NC State of Business

This is a short, but relevant blog entry. We were visiting a client last week and discussing their business. They are a small manufacturing company, privately owned and have been in business for over 50 years. The company president discussed a business relationship they have with a key customer. He told us that his business started with one customer and still maintains this same customer (plus many others). For all the years this manufacturer has been in business, they have never missed a shipment due date to this customer. That’s 100% on time delivery. And for all the same years, this customer has never failed to make payment on time. They never stretched beyond 30 days terms.

Of course there are many more things that are in place to maintain this solid relationship since simply on time delivery and payment alone do not guarantee business. But here, we see there is a long standing foundation of mutual respect between supplier and customer that is so important in a business relationship. Being viewed as a partner rather than simply a vendor. Many companies do get it. It’s about supplier development rather than supplier auditing. Building on the relationship foundation and working towards the best value chain. Many customers work with their suppliers using the process improvement tools to really work on reducing overall lead times and inventories rather than just pushing it back onto the supplier’s books. And they use these tools together to determine bottlenecks and opportunities rather than simply saying “it’s your problem, fix it”. There are many more things that can build on your customer supplier relationship foundation. What ideas or best practices do you have?

This week I happened to be working as a Lean Six Sigma facilitator. It was the second week of a client’s on-site Green Belt training series. One of my favorite activities is when we hear team presentations from our training lab as well as presentations from the new and in-process company projects.

After several days of introducing powerful data analysis and optimization tools such as hypothesis testing and design of experiments, we ask the program participants to display and explain how they defined, measured, analyzed, improved, and controlled the problem process presented to them at the start of the training.

Since the tools are new, we always see interesting ways teams attempt to apply them and interpret results. I can never remember this exactly, but there is a good story our Lean Six Sigma team manager often tells about how a large statistical analysis software firm executive describes two key aspects of a project.

When you are collecting and analyzing the problem processes, reading graphs, making discovery and judgments, and developing solutions; he relates that to the work of a crime scene investigator. It is really all about knowing what you are doing technically, ruling out possibilities, getting to a root cause, and identifying solutions.

On the other hand, when it is time to present your results to management, he says you must be similar to a prosecuting attorney often putting on a case for investing thousands of dollars now to save millions over time. Weak and confusing presentations can often discredit months of great Lean Six Sigma work. Executives often care little about multiple presentation slides of complex graphs from statistical packages even though the Black Belt or Green Belt practitioner will carry great pride in his or her proper use of a critical analysis tool.

Lean Six Sigma presentations are not unlike any other displays of information for discussion. We must work very hard to consider practical concerns of the audience. Although the “devil may be in the details”, it is okay to leave him there and put more effort into your interpretation as to what must now be done to realize those bottom-line savings. You did promise them at the beginning of your project...

If you look up the word transformation in the dictionary one of the definitions is: "A marked change, as in appearance or character, usually for the better." Usually for the better; interesting, as we work hard with our clients to create positive change for the better, this definition seems to fit.
Another word that relates to change is metamorphoses, which means "A marked change in appearance, character, condition, or function". This one fits too.

When we begin transformation projects with our clients we have every intention of creating positive change in the client process system. This applies to industries maufacturing products, service industries, healthcare facilities, offices, supply chains, and enviornmental efforts.

The transformation is aimed largely at the culture piece of an organization, the soft side as well as the hard side of the systems that drive the organization. We have discussed before the fact that over 80% of journey is the culture and not the tools we use. It is an obvious fact that for a transformation to be successful the entire organization has to embrace the concepts and basic principles that are necessary for sustained positive change, and come to grips with a core concept that embraces and promotes change.

So, a transformation project takes time and it can never be a three to five day project, that might include a drive by solution that ultimately has little chance for a long term sustained success much less a "change in appearance, character, condition, or function".

When a company decides they want to pursue a Lean Transformation they are starting a process that will take months and possibly years to mature. In addition to that, they are moving in a direction that not only requires a Lean Production system, but more importantly a Lean Management system to direct, support, and manage the transformation.

Lean talks about Standard Work and how key it is to effective and positive change and lean progress within an organization. Well, it is equally necessary that Managers have Standard Work in their daily activities, that support the Lean Transformation. In fact, without the presence of Standard Work for managers the Transformation will usually fall short. The managers must be part of the process, and are key in setting priorities, maintaining accountability and discipline to the transformation. Without this "hand on the wheel", the "boat" can not stay on course and the effort for transformation will not be successful. Management in this case means all the management team, team leaders, supervisors, value stream managers, department heads, plant managers, VP's, President, CEO. All of these folks have different time demands, but all of them have to have part of their day, everyday, aimed at the transformation thru their Standard Work.

Lean implementations require hard work, but true Lean Transformations require "harder" work that is inclusive of everyone on the team.

Recently I had noticed that our home’s garage door was making creaky noises when closing. It’s the type that is activated by remote control, and runs automatically along a track to open and close. On top of that, it wasn’t long after that I found a lone screw lying on the garage floor one morning. Then one day I came home, pressed the remote, and…nothing happened. I was frustrated with what I perceived to be a dead battery. I thought, why don’t they build in an early warning system for battery failure? I entered the house and proceeded to the garage so that I could open the door manually (the way I did for 15 years at my last house, but that’s another story). When I walked into the garage, to my surprise, I discovered that the garage door had become physically separated from the track upon which it travels up and down. Suddenly, the mysterious screw made sense, especially after I found a second one on the empty garage floor. They had worked their way out of the door after the bracket joining the door and track broke from cyclic stress. I had just experienced a textbook example of neglected maintenance, and I had no excuse, having taught and implemented Total Productive Maintenance (TPM) concepts within the manufacturing world.

So what went wrong? Here are a few examples:

One aspect of preventative maintenance is that you should inspect and clean your equipment at some regular interval. I had no list of inspection activities and certainly no schedule. It’s hard to schedule something that you don’t do.

It is important to have a spare parts strategy. When the bracket connecting the door to the track broke, I had no spare parts list, let alone another part in my possession. It took a good deal of time to (a) figure out what part I needed, and (b) where to get it. Phone calls, internet searches, etc. Of course, it was late on a Saturday afternoon when the problem manifested itself, and knowledgeable people (i.e., garage door installers) were hard to reach. Can you imagine if I was a business owner and this part was causing my factory to sit idle?

An expectation of autonomous, or operator-based, maintenance is that the person operating the equipment (in this case, the homeowner opening and closing their garage door) has developed a good working knowledge of their equipment and is actively checking on its condition. They take ownership and in doing so, detect problems before they grow and engage experts (e.g., mechanics) in a timely manner when needed. I inexplicably ignored the very obvious warning sounds of a groaning, creaky door. In addition, I did not do visible inspections of my door’s hardware. If so, I could have dealt with this issue on my own terms.

The story has a happy enough ending. I was able to find the required bracket relatively quickly, although I had to wait until Monday to purchase it from a local garage door parts distributor. It was a relatively easy repair. And I now find myself inspecting the screws in the door on a fairly regular basis to ensure that they are still tight.

What is your process in need of TPM?

I am reading Malcolm Gladwell’s new book, Outliers (2008). Chapter seven is about preventing plane crashes. Gladwell describes how many airlines have and teach a “standardized” procedure for co-pilots to interact with the pilot to communicate more clearly particularly in dangerous or unusual conditions where good communication between experts (the pilot and co-pilot) on the plane may make the difference between a safe and an unsafe landing. The issue is that in some cultures there is a greater sense of power between levels of the organization that prevents clear and open communication.

I recently observed the results of a standardized problem solving process in a manufacturing company. I was on a plant tour with 25 other people, all wearing safety glasses and audio headsets. We were gathered around a band saw listening to 103 safety concerns and 20 maintenance issues that had been identified by a team of employees. The speaker was a member of the team and the listeners were other employees, supervisors and managers. The speaker was very effective when he described the importance of safety as he held up his own hand with only four fingers. The speaker went on to demonstrate how those safety concerns had been corrected using the standardized problem solving methodology at this company.

This made me think how standardized process for manufacturing employees to identify and solve problems are an important part of a highly effective and productive company. The standardized process sets up the employees as experts in their own areas of work and reduces the power differential between the employees and their managers.

Establishing a standard problem solving process for your employees could be like preventing a plane crash – preventing the company from failing.

Gladwell, M. (2008). Outliers. New York, Little Brown and Company.

FLASH - Breaking News

Dr. Steve Spear's new book, Chasing the Rabbit: How Market Leaders Outdistance the Competition and What Great Companies Can Do to Catch Up and Win, was awarded a Shingo Prize for Research Excellence, and it received a flattering appraisal in Harvard Business Review's April issue.

The reviewer, Anand J. Raman, writes:

Spear...has dazzled readers with his insights into what makes Toyota tick and his understanding of how any organization can use those ideas to improve its effectiveness. Not surprisingly, his first tome was highly anticipated, and it’s probably an understatement to say that it won’t disappoint.

He concludes...

I have a dozen books on Toyota stacked on my shelf, in order from the least read to the most referred to—and Chasing the Rabbit is probably going to stay right on top of the pile.

Deborah Porto - your blogger highly recommends this book as well!