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Is Kaizen Required to Make Those DAM iPhones?
January 3, 2013 |Estimated reading time: 10 minutes
Editor's Note: This article originally appeared in the November 2012 issue of The PCB Magazine.
If you look at the assembly for the iPhone5 by Foxconn in China, the answer to the question that this article title poses is no. If you look at the precision manufacturing of the outer aluminum case for the iPhone5, made by Jabil Circuits, the answer is yes. In my research, and in talking to industry insiders, Kaizen does not fit and likely would not work within Foxconn’s current business model--a model devoted to high-volume, flexible manufacturing, which is highly dependent on manual labor and an instant availability of a very large work force. Jabil relies heavily on a highly trained work force and experienced work teams. Jabil achieves their objectives using Kaizen. In the Tampa Bay Times article, How Jabil Circuits defies the flatlining global economy, for now, they claimed to have 14,000 Kaizen blitzes going on simultaneously.
Figure 1: When Kaizen is about good change, it is divorced from Lean for difficult and complex business problems. This produces unsatisfactory results.
Figure 2: When Kaizen is about change is good, it is part of a social construct that elevates any team initiative, not just a Lean initiative. This maximizes the probability for breakthrough results to seemingly impossible problems.
To Use, or Not to Use?
This raises a very interesting question for those of us in the PCB industry. Should we follow Jabil’s example and use Kaizen, or Foxconn’s example and not use Kaizen? To be or not to be? That is the question. For the most part, we have chosen to follow the Foxconn example and move our operations to China using the manual-labor-intensive model. What I would like to suggest is, even though the late Steve Jobs famously declared a few years ago, “These jobs aren't coming back” with regard to assembling the iPhone and the iPad, the Foxconn model will come to an end. The rapidly rising cost of Chinese labor, the shrinking availability of people from China’s Western agricultural provinces, the exponential tightening of quality tolerances and miniaturization making hand labor increasingly impossible, are just some of the reasons. The company and the country that can figure out a highly automated, high-volume production model that can be retooled, reconfigured, and instantly come on line for a new iPhone product launch, will win the iPhone assembly contracts in the future. The complexity of this challenge will require all aspects of the iPhone to be made by workers, engineers, supervisors, and managers who have embraced the value, principle, and philosophy of Kaizen.
What is Kaizen?
A simple, working translation of the word gives us that “kai” means “change” and “zen” means “make good or better.” Together, the word refers to a state of “making change for the better” and the evolutionary steps that eventually produce a detectible business result. This classical definition of Kaizen creates the issue of when to use it. For example, with this definition, how can you justify applying Kaizen to a large, complex problem, like the complex problems Jabil had to contend with to make the iPhone5’s aluminum case? You wouldn’t. Instead, you would divorce Lean from Kaizen (Figure 1). You would strip away the operator involvement, the need to meet collectively as a team, the collaborative workspace, and even the time box, which discourages the great sin of procrastination. If Jabil did this they would have failed.
But what is Kaizen, really? Another way to look at Kaizen is “change is good.” This is a value statement. To execute on this value requires a process. When I think of process, I use this definition provided by author Joseph Campbell: “Every process involves breaking up something else.” The first objective for a good change is to define the current state with all of its undesirable attributes and run this through a Kaizen blitz of five to ten days, which demolishes this current state in order to achieve a much more desirable future state. With this definition, Kaizen is all about change--all about process. It can be applied to any level of problem, big or small, simple or complex.
At Jabil’s May 03, 2012 analyst meeting, Tim Main, president and CEO of Jabil, had this to say, “[Today] Jabil’s in…higher growth markets in higher value-add activities driven by engineering and capabilities. We’re managing complexity around the world with real, genuine know-how…managing complexity requires a great deal of know-how, systems, and capability.” Later, Bill Muir, executive vice president and CEO of the Manufacturing Services Group, said, “In fiscal year 2011, we did 17,000 Kaizen events more or less. This year we’re on track to do in excess of 30,000 Kaizen events…We think that in fiscal year 2013 we’ll be on pace in excess of 40,000 Kaizen events.” That’s a lot of Kaizen events!
For companies like Jabil, they think of Kaizen in a way that is similar to Figure 2, where it not only is a base requirement for Lean, but also for SCRUM, lateral thinking, and process modeling, too. Work is social and Kaizen done well maximizes productive social interaction. Essential to Kaizen is the mastermind concept: two or more minds thinking about a problem are better than one. This can only happen where openness is encouraged and egos aren’t allowed to get in the way--no DAM thinking! In this way Kaizen can cut fast to solutions to very complex problems.
Before we move on, let’s check in to see what Wikipedia has to say about Kaizen. As imperfect as Wikipedia is, it provides an amalgam of peoples’ thinking and perceptions. I found the following important points, starting with, “Kaizen is a process.” I couldn’t agree more, because a process creates change. Wikipedia goes on to say, “when done correctly [Kaizen] humanizes the workplace.” Humanizing the workplace is lacking when labor is thought of as a commodity, but is fundamental when your company’s growth is dependent on the growth of your employees. Continuing, Wikipedia stated, “Kaizen eliminates overly hard work (muri).”
Overly hard work can be lifting heavy objects, or boring repetitive tasks that cause physical and mental stress, or tasks that are difficult to do because they are poorly designed or poorly implemented. This next point is one that I hardly ever see in Lean or in Kaizen blitzes: “Kaizen teaches people how to perform experiments on their work using the scientific method.” This requires a proficiency in conducting experiments and analyzing data, not to mention a true understanding of the scientific method. In the PCB industry in the U.S. we don’t have enough people who can do this today. Finally, according to Wikipedia, Kaizen teaches us “how to learn to spot and eliminate waste in business processes.” This points to the traditional root of Kaizen being married to Lean.
The broad strokes of a generalized Kaizen process are:
- Form an open, cross-functional team that is trained not to let their egos get in the way--no DAM thinking;
- Define the current state and the undesirable attributes;
- Define a future state and the desirable attributes;
- Identify the problems and impediments that must be resolved in order to achieve the future state;
- Determine the specific plan, resources, and tools to achieve the future state; and
- Implement the plan and adjust and re-plan frequently.
It is obvious that having iPhone assembly here in the states would provide a need for U.S.-based manufacturing for the iPhone logic board. In order to understand the challenge of achieving this future state we need to understand the level of production flexibility Apple has grown use to with Foxconn. Consider this example, which has been documented in the New York Times article, How the U.S. Lost Out on iPhone Work. This article explains how Steve Jobs declared six weeks before the first iPhone product launch that the face of the phone would be changed from plastic to glass! Apple people instantly went to China and found a company close to Foxconn to cut the glass in large volume. Eventually, truckloads of glass arrived in the dead of night at Foxconn City. Thousands of workers were instantly roused from their sleep, sent off to the floor, and placed on the line. Then, they began making thousands upon thousands and then millions upon millions of iPhones by hand. According to Jennifer Rigoni, who was the worldwide supply demand manager for Apple until 2010, “What U.S. plant can find 3,000 people overnight and convince them to live in dorms?”
What would be required to achieve this same flexibility using automation instead of tens of thousands of manual laborers? Many things would be required, but among them would the correct scale of the equipment so that very little flexibility is lost. For example, in our industry, the bigger you make the drill machine, the bigger you make the plating line and its tanks, the bigger you make any piece of equipment, the more you lose flexibility. The smaller you make everything, the more equipment you need, and if you go too small the number of pieces of equipment becomes impractical. Figuring out the optimum scale for everything is a complex problem. And the other issues, in terms of speed, ease, function, and cost of the equipment demands close collaboration with the equipment vendors. Has anything like this ever been done anywhere in the world for any industry?
Actually, it has: in Sheboygan, Wisconsin. Back in August of 2011, I wrote a column entitled, Are we Nothing More than a Pair of Socks at Walmart? It turns out that Sheboygan is the home of WigWam socks. WigWam socks aren’t sold at Walmart, but they are sold at REI, Cabela’s, and Dick’s Sporting Goods, among other places. According to my recent phone conversation with Jerry Vogel, president of WigWam, they pride themselves on rapid product innovation to meet the specialized performance and quality demands of their customers. Their specialized socks are made for the hiker, hunter, skier, climber, and hospital professional to name a few. In a Reuters article titled, Special report: Does corporate America kowtow to China? you will see Jerry with the Chairman and CEO of WigWam, Bob Chesebro, standing in a 200,000 square foot, brightly lit ultra modern factory with what looks like a parquet floor, filled with hundreds of state-of-the-art automated machines. Go socks!
In my conversation with Jerry, he explained that they would never consider putting a factory in China. They feel they would never get the velocity they need for ramping up new products into the distribution channels, nor would they achieve the consistent quality levels their customers expect. In an article in Automation World, Jerry Vogel said, “We continue to work very closely with the Italian manufacturers…”
Apparently, all of the machines WigWam uses come from Italy, where all the different companies are located in close proximity. When WigWam decides to revamp their equipment set, because they are always pushing the technology envelop and developing new patents, they don’t sell the machines back to China. Instead they destroy the machines in the back of the factory and sell them as scrap metal. What is clear is that WigWam hires some of the best and brightest people, they have very low turnover, and they make more than enough money to keep everyone happy.
Whether this WigWam model can be morphed into making iPhones at the volume levels and short time frames Apple demands remains to be seen. But this is the ultimate challenge. The race is on for the answers. If we can put our egos aside and mastermind using the value, principle, and philosophy of Kaizen, we likely can bring iPhone manufacturing back to the U.S.
Steve Jobs said, “These jobs are never coming back.” Is he right? Or are we going to be bold and prove Jobs wrong?
Gray McQuarrie is president of Grayrock & Associates, a team of experts dedicated to building collaborative team environments that make companies maximally effective. McQuarrie is the primary inventor of the patent, Compensation Model and Registration Simulation Apparatus for Manufacturing PCBs. He has worked for AlliedSignal, Shipley, Photocircuits, Monsanto, and others. Contact McQuarrie at gray@grayrock.net.