10.27.2006

Warren Buffett Likes Lean

I don’t normally write about awards, particularly those given by one company to another, because they rarely have significance to anyone other than the people involved.


            However, a recent award announcement intrigues me. I’m hoping it may indirectly help the cause of lean production.


            NetJets, an operator of private business jets, has given what it describes as its first-ever Annual Performance Award to Cessna, a division of Textron. Why? Cessna, which maintains jets for NetJets, used what a news release describes as “Six Sigma lean improvement processes” to decrease maintenance down-time on the jets by 30 percent, or four days per jet operated. NetJets is Cessna’s largest customer.


            So why is this interesting? NetJets is owned by Berkshire Hathaway – which, as anyone who follows business knows, is essentially a holding company for the investments of Warren Buffett, the world’s second-richest man.


            Actually, I’m not sure if he’ll still be the second-richest man after he gives a huge chunk of his money to the foundation of his friend, Bill Gates, who is number one. However, that’s not the point.


            The point is, when Warren Buffett speaks, people listen. And if Warren Buffett is saying, in effect, that applying lean principles works, maybe the cause of lean will get some increased attention and a few more devotees.


            Now Buffett himself didn’t actually say anything about lean. In fact, he isn’t even mentioned in the Cessna news release, though Berkshire Hathaway is. The only person quoted in the release is Ron Chapman, senior vice president of customer service at Cessna (who issued a humble, obligatory thank-you).


            But clearly, one of Buffett’s companies is sending a signal that it likes lean suppliers. That’s a start. I look forward to hearing more.


 

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