Management

Aug 21 2014

Purpose and Etiquette of On-Line Discussions

In the Lean Six Sigma Worldwide discussion group on LinkedIn, Steven Borris asked about the purpose of on-line discussions, whether they should stick precisely to the topic they were started on, and how disagreements between participants should be expressed or handled. As a participant in a variety of professional forums for the past 16 years, I have come to think of an online discussion as a conference that is always in session, in which the posting etiquette should be the same as at conferences.

Contributors should think of readers first. LinkedIn members read discussions for enlightenment, not entertainment. This isn’t Facebook. When readers browse a discussion, it is based on its subject, and that is what they expect to be covered. Like the title of a book, the name of a discussion announces what it is about. Readers are drawn to it by the need for information on that topic and have a legitimate expectation that the posts will be about it. If participants disappoint them, they go away upset at having been misled. For this reason,  discussions should stick to their subject, and group moderators or managers should make sure they do, with interesting digressions spawning new discussions.

Professional readers are also turned off by personal attacks and posts that question other posters’ motives. The participants need to “play nice” with each other, but a discussion where they all express the exact same ideas would not be informative and would be dull. The contributors to the discussions I participate in often have decades of experience that have shaped their perspectives on the topics, differently based on the industries and companies they have worked for. They are not on the same wavelength.

Often, however, apparent disagreements disappear when the context is properly set. For example, in his 1999 book on Six Sigma,  Mikel Harry wrote that the future of all business depends on an understanding of statistics; Shigeo Shingo, on the other hand, had no use for this discipline and wrote in ZQC that it took him 26 years to become free of its spell.

That sounds like a clear-cut disagreement. Mikel Harry developed Six Sigma at Motorola in the 1980s; Shigeo Shingo was a consultant and trainer primarily in the Japanese auto industry from 1945 to the 1980s, too early for discussion groups. Harry and Shingo worked in different industries with different needs at different times.With proper context setting, they can be both right.  Posts that start with “In my experience…” and support topical conclusions with an account of what that experience go a long way towards setting that context.

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Jul 30 2014

“Studies show…” or do they?

Various organization put out studies that, for example, purport to “identify performances and practices in place among U.S. manufacturers.”  The reports contain tables and charts, with narratives about “significant gaps” — without stating any level of significance — or “exponential growth” — as if there were no other kind. They borrow the vocabulary of statistics or data science, but don’t actually use the science; they just use the words to support sweeping statements about what manufacturers should do for the future.

At the bottom of the reports, there usually is a paragraph about the study methodology, explaining that the data was collected as answers to questionnaires mailed to manufacturers and made available on line, with the incentive for recipients to participate  being a free copy of the report. The participants are asked, for example, to rate “the importance of process improvement to their organization’s success over the next five years” on a scale of 1 to 5.

The results are a compilation of subjective answers from a self-selected sample. In marketing, this kind of surveys makes sense. You throw out a questionnaire about a product or a service. The sheer proportion of respondents gives you information about the level of interest in what you are offering, and the responses may further tell you about popular features and shortcomings.

But it is not an effective approach to gauge the state of an industry. For this purpose, you need objective data, either on all companies involved or on a representative sample that you select. Government bodies like the Census Bureau or the Bureau of Labor Statistics collect useful global statistics like value-added per employee or the ratio indirect to direct labor by industry, but they are just a starting point.

Going beyond is so difficult that I don’t know of any successful case. Any serious assessment of a company or factory requires visiting it, interviewing its leaders in person, and reviewing its data. It takes time, money, know-how, and a willing target. It means that the sample has to be small, but there is a clash between the objective of having a representative sample and the constraint of having a sample of the willing.

For these reasons, benchmarking is a more realistic approach, and I know of at least two successful benchmarking studies in manufacturing, both of which, I believe, were funded by the Sloan Foundation:

  • The first was the International Assembly Plant Study, conducted in the late 1980s about the car industry, whose findings were summarized in The Machine That Changed The World in 1990. The goal was not to identify the distribution of manufacturing practices worldwide but to compare the approaches followed in specific plants of specific companies, for the purpose of learning. Among other things, the use of the term “Lean” came out of this study.
  • The second is the Competitive Semiconductor Manufacturing Program, which started in the early 1990s with a benchmarking study of wafer fabrication facilities worldwide. It did not have the public impact of the car assembly plant study, but it did provide valuable information to industry participants.

The car study was conducted out of MIT; the semiconductor study, out of UC Berkeley. Leadership from prestigious academic organizations helped in convincing companies to participate and provided students to collect and analyze the data. Consulting firms might have had better expertise, but could not have been perceived as neutral with respect to the approaches used by the different participants.

The bottom line is that studies based on subjective answers from a self-selected sample are not worth the disk space you can download them onto.

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Jul 20 2014

The Toyota Production System (TPS), Philosophy, and DNA

According to Ranga Srinivas, “TPS is a ‘Philosophy’, not a system (System in TPS is given by Western world). That philosophy is in their DNA.”

We tend to get carried away with metaphors, and I think we need to get back to earth.

Louie de Palma

In Japanese, TPS is not only NOT a philosophy, it is not even a system, but just a method! The term is Toyota Seisan Hoshiki (トヨタ生産方式), and Hoshiki means “method,” not “system.” It reminds me of Louie de Palma, the Danny de Vito character in the series Taxi, saying about his girlfriend,  “She sees something in me that no one ever saw, something that isn’t there.”

Let us study TPS for what it really is: the best known way to make cars. And, if Mark Graban can learn from it and improve hospitals, it’s wonderful. But let us not go to a car maker for philosophy. It’s the wrong shop.

Saying it’s the best known way to make cars is not talking it down; it’s what drew me to it. Philosophy is also a wonderful thing, but corporate philosophy is to philosophy as advertising is to poetry. If you parse it, it should be to understand the image management wants to project, not what the company does.

There is a Japanese word for philosophy (tetsugaku, 哲学). Googling “toyota tetsugaku” yields a single occurrence on the Toyota website, in one paragraph about “Business strategy” (hoshin), which translates as follows:

“Toyota aims to be a good corporate citizen through the provision of clean and safe products, to contribute to the prosperity of society, and earn the trust of the international community. I will introduce the vision for the future and Toyota’s philosophy, which is alive in the Toyota Production System and the corporate concept.”

For comparison purposes, this is what GM says about itself on its website:

“In order to achieve our goals, GM has remained committed to the following formula for success:

  1. Move faster and take risks to achieve sustained success, not just short-term results
  2. Lead in advanced technologies and quality in creating the world’s best vehicles
  3. Give employees more responsibility and authority and then hold them accountable
  4. Create positive, lasting relationships with customers, dealers, communities, union partners and suppliers, to drive our operating success.”

I have the greatest respect for TPS, and have experienced its adaptability to industries ranging from making frozen foods to computers and aerospace.  And I understand that you can’t go to a hospital and tell administrators, doctors, and nurses that you are going to help them with a method for making cars. You not only have to adapt it, you must also present it in such a way that they will listen. For 25 years, the word “Lean” has been used for this purpose. It has also been abused, to leverage the respect inspired by TPS in order to promote unrelated ideas.

We also need to be careful about references to DNA in this context. I believe it started with Spear and Bowen Harvard Business Review Article Decoding the DNA of the Toyota Production System. Culture is nurture; DNA, nature. Your culture is the way your family, school, and society molded you; your DNA is the genetic program that made you.

Generally, we should treat national culture as irrelevant to manufacturing. If Japanese business leaders in the late 19th and early 20th century had considered it relevant, they would have decided that manufacturing was a product of European and American culture that could not be transplanted to Japan.

About housekeeping habits specifically, I remember being impressed, while walking the streets of Rotterdam at night, by houses with the drapes pulled and the lights on to let passers-by admire spotless living rooms. What we saw in factories in the same country, however, told us that the cultural obsession with neatness in daily life did not carry over to the production shop floor.

DNA is even less relevant. In every society, there are misguided individuals who believe that having been born into a particular group makes them better at some activities; the rest of society calls them bigots. If DNA had anything to do with manufacturing excellence, it could not be achieved by learning. You can learn a method, master a system, and even assimilate a culture, but you can’t change your DNA.

 

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Jul 10 2014

What is “Operational Excellence”?

Who would not want something called “Operational Excellence”? “Excellence” is superlative goodness, and “Operational” suggests a scope that includes not only production, logistics, and maintenance in Manufacturing, but also administrative transaction processing like issuing car rental contracts or marriage licenses. The boundaries are fuzzy, but Marketing and R&D are not usually considered part of Operations.

Hearing “Operational Excellence” for the first time, everybody takes it to mean whatever they think is the best way to run operations, which makes it unlikely that any two people will have the same perception. If marketers of consulting services can prevail upon a profession to accept such a vague and generic term as a brand, they can sell pretty much anything under this label. By contrast, the Toyota Production System (TPS) specifically refers to the principles, approaches, methods, and tools that Toyota uses to make cars. When you first hear it, you may not know what those are, but you know that you don’t know. Another difference between “Operational Excellence” — also known as “OpEx’ or “OE” — and TPS, is that the first is a goal, while the second one is a means to achieve the unmentioned but obvious goal of thriving in the car industry.

Chevron OE
OE at Chevron

It is an increasingly popular term, perhaps because of its very lack of precision. Google it, and you find, for example, that, Chevron “has spent more than 20 years expanding systems that support a culture of safety and environmental stewardship that strives to achieve world-class performance and prevent all incidents. We call this Operational Excellence (OE),…”  So, at Chevron, OE is about avoiding accidents that directly hurt people and oil spills that ruin the environment.

It is certainly not what it means to the  Institute for Operational Excellence. Its website has a glossary that contains exclusively terms from TPS or Lean, like Andon, Cell, Chaku-Chaku, 5S, Kanban,…, which strongly suggests that Operational Excellence is just the latest avatar of TPS when applied outside of Toyota. For 25 years, “Lean” has reigned supreme in this role but may finally be getting stale after so many botched implementations.

Shingo Prize for OpExThe Utah State University website, on its Jon M. Huntsman School of Business page, has a directory entry for The Shingo Prize for Operational Excellence. The Shingo Prize site itself, however, while using “excellence” in almost every sentence, does not refer to operational excellence. The theme of this year’s Shingo Prize conference, in Sandusky, OH in May, was “Enterprise Excellence,” which sounds like a further generalization. But, digging deeper, you find that the Shingo Model Handbook contains “operational excellence” 31 times, “Lean” 7 times,  “Toyota”  twice, and “TPS” never.

 

Shigeo Shingo
Shigeo Shingo
stuck_gear-teeth
Stuck gears on the Shingo Prize page

The Shingo Prize page uses as a banner a picture of three gears with the teeth enmeshed in such a way that they can’t move, a picture that would have seemed odd to an engineer like  Shigeo Shingo. His legacy is primarily contributions to production engineering like SMED, Poka-Yoke, and line/work station design. On these subjects, you cannot see daylight between Shingo’s work and the Toyota Production System (TPS). Therefore, when you see a document called “Shingo Model Handbook” that refers repeatedly to Operational Excellence and never to TPS, you can’t help but conclude that Operational Excellence is just another name for TPS.

UC Berkeley OE Program Office Team
UC Berkeley OE Program Office Team

UC Berkeley has an Operational Excellence (OE) Program Office. Based on the family picture in its Spring 2014 Progress Report, it has 12 members. UC Berkeley has a total workforce of 29,000, of which 2,000 are full and part-time faculty members, and about 36,000 students. It works out to 1 member of the OE Program Office for every 2,417 members of the work force and 3,000 students. They present themselves as  internal consultants, with access to funding and expertise in “project management, change management, strategic planning, campus engagement, financial analysis and planning, business and data analysis, and communications.” The director of the office has been on the administrative staff for 13 years and reports to the university’s chief administrative officer. This is yet another take on it.

Do the proponents of Operational Excellence do a better job of capturing the essence of TPS than their predecessors in Lean, World-Class Manufacturing,  Synchronous Manufacturing, or Agile Manufacturing? The above-mentioned institute has a page defining Operational Excellence as “the point at which ‘Each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.’” 

At first, it sounds like another version of True North, as explained by Art Smalley. Taking a closer look, as a general statement, it does not make much sense. It implies that every employee of every organization is involved in something that can, at least metaphorically, by described as a “flow of value” to customers. It is no stretch to see how this applies to a hot dog street vendor, but how does it work for, say, a firefighter? A firefighter serves the public by putting out fires, but the value of a firefighter resides in the ability to put out fires when they occur, not in the number of fires put out. A firefighter “seeing a flow of value to customers” is a head scratcher. As for “fixing the flow before it breaks down,” it conjures up the image of a plumber repairing a pipe that doesn’t leak.

Even Wikipedia editors are uncomfortable with their article on Operational Excellence. They denounce it as “promoting the subject in a subjective manner without imparting real information.” The definition is indeed short and confused:

Operational Excellence is an element of organizational leadership that stresses the application of a variety of principles, systems, and tools toward the sustainable improvement of key performance metrics.

Much of this management philosophy is based on earlier continuous improvement methodologies, such as Lean Manufacturing, Six Sigma, and Scientific Management. The focus of Operational Excellence goes beyond the traditional event-based model of improvement toward a long-term change in organizational culture.

It says what Operational Excellence is an element of, what it is based on, and what it goes beyond, but not what it is. And much of what these few words say raises eyebrows:

  1. The emphasis on metrics is a throwback to Management-By-Objectives, an approach that has historically not led to excellence at anything but gaming metrics.
  2. Lean Manufacturing, Six Sigma, and Scientific Management are emphatically not continuous improvement methodologies. Continuous improvement is a component of Lean but by no means all of it. Six Sigma is not continuous improvement at all, and Taylor’s “scientific” management was about preventing operators from colluding to curtail output, not improving processes.
  3. Continuous improvement is not event-based.  Contrary to what the name suggests, “Kaizen events” don’t do continuous improvement. This format was actually developed in the AME in the 1990s based on the realization that just continuous improvement could not accomplish changes of the scope that was needed.
  4. TPS/Lean, when correctly implemented, has always been about a long-term change in organizational culture.

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Jun 15 2014

The Goals That Matter: SQDCM | Mark Graban

See on Scoop.it – lean manufacturing

Blog post at Lean Blog : “Today is the start of the 2014 World Cup, which means much of the world will be talking about goals.I’m not really a soccer, I mean football, fan but I’m all for goals. In the Lean management system, we generally have five high-level goals. These were the goals taught to us in the auto industry, where I started my career, and they apply in healthcare.”

 

Michel Baudin‘s comments:

As I learned it, it was “Quality, Cost, Delivery, Safety, and Morale” -(QCDSM) rather than SQDCM. I am not sure the order matters that much. The rationale for grouping Quality, Cost, and Delivery is that they matter to customers, while Safety and Morale are internal issues of your organization, visible to customers only to the extent that they affect the other three.

They are actually dimensions of performance rather than goals. “Safety,” by itself, is not a goal; operating the safest plants in your industry is a goal. In management as taught in school, if you set this goal, you have to be able to assess how far you are from it and to tell when you have reached it. It means translating this goal into objectives that are quantified in metrics.

In this spirit, you decide to track, say, the number of consecutive days without lost time accidents, and the game begins. First, minor cuts and bruises, or repetitive stress, don’t count because they don’t result in the victims taking time off. Then, when a sleeve snagged by a machine pulls an operator’s hand into molten aluminum, the victim is blamed for hurting the plant’s performance.

Similar stories can be told about Quality, Cost, Delivery and Morale, and the recent scandal in the US Veterans’ Administration hospitals shows how far managers will go to fix their metrics.

To avoid this, you need to reduce metrics to their proper role of providing information an possibly generating alarms. In health care, you may measure patients’ temperature to detect an outbreak of fever, but you don’t measure doctors by their ability to keep the temperature of their patients under 102°F, with sanctions if they fail.

Likewise, on a production shop floor, the occurrence of incidents is a signal that you need to act. Then you improve safety by eliminating risks like oil on the floor, frayed cables, sharp corners on machines, unmarked transportation aisles, or inappropriate motions in operator jobs. You don’t make the workplace safer not by just rating managers based on metrics.

In summary, I don’t see anything wrong with SQDCM as a list. It covers all the dimensions of performance that you need to worry about in manufacturing operations, as well as many service operations. Mark uses it in health care, but it appears equally relevant in, say, car rental or restaurants. I don’t see it as universal, in that I don’t think it is sufficient in, for example, research and development.

And, in practice, focusing on SQDCM  easily degenerates into a metrics game.

See on www.leanblog.org

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Jun 13 2014

Pots of gold, Crutches, Mermaids, and Alligators

Kelvyn Youngman is a consultant from New Zealand, whose writings are usually easy to follow. This is why I was surprised by a post of  his in the TLS-TOC Lean & Six Sigma discussion group on LinkedIn that I found unintelligible. The following quotes omits the parts in plain English, but there were too few for me to make sense of the whole:

[…] we in TOC still confuse local/local clouds (part-to-part) and local/global clouds (whole-to-part) […] A systemic cloud, a local/global cloud (whole-to-part) is the destination but it is not the journey. More and more I am coming to believe that the journey is a dialectic, the local/local cloud (part-to-part). The matrix is bound up in this as I hope that I can explain.

[…] When we use a change matrix, “they” will list their crocodiles (UDE’s) and their pot of gold (DE’s) or more correctly as I asked the other day, their interpretation of their firm’s UDE’s and DE’s. They are indeed not personal UDE’s/DE’s, they are those of the organization. In fact if you do an affinity diagram with these key stakeholders and ask them each to list the UDE’s most of them will be common to most of the individuals. There is a shared understanding of the UDE’s. Sure there will be a small number of unique UDE’s too, but on the whole everyone is in agreement. […] The issue is our values roughly speaking, the issue is how we interpret these entities. Forget about root cause and so forth. Our side will generally recognise issues of interdependency, and they independency. Their more-of-the-same solution will display this. Their solution will go in the D of the cloud, ours will go in the D’. But right at that moment, their crocodile and their pot of gold is in conflict with our intent (and will impact upon our mermaid and crutches). […] We do see the same UDE’s/DE’s for both sides but we also see different interpretations of the solution. And then we have to move with some sensitivity to help to understand the invalidity of their solution – because their whole sense of identity is built around this.

I surrendered, and confessed that I didn’t have a clue what he was talking about with clouds, crocodiles, pots of gold, UDEs, DEs, and Ds, and asked for help. The first response I received was from Henry Fitzhugh Camp:

My simple explanation is that a global/local change/conflict can be understood through a blended change matrix with the global Pot-of-Gold and Alligators combined with the local Crutches and Mermaids. The latter diagonal (NE – SW) is the one most often ignored, particularly by those with authority about those who have none.

It didn’t help much, but then, fortunately, he added:

For those who are left behind:

  • UDE = UnDesirable Effect (part of a Current Reality Tree CRT)
  • DE = Desirable Effect (part of a Future Reality Tree FRT)

Both CRT and FRT are sufficiency logical diagrams showing the interconnectivity of a system.

He included a link to a video about Goldratt’s change matrix. Others also directed me to webinars, and debated whether there was rich knowledge embedded in the jargon, which prompted me to respond that yes, sometimes, technical terms do embed rich knowledge, for example in math or biochemistry. Often, however, the primary purpose of jargon is to exclude the uninitiated.

Some like to learn from webinars and videos. I don’t mind them for cooking recipes, but I find them an excruciatingly slow way to learn vocabulary.  Clouds, crocodiles, pots of gold, UDEs, DEs, crutches and mermaids should be explained each in 25 words or less.

Lisa Scheinkopf then came to my rescue with explanations for at least some of these terms, which I summarized as follows:

  • Pot of Gold: The benefits of successfully making a change.
  • Crutches: The risks of trying to make the change.
  • Mermaids: What you would lose by making the change.
  • Alligators: The risks of not making the change.
Mermaid

As metaphors, Pot 0f Gold and Alligators are OK, but Crutches and Mermaids make no sense. A crutch is a device that helps you, not a risk. And I can’t see what mermaids have to do with the benefits of the status quo. In many cultures, mermaids, or sirens, lure sailors to their deaths. That is not much of a benefit. In others, they fall in love with human males, which makes you wonder what kind of “mermaids” a woman employee would have.

These terms are all about what you have to do to convince members of an organization to embrace a change you are recommending or have been tasked with implementing. In my experience, words are ineffective. To drive change, I have usually focused on finding protagonists rather than persuading antagonists.

Among the first-line managers in a manufacturing plant, for example, you usually encounter about 30% of antagonists who, for whatever reasons, oppose what you are recommending, about 50% of fence-sitters who are waiting to see which way the wind blows, and 20% of protagonists, who see an opportunity and want to take it. You work with the protagonists to get pilot projects done.

Their success then wins over the fence sitters and, together, the original protagonists and the converted fence sitters overcome the objections of the antagonists. Of course, this approach requires you to take human issues into consideration when selecting projects. You may select a smaller pot of gold because the manager in charge is ready to go for it.

And I still don’t know what Kelvyn meant with his “clouds.”

 

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