Economy I and II - Never the Twain Shall Meet?

By Pascal Dennis (bio)

In a previous blog I introduced the idea of Economy I & II

The former comprises private sector companies like Apple, Amazon, Toyota and GE.

These companies face withering competition every day.

As a result, they're wonderful at creating value, but not so good at creating jobs.

Economy II, by contrast, comprises government and quasi-government organizations like schools, universities and hospitals.

These organizations face comparatively little competition (or in the case of government agencies, none at all.)

As a result, they're wasteful and inefficient -- but good at creating 'jobs', of a sort.

But Economy II is bankrupting America (and Europe, for that matter). Economy I can no longer create enough off-setting value and wealth.

What to do?

Conservatives argue that Economy II can only be mended by applying the disciplines of Economy I.

Essentially, this means enabling and applying Lean thinking:

• Understanding your customers, and thereby, value & waste,
• Visual management and 5 S,
• Standardized work,
• Jidoka (building quality into the process,
• Heijunka (level loading), and
• Point, flow and system kaizen

Enablers to this approach include education and health care vouchers that put choice into the hands of the customer.

Liberals ("progressives") argue that the philosophies & techniques of Economy II are not necessary and wouldn't be effective in any event.

A better approach, they argue, is to elect capable, charismatic political leaders, who can reform Economy II by force of personality.

They cite Rahm Emanuel, former mayor of Chicago, as such a leader.

What do I think?

Being an engineer and a businessperson, I'm naturally inclined to the practices I learned at Toyota.

Over the many years, our Lean Pathways team has applied them with great success in a variety of industries.

Toyota thinking is rocket fuel. Stick to the recipe and wonderful things happen.

This is the evidence of my eyes and whole being.

The liberal/progressive argument seems, forgive me, to entail 'magical thinking'.

Even if it were based in fact, how many Rahm Emanuel's are there?

The broken processes mean a rapid regression to the bankrupt mean.

Sorry,

Pascal




In case you missed our last few blogs... please feel free to have another look…

Strategy is Not About Doing What’s “Important”
Agriculture - The Next Frontier?
Lean Thinking in Software Design
Problem Solving and the Worlds of Reflection & Experience

Lean Production Simplified – 3rd Edition by Pascal Dennis

by Pascal Dennis

The more I know, the more I realize I don’t know.
Socrates

I wrote the first edition of Lean Production Simplified hoping to share what I’d learned at Toyota. It had been my blind luck to work with patient senseis. I felt that if I could explain things simply, then perhaps I had gained a certain level of understanding.

The past twenty years, I’ve been the sensei, helping companies apply the Toyota system or ‘Lean’. My practice has taken me far from the Toyota shop floor – into hospitals, power plants, container terminals, and research laboratories.

I’m certain that I learn as much as I teach. And the more I learn, the more I think of Socrates.

Why did I write the 3rd edition?

We need to learn the Toyota system – and not just in manufacturing. Hospitals, banks, universities, software developers, government agencies and other service providers are also hungry for Lean thinking and methods. Customers will no longer accept substandard safety, quality, delivery or cost performance.

Who is the book written for?

Leaders and learners at all levels in manufacturing, and in the ‘undiscovered country’ – health-care, financial services, the process industries, software development, construction, universities and the public service.

What’s different about the 3rd edition?

I’ve added many more examples from outside the factory (e.g. design, engineering, administration etc.) and from the industry sectors mentioned above.

I’ve also included study questions at the end of each chapter. My hope is that Lean Simplified 3rd Edition will be a working book and that I’ll continue to find in the gemba, filled with highlights and notes in the margin.

My study of aikido had prepared me for the Toyota “way”. I understood that it was a ‘do’ or path, and that the Toyota shop floor was a dojo, a place where you practiced a profound art, working on your technique, and on yourself. Indeed, before stepping on to the shop floor, I felt like bowing, a sign of respect for my team, organization, and the art of management.

I still feel that way.

Pascal

Pascal Dennis Bio

Economy I and II - Never the Twain Shall Meet?

By Pascal Dennis

In a previous blog I introduced the idea of Economy I & II

The former comprises private sector companies like Apple, Amazon, Toyota and GE.

These companies face withering competition every day.

As a result, they're wonderful at creating value, but not so good at creating jobs.

Economy II, by contrast, comprises government and quasi-government organizations like schools, universities and hospitals.

These organizations face comparatively little competition (or in the case of government agencies, none at all.)

As a result, they're wasteful and inefficient -- but good at creating 'jobs', of a sort.

But Economy II is bankrupting America (and Europe, for that matter). Economy I can no longer create enough off-setting value and wealth.

What to do?

Conservatives argue that Economy II can only be mended by applying the disciplines of Economy I.

Essentially, this means enabling and applying Lean thinking:

• Understanding your customers, and thereby, value & waste,
• Visual management and 5 S,
• Standardized work,
• Jidoka (building quality into the process,
• Heijunka (level loading), and
• Point, flow and system kaizen

Enablers to this approach include education and health care vouchers that put choice into the hands of the customer.

Liberals ("progressives") argue that the philosophies & techniques of Economy II are not necessary and wouldn't be effective in any event.

A better approach, they argue, is to elect capable, charismatic political leaders, who can reform Economy II by force of personality.

They cite Rahm Emanuel, mayor of Chicago, as such a leader.

What do I think?

Being an engineer and a businessperson, I'm naturally inclined to the practices I learned at Toyota.

The past twelve years, our Lean Pathways team has applied them with great success in a variety of industries.

Toyota thinking is rocket fuel. Stick to the recipe and wonderful things happen.

This is the evidence of my eyes and whole being.

The liberal/progressive argument seems, forgive me, to entail 'magical thinking'.

Even if it were based in fact, how many Rahm Emanuel's are there? And what happens when Rahm inevitably resigns as mayor of Chicago?

(Insiders say Rahm is there for one term.)

The broken processes mean a rapid regression to the bankrupt mean.

Sorry,

Pascal