at about 3 times the rate of the magnificent climb we witnessed in the last 8 years. Like never before the time is now.
Greg's Recommended Reading
A high dollar is good right? Yes it is if the population is employed at something that earns more of them. A high dollar is well known to cheapen imports and push manufacturing, and even services, to off -shore competitors. If our population's productivity and ingenuity did not 'earn' the dollar's increase, and our prosperity exists only because of the world's insatiable demand for non-renewable energy and resources, then we better buckle up for higher unemployment and more McJobs.
Producers in Canada need to adjust faster than ever. In the next 12 months we could see the dollar increase at about 3 times the rate of the magnificent climb we witnessed in the last 8 years. Like never before the time is now.
Greg's Recommended Reading
Thursday, September 30, 2010
Medication labelling needs error-proofing NOW
Bureaucratic solutions too-little too late to save lives
Today I read an article in the NP that needs a lean response. Tom Blackwell's article puts light on a serious problem in health care: confusion over similar looking labels has led to mistakes causing death. The tragic deaths of 2 people in Calgary who while undergoing dialysis were given deadly potassium chloride instead of harmless sodium chloride solution; a mistake traced to the extreme similarity of the packaging and labelling. The article quotes pharmacy professor Neil MacKinnon: "If you ask any kind of front line nurse or pharmacist they would say 'Gee, this isn't rocket science, why can't they make labelling clearer- put things in different size fonts and colors?' It's a big problem we've known about for a long time but there doesn't seem like a lot of impetus for change."
The government and industry are working on a standard bar code system for use with scanners - a highly expensive solution that will take "years" to implement. Health Canada is also being asked to vet labels and packaging that may lead to mistakes. They are committing $2 million to a system for REPORTING incidents and developing preventive measures! I am sure the reporting system will comfort the next family that loses a loved one.
This example screams for simple and immediate implementation of lean methods. It is not rocket science. Although the bureaucracy is doing its "best", action on this problem need not be delayed. Error proofing is a basic concept of lean. You simply devise ways to completely prevent common and likely errors. A lean manufacturer would immediately address this issue and market the improved safety. Luckily the Institute for Safe Medicine Practices in Atlanta has begun positive work with drug suppliers but it is clearly not moving as fast as is needed. Interestingly they have a system standard of TALLMAN letters for labels that emphasize the differences between similar medicines right on their label. Why is this not industry standard?
Interested lean leaders would simply ask the front line workers to identify the most likely confused medications. Thereby creating an immediate database of improvements to tackle, heading off mistakes in the short term. I bet there are many simple (and cheap) error proofing ideas on the minds of health care workers waiting to be engaged. Lean is about making improvements right now using the expertise of the front line workers. It is ironic that the bureaucracy has such a hold on "improvement" that even simple changes that save lives can't be made quickly. Isn't saving lives quickly is what health care is all about? I would start with those on the front line, not waste time installing long term costly "solutions" or developing a reporting system that costs more than the solutions to most of this issue would. It is sad that lean in health care at the national level in Canada is not visible at all.
Today I read an article in the NP that needs a lean response. Tom Blackwell's article puts light on a serious problem in health care: confusion over similar looking labels has led to mistakes causing death. The tragic deaths of 2 people in Calgary who while undergoing dialysis were given deadly potassium chloride instead of harmless sodium chloride solution; a mistake traced to the extreme similarity of the packaging and labelling. The article quotes pharmacy professor Neil MacKinnon: "If you ask any kind of front line nurse or pharmacist they would say 'Gee, this isn't rocket science, why can't they make labelling clearer- put things in different size fonts and colors?' It's a big problem we've known about for a long time but there doesn't seem like a lot of impetus for change."
The government and industry are working on a standard bar code system for use with scanners - a highly expensive solution that will take "years" to implement. Health Canada is also being asked to vet labels and packaging that may lead to mistakes. They are committing $2 million to a system for REPORTING incidents and developing preventive measures! I am sure the reporting system will comfort the next family that loses a loved one.
This example screams for simple and immediate implementation of lean methods. It is not rocket science. Although the bureaucracy is doing its "best", action on this problem need not be delayed. Error proofing is a basic concept of lean. You simply devise ways to completely prevent common and likely errors. A lean manufacturer would immediately address this issue and market the improved safety. Luckily the Institute for Safe Medicine Practices in Atlanta has begun positive work with drug suppliers but it is clearly not moving as fast as is needed. Interestingly they have a system standard of TALLMAN letters for labels that emphasize the differences between similar medicines right on their label. Why is this not industry standard?
Interested lean leaders would simply ask the front line workers to identify the most likely confused medications. Thereby creating an immediate database of improvements to tackle, heading off mistakes in the short term. I bet there are many simple (and cheap) error proofing ideas on the minds of health care workers waiting to be engaged. Lean is about making improvements right now using the expertise of the front line workers. It is ironic that the bureaucracy has such a hold on "improvement" that even simple changes that save lives can't be made quickly. Isn't saving lives quickly is what health care is all about? I would start with those on the front line, not waste time installing long term costly "solutions" or developing a reporting system that costs more than the solutions to most of this issue would. It is sad that lean in health care at the national level in Canada is not visible at all.
Friday, September 17, 2010
Low Cost Labour Not Enough for Chinese Manufacturers
An item in the Financial Post by David Barboza caught my eye today. China's "industrial miracle" is learning quickly to reshape itself as cheap labour dwindles. The predicted future strengthening of the yuan, and wage inflation facing manufacturers in the large industrial zones have them looking to go "to the next stage of development" by upgrading facilities and service. Some factories are moving inland where wages are 30% cheaper. Some are going offshore to other countries like Bangladesh and Vietnam where labour remains cheap. A Chinese scholar hopes "that China's comparative advantage as a low-wage producer does disappear - the sooner the better". It is realized that some factory investments can't easily be moved and new tactics are required to add value.
Predictably Chinese manufacturers are learning to serve their customers better to overcome some of the drawbacks of being far away. TAL Group is now managing the supply chain for its products at JC Penney, one of its biggest T shirt buyers. "We know what's in the warehouse, what's on the boat. We help reduce inventory". This sophisticated partnering approach is in stark contrast to the business environment during the first big expansion last decade. From now on look for happier customers partnering with their Chinese suppliers.
The Leaning-out of the supply chain and manufacturing facilities in North America has never been more urgently needed.
Predictably Chinese manufacturers are learning to serve their customers better to overcome some of the drawbacks of being far away. TAL Group is now managing the supply chain for its products at JC Penney, one of its biggest T shirt buyers. "We know what's in the warehouse, what's on the boat. We help reduce inventory". This sophisticated partnering approach is in stark contrast to the business environment during the first big expansion last decade. From now on look for happier customers partnering with their Chinese suppliers.
The Leaning-out of the supply chain and manufacturing facilities in North America has never been more urgently needed.
Elephants, Awards and Lean Health Care
Here are two of my favourite elephant stories that seem apropos to lean transformation of health care:
1) How do you eat an elephant? One bite at a time of course!
2) A king has the blind men of the capital brought to the palace, where an elephant is brought in and they are asked to describe it.
"When the blind men had each felt a part of the elephant, the king went to each of them and said to each: 'Well, blind man, have you seen the elephant? Tell me, what sort of thing is an elephant?"
The men cannot agree with one another and come to blows over the question of what it is like and their dispute delights the king.
The cost of our health care is predicted to completely outstrip our ability to fund it within our lifetimes. Hear that boomers? If any sector in our economy needs to embrace lean quickly and effectively right now, it is our Canadian Health care system. We are in trouble. Recently, right across the country, major initiatives to streamline provincial health care data systems have been tainted by scandals. The public faith is eroded daily by every failure, scandal and personal tale of suffering. I will not turn this into a political debate (you're welcome) but the politicians are our leaders and they must not keep passing the buck by simply cutting services and rationing health care. Can the "blind men"/stakeholders in our health care system do anything to change the downward course of the behemoth that is our medical system? The debate is nothing to fear compared to what is at risk. The time is now to get together, understand what they really have on their hands, and then get eating!
Universal health care was a populist initiative that set us apart from the rest of North America. Canadians are rightly proud of their system, and also rightly wary of US style health care. Perhaps to a fault. Universal health care access is right up there with hockey as a Canadian cultural icon. Federal elections have been swayed by the mere suggestion of "two tiered health care". I know we have excellent arguments about why universal health care is better for society, but why can't our public system rival the best privately run operations? Why should the Canadian public accept less value-for-money as a condition for a universal system? I have spoken to a number of health care workers and virtually all are unsatisfied with the system somehow (some to the point of despair). I am told things are dysfunctional and the future is bleak. I understand there is much to discuss and my point here is that it is clearly time for us to act differently and face our elephant.
Advocating the American style solution is "not on" in Canada. That is a political reality. But, (putting aside cultural biases) if the US system is so bad why were so many US citizens opposed to health care reform? In that recent and divisive debate down south, our Canadian system was demonized for having a lower standard of care and huge waiting times that cause unnecessary suffering and death. Hmmm...let me ask you Canadians in your heart-of-hearts; are our wait times for treatment and level of care all that you would like them to be? I know the US debate was ill informed and hysterical/comical when referencing our Canadian system, but I believe the anti-reform forces in the US had a point underpinning their arguments. The opponents did not want any system that reduced standards of available care. Nor did they want care rationed or limited. They wanted high standards of health care. That desire for quality is one of the best attributes of the consumer and it forms a key motivator for a transformation to Lean. It is extremely important to understand that the Canadian public is doubly empowered compared to Americans because we own the system as well as being its customers. We are in the better position to demand both quality and efficiency in our health care.
A great example of Lean in health care is at Virginia Mason Medical. Virginia Mason has transformed itself such that it now offers training and consulting to other hospitals using their own "production system". They went and took the best of lean from manufacturing and applied techniques like kaikaku (rapid change) successfully to health care. Why haven't our institutions gotten that far on the lean journey?
I understand there are efforts to go lean in most health jurisdictions in Canada. A good place to measure the state of Lean Health care in Canada is at the 3rd Annual Lean in Health Care conference being held this month in Vancouver. This conference represents a good bite from the elephant. Private health care support services are among those presenting lean success stories to the conference and that is a very good sign. All these good efforts must be leveraged and we must raise our collective expectations in order to aggressively pursue excellence in health care quality.
In the US there is a Baldridge Award for excellence in health care quality that we in Canada would be wise to shamelessly emulate. The recognition of excellence on a national basis is long overdue. (There is an emerging award CHEQA Canadian Healthcare Excellence in Quality Award that is taking steps in the right direction, but it doesn't have the profile or the criteria to compete with the impact of a Baldridge Award). If we had a prestigious national award of excellence I believe we could better inspire the stakeholders to take on root cause solutions, and to fan the sparks of innovation.
Awards create focus and focus usually creates discussion. Let's get the "blind men" talking seriously. In this case the "blind men" on the health care elephant are: the Public, Government, Doctors, Nurses, Management, Support Industries, and Politicians. Of all the "blind men", the Canadian public have the most potential influence on the pace of improvement. If we could just allow the politicians to fully debate the challenges faced by our system there is a chance we could steer away from the bleakest vision of our health care future. Let's not fry the next intrepid politician that wants to jump start the debate!
Healthcare leadership in governments must be pressed to promote recognition of innovation and quality. Everyone should know who in the country delivers the best care. The public needs to open their ears to the debate, and get used to the fact that change must happen or the great Canadian social accomplishment of the last century will wither away in our lifetimes.
1) How do you eat an elephant? One bite at a time of course!
2) A king has the blind men of the capital brought to the palace, where an elephant is brought in and they are asked to describe it.
"When the blind men had each felt a part of the elephant, the king went to each of them and said to each: 'Well, blind man, have you seen the elephant? Tell me, what sort of thing is an elephant?"
The men cannot agree with one another and come to blows over the question of what it is like and their dispute delights the king.
The cost of our health care is predicted to completely outstrip our ability to fund it within our lifetimes. Hear that boomers? If any sector in our economy needs to embrace lean quickly and effectively right now, it is our Canadian Health care system. We are in trouble. Recently, right across the country, major initiatives to streamline provincial health care data systems have been tainted by scandals. The public faith is eroded daily by every failure, scandal and personal tale of suffering. I will not turn this into a political debate (you're welcome) but the politicians are our leaders and they must not keep passing the buck by simply cutting services and rationing health care. Can the "blind men"/stakeholders in our health care system do anything to change the downward course of the behemoth that is our medical system? The debate is nothing to fear compared to what is at risk. The time is now to get together, understand what they really have on their hands, and then get eating!
Universal health care was a populist initiative that set us apart from the rest of North America. Canadians are rightly proud of their system, and also rightly wary of US style health care. Perhaps to a fault. Universal health care access is right up there with hockey as a Canadian cultural icon. Federal elections have been swayed by the mere suggestion of "two tiered health care". I know we have excellent arguments about why universal health care is better for society, but why can't our public system rival the best privately run operations? Why should the Canadian public accept less value-for-money as a condition for a universal system? I have spoken to a number of health care workers and virtually all are unsatisfied with the system somehow (some to the point of despair). I am told things are dysfunctional and the future is bleak. I understand there is much to discuss and my point here is that it is clearly time for us to act differently and face our elephant.
Advocating the American style solution is "not on" in Canada. That is a political reality. But, (putting aside cultural biases) if the US system is so bad why were so many US citizens opposed to health care reform? In that recent and divisive debate down south, our Canadian system was demonized for having a lower standard of care and huge waiting times that cause unnecessary suffering and death. Hmmm...let me ask you Canadians in your heart-of-hearts; are our wait times for treatment and level of care all that you would like them to be? I know the US debate was ill informed and hysterical/comical when referencing our Canadian system, but I believe the anti-reform forces in the US had a point underpinning their arguments. The opponents did not want any system that reduced standards of available care. Nor did they want care rationed or limited. They wanted high standards of health care. That desire for quality is one of the best attributes of the consumer and it forms a key motivator for a transformation to Lean. It is extremely important to understand that the Canadian public is doubly empowered compared to Americans because we own the system as well as being its customers. We are in the better position to demand both quality and efficiency in our health care.
A great example of Lean in health care is at Virginia Mason Medical. Virginia Mason has transformed itself such that it now offers training and consulting to other hospitals using their own "production system". They went and took the best of lean from manufacturing and applied techniques like kaikaku (rapid change) successfully to health care. Why haven't our institutions gotten that far on the lean journey?
I understand there are efforts to go lean in most health jurisdictions in Canada. A good place to measure the state of Lean Health care in Canada is at the 3rd Annual Lean in Health Care conference being held this month in Vancouver. This conference represents a good bite from the elephant. Private health care support services are among those presenting lean success stories to the conference and that is a very good sign. All these good efforts must be leveraged and we must raise our collective expectations in order to aggressively pursue excellence in health care quality.
In the US there is a Baldridge Award for excellence in health care quality that we in Canada would be wise to shamelessly emulate. The recognition of excellence on a national basis is long overdue. (There is an emerging award CHEQA Canadian Healthcare Excellence in Quality Award that is taking steps in the right direction, but it doesn't have the profile or the criteria to compete with the impact of a Baldridge Award). If we had a prestigious national award of excellence I believe we could better inspire the stakeholders to take on root cause solutions, and to fan the sparks of innovation.
Awards create focus and focus usually creates discussion. Let's get the "blind men" talking seriously. In this case the "blind men" on the health care elephant are: the Public, Government, Doctors, Nurses, Management, Support Industries, and Politicians. Of all the "blind men", the Canadian public have the most potential influence on the pace of improvement. If we could just allow the politicians to fully debate the challenges faced by our system there is a chance we could steer away from the bleakest vision of our health care future. Let's not fry the next intrepid politician that wants to jump start the debate!
Healthcare leadership in governments must be pressed to promote recognition of innovation and quality. Everyone should know who in the country delivers the best care. The public needs to open their ears to the debate, and get used to the fact that change must happen or the great Canadian social accomplishment of the last century will wither away in our lifetimes.
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