Jun 30 2012

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.

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MB with Erausquin and Roberto

Jun 30 2012

Role of Management in Lean (In Spanish)

See on Scoop.it – lean 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

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Jun 28 2012

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.

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Jun 27 2012

Mark Graban on Kaizen in health care

See on Scoop.it – lean manufacturing

Author encourages kaizen methods to improve healthcare (San Antonio Express) The book, published Wednesday, highlights lean management practices, which focus on methods of daily continuous improvement, or “kaizen,” for healthcare …and more »…

See on www.mysanantonio.com

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Jun 27 2012

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.

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