Organization structure and Lean


There have been several posts on this issue in The Lean Edge:

My own answer to the same question is as follows:

The first question to ask is the extent to which converting silos to process organizations should be done, and whether pursuing it at a given moment is opportune.

It is easy to overestimate the importance of organization structure. In discussions of these issues, American managers often use the following quote: “We trained hard, but it seemed that every time we were beginning to form up into teams we would be reorganized. Presumably the plans for our employment were being changed. I was to learn later in life that, perhaps because we are so good at organizing, we tend as a nation to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization” (C. Ogburn, Merrill’s Marauders, Harper’s Magazine, 1957). To emphasize how long this has been going on, many even falsely attribute this quote to Satyricon author Petronius, or even Cato the Elder.

It doesn’t mean, however, that organization structure is unimportant, only that changing it is not the right first step to solve a problem or implement change. What actually works is to start by changing the work that is being done, and then adjusting the organization to remove the friction caused by the changes. For example, in a machining job-shop, you would first implement some cells — moving the equipment and redesigning operator jobs — and then you would worry about changing the job categories in Human Resource policies to reflect how the work of cell operators differs from that of specialized mill or lathe operators.

The relative merits of functional versus process organizations have been widely discussed in both American and Japanese business literature, with various solutions proposed. In “Another Look at How Toyota Integrates Product Development,” (Harvard Business Review, July, 1998) Durward Sobek and Jeffrey Liker describe a functional organization with several twists added to ensure information flow between silos. One car company that did use an integrated team to develop a car is Ford, for the 1996 Taurus. All the product planning and engineering resources, including some representatives from Manufacturing, were collocated at one facility in Michigan. The approach did reduce the product development time but the resulting product, while great as a work of art and engineering, was not the market success that its designers had hoped, and the previous versions had been. For details, see Mary Walton’s Car.

In Electronics, a common approach has been to use “matrix organizations,” in which professionals report to both a process manager, for the work they do, and a functional manager for training, skills maintenance, and career planning.

When organizing around a process, we should always remember that Lean is about making it easiest to do what we do the most often. Putting together baskets of products around feature or process similarity is just classical group technology.The Lean approach starts with a Runner/Repeater/Stranger analysis to determine what it is we do often and what not. Without this analysis, we commingle in the same lines products made every day with other products made sporadically. In Japan, this is called P-Q, or Product-Quantity analysis, with the categories called A, B and C. The more vivid Runner/Repeater/Stranger terminology comes from Lucas Industries in the UK. You then use dedicated, integrated production lines for Runners, flexible lines for Repeaters, but a job-shop with functional groupings of equipment for Strangers.

MB with Erausquin and Roberto

Role of Management in Lean (In Spanish)


See on Scoop.itlean manufacturing

Interview published in March, 2012.

It was prepared with your help, in the following posts:

Thanks for the many comments.

See on www.apd.es

Metrics on the web versus manufacturing


Mingled last night with 209 internet operations “ninjas” at the meetup of the Large Scale Production Engineering (#lspe) group, on Actionable Metrics, hosted by Yahoo! in Sunnyvale, CA,  and heard speakers from collectibles marketplace site etsy, web performance testing service SOASTA, and video streaming service Netflix describe how they used metrics in their activities.

Both in style and content, the presentations were radically different from what I have heard in manufacturing on that subject. The speakers went fast, as if they were in a great hurry to give us as much information as possible prior to returning to work. They were also extraordinarily open about the tools they used and how they used them.

The first feature of their work that struck me was the simplicity of their dashboards. Almost all the charts they monitor are simple line plots of time series, free of the jumble of 3D pie charts, stacked bar charts, and other complicated displays commonly found on manufacturing dashboards.  The most elaborate display showed a time series of, for example, login response times, with a dynamically adjusted confidence band based on a statistical model to help operations engineers tell significant changes from fluctuations. Yet, even with these features, the meaning of the chart was obvious, even to an outsider to their business. It is not difficult, for example, to understand a plot of the evolution of login times as the number of users grows or additional security is added.

As engineers tweak and enhance the functions provided on their servers everyday, they monitor metrics to see if it does any good, and take immediate action if it doesn’t. The time within which they can and must react is measured in seconds, not hours or days. Their metrics fall into the following categories:

  1. Customer experience/business. This includes the user experience and its translation into business activity, like the number of page views and the conversion ratio of page views to orders. For a subscription-based service like Netflix, it might include the number of times subscribers visit the site without streaming anything, suggesting that they didn’t find what they were looking for.
  2. Infrastructure. This covers the behavior of the servers and the networks through which user inputs are passed to the applications and outputs returned. This has to do with processor and memory utilization, and with the availability of these resources in the face of very large and varying numbers of user interactions.
  3. Application. These metrics rate the ability of the application software to process the user data once it has them and until it sends a response. This includes the speed and quality of concurrent searches or commercial transactions, or the protection of user data.

Customer experience translates as is to a manufacturing context but Infrastructure, on the other hand, corresponds to Logistics, and Application to Production all with different time scales. While one of the speakers described response time as “one metric to rule them all,” none of the organizations presenting imposed any standard set of metrics on their engineers. Instead, they provide them with tools to capture the data, compute the metrics, display them on charts, and generate alerts, but it is their choice and their responsibility to define the metrics.

Response time is to their world what order fulfillment lead time is in manufacturing, but its importance is much greater. There are sectors in manufacturing where short order fulfillment lead times are a competitive advantage with customers, but also many, particularly with big ticket items, where other factors trump short lead times. If you are a farmer buying a tractor, for example, you will take one with the features you want over one you can have sooner that doesn’t have them. The pursuit of short production lead times has to do with other considerations, such as reducing inventory, detecting quality problems faster, or reducing the obsolescence cost of engineering changes. When providing services on the web, on the other hand, any slowdown in response causes customers to balk, and, internally, any increase in transaction processing time can cause servers to saturate and customer response times to explode.

For these engineers, capturing one metric is a matter of adding one line of code in their software, and they use open-source tools to generate plots and dashboards. It is not difficult to do. The hard part  is identifying the right metrics. The Netflix speaker was quite aware of this. After someone had him “No matter what you measure, it’s useful,”  he charted the evolution over one year of the proportion of user IP addresses ending with an even number.

What the gizmos are for at Chrysler’s WCM academy


Chrysler’s recently opened “World Class Manufacturing” (WCM) academy in Warren, MI, uses a number of high technology tools, including a 3D immersion theater, the motion-tracking suits used in video game design, and a modified slot car track. To figure out what they are used for, however, we need to piece together separately published information from the Kelley Blue Book’s Car News from 1/24/2012  and the  1/30/12 issue of the  UAW’s Solidarity magazine,

The 3D immersion theater

From Car News, this is what it looks like:

According to Solidarity magazine, it is used for safety training, as follows:

Students don 3D goggles to become fully immersed in a plant setting full of unsafe acts and conditions, thanks to the same technology used by the U.S. Department of Defense to train soldiers deployed to Afghanistan.

The video becomes a learning tool to help workers become aware of unsafe conditions, identify potential hazards and work through possible solutions.

Motion tracking suits

From Car News:

From Solidarity:

…the Human Motion Capture Arena employs the same technology used to create video games in an exercise designed to improve efficiency in performing job functions.

A student dresses in a special suit covered with LED sensors that capture the individual’s movements, from the largest such as walking to the slightest such as the movement of a finger. Above, a ring truss is equipped with multiple cameras that capture the movements and project them on a video display.

This exercise enables students to visualize how an operator would move to perform a given job function so they can eliminate waste by deciding how to reduce the number of movements or make them more consistent with a person’s natural movements.

The slot car track

From Car News:

From Solidarity:

The slot car track is used to demonstrate the seven steps of micro-stoppages on the line – small equipment breakdowns that can cause major losses.

The cars on the track and the track itself have been modified to “break down” while racing. A high-speed camera captures the movements, helping students see that the breakdown might be worse than what is obvious to the naked eye. In this way, operators learn to apply a disciplined process to discover the root cause of a problem.

Obl_be_06_2012.indd

Lean and national cultures: interview in Russia’s Business Excellence magazine


This month, I made the cover of Russia’s Business Excellence magazine, with an interview on my international experience of implementing Lean. For those who do not read Russian, the English version is as follows:

Michel, you implemented Lean in the US, in France, and in Japan. How do you see your experience of working in Russia against this background? What is peculiar about the Russian approach to management?

Generalizations on such matters are always counterproductive for me. I work with people, and find that variations in personalities transcend national culture. I had a conversation recently with an aerospace executive who decides where to locate factories, and he was saying “China this…” and “India that…,” which struck me as the stereotypes I avoid. Then I realized that the kinds of work we do gave us different perspectives. When he decides to build a plant in a location, he does not yet know who will work in it, while I help people who are already there.

When it comes to organizing people, materials, equipment and processes to produce globally competitive products, you should neither expect Russian culture to give you an edge nor accept it as an excuse to apply any but the best known practices. National culture is about as relevant to assembly lines as it is to soccer. If there is one lesson to learn from Japan, it is the willingness to abandon obsolete traditions and use good ideas from elsewhere.

In the mid 19th century, when confronted with American and European powers, the leaders of Japan boldly and deliberately adopted their technology, business structures, education systems, and legal systems, as a result of which Japan became a world power within 50 years, a performance unmatched by any other country in Asia or Africa.

Russian managers today should not worry about russianness. Instead, they should focus on making products that worldwide customers want to buy, and on creating brands that are recognized and respected. The Russian soul can express itself in books, paintings, music and movies… It does not need to do it on the shop floor of soap or helicopter factories.

There is a lot of state capital in Russian business, and many companies with large share of government participation. Do you think it’s possible to change production systems quickly and irreversibly in such companies, taking into account their inertia (slow reaction to changes) and disposition to conservative models?

You always need to improve in order to be competitive. It is true whether you operate in Russia, the US, Japan, or Sri Lanka, and whether or not a government is one of your shareholders. It requires intense efforts over time and can be undone. In 2000, Wiremold, a showcase of Lean success in the US, was bought by Legrand, whose management reversed the improvements over the following 6 years. And this story unfolded in the private sector, with no government involvement.

Working with OrgProm in a Russian plant, I remember a manager who always had a reason why nothing could be done. The proposed solutions violated Russian labor laws or fire codes, or just wouldn’t work with Russian workers. In a meeting, he interrupted a presentation by just saying “It’s not allowed!” with great conviction, at which point everybody laughed. That was the end of his obstructions.

Many Americans have a negative view of government; many French people, excessive expectations from government. Russians have the experience of government running the entire economy… There are real questions as to the role it should play in general, and in particular in manufacturing. The record is mixed. Besides their obvious role is setting regulations in areas like minimum wages or pollution, governments are sometimes able to undertake projects that are beyond the scope of anything the private sector would.

For example, the machine tool industry and technical drawings with critical dimensions and tolerances that we use today are the output of a program to develop interchangeable parts technology funded by the US government for the entire first half of the 19th century. More recently, TWI was also a US government program. And there are many other examples outside of manufacturing.

On the other hand, the US government often gets it wrong, as in the Manufacturing Extension Partnership (MEP) program, in which it subsidizes consulting firms to provide discounted Lean implementation services to small and medium-size manufacturers (SMEs). The problem with this approach is that they government is not competent at selecting consulting firms for such services, and that the MEPs are unfair competitors to all other consultants. Instead, the government could have subsidized the SMEs directly, and have them pay market rates for the services.

If, as a Russian, you work for a manufacturing company with the government as a dominant shareholder, you have to decide for yourself whether it is a plus or a minus. As a Russian citizen, you need to decide what the extent of government involvement in the economy should be. In the US, the question is not settled. It is being argued fiercely in the current presidential election.

Your colleague Michael Wader has gained the affection of many Russian managers. His training style has a lot to do with this – he goes to the shop floor and actually dives into machines, etc. How would you describe this style? Should all business trainers working in Russia dive into machines?

Consultants should dive into the work of the people they are helping, whether machining or software development. “Diving” into the work does not mean doing it but getting close enough to understand the issues and provide useful input. It cannot be done in a conference room.

The general principle is to go where the work is being done and focus on its actual object, in Toyota terms, “Genchi Gembutsu.” It needs to be emphasized because so many managers, engineers and even consultants are not doing it. In the US, I remember walking through the shop floor of a machine-shop with its owner, who had not been through it in over two years and was shocked by what he saw.

Of course, it doesn’t mean that it is all we need to do. As consultants, we must also listen to the ideas, strategies and perceptions of the company that are communicated by people at all levels through words, tone of voice, and body language. And we must also analyze the company’s data to get a complete picture, but that is another discussion.

It also means that clients should show their operations to consultants in detail, without defensiveness or embarrassment. If you show a Potemkin village, the consultant won’t be able to help you.

One of your courses is called “The Journey to Perfect Quality Through Lean Implementation”. How did you develop it and where did you implement it in real life? Please describe the results in detail. 

Quality is improved by Lean, often using methods that Quality professionals are unaware of. In aerospace machining, for example, I have seen one-piece flow in a cell divide defective production by a factor of ten, but I have never seen that in textbooks on Quality Management. I developed this course jointly with Kevin Hop, who used these approaches at Honda.

The Quality profession overemphasizes the statistical methods — the old SPC or the new Six Sigma — that are useful when process capability is your main source of quality problems. Once process capability is established, however, the focus should shift to discrete events such as tool or machine breakdowns, and to the rapid detection of these events. This is where one-piece flow yields the next order-of-magnitude reduction in defect generation. What remains beyond this is human error, which is the object of mistake-proofing. For details, see the paper I wrote 10 years ago in IE magazine.

More recent developments at Toyota include JKK, which means “autonomous process completion” and is focused on preventing the transfer of defectives to the next operation, and CPM, or “Change Point Management,” which is the development of planned responses to problems before they occur.

The job of a consultant and business trainer requires constant travelling around the world. How does your regular work day / month look?

I am on the road about 50% of the time, to have enough time left for preparation, and research. When not on the road, I keep odd hour to communicate with clients in multiple time zones. The late afternoon works for China, late night and early morning for Russia, later in the morning for Western Europe, and the rest of the day for the US.

How do you manage to overcome inevitable cross-cultural differences and reach the minds and hearts of managers with completely different mentalities?

You develop a rapport with engineers and managers by focusing first on technical issues, where culture matters least, and then you move on to the tougher management issues.

Does your own multi-cultural experience (living in France and then moving to the US) have anything to do with it?

It has to do with wanting to do it. The Lebanese writer Amin Maalouf says that we have origins rather than roots. Your origins are where you are from. They don’t limit where you go. Roots, on the other hand, tie you to a place.

From an early age, I have always wanted to interact with people from other cultures, and that is why I learned several languages. Russian was actually the second one, after German, and I studied it for seven years, ending in 1977. Unfortunately, I didn’t get a chance to use it for another 29 years, when OrgProm first invited me to Yekaterinburg. By then, I barely remembered the alphabet.

In my professional travels, I rarely get to see the tourist attractions, but I feel that you experience more of a country from working with people in its factories than through sightseeing.

Which of your Lean implementation projects is your favorite and why?

CIADEA/Renault in Argentina, 20 years ago. It was a small car company and, as a result, we intervened in all aspects of its operations, from final assembly to foundry, and even consumer credit operations, as well as supplier development. It involved multiple visits by four consultants over three years and was spectacularly successful.

Do you think it’s possible to create a model (ideal) production system?

Whoever thinks he has is sure to have a nasty surprise when something better comes along. This is why I have banned the word “optimal” from my vocabulary.

Toyota counting on exporting Lean to ride out strong yen, seek global growth


See on Scoop.itlean manufacturing

TOKYO — Toyota Motor Corp. has been hammered by the strong yen, putting extra pressure on the automaker to stay lean and come up with new innovations to ride out the challenge, a senior executive said Thursday.

Note the statement that “…a line was extended in just 78 minutes by moving chunks of it and putting it together differently as though they were Lego parts…”

See on www.washingtonpost.com