Sep 13 2012

L.A.M.E. strikes again, in an office environment

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L.A.M.E. (Lean As Mistakenly Executed) is giving Lean a bad name. The article’s lead paragraph says is all:

“The lean manufacturing model, when applied to knowledge work, is a race to the bottom where humans are reduced to robots and creative output to widgets. The work is process-mapped to death, and management demands “faster, better, cheaper.” The concern is not for the experience of the end customer or the growth of the company, but rather ‘what can the customer live without so that we can save more money?’”

How do you respond to this? Following is a comment I posted:

What I find striking in your story is that you never mention what your office was supposed to be doing, which suggests to me that the “Lean” approach was the deployment of generic tools under the mistaken assumption that they would help regardless of whether the office was architecting skyscrapers or processing insurance claims.

First, you have Toyota, the company where Lean was invented as a means of becoming a better car maker. It worked. Then you have had many people who used Toyota’s reputation to peddle simplistic, dumbed-down copies of Toyota’s system under the Lean label. It didn’t work, and they are giving Lean a bad name.
Then you have had more people further simplify and double-dumb down the approach to port it over to offices, and it seems to be what you experienced.

The starting point should be the work: what it is, how much of it there is, and how it varies over time. Then you look for ways to improve effectiveness, which means producing more relevant, higher-quality output faster. Finally, you worry about efficiency, which means eliminating waste in the process. And waste is by definition stuff you are better off not doing, like printing and disributing reports nobody reads.

My recommendation to you is to go back and study the original, rather than the output of a multi-stage telephone game.

See on lukerumley.com

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Inspection checklist

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 .

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Sep 12 2012

Kaizen by QC Circles in Pakistan

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KARACHI: The auto industry, especially Indus Motor Company (IMC), has done a commendable job to improve its business processes through Kaizen initiatives and activities and this practice should spread to other industries paving the way for accelerated economic development of our country.This was stated by Parliamentary Secretary for Industries MNA Pir Haider Ali Shah at the 19th Annual Kaizen Convention recently organised by Indus Motor Company (IMC) at a local hotel.

He said that growth and excellence lies in the adoption of Quality Control Circle (QCC) approach and Kaizen, which have enabled IMC to improve its development processes taking it to new heights.

See on www.dailytimes.com.pk

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Sep 11 2012

Lean as an Alternative to Mass Layoffs in Healthcare | Hospital Management & Administration

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When faced with financial pressures, hospital leaders often try to reduce costs by laying off hospital employees. This is, in a way, understandable, since payroll makes up 60 to 70 percent of a typical hospital’s overall costs.

An increasing number of hospitals, however, are questioning the long-term impact of layoffs on morale, cost and quality. As a result, many are turning to “Lean management” practices, based on the Toyota Production System, as an alternative. The Lean methodology reduces costs, with lower costs being the end result of higher staff engagement and better patient care. Denver Health is one such health system with a “no-layoffs philosophy,” having saved over $150 million through their Lean program. Without those savings, Denver Health would “absolutely have had to cut jobs,” said CEO Patricia Gabow, MD, in a Denver Post report.

See on www.beckershospitalreview.com

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Sep 11 2012

How to Break Free from Email Jail

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How often are people’s email privileges suspended (aka, “mail jail”) because they’re inundated with a blizzard of questions, status updates, notifications, and other non-mission critical information? Most inboxes — and calendars — are gorged with junk because the dominant paradigm of communication is information “push.” This means that information is being pushed onto people when it’s ready, but not necessarily when the recipient needs it. Think of all of the emails and documents you have going back and forth. Irrespective of the value of the information, how often is it relevant to you at that moment?

See on blogs.hbr.org

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Philosophy -- Old versus New

Sep 10 2012

Deming’s point 2 of 14: Adopt the new philosophy…

This is the most cryptic of all of Deming’s points:

“Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.”

This could have been said, with different meanings, at any time in the past 200 years. It could be said today, about a “new philosophy” that would not be the one Deming was referring to 30 years ago.  What was new in 1982 or even 1986 may be long in the tooth in 2012. Also,  is there such a thing as “Western management” as a common approach spanning the Americas and Western Europe? In the elaboration on this point, Deming asserts “We are in a new economic age, created by Japan.”

Deming’s 2nd point could be rephrased as “study and adopt Japanese management,” but it still would not be specific. It certainly made sense for car companies to learn the Toyota Production System, as they eventually more or less did, but Japan is 130 million people and more than 1 millions companies, engaging in all sorts of behaviors, not all of which are worthy of emulation. In addition, explicit references to another nation are counterproductive when you are trying to implement anything, as they instantly elicit the response that “it won’t work here.”

To make his point, Deming dives from the stratosphere of philosophy to the nitty-gritty of train schedules. Japanese trains, today as well as 30 years ago, run fast, frequently, and on time, which certainly enhances your traveling experience. As a train engineer told me in 1977,  “It’s a very interesting country, from a railroad point of view.” When I returned from Japan 18 months later, I brought him a copy of the latest schedule, which was sold at newsstands and looked like a small phone book. 34 years later, I crisscrossed Japan  for a week with tight connections and never missed one. It is radically different from using high-speed trains in Germany (ICE) or France (TGV). The Japanese high-speed trains, the Shinkansen, are no longer the fastest in the world, but what is most remarkable about them is that, if you stand close to the Tokyo-Osaka line, you see trains of 16 carriages roll by at 150 tp 200 mph every few minutes, as shown in Figure 1. By contrast,  TGVs from Paris to Lyon run about once an hour, and often late.

Figure 1. Schedule of Shinkansen departures from Tokyo to Osaka and beyond

And punctuality in public transportation in Japan is not limited to the Shinkansen: if you stand on a country road, with a schedule that calls for a bus to come by at 4:36PM, you see it coming round the bend at 4:35PM.

One good reason to point this out to American managers in the 1980s was that such a quality of service could not be explained by hard work, low wages, or protectionism. It required advanced technology and management, engagement of the work force, and attention to details. Furthermore, from 1964 to 1981, the Shinkansen was the only train of its kind in the world.

While the Shinkansen and its operations are a wonder to behold, it also has characteristics that have made it impossible to sell outside of Japan. It uses a wide gauge and cannot run at reduced speeds on regular tracks like the French TGV or the German ICE, as a result of which the Shinkansen network requires many more specially built bridges and tunnels.

Figure 2. Shinkansen tracks versus regular Japanese tracks

In fact, the only stretch on which traffic is intense enough to run profitably is the original Tokyo-Osaka line, and some lines are known to have been built because a powerful politician wanted his district served. Japan is a place where you find the Shinkansen and many other engineering marvels, but it is not immune to major errors in business planning and has its share of bridges to nowhere. It is not an ideal society, as Deming must have known, but a real, flawed one, comprised of 130 million fallible human beings.

In the US, fear of Japanese competition peaked in the late 1980s, and ebbed in the 1990s when the country entered a long recession that it has yet to overcome. In 2012, the focus of attention is China, not Japan. Not everything about Japan is worth following, and it was a mistake to believe so, but it is also a mistake to go back to ignoring it. In manufacturing, the most advanced concepts in both technology and management are still  found in the best Japanese factories, and the Japanese literature on the subject has no equivalent anywhere else.

But none of this tells us what the “new philosophy” is. By riding trains and visiting factories, you can observe practices, but not their underlying principles.  And you need these principles to develop corresponding practices in other contexts. There isn’t a single such philosophy for the whole of Japan. Instead, each successful organization has its own, which may or may not be explicitly stated, and if stated for internal use, is not necessarily shared with the world. In Out of the Crisis, the 14 points are the closest there is to the statement of a philosophy. Therefore this points essentially says that they the others should be adopted.

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