Tag Archives: Decision Making

Reddit: I am Chris Roser, a professor studying the past, present, and future of manufacturing, and just published my first book. AMA!

reddit-logo-notextOn September 27, I did my first Reddit: “I am a … ask me anything.” With almost four hundred comments, I consider it a quite successful AMA.

I am Chris Roser, a professor for production management; a lean expert; a Toyota, Bosch, and McKinsey alumnus; and I’m interested in the past, present, and future of manufacturing. I lived and worked for multiple years in the USA, in Japan, and in Europe. I run a blog, AllAboutLean.com, and just completed my first book, “Faster, Better, Cheaper” in the History of Manufacturing: From the Stone Age to Lean Manufacturing and Beyond. Continue reading Reddit: I am Chris Roser, a professor studying the past, present, and future of manufacturing, and just published my first book. AMA!

Volkswagen Supplier Relations Failure

volkswagen-fightIn the last months, there has been an unprecedented power struggle between Volkswagen and its suppliers. Two of the suppliers stopped delivering, leading to a full stop of multiple production lines at six Volkswagen plants, including its main plant Wolfsburg. This whole mess comes on top of the separate problems Volkswagen has had with its Dieselgate. In this post I would like to look in more detail at what happened. Continue reading Volkswagen Supplier Relations Failure

The Problems of Cost Accounting with Lean

Calculator and MoneyAccounting is one of the cornerstones of the modern economy. Cost accounting in particular helps in decision making with the goal to maximize profit. Many decisions are based on these numbers. Unfortunately, cost accounting usually does a really poor job of capturing the essence of manufacturing in general and lean manufacturing in particular. Continue reading The Problems of Cost Accounting with Lean

American Automotive Market Strategy of Toyota and Others

Major Car MakersThe largest ten car makers sell over 200 different car models on the US market. Without vans, SUVs, and sport cars, there are still 100 consumer cars left. Toyota has the largest number with a total of 14 models, yet they still have an excellent market strategy and very little self cannibalization. BMW has much fewer models, yet still manages to cannibalize itself. GM has 13 models and also steps on its own toes, while completely missing another market segment. This post is based on a master’s thesis of one of my students, Amir Javanshir, and the detailed source is at the end of the article. Continue reading American Automotive Market Strategy of Toyota and Others

Lies, Damned Lies, and KPI – Part 3 Countermeasures

Kid with Glasses
How to measure good KPIs

There is an inflation of key performance indicators (KPIs) in industry. In my last posts I have explained how KPIs are often wrong, and why bad and fudged KPIs are a huge waste. Yet, you cannot really run a larger corporation without KPI. In this post I will finally give some advice on (1) what you need to do to measure good KPI, and (2) how to avoid fudged KPI. Continue reading Lies, Damned Lies, and KPI – Part 3 Countermeasures

Lies, Damned Lies, and KPI – Part 2: Effects of Fudging

Business fraud
About the ills of number fudging

Modern manufacturing works with a lot of performance measures, often called key performance indicators (KPIs). Unfortunately, they are rarely accurate, and often even intentionally misleading. In my previous post I described some examples of commonly manipulated KPIs. In this post I would like to explain the ugly consequences of incorrect or manipulated KPIs. In a final post I will also show some ways that you can reduce this negative effect. But first, how do bad KPIs (and hence most KPIs) hurt your company? Continue reading Lies, Damned Lies, and KPI – Part 2: Effects of Fudging

Lies, Damned Lies, and KPI – Part 1: Examples of Fudging

Upward Trend
Don’t get too excited about your numbers!

Statistical measurements, usually called key performance indicators (KPIs) are found on pretty much every shop floor and in every company. Many management decisions are made based on KPI. Unfortunately, these numbers often are not reliable at all.

Mark Twain popularized the phrase “Lies, damned lies, and statistics.” Winston Churchill famously said, “I only believe in statistics that I doctored myself.” Hence, both men were wary of trusting numbers. You should be too! Continue reading Lies, Damned Lies, and KPI – Part 1: Examples of Fudging

Common Mistakes of Top Executives – A look at “Undercover Boss”

Undercover BossI occasionally watch the reality show Undercover Boss, where top executives work undercover in their own companies. Over and over again I see these managers making the same mistake: They have no understanding whatsoever of what is really happening on the front lines. It is a typical case of not going to the shop floor often enough, or in lean speak, no genchi genbutsu (Japanese for “go and see”).  So, <dramatic voice> Why do bosses all make the same mistake? Will they ever learn? Will you enjoy this post? See for yourself in the post below! </dramatic voice>. Continue reading Common Mistakes of Top Executives – A look at “Undercover Boss”