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Newsletter no.2
dec '11 - april '12

One valuable mail, every 4 months
Dear sir, mrs,

This is the second newsletter of! is a knowledge platform about all common business improvement methods, without prejudice. You should see us as a source of ideas! If you like our site, we hope you will spread the news of our existence, for example by forwarding this newsletter or by linking to our articles.

All methods for continuous improvement address one and the same question: How can I serve my customers with products which are of maximum value to them – but at the lowest possible costs and with an acceptable delivery time.

Therefore it is no wonder that attempts are made to combine the strengths of two or more improvement methods. Lean Six Sigma is the most familiar example. Less well-known is however the combination of Lean and TOC. In this newsletter therefore among others two articles about Lean TOC.

First, a discussion of the book "Isn't it Obvious" of Eli Goldratt. In this book TOC strategy and tactics are applied to retail, but most tactics turn out to be Lean!
In the book Velocity we see a remarkably similar approach: Again a strategy is developed with TOC, but this strategy is accomplished with Lean and Six Sigma tools.

Hope you enjoy our newsletter!

Best regards , 
Dr Jaap van Ede, 
owner and editor-in-chief

Via Twitter we keep you informed about our newest articles and cases process improvement.

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A. Outline of new in-depth articles:

1. Lean:  The evolution and state-of-the-art regarding Lean  
Analysis, includes cases Wipro Technologies & Stork

2. TOC:  Why obvious solutions are not always accepted*
Review:   Isn't it obvious?

*) free registration needed, we respect your privacy

3. Lean: Framework to evaluate outsourcing lean logistics   
Case:  Scania

4. WorldClass: Combining Lean, Six Sigma and the TOC
Review:   Velocity

Summaries of these articles you will find below. For more case descriptions, see our case-menu.
Do you have suggestions, remarks, ideas?
 Please send us an e-mail

B. Summaries new articles about the application of continuous improvement methods*:
(*Lean, Six Sigma, TPM, TOC, QRM, Lean6S, WordClass, BPM)

1. Lean:  The evolution and state-of-the-art regarding Lean  
Analysis, includes cases Wipro Technologies & Stork

Moving assembly of the T-Ford in 1924    
^ Early example of Lean. Moving assembly of
   the T-Ford in 1924 (source: Ford)

There are people who grasp each problem within Toyota, to state that Lean manufacturing now really is out of date. Others fight tooth and nail to defend the production system of the Japanese car manufacturer.

Both attitudes are rather peculiar. What we call Lean today, is no more or less then the state-of-the-art to deliver good quality products or services on time, and at the lowest possible cost. So, even if Toyota fails, this does not mean that Lean comes to an end. Regardless of how well Toyota is doing, our view on smart production will continue to evolve, like it did during the last century.

Nowadays, the attention for the organisational side of Lean increases. How can I make problem solvers of all my employees, is a question that many Lean researchers try to answer.   

Besides that it catches the eye that Lean turns out to be applicable in an increasing number of organization types. Even design to order production and administrative processes can be made Lean. This is also a matter of evolution, since Lean is adapted to match with these new environments.

> more
2. TOC:  Why obvious solutions are not always accepted!
Review:   Isn't it obvious?

Eliyahu Goldratt and cover Isn't it Obvious
^ Eliyahu Goldratt and cover Isn't it Obvious

After an illness of several months, Eliyahu Goldratt, managementguru and founder of the Theory of Constraints (TOC) passed away in june. At the time he stayed in his house in Israel, surrounded by his family and friends.

Goldratt's death is a big loss to the process improvement community. No name of any other managementguru, not even Taiichi Ohno, remained so strongly connected with his own process improvement theory. Goldratt could keep an audience captivated for hours, with his pioneering and thought-provoking ideas. Powerpoint sheets he hardly needed, a few challenging remarks or questions were enough to get undivided attention.

Just before Goldratt passed away, we read, reviewed and discussed what has become his last book: Isn't it Obvious.

In his article Standing on the shoulders of Giants, Goldratt already positioned Lean manufacturing as a method with the same roots as the Theory of Constraints.

In Isn’t it obvious he goes a step further. The way in which he analyses a retail chain, by mapping causes and effects, is still typically TOC. However, the solutions found – demand driven replenishment, mini-markets in warehouses, go see how your suppliers operate and find a win-win solution – all are typically Lean!

The cinematic book Isn’t it obvious not only shows what can be accomplished with the TOC in a retail chain, there is also a deeper message in it. Good solutions are often based on correcting wrong assumptions. Therefore these look embarrassingly simple, once you found them (remember Archimedes yelling Eureka?). However, this does not mean that everyone will accept these ‘obvious’ solutions at once! Hidden in the book, there is cause and effect logic to be used for change management. People can have a distorted picture of the gold, the pain, the crocodiles and/or the mermaids associated with change. If so, these wrong assumptions should be corrected.     

> In memoriam Dr. Eliyahu M. Goldratt (1947-2011)
> Review and discussion "Isn't it Obvious*
   *) free registration is needed, we completely respect your privacy
3. Lean: Framework to evaluate outsourcing lean logistics   
Case: Scania

Production within Scania
^ Systematic evaluation of outsourcing
   possibilies proves it's value within Scania

There are many models to evaluate logistic outsourcing possibilities. However, none of these include in the assessment which part of the material handling should be part of the deal. This is crucial for companies with lean operations. In that case, wrong decisions can be a direct threat to the flow from raw materials to the final product.

Scientists from the university of Groningen in the Netherlands therefore developed a conceptual framework to evaluate outsourcing possibilities, based on two things: the location and the type of material handling.

This new framework was successfully tested within truck manufacturer Scania in the Netherlands. This company considers logistics outsourcing, to meet an expected increase in demand.

> more
4. WorldClass:  Combining Lean, Six Sigma and the TOC
Review:   Velocity

The authors of Velocity: Jeff Cox, 
Suzan Bergland and Dee Jacob    
^ The authors of Velocity: Jeff Cox (left),
   Suzan Bergland (middle) & Dee Jacob (right)

Gerritjan van der Ven, plant manager at Balchem in Italy, reviewed the book Velocity for us!

His findings:  "The authors recognize that only with a combination of the main logistic manufacturing theories you will get the breakthroughs you need in today’s competitive environment. This is a big plus, since the literature I studied so far kept especially Lean and the TOC strictly separated. Until now, it was like you had to choose between the Beatles and the Rolling Stones!

Lean, Six Sigma and the TOC all have their own strong points and weaknesses. As a plant manager I discovered myself how well a strategy based on TOC, can be filled in practically by applying Lean and Six Sigma tools. This approach I found justified in the very readable business novel Velocity.

The message in this book is twofold:

  1. TOC should not only be used to maximally exploit a bottleneck machine, but should also be applied broader, to find business constraints on a strategic level.
  2. When the TOC is applied that way, practical tools from the Lean and Six Sigma toolboxes can be used on the operational and tactical level, to relieve those business constraints.
In my opinion, this book about achieving breakthrough performance is also a breakthrough in manufacturing theory. However, there is also a minus: The examples of Lean and Six Sigma are weak and don’t show how these methods can really accelerate a TOC implementation. This is a missed opportunity"

> more

C. Brief news

The latest news (also about new published articles in specialist journals) you will find on on our newspage. Visit our site on a regular basis!

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© C.J. van Ede 2011
(NL / Europe / Worldwide)