The Canadians Feel Our Pain

I only know Rhode Island from the Farrelly brothers movies. They are famous native sons.

This article from The Globe and Mail highlights Rhode Island's manufacturing problems:

...more than 11 per cent of its work force is jobless, the worst anywhere in a
state that rivals economically battered Michigan for the highest unemployment
rate in the country.

...few feel the pain quite like Rhode Island, a southern neighbour to Massachusetts that lost its manufacturing base in the 1960s and 1970s and is struggling to find a new economic engine.
The state reported a record 53,000 people out of work in October and its unemployment rate of 9.3 per cent tied with Michigan, home of the devastated auto industry, for the highest rate in the country.

Dominos

The large consumer product companies, of which automotive is the largest, were the first hurt by the credit crisis and then by the consumer confidence crisis. Now watch as their contractions affect the rest of the economy: (By Courtney Schlisserman and Bob Willis,Dec. 15 (Bloomberg))

Manufacturing in the U.S. slumped further in November as exports tumbled and automakers slashed their assembly rate to the lowest level in more than 18 years.

As consumers tighten their belts, so do the companies:

“Companies are cutting back on investment, capital, inventories and production and you should see this number going down,” said Lindsey Piegza, a market analyst at FTN Financial in New York. “The crisis has spread to all parts of the production line and we’re really going to have to cut back more.”

Well, at least exports will remain strong. Right?

As a recession spreads across the globe, the overseas demand for American products that had sustained U.S. manufacturing growth is drying up. The Commerce Department reported last week that American exports declined in October for the third straight month.

Hooverites

At Talking Points Memo, Josh Marshal discusses and article by Ed Kilgore regarding the Republicans' recent behaviour regarding actions to confront the credit crisis.

There's an interesting and I think important question here as to whether neo-Hooverite Republicans are pushing Hooverite policies for strictly economic reasons (creditors can do well in a deflationary economy), moral reasons (need a good hard recession to re-teach the poor moral values) or just because they're economic illiterates who just don't feel right echoing the calls of centrist and liberal economists.

Watching Senator Shelby's performance makes you wonder.

Plant Closing #17

From the Daily Journal in Northeast Mississippi:

SHERMAN - When furniture maker and retailer La-Z-Boy announced last month it was going to cut 850 employees company wide, this small community braced for what could happen to the Bauhaus upholstered furniture plant.

It turns out that furniture, especially La-Z-Boy loungers, is another discretionary consumer item being hurt in this downturn.

More on Forging

Regarding the Pakistan Ordnance Factory video I posted yesterday, I had a question about one of the processes. I think the process was probably hot forging. Here are a few other examples:
Brass Hot Forging:


Steel Forging: (although more of a Blacksmith method in this vid)


Aluminium Forging:

Plant Closing #16

Fleetwood is announcing some severe cuts. If automotive is hurting, I can understand how recreational vehicles would be killed. I drove by an RV sales lot on the way to Midnight Madness. The floodlights lit the behemoths.....

Fleetwood Enterprises Inc., the third-largest U.S. maker of recreational vehicles, said it’s closing 8 of its 24 plants because of reduced demand for travel trailers and factory-built housing.
The company expects to cut about 760 jobs, or 13 percent of the 5,700 positions it had at the end of August, as production is consolidated at other facilities.

Pilgrim's Pride Chapter 11

I posted about Pilgrim's Pride a few weeks ago. At the time they announced about 300 layoffs due to sluggish sales. Now:

The poultry giant, Marshall County’s largest employer, is seeking Chapter 11 protection. That would free the company from the threat of creditors’ lawsuits while it reorganizes its finances.

Matt Arnold, president and CEO of the Marshall County Economic Development Council, said Pilgrim’s Pride is in relatively good shape because its assets outweigh its debts.

“It’s just a matter of liquidity,” he said. “They need some cash to get them through a tough spot right now.

“I think we just keep plugging along. A lot of these farmers who had Gold Kist stock when it was cooperative kept their stock, and now that stock’s not worth a whole lot, but it’s going to come back up.”

What about the rest?

The car manufacturers appear in DC starting tomorrow.

Joe Murrey of The Bulletin, a Philadelphia paper, has a commentary about the prognosis for U.S. manufacturing entitled: "Can US Manufacturing Industry Be Saved? "

But if the Big Three fail what will be left of the U.S. manufacturing base? Televisions, computers, cell phones, radios and other electronics have already been ceded to Asia, particularly to China. The U.S. barely makes cruise ships, Boeing is becoming a relic, and U.S. factories dwindle as China assumes her spot as the factory floor to the world.

Joe's last sentence:

As for the U.S., its greatest trade surpluses with China stem from corn, wheat, animal feeds, hides and skins, pulp, cotton, meat and soybeans - what Paul Craig Roberts called the "export profile of a 19th century Third World colony."

Pakistani Manufacturing

Here is a promotional video from the Pakistan Ordinance Factory.
These vids make me smile because they are so earnest, "internationally recognized for quality and reliability", and the music is cheesy. But, still, interesting.
I could not imbed it, so here is the link.

I wouldn't mind working in the small arms plant, but the artillery factory might make me nervous.

I am sure many of you work in the defense industry.

http://www.youtube.com/watch?v=3wy8i8EXuPM

At about 2:53, is that semi-solid casting? or forging?

Plant Closing #15

Magna announces some plant closings:

Magna International Inc., battered by production cuts at Chrysler and General Motors, will shut two auto parts plants in the Toronto area next June, eliminating 850 jobs in the latest example of how the U.S. auto slump is creating fallout on this side of the border.

Since 2007??

ummm.... I can understand not being able to predict something, but how can it take a year to understand we are in a recession?

WASHINGTON -- The U.S. economy has been in a recession since December 2007, the National Bureau of Economic Research said Monday.

What good is it for a group of economist to spend the time and expense conferring to announce something that is a year old? There has to be a Monty Python skit that relates to this.

Plant Toilet Tails

I posted about the server room that was accessed through the woman's handicapped restroom. Here is another comment about a plant toilet.

My favorite restroom cubicle was on the far side of the tool and die shop. You went up a worn concrete stairwell. The men's room must have had 24 stalls, three double sided rows or 4 stalls. When the plant was built there must have been a heck-of-a-lot more laborers in the plant, and with stricter break schedules, that required so many stalls for peak usage times. At the time I worked there you hardly even ran into another user. Plus, the ambient plant noise gave you a sense of auditory "privacy".

What is your favorite spot?

Plant Closing #14

Plant Closing #14 is an automotive glass factory;

Pittsburgh Glass Works, the former auto glass unit of PPG Industries Inc., announced three plant closings and 150 layoffs to keep pace with slumping auto demand.
PGW will shutter production at its Oshawa, Ontario glass fabrication site in the first quarter of 2009, and close two satellite assembly plants in Newark, Del., and Cambridge, Ontario later in 2009.

I know GM is closing a vehicle plant in Oshawa. The Newark Delaware plant closing may related to the Chrysler plant closure there at the end of December.

Boosting U.S. Exports

The November 24 issue of Fortune magazine has a commentary by Ram Charan (with Jia Lynn Yang) titled "A Goal We Can Believe In". You can find it here.

The two page article discusses some ideas to help boost U.S. exports. This is especially important now in this time of crisis that highlights an area of weakness in our economy. We have consumed too much and produced too little. And now,

We are now experiencing a full-blown crisis of confidence in America's economy. It shows up in consumer spending, which fell more than 3% in the third quarter, the sharpest drop since the dark days of 1980. Corporations are cutting their capital investments drastically for 2009. People see unemployment rising and have good reason to think it could happen to them, if it hasn't already. By September, 760,000 jobs had been lost in the U.S. this year, with more mass layoffs announced every day.

Ram and Jia propose this for the new President: (And from what I have seen of Barack Obama's capability I am VERY hopeful that President Obama will have focused, capable, empowered cabinet, staff, and advising members that will be considering just this sort of thing):

The new President... needs to restore faith in America's economic engine. He must show real leadership to do that. But what does that mean in a situation like this? It may seem counter intuitive at the moment, when there are so many short-term dangers, to get Americans focused on the long run. But that's what the new President needs to do. As Obama himself said during the campaign, "It is going to be part of the President's job to deal with more than one thing at once." Confidence depends not only on urgent, short-term patchwork but also on the pursuit of believable and attainable goals. That's what a true leader does: sets a goal that is clear and then inspires people to focus on achieving it. That's how great organizations are run, and that's what this great country desperately needs at this moment. The next President can get us out of this psychological and economic funk by pointing the way ahead, especially with one overarching objective.

With the concern over "socialism" and the view that "government is the problem"* can we please get some leadership to help the U.S. compete with other economic organizations?

Here is their proposal:

Here's what I propose: Set a goal to get our fair share of exports and jobs in the world. That means putting aside our protectionist impulses and rolling up our sleeves to compete with the rest of the globe. Americans can do this: Our productivity is still among the highest in the world. And according to the Bureau of Labor Statistics, business sector productivity in the U.S. increased 19% from 2000 to 2007. The U.S. is the best in the world at nurturing new businesses and technologies, we have the best institutions of higher learning, and even our labor cost is competitive with Europe and Japan. But somehow all that doesn't translate into an ability to capitalize fully on our strengths.

They lay out some specific ideas. You should take a read. I like the idea of looking at our competitiveness as a matter of national security. "Rename [the Department of Commerce] the Department of Exports and Imports and make this cabinet post as critical as Treasury or Defense."


* This quote from Ronald Reagan's First Inaugural Address, January 20, 1981, is often misquoted to mean that there is no need for government oversight, regulation, or leadership.

Factory Laughs

Here is a funny video. Unless you want to gripe about the lax safety, injuries etc. (Scrooges)
I like the look and the sounds. You even here the forklift backup tone. Dead on capture of what a lot of factories are like.



As one of the commenters said:
Boss: Why aren`t you working!
Limbless employee:Dropped my starburst Chief
Boss: sighs *rolls up sleeves* Ugh if you want something done right...

Server Rooms are the "in" Place

Yesterday we heard about the alternate entrance to the server room. Now come "Server Huggers"

Server huggers relish spending time in air-conditioned data centers, sitting on raised floors under florescent lighting with a laptop connected to a console port of a server (or, if they are lucky, standing against a server rack using a dedicated terminal and a slide-out keyboard tray). They spend hours staring at command-line on a terminal and at notebooks of commands, passwords and IP addresses…

Remind you of the people who hang out in the measurement lab?

How Did This Happen?

We have heard blame placed at the feet of Democrats, Republicans, poor people, greedy home flippers.... Brad Delong has an extended excerpt of Michael Lewis's article "The End" in Portfolio magazine.

Michael Lewis believes that the seeds of our financial crisis were sown when Wall Street investment banks transformed themselves from partnerships to public corporations--that that destabilized their internal risk controls and incentives and made them go for variance

It continues to be enraging to me that the economy and the manufacturing base suffers because of the flippant risk accepted and the huge rewards as happily accepted by those in power.

From Michael Lewis:

I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.

How often does this happen in our plants?

Creative Access

Here is a good example of using creativity to solve a problem. It seems to be a common occurrence to find that a machine needs to be moved, but there is no space in the new area, or access is limited. There are lots of alternatives and solutions, you just have to be open to new ideas.
Here is a good example.

The access to the server room is now via the women’s bathroom.

The photo is a killer.

CEO Gluttony

It used to be a sin. At the New Century Financial Corp "Loan volume was down and defaults were up, the earnings report showed, and in recent weeks at least five stock analysts had downgraded the company's shares."

Moreover, four executives had sold nearly $20 million in stock in the last four months, six times as much as they had sold over the previous 12 months.

The LA Times goes on to state:

Those executive stock sales, however, have emerged as a central element in
the Justice Department's criminal investigation of New Century, according to a
person familiar with the inquiry who was not authorized to speak publicly.

Do manufacturing business CEOs have the same avarice?

Interview Tip

Here is a nice piece on an interesting aspect of the job hunt. What happens if a position is filed too quickly?

I went into their conference room, and was a bit startled by the fifteen people sitting around the table. This was known as "The Gauntlet." This group of people only asked a few, fairly non-technical questions. Most seemed bored, and some occasionally looked at their watches and yawned! Now, I am not the most exciting person in the world, but I am certainly not that boring. I finished the interview and left feeling quite confused. What the hell just happened?

The Lighter Side of an Assembly Line

Time for some comic relief. Does the Supervisor remind you of anyone that you know?

Dirty Finger Nails

Mitch Albom has an opinion. He has a thing or two to say to Congress if he had the chance.

Which makes me wonder why you're so against our kind of business? The kind we do in Detroit. The kind that gets your fingernails dirty. The kind where people use hammers and drills, not keystrokes. The kind where you get paid for making something, not moving money around a board and skimming a percentage.

From the November issue of Quality Digest: Lean Six Sigma as I Saw It - Part 1

H. James Harrington's November column is a cliffhanger. Harrington traces the roots of Six Sigma from Motorola through GE and into some further improvements from Allied Signal.

Motorola's Six Sigma program highlights:

• Record hard savings
• Focus on measurement
• Statistical analysis
• Process mapping
• Process capability analysis
• Statistical process control
• Graphical methods

GE's management ..brought some changes to the Motorola model:

• it added "define" to MAIC, making it DMAIC
• it placed a strong focus on the voice of the customer
• it added process redesign to Six Sigma
• it pushed Six Sigma into the product development area, creating Design for Six Sigma
• it extended Six Sigma to service
• it achieved cost savings as a result of changes to the process, not only from reductions to the staff.

Harrington then traces through the lean concepts at Ford, the death of lean at Ford, and ends with a question, :with lean all but dead in the auto industry, how and why did Toyota bring it back to life in the 1960's?"

The Market's Impact on Industry and the Role of the Government

How is this like the Great Depression?
http://video.nytimes.com/video/2008/10/08/business/economy/1194822635827/echoes-of-a-dismal-past.html?partner=permalink&exprod=permalink

CEOs to Speak at National Summit in '09

Let's hope manufacturing gets much more attention. The Detroit Economic Club announced the speakers.

DETROIT - More than a dozen corporate chiefs have agreed to speak at a national convention in Detroit next year on the future of manufacturing, technology, energy and the environment.
Speakers at The National Summit June 15-17 at Ford Field are to include James Mulva of ConocoPhillips, Matthew Rose of BNSF Railway Co., Michael McCallister of Humana Inc., Robert Nardelli of Chrysler LLC and Rick Wagoner of General Motors Corp. Ford Motor Co. Chairman Bill Ford and Dow Chemical Co. chief Andrew Liveris announced plans in September to co-host the summit.
Organizers say it's the nation's first such gathering and could promote a national plan to overcome industrial and economic upheavals.

Cleanliness Requirements

Depending on the type of product your factory produces there are different definitions of "clean".

For electronics there are a series of cleanliness guidelines that can be quite intense.

The International Organization for Standardization (ISO) has developed a code system called ISO Cleanliness codes, a universal standard for measuring and reporting particulate contamination levels in fluids. ISO 4406:99 is the newest
and most commonly used cleanliness code.

For more routine electrical and mechanical components you may also have requirements. These are stampings, laminations, forgings, machined steel, etc. Often a drawing will say something like "free of debris" or "clean and oil free". How does your plant handle these requirements? My experience is that usually there is minimal attention paid to cleanliness. Unless there has been a complaint in the past, parts are shipped with standard due care. What is standard due care?

• Practices such as:
• Parts are cleaned with machining coolant with no specific method defined.
• Parts are wiped down with whatever paper shop towel or rag that is provided.
• Blown off with air.
• Parts are put through a washer.
• Nothing is done at all because the process is considered to be clean (like plastic molding for example)

Does your plant monitor cleanliness? Let me know your experience. Please!

Businesses for the New Economy

With so many plants closing, many of us need to find new careers. Here is a golden oldie:

The View from Canada - Leo Panitch

Leo Panitch is a Distinguished Research Professor, renowned political economist, Marxist theorist and editor of the Socialist Register. Without delving into Panitch's pedigree of economic theory, his discussion here is another perspective to help sort out what happened.

Peter Schiff and the further fall.

Peter Schiff called the current meltdown. Viewing his appearance on November 20 on CNBC one is struck by his comment about the false economy.
"Our entire phony economy is callapsing around us."
"We have to go back to a sane economy where we save our money and actually make stuff."

Plant Closing #13

Paper is another thing in less demand in a weaker economy. Boise Inc announces some capacity reduction.

BOISE, Idaho, Nov. 17 /PRNewswire-FirstCall/ -- Boise Inc. (NYSE: BZ - News), a leading manufacturer of packaging products and communications papers, announced today that it will restructure its paper mill in St. Helens, Oregon, permanently halting pulp production at the plant and reducing annual paper production capacity by 200,000 tons.
The permanent capacity reductions will result in a loss of approximately 300 jobs at the St. Helens mill and 25 jobs in related sales, marketing, and logistics functions elsewhere in the company. Eligible salaried employees will be offered severance packages and outplacement assistance. Closure agreement negotiations will be scheduled with the AWPPW Local 1 to determine the impact for union employees.

Photo: Scott Butner's photostream

The Unemployment Rate

"The number of Americans filing for unemployment benefits approached a 26-year high." Ouch.

Via the Bureau of Labor Statistics.
THE EMPLOYMENT SITUATION: OCTOBER 2008

Nonfarm payroll employment fell by 240,000 in October, and the unemployment rate rose from 6.1 to 6.5 percent.
The unemployment rate rose by 0.4 percentage point to 6.5 percent in October, and the number of unemployed persons increased by 603,000 to 10.1 million. Over the past 12 months, the number of unemployed persons has increased by 2.8 mil-lion, and the unemployment rate has risen by 1.7 percentage points.

Plant Closing #12

From their website; Pilgrim's Pride produces healthy, high-quality food products that go into some of the world's finest recipes.

• Pilgrim’s Pride Corporation (NYSE: PPC) is the largest chicken company in the U.S. and the second-largest in Mexico.
• Net sales in fiscal 2007 totaled $7.6 billion.
• Pilgrim's Pride is currently ranked #327 on the Fortune 500 list of largest U.S. corporations.
• Pilgrim's Pride employs approximately 50,000 people in the U.S. and Mexico.

This news is not shocking from a percentage impact to their employment, what I didn't know is that a suffering economy impacts chicken producers.

HARRISONBURG VA - Pilgrim's Pride will cut more than 300 jobs nationwide as it wrestles with the sluggish economy, the company announced in a statement Friday. A source close to the company's Broadway plant says the local facility will likely cut "six to seven" positions. A Pilgrim's Pride spokesman would not confirm that figure

They supply Kentucky Fried Chicken, maybe people are eating out less.

Why Save Financial Industries And Not Real Industries?

Robert Reich has a great article at Talking Points Memo Cafe discussing why financial companies seem to be favored for assistance in this crisis, while real industries like the automotive companies are denied.

Why We're Rescuing Wall Street and Not the Auto Industry: Citigroup Versus General Motors
By Robert Reich - November 22, 2008, 1:29PM

Read it.

Viewed from Wall Street, Citi is too big and important to be allowed to fail while GM is simply a big, clunky old manufacturing company that can go into chapter 11 and reorganize itself. The newly conventional wisdom on the Street is that the failure of the Treasury and the Fed to save Lehman Brothers was a grave mistake because Lehman's demise caused creditors and investors to panic, which turned the sub-prime loan mess into a financial catastrophe -- a mistake that must not occur again. So, by this view, the government must do everything and anything to keep Citi alive. But GM? GM is just ... jobs and communities.

"GM is just ... jobs and communities." I don't know if you have been following the Congressional hearings. Did you pick up a "tone". It was infuriating.

Reich makes a great point. "...Wall Street's self-serving view of the unique role of financial institutions is mirrored in the two agencies that run the American economy -- the Treasury and the Fed. Their job, as they see it, is to keep the financial economy "sound," by which they mean keeping Wall Street's own investors and creditors reasonably happy."

Why don't we have a federal agency that is focused on manufacturing industries with a view to recognize unfair foreign competition and supporting a strong national manufacturing base?

Robert Reich is one of those people I always stop to watch on the pundit shows. He would be a great dinner guest. I wonder what role he might have in the new administration.

Worker Adjustment and Retraining Notification Act (WARN) for Employees

More of us need to be aware of what to expect if we are to be layed off. Or our plant is going to be closed. The Worker Adjustment and Retraining Notification Act (WARN) applies to employers with 100 or more employees. The purpose of WARN is "to protects workers, their families, and communities by requiring employers to provide notification 60 calendar days in advance of plant closings and mass layoffs".

There is an employee guide here.

WARN applies when an employer:
• Closes a facility or discontinues an operating unit (see glossary) permanently
or temporarily, affecting at least 50 employees
• Lays off 500 or more workers (not counting part-time workers) at a single
site of employment during a 30-day period
• Announces a temporary layoff of less than 6 months that meets either
of the two criteria above and then decides to extend the layoff for
more than 6 months
• Reduces the hours of work for 50 or more workers by 50% or more for
each month in any 6-month period. Thus, a plant closing or mass layoff
need not be permanent to trigger WARN

The Department of Labor has a fact sheet for employers here.

What happens if an employer fails to give the proper notice?

An employer who violates WARN is liable to each affected employee for an amount
equal to back pay and benefits for the period of violation, up to 60 days. This
liability may be reduced by any wages the employer pays over the notice period.
WARN liability may also be reduced by any voluntary and unconditional payment
not required by a legal obligation.
An employer who fails to provide notice as required to a unit of local government is subject to a civil penalty not to exceed $500 for each day of violation. The penalty may be avoided if the employer satisfies its liability to each affected employee within three weeks after the closing. In any suit, the court, in its discretion, may allow the
prevailing party a reasonable attorney's fee as part of the costs.

• WARN is enforced through the U.S. District Courts, as provided in section 5 of the Act.
• Workers, their representatives, and units of local government may bring individual or class action suits against employers believed to be in violation of the Act.
• The U.S. Department of Labor has no authority or legal standing in any enforcement action and cannot provide specific binding or authoritative advice or guidance about individual situations.
• The Department provides assistance in understanding the law and regulations to individuals, firms, and communities.

AIAG PFMEA 4th Edition Minor Corrections

For those of you that use the AIAG PFMEA manual, AIAG has published a few minor corrections. Several of the corrections are due to a common mistake where people say, "Process Failure Mode Effects and Analysis". The correct title does not include the "and". I probably do this myself. I rarely say more than "PFMEA" anyway.

FMEA (Potential Failure Mode and Effects Analysis) 4th Edition Errata Sheet
Page Original Language (see highlight) Corrected Version Language or explanation

Chapter III focuses on DFMEA
(Design Failure Mode Effects and Analysis)

Correction:

Chapter III focuses on DFMEA
(Design Failure Mode and Effects Analysis)

Exagerated Wage Claims

Have you heard how Detroit wages are about $70 an hour including benefits? Does this seem possible? An article in The New Republic, by Jonathan Cohn, tries to set the story straight.

Let's start with the fact that it's not $70 per hour in wages. According to Kristin Dziczek of the Center for Automotive Research--who was my primary source for the figures you are about to read--average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income--hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers.
More important, and contrary to what you may have heard, the wages aren't that much bigger than what Honda, Toyota, and other foreign manufacturers pay employees in their U.S. factories. While we can't be sure precisely how much those workers make, because the companies don't make the information public, the best estimates suggests the corresponding 2007 figure for these "transplants"--as the foreign-owned factories are known--was somewhere between $20 and $26 per hour, and most likely around $24 or $25. That would put average worker's annual salary at $52,000 a year.

OK, so where does the $70 an hour come from?

Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila.

That matches what I have heard about the massive legacy costs that the big three support, all of the retirees' health care costs and pensions. The transplants do not have this burden because they are newer and do not have many retirees, plus the corporations overseas have massive government support for the health care and retirement of those workers.

Plant Closing #11

The automotive OEMs do not look like they will convince Congress to loan them any money this year. I am not sure what this will mean. The CEOs say that it could mean huge job loses. For now, Chrysler has announced one of there truck plants that was already targeted to be closed will be closed early.

Chrysler has announced it is closing its plant a year early, by Dec. 31. It will lay off more than 1,000 workers.

Plant Closing #10

I just read that the Spam plant is working overtime because people are turning to cheaper meats. Now I see Sara Lee is closing a hot dog factory on the South Side of Chicago.

Sara Lee Corp. is closing its South Side kosher hot dog and meat processing plant, 1000 W. Pershing, leaving about 185 people without jobs.

Sara Lee plans to sell the plant..... good luck. I hope they do find a buyer. Sara Lee says that the kosher meat business is not a core business and not profitable enough. Maybe a more focused owner can keep it thriving.

The Buzzards are Circling

Hey, here is some good news for a change.

Plant closings mean huge opportunities for demolition, remediation, transportation and other related companies. The sheer size and complexity of a plant closing means millions of dollars in contracts are up for grabs.

Even in death there is life.

Plant Closing #9

I spent a night in Ft Smith once. Nice little town. I think I had to buy a membership in a club in order to drink there. Actually, it was just a bar, but the law said you had to be a member to drink there. Here is some bad news for the town.

Plastics manufacturer Jarden Plastics Solutions in Fort Smith is closing and will lay off 93 workers.
The company said Tuesday that external factors, including diminished demand from Whirlpool Corp., made the closing necessary. Whirlpool laid off another 700 workers at its Fort Smith plant last week.

Ft Smith is the "future site of the U.S. Marshals Museum."

Corrosion Protection

The Automotive Steel Partners has another publication that could be helpful to those of you who deal with corrosion to steel elements. Of you have inadequate corrosion protection you either receive corroded parts, or you ship them.

The publication brings together basic corrosion conditions, materials, coatings, manufacturing processes, design considerations, test methods and “lessons learned”.

Four types of corrosion are relevant to underbody structural components: crevice, pitting, galvanic and cosmetic.

The document is focused on automotive applications, but is a great resource for useful knowledge about various coatings and definitions. The focus is on the design engineer, but I think the plant needs to be as aware of the requirements and testing for steel parts so that the long term processes are properly focused.

A Plumber's Tale

NY Times has an article about real plumbers.

While Mr. Wurzelbacher’s question concerned Mr. Obama’s plan to raise taxes on people earning $250,000 a year, the median wage of the nation’s 436,000 plumbers, pipefitters and steamfitters in 2007 was $44,090, according to the Bureau of Labor Statistics.

Binomial Probability Calculator

I found a helpful web site, stattrek.com. Stat Trek, get it?  I needed to calculate the probability of only having one failure out of 248 tries. I know this is a binomial distribution problem and wanted to find an on-line calculator. The probability of a failure in the current population is 0.0204.

I wanted to know the probability that at least 1 fails. P(X ≤ 1) = P(X =0) + P(X=1) There are a bunch of on-line calculators that will tell you the binomial probability as well as the cumulative probability. Stattrek has a decent one. They also have tutorials.

Rick Wagoner

I was listening to the exchange between the US 3 Auto CEOs and the Senate Banking Committee. I am not sure who was asking the question. It was a Southern Senator, by the accent. He asked something like, can you guarantee that you won't come back for more money?

Rick replied, if you can guarantee exactly when the credit crisis will end, we can give you a solid estimate of what we need. He got a little hot. He is under immense pressure.

What is Happening at Your Plant?

Share your experiences. Is your plant seeing production cuts? Layoffs?
How is you management dealing with the situation? Is communications good? Are actions fair?

We all want to know!

Industrial Production Facts

Related to my prior post, I want to provide some definitions to help with understanding the data provided by the Federal Reserve Statistical Release.

What does the Industrial Production index cover?

The industrial production (IP) index measures the real output of the manufacturing, mining, and electric and gas utilities industries.

Manufacturing consists of those industries included in the North American Industry Classification System, or NAICS, definition of manufacturing plus those industries–logging and newspaper, periodical, book and directory publishing–that have traditionally been considered to be manufacturing and included in the industrial sector.

Where does the data come from?

On a monthly basis, the individual indexes of industrial production are constructed from two main types of source data: (1) output measured in physical units and (2) data on inputs to the production process, from which output is inferred. Data on physical products, such as tons of steel or barrels of oil, are obtained from private trade associations and from government agencies; data of this type are used to estimate monthly IP wherever possible and appropriate. Production indexes for a few industries are derived by dividing estimated nominal output.

All of the juicy details are here.

Industrial Production Increased in October?

Industrial production increased 1.3% in October, according to the Federal Reserve. This result follows a 3.7% decline in September.

However, the 1.3% increase is month over month, so the October result just reflects a return to more normal operations affected in September by hurricanes Gustov and Ike in the Gulf of Mexico and the Boeing strike.

Excluding these special factors, total industrial production is estimated to have fallen around 2/3 percent in both September and October.

At 107.3 percent of its 2002 average, total industrial production in October was 4.1 percent below its level of a year earlier. The capacity utilization rate for total industry rose to 76.4 percent in October, a level 4.6 percentage points below its average level from 1972 to 2007.

Hardest hit, construction supplies (-7.0%) and business equipment (-8.0%)
You can look at the whole thing here.

Plant Closing #8

Umm... Many of the articles about plant closings cite 3rd quarter earnings. Those might be the good old days..... Here is a piece on Dana

Revealing it lost $271 million on lower sales in the third quarter, Dana Holding Corp. announced additional layoffs and plant closings Thursday morning.The Toledo auto parts producer said it will shut as many as 10 more plants in 2009 and 2010 and will cut 5,000 jobs this year instead of the originally announced 3,000.

Dana just emerged from Chapter 11 in Febrary.

Bailing Out the Automotive Companies

I wonder how many of you work in businesses that rely on the automotive industry? If you do not work directly for an OEM are you a direct supplier? Tier 2?

The debate is on as to whether to give the big 3 some sort of support to get over the current credit crisis. The argument goes pretty much one of two ways.

Let them sink due to their own bad decisions. We have many alternatives thriving outside of Detroit.

The automotive companies support too many employees and retirees, and tiered suppliers to allow them to fail. Not now in this crisis. Plus, the US needs an automotive industry as a manufacturing base.

David Lazarus of the L.A. Times has an excellent article, "Bail out Big Three car makers? Sure, with conditions".

"It would be hugely catastrophic if Detroit went under," said Ehrlich, 60. "Some level of assistance would be helpful." Then he climbed into his German-made Porsche and roared off.

Lazarus's article, coming from a Californian perspective, is worth the read.

Plant Closing #7

Siemens announced the acceleration of a pant in Bellefontaine Ohio.

The Bellefontaine plant closure will affect 434 jobs.

Siemens originally announced the closing for 2010.

The work will go to existing Siemens facilities in Monterrey and Juarez, Mexico, and to other third-party suppliers.

Automotive Steel Partners

If you do any work with steel stampings then you may find the work of the Automotive Steel Partners useful. One publication that they have gives some guidelines for establishing and evaluating CMM measurement:

Automotive Body Measurement System Capability Gage Capability for CMM Data Evaluating the capability of a CMM differs slightly from a check fixture. Since CMM measurements are taken using automatic programs, manufacturers generally are not concerned with the operator or reproducibility effect. In this instance, the gage variability for a CMM consists primarily of repeatability. Some manufacturers, however, break CMM gage repeatability down to static repeatability and dynamic repeatability. Dynamic repeatability, or setup error, represents the ability to measure identical part characteristics using the same gage on the same part with loading and unloading between measurement trials. In the case of static repeatability, the part is not unloaded or unclamped between trials. Thus, static repeatability represents the pure error in the measurement instrument. These data suggest that the dynamic repeatability, based on the setup or loading/unloading of the part in the holding fixture, is the main source of CMM gage error. Here, more than 90% of the repeatability error repeat may be attributed to loading and unloading of the part between measurement trials.

Voting Lines

Have you followed the problem with long lines at polling places? I watched the news running up to the election and saw the long lines. There was discussion about lawsuits to add more machines or times in some locations. Why was there such a problem?

When I voted there were no long lines. And on election day itself there didn't seem to be reports of a problem lingering through the day. At opening there was often a line built up but as the day progressed these lines dwindled down.

At my polling place the "fill in the oval" method is used. You get a huge ballot sheet and fill in the oval of your choices with a black ink pen. When you are finished you take the ballot to a scanner and your votes are scanned in. There is a paper record and the votes are electronically tabulated.

Here is the process where I live:

The sign in desk had 3 staff.

Step 1: had you sign a signature card and show ID.
Step 2: checked you against the voter roll.
Step 3: handed you the ballot and explained what to do next.Each of these steps took about 15 to 30 seconds.
Step 4: queue waiting for a voting station.

There were four of the portable voting desks that many of you have seen. The voting desks have fold up screens on three sides to offer some privacy. In addition to the four voting desks the staff had set up four additional desks with cardboard screens. This brought the total "fill in the dot" stations to 8.

Step 5: fill in your selections.

I will tell you that step 5 was the bottleneck. The ballot had the national races, state races and proposals, and a bunch of judges and other "stuff". If a voter actually weighed in on every single issue they probably had to fill in 20 ovals. Assuming they knew their choices in advance (hahaha) it might only take 2 minutes. I watched some people stand there for 10 minutes.

Step 6: have your ballot scanned. There was one scanner. This took about 10-15 seconds, including banter.

The staff could have increased output by adding a few more tables if needed.
What went on in your area?

Census Bureau Reports September Manufacturers' Data

The U.S. Dept of Commerce has released the September 2008 "Full Report on Manufacturers' Shipments, Inventories and Orders".

New orders for manufactured goods in September, down two consecutive months, decreased $11.2 billion or 2.5 percent to $432.0 billion, the U.S. Census Bureau reported today.

There is a lot of data in the report, almost all grim. One industry segment that stood out was farm equipment. Year to date increase over 2007 was 26.5%. Most other segments were down. And this is September data, before most of us were aware of the crisis.

Plant Closing #6

A recent post explained that the cost of labor in China was 4 to 5 times more expensive than in countries like Cambodia and Bangladesh. The global downturn is also having an affect on the global manufacturing base. Chinese exports are declining which is having an effect on toymakers that export to the US.

European Plants Hit Too

Europe automotive industries are also in a crunch. Bosch announced measures to deal with reduced orders in Europe.

Some 3,500 workers at the Bamberg plant will start working reduced hours on Friday, with the measure set to last six months. The workers affected produce diesel engine components.
Bosch's move comes as the global financial crisis weighs heavily on the auto industry. In recent weeks, automakers such as BMW AG, Daimler AG and General Motors Corp. subsidiary Adam Opel AG, among other automakers in Europe, have announced production cuts.

Ugh... October was BAD

I think we all knew this.

NEW YORK (Reuters) – U.S. factory activity contracted sharply in October, falling to its lowest in 26 years as the financial crisis ravaged the world's largest economy and its trading partners around the globe.

From the Institute of Supply Management:

(Tempe, Arizona) — Economic activity in the manufacturing sector failed to grow in October for the third consecutive month, and the overall economy concluded 83 consecutive months of growth, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

Amazing that we had 83 consecutive months of economic growth. It makes the 84th the more striking.

Plant Closing #5

The housing downturn claims another factory:

It's not merely that Shaw Industries Group Inc.'s Plant 76 is the economic lifeblood of Trenton and Dade County, its 440 good-paying jobs make it the county's largest private employer. The factory has been a constant here for some 40 years, changing hands from time to time but always providing economic certainty: It was where people went to work after high school, and the only place many ever worked.

In towns like Trenton there are often only one main plant. Sometimes they have survived through the years by leaning the operations enough to remain competitive. The recession was too much to withstand.

Demographer Johnson says small towns that lose their main employer often fade
into obscurity, but he believes Trenton will endure: "Their saving grace is
their proximity to the Chattanooga metro area. A lot of these people are
certainly going to find jobs there."

Hope.

Melamine - Tainted Food. How Could it be so Pervasive?

Have you followed the current melamine scandal from China? The first scandal involved pet food.

Melamine was first discovered in food during the pet food scandal in 2004 (and again in 2007), which caused the death of many animals in the United States.

The new scandal started with baby milk contamination that hospitalized a bunch of kids.

The scandal broke on 16 July, after sixteen infants in Gansu Province who had been fed on milk powder produced by Shijiazhuang-based Sanlu Group were diagnosed with kidney stones.

The milk was contaminated with melamine. What is melamine?

Melamine is sometimes illegally added to food products in order to increase the apparent protein content. Standard tests such as the Kjeldahl and Dumas tests estimate protein levels by measuring the nitrogen content, so they can be misled by adding nitrogen-rich compounds such as melamine.

In other words, melamine is sometimes added to milk to make the milk appear to be a higher grade or to allow diluting to stretch the milk and earn more profit. (Same reason it was added to pet food)

Over the course of a few weeks melamine was found throughout the Chinese milk supply. Then it was found is many products that contain milk in China. Then it was found on products outside of China that contained Chinese milk products.

Now.... it seems meat may be contaminated.

In an AFP news report, Zhang Zhongjun, programme officer with the Food and Agricultural Organisation, said China’s agriculture ministry was investigating the possibility that melamine had been added to animal feed.
“If the feed is found to be contaminated, then there is the possibility (that pork, chicken, fish and beef could also be contaminated),” he said.
Zhang believed that feed producers could have laced their products with melamine to falsely boost protein content, similar to the methods of milk producers.

The question that I have is, how can melamine be so pervasively used, by so many companies, and so many employees, and there is no whistle blown? How likely do you think it would be for some illegal or immoral practice to be conducted in your plant without someone alerting authorities?

At the Mercy of Design

How often do yo think about how linked your factory is to the products that you sell? Sometimes sales are simply due to the overall economy, as they are right now. However, your company is always fighting for market share from your competitors. the design of your product matters. Brandweek.com has an in-depth article about something called Design Thinking.

When Whirlpool launched its KitchenAid Series II line of appliances in 2007, the company was taking a bigger-than-usual gamble. Whirlpool's designers didn't just imbue the Series II—a refrigerator, microwave, range, oven and dishwasher—with the kind of sleek, industrial look popularized by TV foodie shows; the appliances shared distinctive design touches like responsive black touch display panels and bow-shaped chrome handles—clear indications that each appliance was meant to be part of a set.That may sound simple, but in fact it broke with industry orthodoxy. Conventional wisdom holds that consumers buy stuff like this piecemeal, most often as a "distress purchase" when the old one breaks down. So why did Whirlpool spend a lot of its own money to create a uniform look when most consumers wouldn't care?

The company's approach to advertising was similarly counter-intuitive: The brand advertised the whole line at once. Usually, ads for refrigerators come in March and campaigns for ovens hit in late summer.

Because the design is closely linked to life on the shop floor it is good to know some of the current thinking about best practices. Hopefully, the design activity has some linkage to the manufacturing environment.

What Operation Do You Work In?

This is a dairy plant.

Let me know what part of the plant operation you work in.

I am currently working in a mix of several areas, mostly focused on assembly.

How about you?

Manufacturing Operations

• Processing

• Assembly

• Material Handling & Storage

• Inspection & Testing

• Coordination & Control

Textile Labor Costs

Here is some interesting data about the costs to produce textile goods in various countries. The data is a little dated. From EmergingTextiles.com:

...lowest labor costs are still in Bangladesh, at 22 US cents per hour or five times lower than in China's richest coastal areas.
Labor costs include wages, social charges, and a series of bonuses.

$0.22 per hour?

In addition to Bangladesh, Cambodia, Pakistan and Vietnam are other apparel exporters taking advantage of extremely low labor costs at 33 cents, 37 cents and 38 cents per hour, respectively.

What about China?

China's lowest labor costs are at 55 cents in the country's inland and remote areas while labor costs may now reach US$1.08 in certain areas of coastal provinces.

Recent strengthening of the dollar will help US relative costs, but..... wow.

Legacy Automotive Shrinks

The current economic crisis is another blow to the US automakers. The high price of gasoline hurt large size vehicle sales. Then the lack of demand for both new and used large sized vehicles hurt the resale value of all of those vehicles currently being leased. their value plummeted. The big three had to write of billions of losses. Then the credit crisis and drop in consumer confidence hurt ALL vehicles sales.

Somehow GM and Chrysler started to discuss merging. I don't know how these things start. I suppose the big dogs sit around in the board room and toss this stuff around. Maybe Cerberus first broached the subject. There has been news leaking about discussions for weeks. Forbes writer Joann Muller wrote an article, Picking Over Chrysler's Bones, with some further details.

Only seven of the 26 models in Chrysler's lineup are likely to be retained if General Motors merges with Chrysler.... They are the Chrysler Town & Country and Dodge Caravan minivans; Jeep Grand Cherokee and Wrangler SUVs; Chrysler 300 and Dodge Charger sedans; and the Dodge Ram pickup. Together, those core models account for 56% of Chrysler's sales.

The alternative to a merger is apparently bankruptcy. Even with the better option of a merger, Muller's article details some of the expected fallout:

....up to half of Chrysler's 14 assembly plants would close, resulting in 24,000 hourly and administrative job cuts, Grant Thornton says. (About 5,000 cuts have already been announced.) In all, the company says 30,000 to 40,000 of Chrysler's 67,000 existing jobs would be eliminated.

That is darn close to 60% staff reduction.

Cartoon about the topic here.
Intersting discussion about it here: new big three; Toyota, Ford/Mazda, Honda?

Industry Classifications

I thought it would be appropriate to define the types of industries plant rats work in. Roughly speaking there are three types of general industry classifications. I work in a secondary type industry. My plant takes incoming materials and produces products. In fact, we use little raw material. We mostly take incoming components and produce final assemblies.

• Primary Industry (sources of raw materials) – e.g., Off-shore oil rig in Gulf of Mexico petroleum-based feedstocks, mining.
• Secondary Industry (converts raw materials into products) – e.g., Maytag’s microwave cooking units
• Tertiary Industry (service industries) – e.g., repair and maintenance of automobiles.

Now that I think about it, farming is also a primary industry.

I would be interested in hearing about your industry!

Plant Closings #4

This one is automotive related:

SHELBYVILLE, Tenn. -- Summit Polymers Inc. has announced plans to close its Shelbyville plant in January, leaving 263 people jobless.
The facility has 222 hourly production workers and 41 salaried employees.
The plant, which began production in 2004, was built to supply plastic interior parts, primarily for trucks and sport utility vehicles

There will be MANY MORE of these closings.

Plant Closings #3

I am by no means trying to list all plant closings. There are too many to capture anyway. I just try and pick out the ones that may have something of a lesson to learn. This article is posted in Triangle Business Journal:

Silver Line Building Products will shutter its plant in Durham before the Christmas holiday, laying off 428 people, according to the state Department of Commerce.

Silver Line, which makes vinyl windows and patio doors, told of its actions in a WARN Act notice with the Commerce Department. The company says it expects the closure to be effective as of Dec. 20.

Sometimes timing is everything. "The company came to the Triangle just four years ago, announcing in December 2004 that it would build a factory in Durham and employ 800 workers." Ouch, just before the housing boom ended.

Inventory Reduction

I know that my company is tightening its belt to conserve cash and reduce costs. Everyone, even households, will try and live off of existing inventory for as slong as possible.

"There's clearly been a slowdown in steel demand, which we have noticed in the United Kingdom, in export markets and in Southern Europe," a Corus spokesman said. "We are taking steps to adjust our production to tie in with the new demand realities and to maintain a low level of stocks."

The company, owned by India's Tata Steel, now produces more than 20 million tonnes of crude steel a year.
A collapse in steel prices, producers and traders de-stocking instead of buying new material and a gloomy demand outlook have helped force steelmakers across Europe to cut production.

Plant Closings #2

Another side effect of belt tightening. This time it is due to a reduction in direct mail advertising.

NC direct mailing company IWCO Direct officials say 380 workers are losing their jobs because a plant that develops direct mail advertising in a small North Carolina town is closing.

Officials handed out notices Thursday at IWCO Direct in the Wilson County town of Elm City. The workers earned between $9 and $25 an hour and were given 60 days severance pay.

The company's Debora Haskel said the plant was closing because fewer companies are sending brochures in the ailing economy. Haskel said the closing "is completely market driven.

"Credit card marketers aren't making as many offers as they used to," Haskel said. "They are not making as many (direct mail) loan offers."

This is a big difference from cutting back a shift or eliminating overtime. This is a permanent closing of a factory. It will not come back.

Doesn't it seem like direct mailing should be done on a regional basis anyway? The "IWCO said it is moving its operations to Minnesota and continues to send 200 million mailings a month." It seems more efficient to me to keep a spread of regional mailing centers to reduce logistics costs. This is how Netflix does it.

Using the Pause for the Upturn?

I think most producers are always looking at ways to be more agile. Recently there is an additional focus on being "green". Agility on the plant floor allows for shifts in product mix by having programmable controllers and CNC machines used in work cells. Green is now focused not only on emissions, but on ways to reduce costs by being more efficient in the indirect materials used.

When the next upturn comes, chipmakers aim to have much leaner, more agile fab operations ready to capitalize on it. That was a dominant theme at the International SEMATECH Manufacturing Intiative (ISMI) conference in Austin, TX (Oct. 22-23). Chip factories will also run greener, cutting costs at the same time, by using less energy, water, chemicals, and other consumables.

Lean manufacturing has been a mantra for decades and a way of life for Toyota since it reached maturity in about 1975. The current immense slowdown will shock many managers with the realization that some "lean plants" are not as flexible as hoped. I am sure the lean idea will be refreshed and become even more entrenched in modern thinking.

Another Reason the Current Crisis is Going to Hurt

"Consumer spending accounts for more than two-thirds of the U.S. economy," is a quote from an article by David Lazarus in the LA Times.

U.S. retail sales fell in September for the third straight month -- the first time this has happened since the government started tracking such data in 1992. The holiday shopping season is expected to be the worst in years. But some forecasters are predicting that spending will pick up by the middle of next year as consumers shake off the recession blues.

Now is the time to consider how well our factories and workshops have been capacitized. With orders declining how will production be reduced? Will an expensive large integrated line have to be run for one shift a few days a week? Or, will is be run with fewer employees to meet the new output requirement?

Job Loses on the Rise

The New York Times has another article about the downward trend in employment. You have to do a free registration to read the article. I think all of us working in production already know. Some of us are watching as layoffs occur.

As the financial crisis cuts demand for American goods and services, the workers who produce them are losing their jobs by the tens of thousands.

Some industries have been hit hard and fast; heavy appliances, automobiles, expensive consumer goods like TVs.

In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.

With the current mood I am sure we have not seen the bottom of the tightening yet. So factories will continue to see lack of work.

Factory Girls in China

Howard W French, in the New York Times, has a review of a book about factory life in China. The book, Factory Girls - From Village to City in a Changing China , focuses on the huge pool of young women that migrate from villages to work in factories in the industrial centers of China.

The author is Leslie T. Chang. It turns out Leslie has a profile on blogger. She contributes to China Beat.

The life Leslie describes for these workers sounds harsh. But it is a way to make some progress from the even harder village life. The book sounds interesting. I have been to China and visited many factories there.

The recent economic downturn we are experiencing in the US is also having an effect on China. Factory orders are down. An economy that has been on a steady rise for years will be shocked when the brakes are put on.

Improvement Planning Charts

Does anyone have some good examples of improvement planning charts? What I mean is a chart that shows how some planned fixes should affect quality or efficiency over time.

Step Chart Elsmar cove has a set of slides about "Error Proofing Techniques" slide 3 has a quality Step Chart (Has note Copyright General Motors. All rights reserved)

This kind of chart comes in handy to show some projects that will be coming online over the next months to solve high defect rates, high downtime, etc.

I have not found a good standard so far. Any suggestions?

Is Your Company a Top Supplier?

Industry Week.com has an article about Proctor & Gamble's 2008 Top Supplier's.

From P&G's 80,000 suppliers 6 were selected. The selections were made "for scoring the highest in broad-based quantitative and qualitative evaluations conducted by the company."

I wonder what the criteria was? I assume the 6 had zero quality problems. Probably they met some cost reduction goal. Another criteria is probably delivery on time. What do you think it takes to be a top supplier? And, does your company qualify?

New Book - Predictably Irrational

Dan Ariely has written a new book called "Predictably Irrational - The Hidden Forces That Shape Our Decisions". I just started to read it. I browsed through the text at the library and found the first chapter interesting. He asks, "do you know why honor codes actually do reduce dishonesty in the workplace?" I don't know the answer yet, but he promises I will know by the end of the book.

Here is a hint about one of his central premises; which middle circle is larger? Many of you have seen this optical illusion and know the center circles are the same size. Yet they LOOK different. The circle surrounded by small circles looks larger than the one surrounded by larger circles. The brain knows what it knows, but sees what is sees.
Being cognizant of this brain function can be helpful when training or explaining.


Update: I finished the book. It was an interesting read. Ariely describes a bunch of experiments he and colleagues conducted to delve into human behavior. I suppose some of this information would be useful for general skill improvement.

You can check out more at predictablyirrational.com.

Getting Certified

Many of us ponder whether to seek certification or not. There is a huge time commitment and there are some significant costs. Taking the ASQ Six Sigma Black Belt CSSBB test ("Stand out as a quality leader in your organization with an ASQ certification next to your name.") cost non-members $420 and members $260. The benefits are personal pride and potentially some career gains.
Mike Micklewright has an interesting article in Quality Digest entitled Black Belt For Sale. Mike is an experienced quality and manufacturing engineer who finaly took the plunge to seek certification. Because of his vast experiences he struggled with how to prepare for the test. In order to understand what to expect he bought a common primer. he found himself focused on the test and not on knowledge, per se.

I was gaining the knowledge of how to pass a test so that I could become
certified. I wasn’t gaining much in the way of knowledge. W. Edwards Deming
would have been ticked off!

Mike's honesty wrung true with me. Topics of whether to certify or not, who gave the certifier the right to judge competency and charge such fees, and is the certification worth it, are ongoing.

The Worsening Economy

With the economy continuing to falter we hear about more factory closings. Ford and GM just announced early closings of plants scheduled for closure. There are federal guidelines governing companies in cases like this. From the US Dept of Labor:

The Worker Adjustment and Retraining Notification Act (WARN) protects workers, their families, and communities by requiring employers with 100 or more employees (generally not counting those who have worked less than six months in the last 12 months and those who work an average of less than 20 hours a week) to provide at least 60 calendar days advance written notice of a plant closing and mass layoff affecting 50 or more employees at a single site of employment. WARN makes certain exceptions to the requirements when layoffs occur due to unforeseeable business circumstances, faltering companies, and natural disasters. Advance notice gives workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain other jobs, and if necessary, to enter skill training or retraining that will allow these workers to compete successfully in the job market.

But are we now in a period of "unforeseeable business circumstance"?

Error Proofing vs. Process Control

I recently had a discussion about the differences between error proofing and process control. Later I was looking for documented answers and realized that error proofing itself is described by several terms with slight shades of meaning. There is also mistake proofing, mistake prevention and mistake detection, fool proofing (now seen as a derogatory phrase but what was its definition?), and Shideo Shingo's description as related in an Elsmar Cove discussion.

Poka Yoke roughly translates as mistake proofing and is typically applied to the PROCESS to prevent the cause of the mistake, shut the process down if the mistake occurs, or trigger an alarm if the mistake occurs. This was originally called Misu Yoke, or fool proofing, but was quickly changed, when Japanese sensibilities were offended by the term fool (anyone can make a mistake).Shingo uses the term Error Proofing to refer to actions applied to the DESIGN to prevent errors from occurring. This could include the addition of design features to prevent misassembly defects such as reversed, upside-down, etc. This could include making the part asymmetrical so it can only be assembled one way, or making it perfectly symmetrical so it does not matter how it is assembled.

More to come

Operating with a Sense of Urgency

The Harvard Business School Working Knowledge website has a book excerpt from "A Sense Of Urgency" bu John C. Kotter. The section excerpted deals with urgency arising from crisis.

The problem with using crises to reduce complacency and create urgency is that the tactic is a potential diamond sitting on a rock surrounded by quicksand and very nasty beasts. Any naiveté about the downside risks can cause disaster.

Kotter lists four Big Mistakes that can be made when asserting or expecting urgency in a time of crisis. He makes some good points. Could be a good read. Mistake #2 is especially timely, "Going over the line with a strategy that creates an angry backlash because people feel manipulated."

John Malkovich Feels Your Pain

The November issue of Esquire features a "What I've Learned" by John Malkovich. A few of his comments struck home.

"Nothing you do particularly matters. But I'm not sure that's a great excuse for doing it poorly."

How often have you had to run against the organizational barriers that stood in your way? Perhaps there was a manufacturing cost reduction that needed a dozen approvals before you had the chance to even run TRIALS. The better of us keep pushing even when you feel that it will not amount to much.

"I've pretty much learned not to worry about things I can't control. I often find myself with friends or acquaintances and they're worrying about this or that - I say, You're worried about the plane going down? What are you, a pilot?"

This is a good one. I often hear, "I am worried about this...or that." I always respond happily that by identifying a potential problem we have a great chance of developing the process to prevent it, or at least detect the problem. Knowing the failure mode is a big part of the solution. Remember the old idiom, necessity is the mother of invention. Sometimes the organization needs worried non-pilots. In the manufacturing business there is little you cannot control if you just know what "it" is that you need to control.

The November issue of Esquire also features Halle Berry as the "Sexiest Woman Alive"

Poop Plant?

Alcohol brewed from corn is becoming common place. Cellousolic biofuel is still in development. But alcohol from cow manure?

Dallas-based company catches a lifeline for completing its troubled manure-powered ethanol plant in Texas. Three weeks after facing the possibility of canceling construction of its cattle-manure-powered ethanol plant, Panda Ethanol has cut a deal with its lenders to complete the Hereford, Texas, facility.

I am not too familiar with continuous processing plants. Anyone work in the new biofuels industry?

Ford's Big Time Factory

Ford Motor Company is in dire peril, along with many other legacy manufacturers. Many of us older (ahem) factory rats remember large factories bustling with thousands of employees. Now there are fewer of those vertically integrated behemoths. Ford's Rouge complex was an iconic standout of the industrial age.




Interior of the Ford River Rouge tool & die factory United States. Office of War Information. Overseas Picture Division. Washington Division; 1944

Recently Ford stock, NYSE symbol "F", traded as low as $1.88 a share, the lowest price in 25 years. Ford's CEO Alan Mulally says bancruptcy is not an option. But you have to wonder when the slide will end.

So far this year, Ford's U.S. sales are down 17 percent, and its market share has dropped from about 26 percent in the early 1990s to around 12 percent last month.

PFMEA

The PFMEA is one of the most useful yet underutilized tools for analysing a process to find potential problems and assign controls. Do you find that the failure modes for quality problems we find at the customer are usually well known and not documented in the PFMEA or not well controlled? Any comments about effective PFMEA usage?

QualityTrainingPortal has a description of the PFMEA.

What It Is Used For
To methodically examine a process or product design to identify where failures can occur and what the relative risks are for each mode of failure.
When to Use It
Start using this tool during the design stage for any process or product.
On existing products and processes, this tool can be used at any time as part of improvement efforts.
Important Notes
FMEAs are a complex undertaking and should always be conducted by a team.
FMEAs need to be updated whenever changes are made to the process or product.