Mar 7 2014

Shortage of skills, not yet – but very soon – a wake up call (part 2) | Wiegand’s Watch

This is a translation of the bulk of Bodo Wiegand’s latest newsletter, about Lean in Germany, followed by my comments:

“In Part 1, we discussed the possibility of becoming more effective in your own work environment by stemming the flood of email and reducing the extent of meetings. In Part 2 , we want to focus on how you can optimize cooperation between employees and departments.

In production, there are precise procedures and instructions , on how a product is to be made. There, the processes are stable , documented and visual. We have not considered this to be necessary in support departments. Everyone works as he sees fit , then delivers when he is ready and at the quality he is capable of.

Sorry – in administration, we produce nothing .

We don’t! Or do we?

In any case, work is not done according to a plan or delivered just in time at a precisely defined quality. Don’t we need to? We do! We need to gradually start to handle administrative processes like production processes – because we need more effectiveness and efficiency on our office floors to reduce skill shortages and remain competitive .

It is not about takt in administration but about flow and on-time delivery. Run time, interfaces, and flexibility are the principles. I can already hear the staff complain in Development or in Construction: “For us no project is like any other – so you can’t define processes , let alone standardize. And yet 7o% to 80 % of the activities are routine and repetitive, consisting of foolishly long meetings and secretarial or travel agency work that is unrelated to project content.

Defining and standardizing the processes of development and construction saves employees valuable time , while proceeding with fixed rules and checkpoints prevents errors or detects them faster, improves the quality and timeliness of the work, and avoids interface problems, for example in making prototypes or starting up manufacturing.

I can already hear the complaints of managers in Human Resources ,  Information Technology, or Accounting : “We produce nothing – we can’t optimize anything.” The most beautiful expression I frequently hear from this faction is “Mr. Wiegand, without us, nothing runs here .” And then when I ask , what products do you make or what services do you render ? Then I see usually only blank stares.

Hello! Is hiring, challenging, and coaching employees not a service? Are indicators that show facts, or figures that support decisions not defined products? Or implementing software , delivering training, and other support functions? Of course, these are products and services.  Can we describe these products, deliver them more efficiently, standardize them, define quality requirements, and visualize their processes?

Yes, we can !

So what is the difference between the production of goods and the products in the so-called indirect areas?

None – except for the fact that the first are visible, tangible, and palpable, while the product of Administration is information – to interpret,  invisible and intangible. If it is possible, therefore, to make the information visible and to define it , then you can treat it like a product and make the processes more effective and efficient. And why do we not  do it?

We had the same problem in production 20 to 30 years ago. Processes were previously under the responsibility of  master craftsmen who delivered as they saw fit. We had to define the processes, specify interfaces, and establish quality, formulate work orders and convert from the functional organization of workshops and production areas to an organization along manufacturing processes.

I remember vividly how the Craftsmen, Workshop Supervisors , and Production Area Managers fought and defended their kingdoms. It was a long, hard struggle. Today, however,  less than 10% of companies are still aligned functionally in production. They all fought to the end, against better judgment, against the greater economic performance, and for their kingdoms.

This is what we face today every day on our office floors. The same arguments are repeated. As an acccountant said, “If we move to a process-oriented organization, the specific know-how goes down the drain.” By the way – the last major innovation in accounting — breakeven analysis —  is more than half a century old. So what kind of know-how must be centrally held, promoted, and protected ?

Do not get me wrong — we need accounting to measure our success , but not in an ivory tower, but on the spot, so you know what you need to measure and therefore can support the decision makers , thus giving guidelines to your trade (see also my article in the Book: The accountant as in-house consultant).

So we anchor the controls in the process , where  needed , and not in a functional department. If we want to raise the potential in the indirect areas , we must not look at the individual functions , but at processes across functions and optimize the functions themselves. Now you know now why it is so hard to find support for Lean Administration. But, as 12 years of Lean Administration consulting have shown , it pays. Here are a few examples :

  • Today, 900 employees in Development and Administration are doing work that used to require 1,300.
  • Capital goods are shipped six months earlier.
  • A service center saves €17M.
  • A pharmaceutical company handle 20% in sales without adding employees.
  • A government office reduced processing time from three weeks to two days .

Now how is this done? It starts with process mapping, defining products , analyzing the task structure and the job  structure,  and then optimizing the value streams . Quite simple – or not?

Unfortunately,  not quite that simple. You can make many mistakes. I have seen many process maps. Some were created from an IT perspective, others from the organization’s point of view — but why not from a customer perspective?

Others avoid analyzing the structure of the activity usually with the argument “Not acceptable to the Works Council.”

What a joke!

We have been implementing Lean administration in companies for 12 years and have never had problems with the Works Councils due to an activity structure analysis. Mostly we were rather supported with the motto: “Finally in this area something is happening.”

Often the products are not defined from a customer perspective. The optimized value streams are contradictory and  watered down by compromise at the interfaces and turned into overcomplex processes.

Why ?

Out of consideration to individuals and functions. Lean Administration projects rarely succeed from the inside out , but require external coaches to bring to light self-interests and put the process in the foreground.

You should however not be deterred by these difficulties . Especially with projects in Administration, the five success factors I so often stress  are:

  • Planning
  • Leadership commitment
  • Holistic approach
  • Resolute implementation /change in mindset
  • Measurement

The potential is large and success easy to achieve. You and your colleagues just have to really want it and, of course, start properly. “

Michel Baudin‘s comments:

As many discussions of the “Lean office” do, Wiegand’s lumps together all activities other than production. Much of his letter is devoted to the standardization of office work, which he presents as essential to avoiding a skill shortage by increasing productivity. While a case can be made for the value of following documented procedures in transaction processing  like rental car issue and return, it is far-fetched for creative knowledge work like R&D.

In product development, it helps to have some discipline in managing the flow of projects through phases, with appropriate validation at various checkpoints, but there is little evidence that it is essential. The history of product development is replete with cases where all the procedures were in place but the products failed, and, on the contrary, of cases of product developers who broke the rules and succeeded.

Wiegand describes the transition from craft control to controlled, documented processes in production as a battle fought won in the past 20 to 30 years. I view it instead as a struggle that started with the industrial revolution about 1750 and is still going on, with the Lean approach to it being only the last of a long list. And it does not involve standardizing everything. If you have machines with controls that are visually obvious and mistake-proof, you don’t need instructions.

Another theme of Wiegand’s letter is the change from organization by function, where employees are in departments focused on one operation, to organization by process, where they are in teams in charge of all the operations needed to generate a finished output. It is like the change from a machining job-shop with departments for turning, milling, heat treatment, grinding, etc. to a flow shop with lines or cells that machine blanks from start to finish.

Wiegand asserts that only 10% of companies still have functional organizations in production. It is a number I have a hard time believing. I don’t believe it’s true even in Japan. In fact, the functional, or job-shop, organization is not wrong for everything. Once you have done your Runner/Repeater/Stranger analysis, it is actually what you need for Strangers. And it is not always wrong in office work either. Product development at Toyota, for example, is done by functional departments.

I am also puzzled by his description of “break-even analysis” as the last great innovation in accounting. It does not strike me as particularly advanced. What about discounted cash flows, internal rates of return, activity-based costing, and other concepts that shine a light on different aspects of operations than just break-even points?

One last comment is that Wiegand mentions “optimization” six times and “improvement” never. One of my pet peeves is that, in Lean, you always improve but never optimize, because it is, by definition, the end of improvement. I have been assured both in Germany and France, that they mean “improvement” when they say “optimization,” which begs the question of what they use when they actually mean “optimization.”

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Mar 5 2014

When One-Piece Flow Restricts Capacity

Philip Marris told me of the case of a machining cell in an auto parts plant where management was ready to buy more machines because it was “lacking capacity,” but he was able to find a cheaper way to increase capacity by 17% in 15 minutes.

Unlike manual assembly cells, in which work can be balanced among stations, cells that involve machines always have one that is slower than all others, and, reallocating work among machines with different capabilities is not an option. In particular, almost all machining cells have a bottleneck, and the situation Philip described involved this bottleneck and the machine feeding it. The cell practiced one-piece flow. Therefore, if the feeder machine had worked perfectly, the timelines of the Feeder and the Bottleneck would have been as follows:

Feeder-and-bottleneck-nominal

The Feeder would have started one piece at the beginning of each takt interval, and, since it is faster than the Bottleneck, it would have finished the piece before the end of the interval. The Feeder then would have waited for  the bottleneck to pick up the piece before starting the next one. The Bottleneck would have been working 100% of the time; the Feeder would not.

But what Philip discovered by observing operations was that the Feeder had microstoppages.  When the Feeder was hit by a microstoppage, the delay it caused passed to the bottleneck, which was prevented from working 100% of the time, as shown below:

Feeder-and-BN-with-microstops

This reduced the capacity of the entire cell. In the actual case, even with its microstoppages, the Feeder had enough capacity to feed the Bottleneck, on the average,  just not on a takt basis. The microstoppages caused the output of the Feeder to fluctuate and disrupt the operation of the Bottleneck.

To anyone trained in Lean, the only appropriate solution was to eliminate the microstoppages… But it was easier said than done. Sometimes, all it takes is slowing down the machine, or changing a maintenance policy from “clean for one minute” to “clean until it is clean.” But it is not always that simple.

Microstoppages are often unreported because they are fixed on the fly by production operators. To understand microstoppages, you need to monitor the machine to observe when they occur and trace their causes. Eliminating them may require you to modify chutes, fixtures, jigs or dies, or even the basic process, and it can take time, but you need to do it if you want one-piece flow to work.

In the meantime, what do you do? Buying more equipment is an expensive solution, especially when you don’t expect to need it once you are rid of the microstoppages. A cheaper countermeasure is to protect the supply of parts to the bottleneck against fluctuations by decoupling the two machines with a buffer of WIP. You can set the size of this buffer by trial and error,  knowing that it is not a long-term solution.

Of course, manufacturing engineers understand that you cannot have one-piece flow with microstoppages. So why did they ignore their own wisdom? The most likely explanation is a demand from a corporate “Lean group” to implement one-piece flow everywhere and “damn the torpedoes!” These engineers had complied not because they thought it was a good idea, but because it was required to keep their jobs.

Technically, Philip sees this story as a case study in the addition of Theory of Constraints (TOC) thinking to Lean; I just see it as due consideration of equipment issues in cell design, as I was taught it more than 25 years ago. From a management standpoint, I see it as an example of the local consequences of half-baked corporate mandates.

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Mar 5 2014

Avoid Inaccurate Signage!

The following is a sign I saw in a plane yesterday:

Unintended signage in airliner galley
Unintended signage in airliner galley

I thought it was amusing, and told a flight attendant that it was unlikely any passenger would mistake that location for a lavatory. She explained  that this sticker was all they could find to hold up the lid of the waste container. While it may not have conveyed the best image to passengers, functionally, it was harmless, but it reminded me of not-so-harmless cases of wrong, obsolete, or ignored signage on factory floors.

Many such signs are often posted hastily as part of a “5S event.” Three months later, you see shadow boards with tools permanently missing, full pallets in front of signs that reserve the space for empties, and junk encroaching on marked transportation aisles. While each instance is a minor issue, collectively, even a small number is sufficient to destroy the credibility of the signage plantwide.

Signage on factory floors must be posted with excruciating care for accuracy and clarity, and it must then be enforced rigorously and consistently. Otherwise, it is a waste of effort.

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MB--Philip Marris-- Christian Hohmann 2-27-2014

Mar 1 2014

Meeting in Paris with Pen Pals Philip Marris and Christian Hohmann

Philip Marris and Christian Hohmann have been on-line pen pals of mine for years, but we had never actually met. My visit to Paris this week was the opportunity to fix this and trade manufacturing war stories for four hours while having dinner at the landmark La Coupole restaurant.

Both Philip and Christian Doc - Mar 1, 2014, 10-55 AMhave been consulting as long as I have and are authors of books about Lean in French. Philip is an Englishman who speaks French without even a trace of an accent, and writes in French. He describes his own book,  Le Management Par Les Contraintes, as “very boring,” because, unlike Eli Goldratt’s The Goal, it is focussed on technical nitty-gritty rather than entertainment. As I told him, this is my favorite kind.

Christian Hohmann has written the following four books:

He has also posted 50 short videos on Youtube. I first approached Christian 15 years ago, when writing Lean Assembly. I had found a picture of an electronics assembly line that he had posted. I wanted to use it in the book, and it had some features I did not understand. I asked him and he gave both the answer and permission to use the picture. When I thanked him this week, he had forgotten about it.

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Feb 27 2014

A brief rant about the ABC’s | Bill Waddell

See on Scoop.it – lean manufacturing

“Apparently the folks writing about stratifying inventory into A, B and C items and building calculations of such into ERP packages didn’t get the lean memo.

Wikipedia is typical of such thinkers when they describe the ABC thought process as:

  • ‘A’ items – 20% of the items accounts for 70% of the annual consumption value of the items.
  • ‘B’ items – 30% of the items accounts for 25% of the annual consumption value of the items.
  • ‘C’ items – 50% of the items accounts for 5% of the annual consumption value of the items.

The idea of micromanaging some items and slacking off on others based on purchase price is the very same theory they taught me at the University of Cincinnati back in the days  when … ”

Michel Baudin‘s comments:

I agree with Bill that, from the point of view of manufacturing operations, the purchase price of materials is not the most important parameter. because the lack of a nail can prevent the completion of a product as effectively as the lack of a pump costing 1,000 times more.

It doesn’t mean, however, that classifying items to treat them differently is wrong, but it must be done by frequency of use rather than price, and I prefer to call the categories “Runners,” “Repeaters,” and “Strangers” rather than A, B, and C.

As a function of rank, I then look for the percentage of units actually built that can be fully assembled with only the items of this rank and higher. It starts at 0%, and, as long as it stays at 0%, I consider the items to be Runners, essentially items you can’t build any product without. At the other end of the spectrum, I call Strangers all the items without which you can make 95% of the units. And everything in-between is a Repeater.

Then you may decide, for example, to dedicate an easily accessible storage location to each Runner, and make special arrangements with suppliers. For Repeaters, you may use the Kanban system, with smaller dedicated locations.  And you don’t keep any stock of Strangers, but order them as needed and store them, if at all, in dynamically allocated slots.

See on www.idatix.com

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Feb 25 2014

About Frederick Taylor and “taylorism”

“What is “Taylorism” ? Why is it called ‘Taylorism’?” asked Emmanuel Jallas in the TPS Principles and Practice discussion group on LinkedIn. To understand Taylor, I would recommend reading not only his own works, particularly Shop Management, but also Robert Kanigel’s biography of him, The One Best Way.

Frederick Taylor was first an engineer and co-inventor of the Taylor-White High Speed Steel machining process. It is not what he is best known for today, but that he did this kind of work is revealing about the kind of man he was. While self-taught, he had enough depth as a young man to challenge established beliefs about metal cutting and conduct experiments that proved it could be done twice as fast. This work led to the development of a feed-and-speed calculation slide rule for lathes at Bethlehem Steel.

Another detail that struck me in the discussion of stopwatch time studies in Shop Management was the method he recommended to calculate times for production steps that are too short to be accurately measured individually. He proposes to measure them in groups, for example, from the 1st to the 5th, the 2nd to the 6th,  the 3rd to the 7th, etc. and  solve a system of linear equations to infer times for each step. Then he explained that this worked if and only if the number of steps in each group was relatively prime to the total number of steps. While true, it is beyond the level of arithmetic usually found in industrial engineering texts, particularly of that era.

Frederick Taylor quote
Frederick Taylor quote

Taylor’s technical depth, however, was coupled with such a crude and dismal view of human nature that is could be called “contempt for people.” His explicit goal in Shop Management is to prevent workers from colluding to curtail output, which he calls “soldiering.” See Perpectives on Standard Work for a discussion of the differences between his approach and that of Frank and Lillian Gilbreth.

He is best known for his use of stopwatch time studies for this purpose, but the confrontational and adversarial way he did it set the stage for decades of conflict with labor and ultimate defeat. While stopwatch time studies are the skill most associated in the public mind with industrial engineers (IEs), most university IE programs don’t even teach it anymore. Such studies are rarely conducted in manufacturing plants and, when they are, the results are so laden with allowances and fudge factors as to be meaningless.

The most commonly used alternative is predetermined time standards, mostly Maynard’s MTM or MOST, and the most effective way to analyze operations is not to time them directly with a stopwatch but to make video recordings and analyze them off line together with the operators involved. See Using Videos to Improve Operations, Parts 1 to 7. When doing this kind of work today, Taylor’s legacy is one of fear that must be overcome before starting.

A more enduring and positive Taylor legacy is his work on functional foremanship. While I have never seen a manufacturing organization follow his recommendations exactly, he defined a number of support functions for production that closely map the ones you do find today. What Taylor called a “Gang Boss” is now a Production Supervisor or an Area Coordinator; his “Speed Boss,” a process or manufacturing engineer; his “Routing Clerk,” the technical data manager; his “Shop Disciplinarian,” the Human Resource manager, etc. Taylor saw each production worker as having eight such functional foremen, which was obviously impractical and no one implemented. What remains is that, through the existing support departments, we can still see the categories he specified.

Taylor’s name is also often mistakenly associated with the invention of the assembly line. It was done at Ford, shortly before Taylor’s death in 1915, and he had nothing to do with it. His work is about individual operations, not end-to-end flow.

Taylor was also the first consultant. As a corporate executive, he was not successful, and found that he could make a living as an independent, selling advice instead. The profession he thus created has been a haven for corporate misfits ever since.

It is usually opponents of an approach who reduce it to an “-ism.” Taylor and his supporters talked about “Scientific Management,” which is an overstatement; labor unions that fought it called it “taylorism,” which makes it sound like an opinion or a movement and denies it has any objective basis. You don’t ever hear of “newtonism” or “einsteinism,” but evolution deniers talk about “darwinism.” Likewise, today, people who oppose the implementation of Lean or TPS call it “toyotism,” which, to them, has the added advantage of sounding ominously like “taylorism.”

 

 

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