Jun 20 2014

Supplier Assessment — It’s The Gut That Counts Says Nobu Morita | Pat Moody

“Beyond Report Cards, Beyond Balance Sheets?  When Evaluating Suppliers, Why It’s Your Gut That Counts.

What’s the best way for supply management and manufacturing pros to evaluate current and potential suppliers? And is there only one “best way?”  There are hundreds of supplier assessment tools, books and checklists, but there is no single standards committee that absolutely dead nuts certifies what’s out there, especially when your supplier is located two continents and three oceans and four hand-offs away!”

Source: sites.google.com

Michel Baudin‘s comments:
When assessing a manufacturing organization, I always look for information from three sources:

  1.  Data, and preferably raw rather than cooked into metrics by recipes unknown to me.
  2. Direct observation of production.
  3. What people tell me, which may or may not agree with the data and what I sense on the shop floor.

I don’t see Morita as disagreeing with this, but I think we must be careful about basing decision on a “gut feel,” which may be no more than the expression of prejudices you didn’t even know you had.

Still, when your gut feel tells you that something is not quite right, it often is. I wouldn’t base my decision on it, but I would take it as a signal that further investigation is needed.

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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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Jun 13 2014

A Deming Interview from 1984

In a discussion in the TPS Principles and Practice discussion group on LinkedIn, Hein Winkelaar pointed out the following video of an interview with W. Edwards Deming taped in 1984:

for more details, you can also read about Deming’s list of “5 Deadly Diseases” in Chapter 3 of Out of the Crisis, pp. 97-148.

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Jun 8 2014

What to Expect From a Corporate Lean Program | MIT Sloan Management Review

See on Scoop.it – lean manufacturing
“We studied the implementation of the Volvo Production System, or VPS. The Volvo Group, based outside Gothenburg, Sweden, is a leading manufacturer of heavy vehicles, such as trucks, buses and construction equipment. (The company sold its Volvo Cars unit in 1999.) The Volvo Group introduced the VPS in 2007, and since then, it has been implementing the VPS in its 67 factories, located in countries around the world. VPS is similar to lean production systems used in many other companies, and we believe the insights from this study can be usefully applied in other companies. We examined the five-year history of this program, visited 44 of the 67 plants and interviewed 200 managers.”

Michel Baudin‘s comments:

The first author of this article, Torbjørn Netland, is among my favorite bloggers. You can rely on him for good, clear-headed writing based on research. And this article delivers, as expected, but not what its title says. It’s not about corporate Lean programs in general, but all about the case of Volvo. Since I have not seen this kind of disconnect on Torbjørn’s blog, I suspect the title was selected by editors at the Sloan Management Review to broaden its appeal.

A general issue that is not addressed in the article is the level of knowledge of Lean in corporate Lean programs. A company that is just starting in Lean, by definition, has no internal expertise to draw on. If it wants its Lean program to be led by experts, it has to hire them from the outside, which is problematic in two ways:

  1. It is a challenge at this point for management to recognize real expertise.
  2. Leaders brought in from the outside have no roots or network in the company.

The alternative is to appoint insiders and expect them to learn. But then it has to be understood that they are not in a position to prescribe what plants should do, and that their role should instead be one of facilitation, coordination, and cross-pollination of ideas between plants.

Often, corporate Lean groups are overeager to standardize the approach across all plants — regardless of what they make or the business and social environment in which they operate.

If they don’t want to turn the Lean program into a exercise in formal compliance, they can instead, for example, on organize periodic conferences  where representatives from different plants present their work. They can also arrange for these conferences to be hosted in turns at the different plants and include shop floor visits. And this can be supplemented by various forms of knowledge sharing on the company’s intranet…

There is nothing wrong with collecting the best practices from different plants into a corporate standard, once the different plants have had the opportunity to develop these practices. But if you do it too early, all you do is stifle the creativity that you need for this purpose.

See on sloanreview.mit.edu

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Jun 6 2014

Next frontiers for lean | McKinsey

See on Scoop.it – lean manufacturing

“…Quietly, though, in Nagoya, Japan, Taiichi Ohno and his engineering colleagues at Toyota were perfecting what they came to call the Toyota production system, which we now know as lean production. Initially, lean was best known in the West by its tools: for example, kaizen workshops, where frontline workers solve knotty problems; kanban, the scheduling system for just-in-time production; and the andon cord, which, when pulled by any worker, causes a production line to stop…”

Michel Baudin‘s comments:

This article implies that the “Kaizen workshop” is a tool of the Toyota Production System, when in fact it is an American invention from the 1990s and what it does is not what is meant by Kaizen in Japan

Then the article describes Kanban as “the scheduling system for just-in-time production.” It is really only a a tool of scheduling among many, including heijunka, just-in-sequence, consignment… The last example, Andon cords, had been observed at Ford in 1931.

Even if this choice of examples is unfortunate, Toyota people invented many tools while adopting and refining existing ones, and it is true that each tool, taken out of context, is of limited value. Toyota’s merit is to have deployed them in a uniquely effective way as part of a system of production.

This is, however, not what the article says. It jumps instead to management disciplines, like “putting customers first,” an idea that bazaar merchants worldwide have had for millenia.

“Enabling workers to contribute to their fullest potential” and “constantly searching for better ways of working” is in fact something that Toyota has done better than its competitors. And these are sound management objectives, but you could pursue them and still not be competitive.

The article implies that the technical content of the Toyota production system is a detail. All that matters is focusing on customers and treating people right. Is it? I don’t think so.

This attitude is the root cause  of the failure of so many “Lean implementations.” Until the technical content of the Toyota Production System is understood and properly valued, the Lean movement cannot claim “Mission Accomplished” in manufacturing.

See on www.mckinsey.com

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