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Gemba in China

I just returned from a two week visit to many cities in China. The visit confirms that the U.S.has a new and powerful competitor that has 1.3 billion people focused on economic success. Reading about China and imagining isn’t enough. You must go and see.China is a series of contrasts but one thing is certain, it has been ,it is, and it will be a major shaper of how the economy of the world evolves over the next generation and beyond. I had the good fortune of visiting China for two weeks during the Chinese lunar new year holiday in 2010. My wife and I visited my son who is volunteering in the Hunan province as an English teacher. Hunan is one of the central states in China near where the ancient philosopher Confucius in 550 B.C. taught the core philosophical principle of "do not impose on others what you do not desire" which has been passed down as part of Chinese values for centuries. We had the opportunity to visit the “real” China. Many foreigners have visited Appleton and ThedaCare over the years and I tell them the real U.S. is not in New York and Los Angelo's but in places such as Appleton and Elkhart and Cedar Rapids. Taking the pulse of a country requires going to the gemba and seeing where the real work is done. In Zhuzhou, and Changsha and Yongzhou we visited the Chinese people and we saw their life. It is changing rapidly. Cranes towering over freshly constructed buildings for as far as the eye can see. New roads, sparkling airports,and 5 star hotels. But the middle class is emerging too. A small family business every 10 feet of  store front space in two and three story buildings housing the families of the business owners in the upstairs apartments. In the poorer areas four or five people sleeping in a loft above their business each night.But no matter whether they are selling one dollar scarves or three hindered dollar refrigerators they work. They work really hard,every day,14-16 hours a day.They work so their children,all 400 million of them can go to more competitive schools realizing that the competition for college is fierce and that the only way for a better life is to get a college education.Education is a highly valued commodity by this people. China is clearly coming of age. The financial center of China is  Shanghai and it is like no city in the U.S. it is better.Better mass transit,better architecture, better infrastructure,and a thriving business environment. I had the chance to meet a project manager from a Chinese engineering firm. His firm is regularly beating out the likes of GE and other American companies because they deliver a quality product at a better price. This  publicly traded engineering firm in Shanghai has seven major power plant projects going on in the middle east and India.  They competed for all these jobs with American companies and won. The major reason? Price! This company has many power plant projects to show for it’s work.All these plants work very effectively so why should the Indians or others pay more? The point? America is pricing itself out of the world market. In Zhuzhou we ate a fabulous dinner including 5 separate terrific Hunan dishes and drinks for twelve dollars. In Shanghai  the project manager from the engineering firm doing work in the middle east  sees his private physician for 10 juan or about a dollar and a half per visit. When people get sick they arrive at the emergency room and are seen with short waits(two hours would be unusual). Contrast this to a Chinese friend who described her experience in a Los Angeles hospital E.R. while visiting her sister; hours of waiting and many thousands of dollars later no accurate diagnosis was made.Maybe the quality of Chinese medicine isn’t very good. We don’t know, but we do know what our system delivers, about  100000 deaths per year due to medical mistakes. My experience in China re-confirms that as healthcare leaders we must redesign American healthcare now. The cost of our healthcare is contributing to our lack of competitiveness in this new world order where price and quality really matter and where companies like the Shanghai engineering firm can provide a quality power plant at a price we can’t match. Wait until they embrace lean!.  

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