We wish all of you a merry christmas and a happy new year and hope that we can welcome some of you in June 2012 in Frankfurt!

Generating Renewable Oil

San Francisco based Solazyme may have the answer to the future of fuel. Many of the companies working to generate oil from algae or other photosynthetic organisms have huge inputs of water or take up vast tracts of land. As mentioned in a post last month, the University of Texas is placing a large bet on algae, which they are “farming” in large tubes instead of open ponds to reduce land use and water consumption. Other companies have focused on ethanol derived from corn. Solazyme takes a “variety of different feedstocks” such as cellulosic materials, switch grass, wood chips, and sugar cane and feeds it to algae instead of sunlight, which according to co-founder Harrison Dillon is 1,000 times more productive than making oil from algae using sunlight.

See the video below for an overview of the company’s efforts and products.

The company has already worked with United Airlines, which recently flew the first commercial flight in the United

States using the their bio-fuel blend. Solazyme’s “unique technology transforms low-cost plant sugars into . . . high-value renewable oils.” This conversion of “low-cost plant sugars” into oil represents an important component of fuels from plant material. One of the biggest issues with biofuels today derives from the use of food-based plant material to produce oil, thereby creating a conflict between food and fuel. Using “virgin” plant material only heightens the problem. In addition, producing plants for the sole purpose of generating fuel drives up the price of food by reducing the amount of food grown.

According to their website, “Solazyme oils address many of the challenges associated with traditional oils, such as constrained supplies, volatile pricing, and potentially negative and irreversible environmental effects. The ‘drop-in’ nature of our tailored oils enables compatibility with existing production, refining, and distribution infrastructure in each of our target markets.” This second point is vital for the seamless integration of biofuels into the existing oil infrastructure. Many of the feedstocks are grown on land that would not produce viable agriculture.

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Check this video.

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The Business Complexity Accelerator at Toyota

There was an interesting article in the Knowledge@Wharton newsletter today. Wharton management professor John Paul MacDuffie interviewed Toyota expert, author and Tokyo University Professor Takahiro Fujimoto. The piece is called Under the Hood of Toyota’s Recall: ‘A Tremendous Expansion of Complexity’ and raises the by now familiar questions of complexity of modern automobile systems design, attitudes at Toyota towards its recent quality problems, and what this means for both Toyota and its competitors. To sum up the article with an automotive metaphor, Toyota needs to take its foot off of the business complexity accelerator.

Fujimoto said, “I was surprised to see that Toyota was the first to be caught in this trap of what we may call

complexity problems.” What has puzzled Toyota watchers is how Toyota, proven to be so great at solving problems for so many years, seems to have stumbled in a big way during this recent acceleration-related recall. Why?

Toyota failed to see this problem in the right way, at least in the beginning.

Failing to grasp a problem clearly, quantitatively and without prejudice is the first step in problem solving. Was this a case that the problem solving approach was flawed, or was it that the problem solving process is still sound but that Toyota did not follow their own process?

The danger is that people tend to connect the two problems. “This happened and that happened, so there must be causal relations between the two.” But this is not the case. There appears to be no connections between the design problems and the Toyota production system or Toyota Way.

He clearly says that the recent quality issue at Toyota is not connected to their way of working within the production operations, i.e. the Toyota Production System or even more broadly their philosophy, the Toyota Way. He suggests that that the complexity of new systems within the design simply got out of hand, and when they did, Toyota was unable to respond properly. While the processes within TPS are sound, the mindsets and behaviors of people may have shifted in an unhealthy way towards overconfidence, even arrogance. Fujimoto said:

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The Rise of Sustainable Supply Chains

After the recession of 2008 companies got leaner and part of this new way of doing business involves looking at inefficiencies throughout the value chain as a way to leverage cost and enhance savings. Lean efforts have been demonstrated to yield substantial environmental benefits (pollution prevention, waste reduction and reuse opportunities) as well as leverage compliance issues.

Although sustainable supply chains have been steadily growing, in 2010 we saw an explosion of activity. The growth of greener supply chains in 2010 included a much greater focus on monitoring, measurement and verification from a host of companies including Wal-Mart, IBM, Proctor and Gamble, Kaiser Permanente, Puma, Ford, Intel, Pepsi, Kimberly-Clark,

Unilever, Johnson & Johnson, Dell, AT&T, P&G, and Herman Miller.

In addition to private enterprise, government agencies in the US (General Services Administration) and abroad (DEFRA in Britain) have set green standards and guidelines for federal procurement.

Major value chain concerns such as materials water and waste management, are part of a growing sustainability trend where companies are increasingly concerned with their suppliers’ sustainability efforts.

Corporate social responsibility issues including addressing concerns for human rights, fair labor and sustainable development got a lot of attention from big companies like Nestle, Corporate Express, Danisco, Starbucks, Unilever and the apparel industry.

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Toyota to Reduce Span of Control in Engineering

The Nikkei reported on June 11, 2010 that Toyota is bringing back front line supervisors, adding a layer of management to staff positions that has been missing since 1989. This is an admission by Toyota, the world’s greatest lean manufacturing company, that they got their span of control in engineering and possibly other staff areas, wrong.

This move is in quite stark contrast to the “de-layering” going on at many global companies in an effort mainly to cut costs. While it may not seem lean to add layers of supervision, it is in fact very lean when done to reduce span of control. Form follows function and in this case the supervisors function as team leaders, coaches and first responders to andon

cord pulls (calls for help). This in turn helps expose, catch and correct problems while they are still small, rather than letting them grow into bigger problems. These problems have apparently been escaping in recent years, based on the recalls and quality problems we are seeing at Toyota.



A few years ago we commented about an article citing concern among old-timers at Toyota that the rush increase volume and make large cost cuts in design was moving the company away from it’s principle of slow, steady growth through development of people. “When did Toyota get to be a company like this?” was the question asked in alarm at the way things were being changed. The person quoted in that article was Shoichiro Toyoda, the father of current Toyota CEO Akio Toyoda, who is leading this latest reorganization towards smaller span of control for engineers.

The Nikkei reports that this new team structure will be implemented first in the technology development sections. About 1,000 employees who have been with the company for about 10 years will move into supervisory positions. The span of control is a conservative five engineers per leader. Toyota has not given this position an official title yet, and plans to do so after a one-year pilot, according to Toyota.

For further reading on this important topic, here are three more articles on our blog about supervisor span of control:

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Road vehicles – Pedestrian protection ISO 11096:2011

The number of pedestrian leg injuries caused by dangerous car design should be reduced thanks to an ISO International Standard defining a new crash test method.

According to the World Health Organization, road traffic accidents kill more than one million people a year, injuring another thirty-eight million (five million of them seriously). The death toll on the world’s roadways makes driving the number one cause of death and injury for people aged 15 to 44.

ISO 11096:2011, Road vehicles – Pedestrian protection – Impact test method for pedestrian thigh, leg and knee, sets out a test method to assess the protection of an adult pedestrian by simulating the leg-impact conditions sustained during the car-to-pedestrian crash.

The goal is two-fold – to:

- Provide information on pedestrian safety to consumers
– Induce manufacturers to develop vehicles with excellent pedestrian protection.

Sukhbir Bilkhu, Chair of the ISO subcommittee that developed the standard, commented: “The pedestrian impact test simulates accidents in which a pedestrian is hit by an oncoming vehicle. These accidents represent about 15 % of fatal crashes. Thanks to ISO 11096, we will make substantial progress in improving vehicle structure, and in so doing, reducing pedestrian lower-limb injuries.”

Read more text http://www.iso.org

Security techniques

From hackers trying to break into networks, to insiders using their knowledge and internal access rights to use company data for their personal gain, the impact from a wide variety of information security threats can be reduced using an information security incident management approach contained in the new International Standard ISO/IEC 27035:2011.

Information security breaches can compromise your business systems, and cause disruption to business operations. Being prepared and responding in a timely and effective way can mean the difference between minor incident and a business disaster. Using an information

security incident management system enables organizations to have the controls and procedures in place to manage a wide variety of security incidents and vulnerabilities.

ISO/IEC 27035:2011, Information technology – Security techniques – Information security incident management, gives “how to” guidance on detecting, reporting and assessing information security incidents and vulnerabilities.

It will help organizations respond to information security incidents, including the activation of appropriate controls for the prevention and reduction of, and recovery from, impacts, and, in so doing, learn and improve their overall approach.

Integrating an information security incident management system offers several benefits:

Read more text http://www.iso.org

Help improve food safety

The use of a new ISO standard on the traceability of finfish products will help improve food safety by supplying stakeholders throughout the supply chain with accurate information about the origin and nature of these products.

Finfish constitute an important part of the modern food industry. We consume more and more products coming from the four corners of the globe and fish, in particular, may be caught thousands of kilometers from their place of consumption.

During the past decade, several food crises have seriously affected many countries. Following the outbreak, the

concept of traceability of food products has become a matter of special interest to policy makers and scientists.

ISO 12875:2011, Traceability of finfish products – Specification on the information to be recorded in captured

finfish distribution chains, specifies the information to be recorded in marine-captured finfish supply chains in order to establish traceability.

It specifies how traded fishery products are to be identified, and the information to be generated and held on those products by each of the food businesses that physically trade them through the distribution chains. The standard deals with the distribution for human consumption of marine-captured finfish and their products, from catch through to retailers or caterers.

Read more text http://www.iso.org