By Kevin Meyer
It's been almost exactly five years since Bill and I took the Shingo Prize to task (to put it gently) for some rather bizarre selections of supposedly excellent factories. Delphi was the straw that broke the camel's back, and when it became obvious that the Shingo criteria was seriously flawed. How else could a company going into bankruptcy win the prize? As Bill put it back then,
When asked if the Shingo Prize should take financial results into account, ala the Baldrige Award, Robson's response was, "They've taken their criteria now and made it so heavy on financial results that they have lost sight of what is being evaluated. You may as well fill out your results and the [manufacturing] process doesn't make any difference." That's pouting, instead of the product of serious reflection. Perhaps Mr. Robson should be reminded that Eli Goldratt was right: the Goal of manufacturing is to make money. If a lean strategy does not generate significant improvement in financial results, it failed. Period.
Delphi was not lean. Their inventory turned so slowly it was almost imperceptible. Their cost did not improve. They may have achieved excellent quality levels, but they proved unable to translate that to bottom line improvement. We don't need to go over the same old ground. They looked lean, but they weren't lean. The legacy cost whining began after it was plain that their lean effort was not producing results.
We revisited the situation in 2008 and found that perhaps they did some hansei and changed the criteria. But they also diluted the prize by adding all kinds of regional versions of the prize.
Apparently they did learn, as the Prize criteria changed a bit. Unfortunately in more ways than one. The Prize has evolved from a manufacturing prize to one broadened to "operational excellence." Additional categories were added for public sector and research, and apparently there will be future categories for industries such as healthcare. Multiple silver and bronze levels. Now it has extended the Prize to a bazillion regions, from the northeast to the northwest, multiple state level prizes, and it has even jumped the pond.
Keep that 2008 date in the back of your mind and fast-forward to today. Yesterday I told you how Callaway Golf was beginning to move their manufacturing operations to Mexico to take advantage of cheap labor, while laying off many years of knowledge and experience in Massachusetts. They were chasing a cheap pair of hands while forgetting that there's a brain connected to those hands - and those brains can create value even if it's not on a balance sheet.
So what does Tim of A Lean Journey remind me of that I completely missed while penning that post?
You guessed it... Callaway Golf, in fact that same Chicopee, Massachusetts operation, won a bronze Shingo Prize in 2008.
So much changes, so much doesn't. Sigh...