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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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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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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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:

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Three Challenges Facing Operational Excellence in Utilities

Within a regulated industry like utilities, operational excellence is a key tool in the balancing act between keeping prices for consumers down and providing value for shareholders. However, market forces are combining to place hurdles in the way of utilities’ continuous improvement efforts, which will ultimately be to the benefit of consumers. In the UK, for example, the “Big Six” energy suppliers are facing pressure from the public and regulators to keep retail prices down and for their influence on the market to be reduced. The energy infrastructure in the country is ageing and a quarter of the capacity will be decommissioned by 2020. Climate change legislation is placing an ever increasing burden on operations. These factors broadly align with the three major challenges facing operational excellence in utilities across the globe: new obligations, changes to the industry landscape and a growing, more demanding customer base.

Challenge 1: Market Reforms



Utilities have often found themselves faced with market reforms, due the essential service they provide and the inevitably costs this presents to the consumer.



The aforementioned changes taking place in the UK form part of the government’s wider Electricity Market Reforms, created to help the country meet its legally binding target of cutting CO2 emission by 80 percent by 2020.

Measures laid out to help achieve this include the introduction of a carbon floor price, new long-term contracts to offer investment incentives and an emissions performance standard. More than £110 billion will be required to make the infrastructure updates needed, and a proportion of this will need to come from suppliers.

Achieving operational excellence in the face of these changes presents a significant challenge.

Challenge 2: Changing Customer Expectations :

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The Illustrated Toyota Production System, Vol. 2

We are pleased to bring to you The Illustrated Toyota Production System, Volume 2. This is a book that sheds light on lean manufacturing practices and in particular the Industrial Engineering underpinnings of TPS. Building on the overview of philosophy, principles and systems provided in Volume 1, the second half gives 60 practical lessons on kaizen and industrial engineering approaches and their use.

To celebrate the publishing of this book in English, we are offering a 2-for-1 sale through the month of June. Click on the banner above or visit www.gemba-shop.com and enter the coupon code TPSGEMBA upon checkout.

Each book is about 130 pages, half of which are illustrations of various principles and tools.

Volume 2 contains 60 lessons made up of one page of text and one supporting illustration, such as the one below from “Lesson 38: Education and Training Help People See Waste“.

The book is organized into four sections as shown below:

Section 1. What Is Kaizen?

1. Kaizen Is Built on Respect for People
2. A Key to Toyota’s Outstanding Success
3. Sharing Information through Visualization
4. Creating a Common Understanding of Work through Visual Management
5. Examples of Visual Management
6. Knowledge Is Not Sufficient–Creativity Is Needed
7. We Know Defects Are Waste–Why Can’t We Kaizen Them Away?
8. Understand Time-Tested and Proven Problem Solving Techniques
9. Kaizen Must Be Workplace-Centered
10. Understand the True Nature of Defects
11. How to Find the Root Causes of Defects in the Workplace
12. Getting Rid of the Waste of Inspection
13. Causes of Careless Mistakes & the Pokayoke Concept
14. Three Approaches to Pokayoke
15. How to Cope with Unplanned Minor Stops of Equipment
16. How Can We Learn to See Waste?
17. What to Do When You Cannot Find Topics for Kaizen

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Future of Quality

Change is persistant, what an old but never outdated wisdom. But what does that mean to our organizational environment? What does that mean concerning the job outline of a Quality Systems Manager? We will give you to both questions some answers. Mr. Paul Borawski, Chief Executive Officer, American Society for Quality, will provide you with useful information about the future of quality. He will invite you to lead. To take action. To prepare yourself and your organizations to benefit by anticipating and preparing for the future.

Mr. Benedikt Sommerhoff, Senior Consultant, German Society for Quality, is going to outline the change of the

occupational image of a Quality Systems Manager and will invite you to look into the future.

Closing Ceremony and Announcement of the 56th EOQ Congress

The quality infrastructure

Introduction

UK businesses need to:

create and enter markets in a timely manner
meet customer requirements, including legislative requirements
manage risks, including risks to financial investment, product introductions, market exclusion, etc.

Underpinning these activities is the need to demonstrate conformance to standards (whether specified by

regulators, the market or the industry) in order to gain market access and gain market confidence in their products and services.



The ‘quality infrastructure’ supports these aims and comprises the physical facilities and the interrelated systems of organizations, structures and people that help organizations to implement quality practices and improve performance.

The principle parts of the infrastructure relate to:

regulation – government, regulators
standards – documentary, physical/ reference, other codified intellectual property
conformity assessment and accreditation
economic operators and their collective representatives
consumers

Overview

The UK quality infrastructure is concerned with the relationships between:

legal requirements contained in regulation and legislation
voluntary standards which define the quality of products and services and the methods of their production
industry practice and the actual solutions provided by business
the market, where the confidence and will to trade is promoted
the accreditation and conformity assessment regimes that provide the evidence and confidence

The UK quality infrastructure is principally made up of a number of separate bodies, each with separate remits but which impact the following:

Market access and international trade – facilitating the removal of technical barriers to trade, evolving common language and practices that promote trade and gaining access to overseas markets
Industrial policy – enabling the UK to take advantage of its strong science base and capacity for innovation to compete in global markets
Regulation – either supporting regulation where there are significant risks to health, safety or the environment, or through market self-regulation
Providing confidence, evidence, information and assurance to purchasers, suppliers and customers regarding the quality of products, services or their supply.
Promoting awareness of and providing training and assistance in quality tools, methods, practices and culture.

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

Toyota

What do you get when you mix 1,000 engineers, four weeks of additional product development lead time and reduced reliance on outsourced engineering by 67%? In most product development departments this would get a decision maker quickly fired. Not so for Executive VP Takeshi Uchiyamada, a chief engineer at Toyota tasked with turning the tide on quality issues. Toyota is taking some expensive countermeasures to the root causes that their quality assurance process from the product design and testing standpoint seems to have been cut a bit too close to the bone over the past decade through cost reductions and development time reduction efforts.

According to the Wall Street Journal article Toyota Assigns 1,000 Engineers to Quality Drive :

Toyota Motor Corp. has assigned 1,000 engineers to help analyze quality problems and is extending time devoted



to testing new models by an average of four weeks in an effort to head off glitches before vehicles enter production

Toyota has so far spent about $4 billion to correct the problem of unintended acceleration in its vehicles, but this has been mostly containment and not root cause correction. The changes suggested in this article are aimed more at root causes, and will cost approximately $400 million if we take the cost of 1,000 engineers to be $150 million per year and estimate the cost of 4 weeks of lead time and the reduction in outsourcing to be another $250 million. Could this be a demonstration of the 10X rule of the cost of quality?

Toyota reportedly saved more than $11 billion in the early 2000s thanks to its CCC21 efforts, and some have linked these cost reductions in the design process as well as supply chain costs as contributors to today’s quality problems. Cost reduction should result from following and improving safe, high quality processes that deliver to customer’s expectations. When cost reduction programs put quality before the other KPIs there is a danger that the overall costs increase in the long-run.

Mr. Uchimayada said he would like to reduce the amount of outside engineers working on research and development, but the process will take time. The company must wait for contracts to expire before it can bring the work inside the company. A company executive said the target is 10% outside engineering contractors, down from 30% now.

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Lean Healthcare Experts Speaking

Roger A Gerard Ph.D., ThedaCare’s chief learning officer, and co-author of On the Mend, is a member of a comprehensive lineup of experts addressing continuous improvement in healthcare at this month’s AME Conference, Oct. 24 – 28, Dallas.

On the Mend was published by the Lean Enterprise Institute in June 2010.

What follows is an overview of the healthcare lineup. Stop by Booth 311 to say Hello to the LEI team. Hope to see you there!

PRESENTATIONS
- The Game Changer that Propelled our Journey Towards Easier, Better, Faster, Cheaper. Alice Lee; Beth Israel

Deaconess Medical Center
- The Skinny on the Emergency Department Redesign. Gregory Horner, Michelle Ruther, Loyola University Medical Center

- Continuous Improvement in Healthcare. Darryl Greene
Lisa Yerian, MD; Cleveland Clinic

- Leveraging Cross-Industry Collaboration in Lean Healthcare. Kathleen Sharp CPC, CMM; Lehigh Valley Health Network

- People to Redeploy: What do we do? Katie Ball PhD, Roger A Gerard PhD; ThedaCare

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