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The obsession with RoE is really just a major form of efficiency. Having things sitting around unused is a huge reason that US car companies got their asses ha

by JPKab 5y ago

The obsession with RoE is really just a major form of efficiency. Having things sitting around unused is a huge reason that US car companies got their asses handed to them by Toyota and their TQM/LEAN system they developed. People writing articles like this forget that it's not just Wall Street, but competitors who created the huge pressures for adopting JIT inventory systems. There's also the consumer. Are you willing to spend the additional money required to buy a car from a company who wastes tons of $ on excess inventory?

ghaff 5y ago
The Toyota system got a lot of attention in the DevOps world because basic principles such as empowering workers resonated with the movement. Reducing waste throughout the system doesn't get as much attention--given that computer software doesn't really have inventory as such (at least not literally)--but inventory/WIP reduction was an important motivation behind Toyota's system.
acdha 5y ago
> Having things sitting around unused is a huge reason that US car companies got their asses handed to them by Toyota and their TQM/LEAN system they developed. It didn’t help but I think that’s more of a symptom of building shoddy products: part of why inventory backed up is that Detroit was producing cars which simply weren’t as good. Toyota didn’t have a shortage of demand, and neither did Saturn. If you make shoddy, poor-handling gas guzzlers, yes, you’ll underperform on sales. That doesn’t meant the only option is less inventory.
- JPKab 5y ago
  There's an entire book (I've read it) about this called "The Machine That Changed The World" published in the early 90's. It goes into great depth as to the issues that were plaguing GM/Ford etc. The excess inventory was absolutely not driven by too little demand. It was simply inefficiency in the manufacturing process and inability to rapidly reconfigure the shop floor or reallocate labor towards bottlenecks. The book is a deep, academic examination of the roots of lean production, and is a must read for any engineer who wants to get the Agile cultists to shut up and go away. I'm a hardcore believer in the ACTUAL Agile philosophy, which is rooted in lean, and I despise the cult of clerics that have risen up around it and turned it into management consulting BS. That book helps to know real agile from consultant billing hours agile.
  - andrekandre 5y ago
    > I'm a hardcore believer in the ACTUAL Agile philosophy, which is rooted in lean would then the work of juran, demming, goldratt et al, be good reading as well?
    - JPKab 5y ago
      I'm a fan of anything that is rooted in reality and has been battle-tested. If it's theoretical, I don't care about it. Toyota didn't will lean into thin air out of nothing. It was evolved, tested, and refined in the harsh economic realities of post WW2 Japan. Bullshit wasn't capable of surviving that environment, just things that actually worked. A lot of the Demming types are pure theory, or just garbage in the modern age.
      - andrekandre 5y ago
        > A lot of the Demming types are pure theory, or just garbage in the modern age wasnt alot of demmings writings used by japanese companies in general though? i guess what your saying is, its better to study those companies themselves, even if influenced by said person...?
makomk 5y ago
This. Also, the tweets complain about not having excess capacity due to the "obsession with return on investment", but that's really just an abstraction around the fact that extra capacity means using more limited real-world resources to supply people with the same amount of stuff - more land, more steel and concrete and construction labour and equipment to build the extra factory and shipping capacity that goes unused - which then can't be used for other things. The tweets frame it as though it's only finance types and investors that benefitted from this, but in reality everyone was better off in real, "what can I afford to buy with my money" terms due to it.
- JPKab 5y ago
  Indeed. It blows my mind how many intelligent, articulate, and privileged people in our modern society fail to realize how much their privilege insulates them from understanding the basics of supply and demand. Anyone who has ever worked on a factory floor, or a construction site, or even a kitchen (I doubt the tweeter has ever worked a job like this in their entire life) intuitively understands excess inventory as waste. They also intuitively understand that this waste translates to money needlessly spent earlier than it needed to be, or even worse, spent and then lost due to reality changing, demand shifts, etc. It really feels like a lot of these folks go to university, embrace a quasi-religious ideology where large companies are the devil and are therefore the root of all things bad, and profits are a sign of greed. Meanwhile, the douchenozzle is sitting there writing that tweet on a piece of electronics that was made possible by the things he's complaining about.

by JPKab 5y ago

ghaff 5y ago

The Toyota system got a lot of attention in the DevOps world because basic principles such as empowering workers resonated with the movement. Reducing waste throughout the system doesn't get as much attention--given that computer software doesn't really have inventory as such (at least not literally)--but inventory/WIP reduction was an important motivation behind Toyota's system.

acdha 5y ago

> Having things sitting around unused is a huge reason that US car companies got their asses handed to them by Toyota and their TQM/LEAN system they developed. It didn’t help but I think that’s more of a symptom of building shoddy products: part of why inventory backed up is that Detroit was producing cars which simply weren’t as good. Toyota didn’t have a shortage of demand, and neither did Saturn. If you make shoddy, poor-handling gas guzzlers, yes, you’ll underperform on sales. That doesn’t meant the only option is less inventory.

JPKab 5y ago
There's an entire book (I've read it) about this called "The Machine That Changed The World" published in the early 90's. It goes into great depth as to the issues that were plaguing GM/Ford etc. The excess inventory was absolutely not driven by too little demand. It was simply inefficiency in the manufacturing process and inability to rapidly reconfigure the shop floor or reallocate labor towards bottlenecks. The book is a deep, academic examination of the roots of lean production, and is a must read for any engineer who wants to get the Agile cultists to shut up and go away. I'm a hardcore believer in the ACTUAL Agile philosophy, which is rooted in lean, and I despise the cult of clerics that have risen up around it and turned it into management consulting BS. That book helps to know real agile from consultant billing hours agile.
- andrekandre 5y ago
  > I'm a hardcore believer in the ACTUAL Agile philosophy, which is rooted in lean would then the work of juran, demming, goldratt et al, be good reading as well?
  - JPKab 5y ago
    I'm a fan of anything that is rooted in reality and has been battle-tested. If it's theoretical, I don't care about it. Toyota didn't will lean into thin air out of nothing. It was evolved, tested, and refined in the harsh economic realities of post WW2 Japan. Bullshit wasn't capable of surviving that environment, just things that actually worked. A lot of the Demming types are pure theory, or just garbage in the modern age.
    - andrekandre 5y ago
      > A lot of the Demming types are pure theory, or just garbage in the modern age wasnt alot of demmings writings used by japanese companies in general though? i guess what your saying is, its better to study those companies themselves, even if influenced by said person...?

makomk 5y ago

This. Also, the tweets complain about not having excess capacity due to the "obsession with return on investment", but that's really just an abstraction around the fact that extra capacity means using more limited real-world resources to supply people with the same amount of stuff - more land, more steel and concrete and construction labour and equipment to build the extra factory and shipping capacity that goes unused - which then can't be used for other things. The tweets frame it as though it's only finance types and investors that benefitted from this, but in reality everyone was better off in real, "what can I afford to buy with my money" terms due to it.

JPKab 5y ago
Indeed. It blows my mind how many intelligent, articulate, and privileged people in our modern society fail to realize how much their privilege insulates them from understanding the basics of supply and demand. Anyone who has ever worked on a factory floor, or a construction site, or even a kitchen (I doubt the tweeter has ever worked a job like this in their entire life) intuitively understands excess inventory as waste. They also intuitively understand that this waste translates to money needlessly spent earlier than it needed to be, or even worse, spent and then lost due to reality changing, demand shifts, etc. It really feels like a lot of these folks go to university, embrace a quasi-religious ideology where large companies are the devil and are therefore the root of all things bad, and profits are a sign of greed. Meanwhile, the douchenozzle is sitting there writing that tweet on a piece of electronics that was made possible by the things he's complaining about.