From Naked Capitalist……

Third, and most important, I am concerned that “mistakes as policy” is becoming established as acceptable practice in American companies, so I applaud the bankruptcy judges’ moves against it. I have been this become entrenched at my health insurer, Cigna. I have been with them for over two decades. It used to be that my claims would be processed, and the fights would be on charges they deemed to be excessive or procedures they didn’t like, such as chiropractic and acupuncture (before you get on your high horse about alternative medicine, Cigna promotes its coverage of acupuncture on its website, but then seeks not to pay for it, even for conditions where there is a considerable body of research saying it produces superior outcomes). I am persistent and have always prevailed (I believe people should live up to their contracts, what a novel concept, and am considerably aided by the fact that I live in the communist state of New York, which allows for external appeal to a state board which then turns to independent experts).

But I have seen a pattern with Cigna very similar to Countrywide’s, that of making persistent mistakes that are clearly errors in their favor, and hoping that the consumer doesn’t catch them. Before 2006, Cigna never mislaid a single claim I sent them. Suddenly, they failed to receive (meaning threw out) about 20%, which puts the onus on me to notice what hasn’t been reimbursed, confirm that it isn’t in their system, and resubmit the claim. Even with customers like me, they get the benefit of hanging on to their dough longer. Their new 2007 trick was trying to reinterpret how the applied claims to the deductible, which since I kept my records and there had been no change in my policy, was not successful. But I imagine that sort of move would have succeeded with at least half the plan members they tried it on.

Value-Steam mapping a electronic transactional process is dumb; Value-Stream maps are meant to show not so much what is happening as what isn’t, where work “in progress” is actually sitting around waiting to be worked on. Given large enough quantities of electronic data, it may also sit in queues and take time to process, but Click Here to continue reading.

The worst famines of the last 100 years were all caused by government policy. Think of Mao’s great leap forward or the horrible Ukrainian famines. So while it is tempting to dismiss Stuart Staniford’s “Fermenting the Food Supply” as being to alarmist, we should not forget that government’s have a track record of causing massive starvation in the name of the greater good.

The weakest part of Mr. Staniford’s argument is where he argues that Ethanol plants would still be profitable even without government subsidies. Especially given the fact that he does not seem to be taking into account the fact that government has been mandating that the refineries put an increasing amount of Ethanol into their gasoline blends.

But this weakness is overshadowed by the graphs he made showing how fast the Ethanol industry has grown and how much of our food supply is already being burned. Anyone who thinks that Ethanol is the wave of the future should look at those graphs and image what will happen if the growth in Ethanol production continues.

From BBC....

People across South Asia are struggling to cope with a severe shortage of affordable wheat and rice.

There have been queues outside Pakistani shops in towns around the country, and flour prices have shot up.

Wheat flour is a staple foodstuff in Pakistan, where rotis or unleavened bread are eaten with almost every meal.

Last week Afghanistan appealed for foreign help to combat a wheat shortage while Bangladesh recently warned it faced a crisis over rice supplies.

Global wheat prices are at record highs. Problems have been compounded by crop failures in the northern hemisphere and an increase in demand from developing countries.

The week before Christmas I was told by our multi-site IT manager that we had to upgrade our shipping software. This piece of software has no data validation and an inadequate interface that requires us to adapt fields for different uses on different shipments. Because the software does nothing to alert users to errors and Click Here to continue reading.

From Calculated Risk and Business Week…..

Hat tip to Disempowered Paper Pusher (the backbone of our industry!) for this excellent BusinessWeek piece on homes abandoned by both borrower and lender, “Dirty Deeds.”

An anecdote with all the right motifs:

In 1998, Elizabeth M. Manuel obtained a $34,500 mortgage on the property from IMC Mortgage (since acquired by Citibank). By 2002, the loan had been sold into a securitization trust administered by Chase Manhattan (now JPMorgan Chase) as trustee. It also went into default, and Chase began foreclosure proceedings. In a court filing, Manuel (who could not be located for comment) said she left the home while the foreclosure action was pending. More than five years later, though, the title remains in her name. The house, although still standing, has become a fire-gutted wreck.

In May 2007, Nowak issued a default judgment against Chase for $9,000. But these cases can be notoriously difficult to untangle. Thomas A. Kelly, a spokesman for the bank, notes that Chase sold its trustee business to the Bank of New York Mellon (BK) in October, 2006, and couldn’t locate anyone at Chase able to comment. But he reiterates the industry view that Chase can’t be held responsible for maintaining a property it never owned. He acknowledges that if a home didn’t seem worth taking as collateral, the bank may have made a decision to “just walk away.”

Besides amusing myself by trying to figure out just what documents I’d have to give Judge Boyko to prove standing to foreclose in this case, I am of course deeply impressed by the social acceptability of “just walking away.”

From Cnews….

The Vancouver-based company that makes much of the world’s methanol — the main ingredient in windshield washer fluid — has had to curtail production in Chile.

The company is having trouble getting natural gas, another key ingredient, from neighbouring Argentina because the country has imposed a hefty export tax.

Methanex is now posting a price of $832 US per metric tonne, up from a low of $309 earlier this year.

In October, the company reported a severe shortage of methanol because of closed plants throughout the industry — including its own in Chile — combined with strong demand. It’s since restored some natural gas supply.

Consumers haven’t noticed the impact yet.

But retailers will soon be running out of inventory and buying — and selling — the product at new, sky-high prices, Paquette said.

On Tuesday the 18th I received an invitation to a meeting on Wednesday the 19th to discuss the implementation of Oracle software to replace our current factory software. Some of the high-level people who were part of the A-Team had assigned various people in the plant to be on teams to document critical functions of Click Here to continue reading.

Lean Production, based on the Toyota Production System, recognizes 7 wastes:

Transportation. Moving something from one spot to another does not make it worth more.
Inventory. If a miser saves all of his money, what good does it do him? If a company has more product than someone is ready to pay for, what is it worth?
Motion. Click Here to continue reading.