May 10 2013

Michelin’s Obsession with Quality | Pete Selleck | IndustryWeek

Pete Selleck

“…It’s brand image,” he explained. “There is tremendous value to the perception of trust—customers don’t want to worry about the products they buy; they want it to be trouble free. We can offer them that….

We all use the same equipment to make tire, so we know it’s not the equipment that makes the difference. It’s the interface between the equipment, the material and the person—the training and the qualification of the person—that makes the difference.”

Michel Baudin‘s insight:

I see two key statements in this article, both quoted above:

The first is an acknowledgement that the company’s reputation for quality is its crown jewels. It’s priceless, and worth any burden to nurture and protect, and the classical “cost of quality” calculations based on the direct costs of failures, appraisals and repairs are irrelevant.
The second is that the key is the way people work with machines. Selleck does not reference jidoka, but his thinking is in line with it and, unlike the bulk of the American literature on Lean, puts the spotlight on production engineering

See on www.industryweek.com

Mar 10 2013

Poka-Yoke at Toyota: the Current State

Mikiharu Aoki’s “All About Poka-Yoke in Toyota Factories” (2012)

Mikiharu Aoki kindly sent me his 2012 book on mistake-proofing (Poka-Yoke) in Toyota factories. I had asked him for it out of curiosity about new developments in this field.

The classics on Poka-Yoke are Shigeo Shingo’s Zero Quality Control (1986) and Productivity Press’s big red book (1987), both of which are useful but leave you hungry for more examples that do not date back to the 1960s and 70s.

In Make No Mistake (2001) Martin Hinckley reused many of the same examples, but added a few using more electronics, discussed the relationship between mistake-proofing and statistical methods, and included a directory of suppliers for tools and devices. I spot-checked the websites of a few of them and, 12 years after publication of the book, found they were all still around.

While Taiichi Ohno and Shigeo Shingo were men of my grandparents’ generation, Mikiharu Aoki is my contemporary. He is not a founding father of the Toyota Production System, but he has worked in its modern incarnation for 26 years before becoming a consultant. He has written several books – only available in Japanese — and all but one with ”Toyota” in the title.

Part I is a discussion of the steps needed to implement Poka-Yoke; Part II, 72 actual examples explained through conceptual diagrams and cartoons.

Part I, about 1/3 of the book, first discusses 5S, standard work, process capability, and one-piece flow as prerequisites to mistake-proofing. It then distinguishes the categories of mistake-proofing devices, such as the ones that physically prevent mistakes versus those that prevent defectives from escaping to the next process. It describes the use of Andons to trigger responses to problems detected by mistake-proofing, and expresses a preference for devices that involve direct, mechanical contact with work pieces over sensors and electronics, because their operation is visually obvious.

On the other hand, I did not see recommendations on how you organize the implementation of mistake-proofing, monitor progress, and make sure that the devices do not deteriorate or fall out of use over time. This is not covered either in any of the other books I have seen on the subject.

The examples in Part II are more similar to those in the older books than I expected. The tangs used to prevent mounting the button in the wrong position on a music player control panel are a classic, and the same method is used in my HP inkjet printer to prevent mounting ink cartridges in the dock for a different color.

Mistake-proofing assembly of music player buttons

In the following case is also consistent with the older Poka-Yokes: the outer dimensions of products are used to tell them apart and make different sets of parts available for assembly.

Bin cover Poka-Yoke

Clearly, the way it works, and whether it works, is obvious. By a method that relies on differences in the outer dimensions of a product is only applicable where such differences exist. With car engines, they do; with computers, they don’t, and many different configurations of the same product are mounted in the same chassis. In such a context, you have to resort to bar codes, QR codes, or RFID tags and the computer systems that go with them.

I expected to see more use of this kind of technology in current Poka-Yokes, but I understand that Aoki’s book is about car manufacturing and that you want, as much as possible, the devices to be invented on the shop floor by production people.

Among Aoki’s books, the one without Toyota in the title is called “All about car factories” (自動車工場のすべて, November, 2012), and its purpose is to explain in an integrated manner both the production process and production control sides of car making. Aoki also included it in his package to me, but I have not had a chance to look at it yet. I will keep you posted.

Oct 27 2012

Deming’s Point 8 of 14 – Drive out fear

(Photo by Lewis Wickes Hine, New York Public Library)

Deming’s complete statement of Point 8 is as follows:

“Drive out fear.”

This is a prescription that Doug Hiatt, a quality assurance manager at Boeing, found bewildering. First, he couldn’t see how fear could be “driven out,” and, second, where dangers are real, he didn’t feel that fear was something to be avoided. Deming is not arguing, however, that external threats, like competitors, should be hidden from employees to make them feel secure. In the 1980s, I worked for a software company whose managers were invariably friendly and courteous to subordinates, and where management communication was mostly “happy talk” that made especially the younger employees feel comfortable. Then, overnight, one third of them were laid off. Their sense of security was false.

Deming is advocating giving employees a genuine sense of security, which is both difficult to create and easy to shatter. Nothing can create such as sense quickly, but we can think of all sorts of human resource policies that can have this effect if carried out consistently over many years. Deming does not give us any pointer, but, in the US in 2012, few companies even try, particularly in environments like Silicon Valley.

Deming feels that fear always leads to “impaired performance and padded figures.” While the fictional Darth Vader can scare a crew into building a fully operational death star faster, the record in the real world is mixed. There, the ultimate manager by fear was probably Joseph Stalin, as shown in his January, 1940 telegram to a plant manager telling him that, unless results were produced within a tight deadline, his management team would be shot. The performance of Soviet industry supports both of Deming’s assertions.

But even in the US, managers like Jack Welch, who introduced Rank-and-Yank at GE, clearly feel that there is nothing wrong with making employees fear losing their jobs. Others like to quote Machiavelli’s “It is better to be feared than loved, if you cannot be both.” But Machiavelli’s world in 15th century Italy was more like the Game of Thrones than a contemporary manufacturing company. His prince is concerned exclusively with stabilizing his power, fending off rivals, and conquering more territory. Machiavelli’s advice is of limited value in areas like product development, marketing, manufacturing, or customer relationship management.

Intel’s Andy Grove was so famous for saying “Only the paranoid survive” that he wrote a book by this title, but the book is about business strategy, not about the way you treat employees. I had an extended project with Intel when Grove was its CEO; the Intel employees I worked with spoke of him with awe and respect, but never with fear. They trusted his steady hand steering the company and were not worried about being treated unfairly. Outside Intel, the company was perceived as secretive and aggressive, bordering on ruthless.

Does fear always impair performance? Stage fright can paralyze public speakers, stage actors or singers, but its complete absence is a sign of indifference to the audience that it doesn’t miss. The best performers are those who feel stage fright but are galvanized by it. Conversely, does the absence of fear always enhance performance? Academic tenure is the ultimate in job security. But do professors perform better once they are tenured than when they are on a tenure track pursuing it? Non-academics may be too quick to assume that they don’t. There is no valid general answer to that question. Some do and some don’t.

Deming sees a “widespread resistance to knowledge.” From the details he gives, what he means for individual contributors is that they are afraid new methods or new technology will make their hard-earned skills obsolete and threaten their positions; for managers, it is the worry that the investment in acquiring knowledge will never be recouped. These are two separate concerns.

The first fear is readily observed in organizations that hire people based on the immediate need for skills, as opposed to recruiting them for a career. If you know you are employed because you are the only one to know how to run a milling machine of a particular model, or navigate the user interface of a legacy information system, then you are naturally less than enthusiastic about the introduction of a way of working that requires you to train others to do your current job, or of new machines or systems that do not need your current skills. If company behavior over decades has built a foundation for this fear, you will not drive it out easily. It will require the establishment of new human resource policies, their communication to the work force, and their sustained practice over a long-enough period to build credibility with the work force

In operations, the managers’ primary responsibility is the output to customers, and employees do learn in the process of producing it, particularly if they rotate between stations. But even this form of knowledge acquisition is not free. It takes management attention to organize and monitor, each job an operator rotates into requires a learning period during which performance degrades, and there is always the risk that your most knowledgeable employees will leave. Other forms of knowledge acquisition include participation in improvement projects and experiments, technology watch, and formal training, in house and at public venues. All are investments in money and time, with uncertain outcomes. Let us look at each in more detail:

Improvement projects. They should always have the dual purpose of improving performance in their target area and learning by the work force. Participation in successful improvement projects develops both technical and managerial skills, in a way that pays for itself through the performance enhancements.
Experiments. While experimentation is a normal part of product development, most managers do not make room for it in operations. A Lean Manufacturing plant, on the other hand, sets aside space for it and encourage engineers or technicians to experiment with concepts, tools, machines, or systems that are not immediately applied in production. This is how they learn to be savvy buyers of technology, customize off-the-shelf equipment, or build from scratch machines that are not commercially available. You cannot write a discounted cash flow analysis to justify such an engineering sandbox, but you can see its impact in the proliferation of clever devices that enhance production performance on the shop floor.
Technology watch. This is keeping up with new developments in one’s current specialty, by reading the trade press, attending conferences, visiting trade shows, and going on plant tours. These are activities that a manager may find difficult to justify, on the grounds that they are not anything a customer would be willing to pay for. Yet, not doing them is a sure path to technical obsolescence.
Training. We discussed training issues in the review of Deming’s Point 6.

How do you “drive out” the fear of making the wrong decisions in this area? This is particularly challenging when you break down functional silos and distribute technical specialists among the processes they serve, whose management owners rarely appreciate the need for them to stay current. If you are an extrusion engineer working for the production manager in a shop that makes extruded rubber parts for cars, you may be dedicated to making the lines perform well, but you will be isolated from professional peers. That is why some organizations either retain the functional silo structure while trying to make it work better using tools like A3 reports for better communication, or they adopt a matrix organization, in which the specialists maintain a “dotted line” reporting relationship to a technical manager whose job is to manage the maintenance and development of their skills. A common strategy for IT in manufacturing companies is to outsource the technical work to a system integrator who is responsible for the technical skills of the contractors he sends.

Deming also describes as a loss from fear the inability to serve the best interest of the company because of rules or production quotas. It conjures up the image of Captain Queeg telling his officers how every rule in the book is there for a reason and has to be followed to the letter. Deming gives the example of a supervisor afraid to stop a machine for needed repairs because he might not fulfill his production quota. Of course, the machine breaks down and he can’t fulfill his quota anyway. But it is a dilemma. On the one hand, you want employees to use their judgement and break rules that are counterproductive. But, on the other hand, you don’t want them to think that shop operating standards and production plans are only guidelines. Finding the right balance is not easy between blind obedience to imperfect rules and absolute control by each individual of what to do and how much to produce. Here are a few pointers on how to do it:

The rules have to be few in number and clearly stated. The following signs show the rules governing the use of a public park in Paris and a swimming pool in Palo Alto, CA. Every visitor to the Luxembourg gardens is expected to know nine articles of small print; the Palo Alto swimmers, seven bullet points.
The purpose of the rules must be communicated, whether it is regulatory compliance, safety, quality, etc. If no one can explain the purpose a rule serves, then it is a candidate for elimination.
A process must exist to modify or cancel rules that are obsolete, ineffective, or counterproductive. The Accidental Office Lady is a memoir of Laura Kriska’s years at Honda in Japan. As a young American college grad, one rule she found particularly objectionable was the discriminatory requirement for women to wear a uniform at work. She recounts how she used Honda’s NH Circle system to organize a group of co-workers and make a case for the elimination of uniforms as an improvement in office work, and got it approved by Honda management.

How do you recognize the presence of fear in an organization? Deming lists 14 different types of statements that he has heard from employees and considers to be expressions of fear. Following is a summary of his list:

The company may go out of business.
Supportive superior may leave.
Putting forth an idea may be perceived as treason.
May not have a raise at next review.
Long-term benefit may require short-term performance drop on daily report.
May not be able to answer boss’s question.
Credit for contribution may go to someone else.
Admitting a mistake may have adverse consequences.
Boss believes in fear; management is punitive.
System will not allow expansion of abilities.
Company procedures are not understood; employees don’t dare ask questions.
Management is mistrusted, and perceived to have a hidden agenda.
Inability to fulfill production quota (Operator or Plant Manager).
No time to take a careful look at the work (Engineer)

Oct 11 2012

Deming’s Point 7 of 14 – Institute Leadership

Deming’s complete statement of Point 7 is as follows:

“Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers”

There are the following three parts to this statement:

Institute leadership.
The aim of supervision should be to help people and machines and gadgets to do a better job.
Supervision of management is in need of overhaul, as well as supervision of production workers.

Part 1: Institute leadership

What does Deming mean by leadership, and how to you institute it? From Plato and Sun Tsu to Peter Drucker, many have written about leadership as a quality a person may possess, without ever precisely defining what it is. You see its effect in others’ willingness to follow, but no one has ever written a credible spec of what makes a leader. There is in particular no agreement on whether this quality is innate to a few individuals or can be nurtured in many. In The Practice of Management (pp. 158-160), for example, Drucker argues that leadership is innate, and that the best management can do in an organization is create conditions for the natural leaders in its ranks to emerge.

When Deming argues that the job of management is not supervision but leadership, he appears to be using leadership in the sense of this rare quality that escapes a precise definition. At the opening of Chapter 8, however, he writes:

“The aim of leadership should be to improve the performance of man and machine, to improve quality, to increase output, and simultaneously to bring pride of workmanship to people.”

In this context, he is referring to a role rather than a quality, and “management” could be substituted for “leadership” without changing the meaning. When you say “Xi is the new leader of China,” it describes Mr. Xi’s formal role, not his qualities.

Part 2: Supervision should help people, machines and gadgets do a better job.

In this light, Parts 2 of Deming’s Point 7 can be interpreted primarily as a recommendation on the role of first-line management in a factory. The name for this position has changed multiple times, from the 19th century Gang Boss, through the less brutal sounding 20th century Foreman, to the gender-neutral Supervisor, and now to the vague and fuzzy Group Coordinator or Area Coordinator. These repeated name changes for the same position suggest that it is an uncomfortable one, between the management hammer and the shop floor anvil. Top management and engineering titles have a longer shelf life.

Deming’s explanations focused on what is wrong with supervising people whose work you don’t know, treating every problem as a special case, and managing by numbers. If being able to do the work of the people you manage is a requirement, then production supervisors will be exclusively drawn from the ranks of operators, and this position will not be given to college grads on their first jobs. My experience, however, is that first-line supervision in production works best when the supervisory team includes members of both types, combining the book smarts of the college-educated rookies with the shop smarts of veteran operators. There may be tensions between the two but, if well managed, they can achieve together results that neither group could without the other.

Treating every problem as a special case is an easy trap to fall into, and it is what most managers do. Each problem they see is a line-item on their to-do list, they find a countermeasure, check it off and move on. The special cause is that we received a defective part last week, or the operator was new, or the cutting tool broke. But leaders should not be satisfied with such answers and dig deeper to consider whether the problem is a symptom of a problem with the process itself. In the Soviet Union, all problems had to be blamed on human error. Someone had to be made a scapegoat and punished. The idea that there might have been something wrong with the system was not allowed to be contemplated. Deming’s point here is that leaders must do exactly that.

In Deming’s view, it is because they don’t understand the work that supervisors fall back on managing by numbers. Even if you have no clue about the work of an operator, you can still count parts and, if your management only cares about the numbers, you end up doing nothing else. Deming’s perspective on managing by numbers in explained in Deming versus Drucker.

Underlying this discussion, but not said by Deming in son many words, is an underestimation of first-line management. In my experience, when backed by their superiors, production supervisors are the most powerful agents of change on the factory floor. Because they are part of management, support groups like Maintenance or Quality listen to them. They can work directly with operators as no one else in management can, and they are processes owners.

This combination of factors makes them uniquely effective as improvement project leaders. Deming puts in their job description, which is necessary but not sufficient. Their area of responsibility must be small enough for them to have time to work on improvement. In the late Toyota-run NUMMI plant, a group leader in assembly had an average of 17 operators. Many other companies boast about having a “lean” management structure with one supervisor for 100 employees, who is too busy to do anything but minding daily numbers. Meanwhile, improvement is the purview of a specialized engineering department that has neither the resources needed to undertake all the necessary projects nor the rapport with the shop floor that is needed to make changes take root.

What does Deming mean by gadgets? We can assume that, when Deming says machines, he implicitly includes fixtures, jigs, and tooling under that term. Gadget is not a technical term, and Deming does not define it, but, except in Point 7, every use of it in his book is clearly derogatory:

“Lag in American productivity has been attributed in editorials and in letters in the newspapers to failure to install new machinery, gadgets, and the latest types of automation such as robots. Such suggestions make interesting reading and still more interesting writing for people that do not understand problems of
production.” p. 13

Among Obstacles, on p. 127: “The supposition that solving problems, automation, gadgets, and new machinery will transform industry. No one should sneer at savings of $800,000 per year, or even $1000 per year. A group of workers took pride in changes that saved $500 a year. Every net contribution to efficiency is important, however small.”

“Gadgets and servomechanisms that by mechanical or electronic circuits guarantee zero defects will destroy the advantage of a beautiful narrow distribution of dimensions.” p. 141

In other words, whatever gadgets are, they are up to no good, so why would supervision worry about making them do a better job? Why not just get rid of them? One reason is that first-line managers usually do not choose the resources they have to work with, whether human or technical. They don’t choose to buy a particular gadget; their task is to use it as best they can.

Part 3: Supervision of management is in need of overhaul

This is clearly about the higher levels of management, but Deming’s elaboration on Point 7 says nothing on this matter. In higher-level positions, it is often impossible to find candidates with personal experience of the work of all their subordinates. To take an extreme example, former presidents of the US are unanimous in saying that nothing could prepare you for that job.

We know that someone is a good leader by the readiness, willingness and enthusiasm of others to follow. Anyone can observe the behaviors of leaders and try to emulate them, but rarely to the same effect. Deming does not offer a theory or even a definition of what he means by leadership, but we know that he didn’t see much of it in American managers.

Oct 7 2012

Ahead to the Past: Dependence on mass inspection in iPhone 5 assembly

See on Scoop.it – lean manufacturing

“…a government spokesman for the Zhengzhou industrial zone said about 100 Foxconn inspectors refused to go back to work after one was reputedly beaten by disgruntled workers.’The instruction to strengthen quality inspections for the iPhone 5 was given by Apple Inc. following multiple complaints from customers regarding aesthetic flaws in the phone,’ said the unnamed spokesman…”

30 years after Deming called on manufacturers to cease dependence on inspection to achieve quality, the practice seems thriving in the assembly of an iconic 12st-century product. It should be noted that the quality issues are not about how the iPhone 5 works but how it looks. They are purely issues of assembly and handling, not electronics.

See on appleinsider.com

Oct 4 2012

Deming’s Point 6 of 14 – Institute Training on the Job

Note: The teacher in this picture is Mustapha Kemal Atatürk, founder and president of the Turkish Republic, in 1928. Until then, Turkish had been written in the Arabic script. Atatürk crisscrossed the country to personally introduce the Latin alphabet to notables in every town. At the end of his presentation, they had to choose a last name and write it on the blackboard in the new script. It may not have been on-the-job training, but it certainly is an illustration of training and of committed leadership. And it worked: 84 years later, Turkish is still written in the Latin alphabet.

Deming’s full, terse statement of his 6th Point is as follows:

“Institute training on the job”

“Institute” is stronger language that just “implement.” It is not just about making something happen, but turning it into an institution. In the language of the 1980s, “on-the-job training” was synonymous with “sink or swim”: as a rookie engineer, you were given projects, and it was up to you to figure out how to carry them out. Given that you had had your fill of classes in college, you didn’t mind. Production line operators received some mandatory orientations on things like safety gears, but relied on colleagues to figure out how to do their work. So, what was Deming talking about?

Deming’s elaboration on Point 6 actually drops the “on-the-job” and is entitled just “Institute training.” In it, explains that it is about “the foundations of training for the management and for new employees,” as opposed to continuing education. Regarding management, he points out that Japanese managers “start their careers with a long internship (4 to 12 years) on the factory floor and in other duties in the company,” implying both that it is systematic in Japan, and not done anywhere else. I once worked with a Purchasing manager in a major Japanese company who had five spent years in Design Engineering (See Point 4), and this was part of a number of rotations preparing him for senior management positions. However, it was not systematic, in that not all professional employees went through this process.

This practice is also predicated on long-term, committed employer-employee relationships. It trains managers who know in depth how the company works and have personal ties to many of its departments, but are not necessarily at the top level of expertise in any of their specialties, and it does more to enhance their value to the company than their marketability outside of it. Similar practices are also found outside of Japan, in companies like Boeing, GM, or Unilever, for young employees identified as having “executive potential” (See Alternatives to Rank-and-Yank in Evaluating People). In Italy, I had the opportunity to work with a production supervisor in a frozen foods plant who was a young German engineer in such a program. The parameters and the management of these programs matter. They may degenerate, for example, if the time spent in each position is too short and if participants are rewarded for not making waves.

Here again, Deming is at odds with Drucker. The rotation of managers to be seasoned in the specifics of the company’s business before being promoted is contrary to Drucker’s concept of a professional manager who can run any business, and more in line with the practices of the military. When, at the end of The Practice of Management, Drucker discusses the preparation of tomorrow’s managers, which he sees as a combination of a “liberal education for use,” centered on classics and on a “basic understanding of science and scientific method,” supplemented by continuing education in advanced techniques of management. In his view, managers need to respect technical workmanship in the activity of the company, but they don’t need to possess this workmanship themselves, and their generic management skills are transferable across industries. At Apple, Steve Jobs would probably have agreed with Deming; John Sculley, with Drucker.

Deming says little on how shop floor operators should actually be trained, and makes no reference to Training-Within-Industry (TWI), a program we would have expected him to be familiar with as a development that was contemporary to his own work in World War II, but a Google search for “Deming +TWI” does not match any document. He bemoans companies’ failure to use people’s abilities but does not explain how training, on the job or otherwise, can remedy this.

Deming also says that training should be focused on the customer’s needs, which, influenced by TQM, we may interpret as meaning the next process. When Deming writes “customer,” however, he does not mean it metaphorically but literally. He is actually thinking of the real customer, the one who pays and has the option to buy elsewhere. In other words, training must relate the work done at any workstation to the experience of the end user of the finished product. The farther upstream from final assembly, the more remote the connection and the more challenging it is to communicate, but the more understanding an operator has of the effect of the work, the stronger the motivation to do it well.

Even in the best companies today, much of the initial training of operators is done off-line rather than on the job. The basic employee orientation on company procedures or personal protection equipment is, of course, done offline, but so is a major part of the work itself. Machinists learn the basics of CNC turning with tabletop lathes that carve wax cylinders before moving on to actual machines, and assembly teams learn the basics of the Kanban system through simulation games.

Oct 2 2012

A Lean Journey: Meet-up: Michel Baudin

See on Scoop.it – lean manufacturing

Interview on Tim McMahon’s A Lean Journey.
See on www.aleanjourney.com

Sep 21 2012

Deming’s Point 5 of 14 – Improve Constantly and Forever the System of Production and Service

Deming’s complete statement of Point 5 is as follows:

“Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.”

At first sight, this point sounds exactly like the first one, which is about constantly improving products and services. What is the difference? Point 1 was about output; Point 5, about internal processes and systems. It says that improvement is an activity that must always be part of the life of any business organization. On this, Deming is on the same wavelength as Imai in Kaizen, which was published almost at the same time as Out of the Crisis.

“Constantly and forever” means that improvement in a plant starts on its opening day and ends only if it closes. Point 5 assumes that improvement is always possible, and should always be pursued. Imai had quoted a Japanese executive saying that he had found a US plant unchanged on his second visit after 30 years. Looking for examples of what this visitor might have seen, I found the following two pictures of coke ovens at the Ford River Rouge plant:

Figure 1. Identical operation 30 years apart

By contrast, a factory that practices improvement looks slightly different if you revisit it after six months and is unrecognizable after two years.

But the idea that you need to constantly improve a factory contradicts the conventional wisdom that it produces diminishing returns. One area of human endeavor where we might expect such diminishing returns is the 100m race, with athletes training ever harder to nibble ever smaller improvements in their times. It is what common sense tells us, but not what the data tells us. Figure 2 plots the world records in 100m racing from 1900 to 2010.

Figure 2. World records in 100m racing from 1900 to 2010

The linear trend is for the record to drop by an average 0.01 sec/year for 110 years, with no sign of a slowdown in improvement. Still, in manufacturing quality, you could claim that there are diminishing returns when the same amount of effort takes you for 30% to 3% defective, then from 3% to 0.3%, and then from 0.3% to 15ppm. In a competitive environment, however, the consequences of making or not making these improvements do not diminish. If you don’t make them, somebody else will and use them to take markets away from you.

In the 50s and 60s, some American appliance makers were not only failing to improve quality but were deliberately degrading it. Even though I had read reports of this, I still thought it so egregious that I didn’t believe it, until, in the 1980s, I met an engineer who had been personally involved. He had been part of a “reliability” department charged with redesigning products to fail as soon as possible after the warranty expired. This was a version of planned obsolescence that opened the door to competitors. Planned obsolescence still exists, but it is now about making customers want to buy a new product because it has new and better features, not because the old one broke down.

Deming does not mention the training value of improvement work. Improving the production system may become ever more challenging, but the work force that has taken it this far has learned lessons and grown skills that enable it to take on the next challenge. The problems may be harder, but the problem-solvers are stronger.

In his comments, Deming does not limit the size of the improvement actions. His recommendation isn’t just about what we now call continuous improvement or Kaizen. It is not just about small changes made to work methods by those who do the work. It can also be large-scale, radical changes. On the other hand, the only target of improvement he seems to have in mind is quality. As he describes it, if quality improve, so does productivity, because you eliminate the friction in the process caused by defects. Bringing processes under statistical control is front and center.

Lean Manufacturing goes much further. First, you cannot have flow lines with processes that are not under statistical control, and, if you have such processes, not much else matters besides bringing them under control. But there are many plants, in mature industries, where it is no longer an issue, and machines, right out of the box, can hold tighter tolerances than required. In this case, Deming’s logic is turned on its head, and it is quality improvement that becomes a by-product of work on productivity.

For example, when you convert a batch production line to a one-piece-flow cell, the immediate effect is that you may see is that double productivity while reducing cycle time and WIP by 90%. Then, as you start operating the cell, you notice that it produces three times fewer defectives per shift than the old line did, essentially because, instead of burying defects in WIP, you detect them immediately. A part coming out of an operation is immediately loaded into the next one, which brings to light any defect it may have. This is a scenario that I have observed many times, but it is not part of Deming’s world view.

Today, you would never hear a manager openly oppose Deming on this. It has become part of the standard talking points but, if you listen closely, you hear different messages that contradict it, such as: “We’ve optimized production, and our big opportunity is now in the supply chain.” If you want to follow Deming’s advice, you should ban the word “optimal” from your vocabulary, because, by definition, if anything you do it optimized, you can no longer improve it. The completion of one improvement action sets the stage for the next one, forever; optimization, on the other hand, leads to a full stop. When you see the shop floor after hearing such a statement, you see plenty of opportunities that have been left on the table and are not being pursued.

There are still very few companies that genuinely pursue improvement “constantly and forever” at all levels of the organization, through all means available, including individual suggestions, circle activities, Kaizen events, and large-scale innovation projects. We usually consider them showcases of Lean.

Sep 12 2012

Deming’s Point 3 of 14 – Cease dependence on inspection to achieve quality…

Deming’s 3rd point is the first to mention quality, and it is specific, even if its implementation is sometimes a tall order. Its complete statement is as follows:

“Cease dependence on inspection to achieve quality. Eliminate the need for massive inspection by building quality into the product in the first place.”

The idea that quality should be built into the design of the products and into the processes to manufacture them has come to be generally accepted in the past 30 years, and implemented in many industries. You never hear anyone arguing against it. At the same time, final inspection and test has never completely disappeared, even in the car industry. Engines, for example, are all tested before moving on to assembly, even at the best manufacturers, and body paint is visually inspected by people.

In the details he gives about this point, Deming acknowledges that there are exceptions where no one knows how to build quality into the process. In particular, he mentions integrated circuits. It is still true in 2012, and the economic importance of this “exception” has grown in the past 30 years. There are also other, older technology products for which there is no alternative to sorting the output. Lead shot, for example, is produced by pouring molten lead into a sieve, collecting the solidified drops, sorting the ones that are sufficiently round based on their ability to roll down chutes, and recycling the others.

Oddly, Deming includes “calculations and other paperwork” in a bank among the activities for which mistakes are “inevitable but intolerable.” Today, an individual using on-line bill-pay to settle a utility bill expects that the exact amounts will be properly debited and credited without human intervention. If, on the other hand, you are occasionally transferring $300K from Russia to the US, you can expect humans to validate the transaction.

At least in Out of the Crisis, Deming does not distinguish between inspection and testing. Inspection is a manual process, subject to human error and to dilution of responsibility when a product is subject to multiple inspections, which is why he describes it as ineffective as a filter for defectives. At the end of their process, however, integrated circuits are not inspected by humans but tested on automatic test equipment that, if properly calibrated, provides consistent results. The relevance of these results depends on the human process of programming the test equipment; the productivity of test operations, on the sequencing of the tests.

Because inspection and test is perceived as “non-value added,” it has a bad odor in the Lean community, and is ignored in its literature. Today, however, it is something we have to do, and we might as well do it well. Deming discusses it in Chapter 15 of Out of the Crisis; I, in Chapter 16 of Lean Assembly .

Sep 6 2012

Journalist Confuses Activity and Growth

See on Scoop.it – lean manufacturing

In yet another examples of journalistic innumeracy, this article confuses a quantity, manufacturing activity, with its variation, growth.

The title “Manufacturing growth is down for third straight month,” leads you to believe it says that growth is lower but activity is still growing.

The first sentence confirms this: “Manufacturing growth in August remained as it had been in the previous two months—sluggish.” Sluggish does not mean negative.

But the next paragraph tells you that manufacturing activity had actually been contracting, not growing: “ISM’s index used to measure manufacturing activity, was 49.6 in August, which is 0.2 percentage points below July and 0.1 percent lower than June. A reading of 50 or higher indicates growth is occurring.”

See on www.logisticsmgmt.com