eVSM Provides an International Language for “Learning to See” the Lean Opportunities for the total Value Stream Map
Leanovations is proud to announce a partnership with GumshoeKI, headquartered in Cincinnati, Ohio, a visual communications company that developed eVSM (electronic value stream mapping) software, the easiest way to visualize the value stream. eVSM utilizes common standardized templates, which provide an international language all Lean practitioners understand. This leading "drag & drop" value stream mapping, analysis and management capability is used today around the world by 8500+ Lean practitioners for Lean manufacturing, Lean office, Lean government, Lean service and Lean healthcare implementations.
The software designed to complement the Lean implementation methodologies in the Shingo award-winning, best-selling publication "Learning To See" by Mike Rother and John Shook, provides comprehensive support for the mapping, calculations, box scores and charts. The combined capability allows Lean practitioners to draw, analyze and communicate globally Value Stream Maps using standardized templates that any Lean practitioner understands regardless of the language they speak. For this reason, over 20% of the Fortune 500 companies use eVSM, with extensive international use.
The benefit to Lean practitioners is a “Visual Net” that helps practitioners develop, think through, connect, and effectively communicate any aspect of a value stream. Visual gadgets that are "in-place" on the map and update with map data is a new innovation that really helps to "see" and make decisions about value stream characteristics. Lean calculation relating to lead time, inventory cost and capacity can be analyzed using the map data in Excel or can be created by picking data directly on the map.
Current state maps, can be easily copied and modified, to create future state maps. The maps can be combined and presented as a storyboard (or value stream board), for Lean management, complete with data on team members, targets, progress and milestones. It is easy to create and deploy standardized templates for maps, metrics, units, tables and storyboards for consistent and productive usage by Lean practitioners and be able to present them to their peers around the world making eVSM a dynamic tool for management in making strategic plans and decisions.
Leanovations helps organizations not only map their organizational Value Stream, but also map which includes the customer and supply chain linkage, creating a flow of information while establishing a pull of products. To learn more about eVSM go to www.leanovations.com .
Sunday, July 19, 2009
Business Succession Planning a Must
“Business Succession Planning” A Must For 2009
Business succession planning seems to have lost its way in recent years. Maybe it is due to the stress of the economy, maybe it is because the current and next generation views business differently, or maybe it is due to the new technology that continues to create new challenges and complexity for businesses. At Leanovations, we encourage businesses to include “Succession Planning”, during their annual “Business Strategic Planning Session” utilizing Plan-Do-Check-Act Process (PDCA).
Leanovations works with a number of small businesses (including many family businesses) to develop Succession Plans. Business succession planning must include a plan for transferring the trust, respect and goodwill that built up over the years. Generally, setting up a successful business succession plan involves the following 5 stages:
1. Selecting and developing a Team of Qualified Advisors – Developing an Advisory Business Council (at Leanovations we call this an ABC Team) to provide insight into Business opportunities, decisions, planning and general counseling with qualified advisors is recommended. This may include an accountant, attorney, financial planner and some industry leaders who can help assure that your plan legally, profitably, and affordably considers the business needs and objectives.
2. Investing in People and Recruiting Talent - Investing time in developing people in key management positions, and allowing them to exercise authority and control, is vital to a successful transition. It is important when the business is closely held, such as in a family, to separate the family dynamic from the business dynamic as much as possible. For those experiences and leadership skills needed to have the business prosper, that are not evident in the current members, it is required to recruit outside individuals to these key management positions. Hiring good people and being able to retain them, always pays dividends and is an important part in succession planning. For family businesses, this often involves a tough analysis of whether family members have the skill set to run the business or whether your key succession candidates are non-family members.
3. Commitment to a Transition Plan—Once a transition plan is developed and successors identified, the owners must be committed to the concept that the business must continue to create opportunities for generations to come. Once a succession plan is in place, the owners need to communicate that plan clearly.
4. Communication -- Communication of a succession Plan gives key management and/or family successors, if a family business, a clear understanding of the path to the future, as well as any role they may play. It also allows them to begin setting future goals and objectives for themselves that support the business. Ensure key employees remain with the business during any succession transfer by sharing the plan with them, keeping everyone involved with the plan and on the same page.
5. Implementation – Having the business continue into the future, without compromising current business owners needs is the most important step (and most difficult) in implementing the succession plan. The owners must be ready to step aside and allow the successors to take over. The owners must be prepared to take on new challenges away from the business, knowing the financial future is secure. As in any other Planning process, always be prepared to adjust and modify as needed. Using the Plan-Do-Check-Act/Adjust process (PDCA) is a perfect fit for creating and developing a robust “Business Succession Plan”.
Business succession planning seems to have lost its way in recent years. Maybe it is due to the stress of the economy, maybe it is because the current and next generation views business differently, or maybe it is due to the new technology that continues to create new challenges and complexity for businesses. At Leanovations, we encourage businesses to include “Succession Planning”, during their annual “Business Strategic Planning Session” utilizing Plan-Do-Check-Act Process (PDCA).
Leanovations works with a number of small businesses (including many family businesses) to develop Succession Plans. Business succession planning must include a plan for transferring the trust, respect and goodwill that built up over the years. Generally, setting up a successful business succession plan involves the following 5 stages:
1. Selecting and developing a Team of Qualified Advisors – Developing an Advisory Business Council (at Leanovations we call this an ABC Team) to provide insight into Business opportunities, decisions, planning and general counseling with qualified advisors is recommended. This may include an accountant, attorney, financial planner and some industry leaders who can help assure that your plan legally, profitably, and affordably considers the business needs and objectives.
2. Investing in People and Recruiting Talent - Investing time in developing people in key management positions, and allowing them to exercise authority and control, is vital to a successful transition. It is important when the business is closely held, such as in a family, to separate the family dynamic from the business dynamic as much as possible. For those experiences and leadership skills needed to have the business prosper, that are not evident in the current members, it is required to recruit outside individuals to these key management positions. Hiring good people and being able to retain them, always pays dividends and is an important part in succession planning. For family businesses, this often involves a tough analysis of whether family members have the skill set to run the business or whether your key succession candidates are non-family members.
3. Commitment to a Transition Plan—Once a transition plan is developed and successors identified, the owners must be committed to the concept that the business must continue to create opportunities for generations to come. Once a succession plan is in place, the owners need to communicate that plan clearly.
4. Communication -- Communication of a succession Plan gives key management and/or family successors, if a family business, a clear understanding of the path to the future, as well as any role they may play. It also allows them to begin setting future goals and objectives for themselves that support the business. Ensure key employees remain with the business during any succession transfer by sharing the plan with them, keeping everyone involved with the plan and on the same page.
5. Implementation – Having the business continue into the future, without compromising current business owners needs is the most important step (and most difficult) in implementing the succession plan. The owners must be ready to step aside and allow the successors to take over. The owners must be prepared to take on new challenges away from the business, knowing the financial future is secure. As in any other Planning process, always be prepared to adjust and modify as needed. Using the Plan-Do-Check-Act/Adjust process (PDCA) is a perfect fit for creating and developing a robust “Business Succession Plan”.
Lean Manufacturing May Qualify for Federal Investment Tax Credit - Section 41 of IRC
Lean Manufacturing May Qualify for Federal Investment Tax Credit - Section 41 of IRC
“To keep our nation leading the world in technology and innovation, we’re extending and modernizing the research and development tax credit. By allowing businesses to deduct part of their R&D investments from their taxes, this bill will continue to encourage American companies to pursue innovative products, medicines, and technologies.”
George W. Bush
While signing the Tax Relief Act of 2006 The White House December 20, 2006
President Bush’s concern for the men and women who work in manufacturing and the critical contribution they make to the U.S. economy is the driving force behind this tax relief and health care act of 2006. Manufacturers are full partners in the effort to build the future of the country in the marketplace for new products and ideas. Simply put, a healthy manufacturing sector is key to better jobs, fostering innovation, raising productivity, and higher standards of living in the United States.
Section 41 of the Internal Revenue Code (IRC), defines “Qualified Research” more broadly than some may think. Section 41 rewards manufacturers for keeping manufacturing and engineering jobs in the United States and Lean manufacturing activities may qualify!
The words ‘Research & Development” creates an image of scientists in white lab coats in sterile laboratories doing advanced research using expensive equipment and instruments. The IRS definition of eligibility under the R&D Tax Credit program is much different. Under the IRS guidelines, if you are developing, designing, testing new processes or products, or improving existing processes or products, which many Lean/Kaizen projects accomplish, your company may qualify. If your Lean/Kaizen projects have devoted resources to evaluating a new technology, investigating new materials, improving machinery or tools, developing and implementing lean manufacturing techniques, or improving the environmental impact of your processes, your company may be eligible for the R&D Tax Credit.
Both large and small companies are potential candidates for the credit. If you are doing things in your business to remain competitive in the global marketplace and designing or developing new or improved processes or products, you may be eligible for the credit. The R&D Tax Credit program is in place to reward and encourage Lean-Innovation amongst all U.S. businesses and it is particularly beneficial to the smaller companies who take a proportionally greater risk in staying competitive.
An overview of IRC Section 41
- Provides a credit against federal tax due equal to 20% of qualified research expenditures over a certain base amount plus 20% of certain qualified basic research payments.
- Net yield of credit on federal level is approximately 6.5% of qualified expenditures. (State credits may provide additional funding.)
- Companies may go back and amend returns up to three years
For additional information on IRC Section 41, please contact your tax adviser.
Despite Setback, Toyota Plans No Layoffs; Will Grow Through Lean and Innovations
Despite Setback, Toyota Plans No Layoffs; Will Grow Through Lean and Innovations
For those of us in the Lean Community who teach the Toyota Production System, the recent announcement that Toyota will lose money for the first time in 70 years is evidence that implementing Lean alone does not insure financial success. There is much more to developing a robust business plan then just implementing Lean.
The root cause of Toyota's current problem is the decision in the late 1990s to become the top global auto sales company. Toyota aggressively added capacity around the world and by 2008 had passed GM as the global sales leader. By focusing on expanding capacity to meet the sales goals, it required Toyota to borrow cash. In today’s market, this objective to become the sales leader made Toyota vulnerable with excess capacity if there was a steep drop in demand. This changed philosophy, to embrace growth and to become the biggest in sales, without regard to financial impact is not the lean way. Simply put, “Toyota lost its’ Way” of making small incremental and profitable improvements, and not to over extend financially.
A severe drop in demand, especially in North America, Toyota’s largest market, accounting for one-third of vehicle sales, and profit erosion from a surging yen were too much for Japan's No. 1 automaker. A strong yen hurts results because Toyota must convert overseas profits into the Japanese currency. With the U.S. auto sales not expected to recover until late 2009, and with the dollar already at a 13-year low against the yen, this could create additional hardships on Toyota.
Despite the setback, the automaker is still poised to stay ahead of its main U.S. rival, General Motors Corp., and be the No. 1 world carmaker in 2008. Toyota reported it sold 7.05 million cars worldwide during the first nine months of the year, compared with 6.66 million for GM for the same period. Toyota had reported strong growth in recent years, boosted by heavy demand for its innovative fuel-efficient models like the Camry sedan and Prius gas-electric hybrid.
Toyota Motor Corp., is committed to zero layoffs, and has not had any layoffs since the 1950s. This practice has become a part of their culture to ensure employment and stability for employees. Toyota announced it has no intention of drifting from its practice of avoiding layoffs for full-time employees either globally or for its 14 U.S. factories located in the South and Midwest. Instead, it assigns other tasks for employees when plants become idle, such as training or community service. Employees can also take unpaid time off. This practice has helped the automaker resist unionization at its factories; saving it from the high costs of labor plagued by its U.S. counterparts, making any U.S. layoffs by Toyota in the future unlikely.
Toyota is a relatively old-style Japanese company that offers lifetime employment, and only in recent years has hired and let go of temporary workers to adjust production.
Toyota vowed it would grow profitably through lean and innovations, this is what we call “Leanovations”, and it would return to profitability even if its worldwide sales fall as low as 7 million vehicles. The automaker will focus on hybrids and small cars, and invest in environmentally friendly technology to prepare for long-term growth.
Companies implementing Lean must continue to teach the Toyota Production System, and the foundation of Lean with smart innovations and profitable growth. It is obvious to us at Leanovations, that the Toyota executive team will reflect carefully, refocus their plans, develop corrective actions, and build a brighter future. Be assured Toyota will learn from this and become stronger, providing even better products and services. Can we say the same for the U.S. Automakers?
For those of us in the Lean Community who teach the Toyota Production System, the recent announcement that Toyota will lose money for the first time in 70 years is evidence that implementing Lean alone does not insure financial success. There is much more to developing a robust business plan then just implementing Lean.
The root cause of Toyota's current problem is the decision in the late 1990s to become the top global auto sales company. Toyota aggressively added capacity around the world and by 2008 had passed GM as the global sales leader. By focusing on expanding capacity to meet the sales goals, it required Toyota to borrow cash. In today’s market, this objective to become the sales leader made Toyota vulnerable with excess capacity if there was a steep drop in demand. This changed philosophy, to embrace growth and to become the biggest in sales, without regard to financial impact is not the lean way. Simply put, “Toyota lost its’ Way” of making small incremental and profitable improvements, and not to over extend financially.
A severe drop in demand, especially in North America, Toyota’s largest market, accounting for one-third of vehicle sales, and profit erosion from a surging yen were too much for Japan's No. 1 automaker. A strong yen hurts results because Toyota must convert overseas profits into the Japanese currency. With the U.S. auto sales not expected to recover until late 2009, and with the dollar already at a 13-year low against the yen, this could create additional hardships on Toyota.
Despite the setback, the automaker is still poised to stay ahead of its main U.S. rival, General Motors Corp., and be the No. 1 world carmaker in 2008. Toyota reported it sold 7.05 million cars worldwide during the first nine months of the year, compared with 6.66 million for GM for the same period. Toyota had reported strong growth in recent years, boosted by heavy demand for its innovative fuel-efficient models like the Camry sedan and Prius gas-electric hybrid.
Toyota Motor Corp., is committed to zero layoffs, and has not had any layoffs since the 1950s. This practice has become a part of their culture to ensure employment and stability for employees. Toyota announced it has no intention of drifting from its practice of avoiding layoffs for full-time employees either globally or for its 14 U.S. factories located in the South and Midwest. Instead, it assigns other tasks for employees when plants become idle, such as training or community service. Employees can also take unpaid time off. This practice has helped the automaker resist unionization at its factories; saving it from the high costs of labor plagued by its U.S. counterparts, making any U.S. layoffs by Toyota in the future unlikely.
Toyota is a relatively old-style Japanese company that offers lifetime employment, and only in recent years has hired and let go of temporary workers to adjust production.
Toyota vowed it would grow profitably through lean and innovations, this is what we call “Leanovations”, and it would return to profitability even if its worldwide sales fall as low as 7 million vehicles. The automaker will focus on hybrids and small cars, and invest in environmentally friendly technology to prepare for long-term growth.
Companies implementing Lean must continue to teach the Toyota Production System, and the foundation of Lean with smart innovations and profitable growth. It is obvious to us at Leanovations, that the Toyota executive team will reflect carefully, refocus their plans, develop corrective actions, and build a brighter future. Be assured Toyota will learn from this and become stronger, providing even better products and services. Can we say the same for the U.S. Automakers?
Two of Leanovations Lean Partners Awarded “Connecticut’s Most Successful Family Enterprises”
Two of Leanovations Lean Partners Awarded “Connecticut’s Most Successful Family Enterprises”
The University Of Connecticut’s School Of Business announced that ten family-owned businesses will be recognized, as “Connecticut’s Most Successful Family-Owned Enterprises” on November 12th, 2008. Of the ten businesses recognized, only four are manufacturers. Leanovations takes this opportunity to congratulate The Willington Companies, of Stafford Springs and Peter Paul Electronics, of New Britain, two of our “Lean Partners” for being recognized by University of Connecticut’s School of Business as “Connecticut’s Most Successful Family-Owned Enterprises” of the year. Both companies have been working with Leanovations since early 2007 developing an organizational culture that embraces a Lean enterprise, which engages and empowers employees to address opportunities to improve, through Kaizen events using cross-functional teams.
The University Of Connecticut’s School Of Business announced that ten family-owned businesses will be recognized, as “Connecticut’s Most Successful Family-Owned Enterprises” on November 12th, 2008. Of the ten businesses recognized, only four are manufacturers. Leanovations takes this opportunity to congratulate The Willington Companies, of Stafford Springs and Peter Paul Electronics, of New Britain, two of our “Lean Partners” for being recognized by University of Connecticut’s School of Business as “Connecticut’s Most Successful Family-Owned Enterprises” of the year. Both companies have been working with Leanovations since early 2007 developing an organizational culture that embraces a Lean enterprise, which engages and empowers employees to address opportunities to improve, through Kaizen events using cross-functional teams.
Leanovations Utilizes “Process Sensei Consultant Style”
Leanovations Utilizes “Process Sensei Consultant Style”
In the world of consultants, there are three basic styles: the Expert style, the Doctor-Patient style and the Process Sensei style. Sensei is a Japanese word for Teacher. When companies decide to begin Lean, it is highly recommended to bring in outside help using consultants that specialize as Process Sensei Consultants.
In the Expert style, the client diagnoses the issue and the consultant resolves it with little or no help from the client. The Doctor-Patient style is a bit more interactive wherein the client (patient) describes symptoms and then the consultant (doctor) diagnoses the issue and decides on the solution. Process Sensei style starts with the development of an equal “Partnership” between the client and the Sensei/consultant with the understanding that the client “owns” the problems (or opportunities as we say at Leanovations). Together, the client and Sensei/consultant form a “Lean Partnership” to diagnose the problem (opportunity), develop and implement solutions, and measure the results, working with cross-functional teams approach during a Kaizen Event.
At Leanovations, we fully subscribe to the Process Sensei style, and model our teaching and coaching after the Toyota Production System (TPS). We believe that in order to help our “Lean Partners” to be successful, we must teach and coach the Lean tools/techniques providing examples of success that they can build upon. Ultimately, we need to engage and empower the employees by asking the challenging questions designed to pull the teams together. As teams begin successfully conquering the opportunities for improvement through Kaizen events, the “successes” begin to fuel a culture necessary to sustain the gains. After all, the companies that are truly successful with Lean are the companies that understand it really is about engaging and empowering the employees. Success is 90% culture and 10% tools. To learn more about Leanovations go to: www.leanovations.com
In the world of consultants, there are three basic styles: the Expert style, the Doctor-Patient style and the Process Sensei style. Sensei is a Japanese word for Teacher. When companies decide to begin Lean, it is highly recommended to bring in outside help using consultants that specialize as Process Sensei Consultants.
In the Expert style, the client diagnoses the issue and the consultant resolves it with little or no help from the client. The Doctor-Patient style is a bit more interactive wherein the client (patient) describes symptoms and then the consultant (doctor) diagnoses the issue and decides on the solution. Process Sensei style starts with the development of an equal “Partnership” between the client and the Sensei/consultant with the understanding that the client “owns” the problems (or opportunities as we say at Leanovations). Together, the client and Sensei/consultant form a “Lean Partnership” to diagnose the problem (opportunity), develop and implement solutions, and measure the results, working with cross-functional teams approach during a Kaizen Event.
At Leanovations, we fully subscribe to the Process Sensei style, and model our teaching and coaching after the Toyota Production System (TPS). We believe that in order to help our “Lean Partners” to be successful, we must teach and coach the Lean tools/techniques providing examples of success that they can build upon. Ultimately, we need to engage and empower the employees by asking the challenging questions designed to pull the teams together. As teams begin successfully conquering the opportunities for improvement through Kaizen events, the “successes” begin to fuel a culture necessary to sustain the gains. After all, the companies that are truly successful with Lean are the companies that understand it really is about engaging and empowering the employees. Success is 90% culture and 10% tools. To learn more about Leanovations go to: www.leanovations.com
Weak Dollar Privides Strength in Manufacturing
Weak Dollar Provides Strength in Manufacturing
American companies are continuing to benefit from a boom in exports due mainly to the decline in the value of the dollar earlier this year.
The Commerce Department that said orders for durable goods jumped 1.3 percent in July compared with the previous month, led by a big gain in demand for commercial aircraft. Durable goods, which also include cars, appliances and machinery, are under scrutiny not only because they reflect business spending, but because they are also an indicator of consumer confidence.
The strength in durable goods is just the latest indication that manufacturing is actually holding on quite well and that is a big plus in this weak economy. These upbeat capital goods numbers amid a downtrodden U.S. consumer sector indicates how helpful a weak dollar is in the current cycle.
U.S. factories saw a surprisingly hefty increase in their orders for big-ticket products in July, reflecting continued strength in export sales and a boost to business investment from the government's tax stimulus package. The July increase equaled a 1.3 percent rise in June; both months produced the strongest gains since a 4.1 percent leap back in December.
Demand for commercial aircraft shot up 28 percent in July. Chicago-based Boeing Co. wrapped up the huge Farnborough, England, international air show last month with orders for 197 planes, including a headline grabbing deal with Air China for 45 planes. European rival Airbus did even better, signing orders for 247 planes.
With Connecticut manufacturing heavily dependant on aerospace and in keeping with the State of Connecticut’s Next Generation Competitiveness Strategy to help Connecticut suppliers achieve World-Class productivity, the Connecticut Aerospace and Defense Initiative (ADI) was created. The State of Connecticut, through the Department of Economic and Community Development (DECD), made available ADI funds to assist companies in the introduction or continuation of Lean manufacturing techniques within their organizations. Companies can receive up to 50% reimbursement for the costs of Lean training and services supplied by a Registered Service Provider such as Leanovations.
Leanovations has helped many Connecticut Aerospace and Defense Manufacturers and their Supply Chain to obtain ADI funding to help offset the cost of training and coaching for Lean manufacturing techniques. To find out more about ADI’s 50% reimbursement for Lean visit www.Leanovations.com Funding Opportunities tab.
American companies are continuing to benefit from a boom in exports due mainly to the decline in the value of the dollar earlier this year.
The Commerce Department that said orders for durable goods jumped 1.3 percent in July compared with the previous month, led by a big gain in demand for commercial aircraft. Durable goods, which also include cars, appliances and machinery, are under scrutiny not only because they reflect business spending, but because they are also an indicator of consumer confidence.
The strength in durable goods is just the latest indication that manufacturing is actually holding on quite well and that is a big plus in this weak economy. These upbeat capital goods numbers amid a downtrodden U.S. consumer sector indicates how helpful a weak dollar is in the current cycle.
U.S. factories saw a surprisingly hefty increase in their orders for big-ticket products in July, reflecting continued strength in export sales and a boost to business investment from the government's tax stimulus package. The July increase equaled a 1.3 percent rise in June; both months produced the strongest gains since a 4.1 percent leap back in December.
Demand for commercial aircraft shot up 28 percent in July. Chicago-based Boeing Co. wrapped up the huge Farnborough, England, international air show last month with orders for 197 planes, including a headline grabbing deal with Air China for 45 planes. European rival Airbus did even better, signing orders for 247 planes.
With Connecticut manufacturing heavily dependant on aerospace and in keeping with the State of Connecticut’s Next Generation Competitiveness Strategy to help Connecticut suppliers achieve World-Class productivity, the Connecticut Aerospace and Defense Initiative (ADI) was created. The State of Connecticut, through the Department of Economic and Community Development (DECD), made available ADI funds to assist companies in the introduction or continuation of Lean manufacturing techniques within their organizations. Companies can receive up to 50% reimbursement for the costs of Lean training and services supplied by a Registered Service Provider such as Leanovations.
Leanovations has helped many Connecticut Aerospace and Defense Manufacturers and their Supply Chain to obtain ADI funding to help offset the cost of training and coaching for Lean manufacturing techniques. To find out more about ADI’s 50% reimbursement for Lean visit www.Leanovations.com Funding Opportunities tab.
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