Saturday, August 27, 2011

Is it time to add value?


Is it Lean anymore?  Have we over Leaned?  Is it time for adding more value?

I recommend to everyone that you read the Forbes article titled, “Why Amazon Can’t Make A Kindle In The USA”.  After reading it I do agree that for the sake of accounting and I will add the Westernization of Lean, we are outsourcing to show short term profits.  This outsourcing, as it takes away from our manufacturing, service, and information base, leaves companies with a shell that they can no longer develop in, because the guts were outsourced.  Hence perhaps a new spiral of declining value.

As we outsource we are also educating the companies we are doing business with.  As we outsource more and more, they become more capable of producing a competing product on their own.  So the marketing strategy of the outsource company would be, why pay the mark up when you can buy it direct . . .

As the article suggests this is not always the case.  If you have a tight control on outsourcing, that you are handling the design specifications yourself, you may have control of the process “so far” as the article put it.

This is sort of basic economics.  You must understand the equilibrium point and causes that can make it shift.  There will be times that you should outsource.  Most believe it is when it is outside your expertise.  There are times when even outside your expertise you may need to keep it “in house”.  Understanding what the customer values should determine this.  With reference to the Kano Model, we need to shift “delighting the customer” to “expected performance” to “the basic need” at a quicker pace.  If outsourcing does not conflict with that, then outsource.  Otherwise, keep it “in house”.

How does Lean Manufacturing fall into this?  Is it possible we have reached the end of Lean to where accounting says all we have left is outsourcing for profitability?  Or, is it more likely we have defined Lean Manufacturing incorrectly (Westernized) and that it should have been defined as the strive for continual improvement?

Friday, August 26, 2011

Let us make this "Common Knowledge" - Part 3


Okay, perhaps we cannot call it common sense, which was the title of this blog series until now.  I was in another LinkedIn forum started by Professor Peter Hines.  His question was, "Something's puzzling me, why are we not doing better with implementing Lean when there seems to be so much common sense talked about in the Lean Business System Linked Group?"  The forum in general was pretty good (and still is at the time of this post).  However, one response has made me think, and it was from Mr. James E. Mitchell.  I suggest you find his entire response in the above linked forum.  Let us just say, I thought there was a large gap between our views, however after thinking some more, it is a much smaller gap than I thought.

Mr. Mitchell stated he is on a personal mission to “eradicate the term common sense”.  I took exception to that right away.  However what he wrote made sense (pun was not intended here).  He went on to suggest common sense was “mostly learned by experience”.  Yes, I agree with that.  He went on to also suggest “it can be intellectually arrived at”.  Yes, I agree with that too.  And then he went on to suggest most of what we call common sense “is still foreign to people”.  Yes, I agree with that even more.  So now Mr. Mitchell suggests if we do not teach what common sense is so that it becomes “common knowledge” throughout an organization, we will always keep saying is it not common sense.  And on the flip side if common sense was really common sense, there would not be a point to the forum, or in my case to my old blog title. (Title was,  "Can We Call It Common Sense?".)

Can we call it common sense?  After contemplating what the forum response was getting at I would have to say no and agree to “eradicate” the term.  However, does 2+2=4?  Why?  Would not someone say this is common sense?  Why?  Just because we were taught this in school?  Why?  Did we not just take this on blind faith because our teachers said so?  Why?

Okay, many questions.  Here is my answer.  No, it needs to be common knowledge.  Leadership is at fault here as Mr. Mitchell later on suggested.  Nobody wants to fail.  Nobody wants to back the “flavor of the month” because should it fail, that would be a sign of personal failure.  Hey, does 2+2=4?  Why?  Does Lean Manufacturing work?  Why?  Does Six Sigma work?  Why?  Does it take a leap of blind faith to say “2+2 does indeed equal 4”, or does it take the backing of someone you respect?  I say this is now common knowledge.  What is preventing Leadership from accepting "common knowledge" is the failure of Lean and any other quality system practitioner to teach Leadership.

As Mr. Mitchell pointed out (and I will embellish a little here), it also takes leadership to Gemba so they can see, touch, breath, and listen to the reality, and to decide what the “common knowledge” needs to be.  For once they do, they should, with the continued help of practitioners, continually improve.

After I wrote this today I kept thinking.  Yes leadership needs to Gemba, but why?  Why does that work?  Then I came to a conclusion based on my knowledge.  Today's leadership still operates from the top down.  They read the numbers and set the goal in a statistically controlled process, where (as Deming would put it) an able and willing body puts all their effort in working to standardized work to maintain that statistically controlled process.  Follow orders, keep you nose clean, and we will continue to make parts, and by the way, meet the new goal that is near the bottom of that statistically controlled process.  This is top down management where there will never be success.  So perhaps common knowledge is still above the equal of leadership and will never be reached.  Once leadership understands the bottom up approach, perhaps common knowledge will come forth.

8/29/2011
My original writing (above) did not mention Mr. Mitchell because I wanted his approval to be sure I did not over extend his point, or leave anything out.  With his permission I have included his name and quotes from his original post.  In fairness and with support of his position, I will post a portion of his E-mail reply to me.
Your question "why does 2 + 2 = 4?" and isn't the answer common sense?, I would argue that the answer supports my premise.  2 + 2 = 4 because it can be proved, and that makes it common knowledge, but only if it is taught.  Even a kid who can count to four does not know that adding two to two more will create four.  Even though "everyone knows the answer", it is not common sense.  Herein lies the problem with most uses of the term "common sense".  The person who inveighs the term usually means that it is such common knowledge that anyone with any sense will already know it - a demonstrably false statement; one you can easily come up with examples of.  One other problem I have with the term is how often it is use as a thinly disguised way of calling someone stupid, or maybe not all that bright, very often because of a lack of learning or inability to infer an answer from the existing evidence.

I hope you find this link interesting as well:  Changing Education Paradigms

(Common Knowledge - Part 1)    (Common Knowledge - Part 2)

Saturday, August 20, 2011

Interview question: "What are your metrics?"

Let us say you walk into a company for a visit and it turns into a job interview.  During this time you assess the company, their goals, and how they measure performance.  So you ask, "what are the company metrics?"  You expect to hear “on time delivery”, “30 day warranty service”, perhaps “12 month warranty service”, and many others.  What do you think when you hear your potential employer state, “we do not operate like that, we are different”?

My first thought would have been, “okay, we are in trouble here”.  The company is successful, is known for quality which you pay a slight premium for, has been around for almost a century and a half, and has a range of employees from those with a lot of white hair to those perhaps just out of college.  And note, there is a strong correlation as to the older you are at this company to the years of service with this company.

This morning I read a LinkedIn forum discussion created by Pedro Burgos who linked a YouTube video of Dr. Deming that was made in 1984.  The title, “The 5 Deadly Diseases”.  Anything I write at this point will only dilute the message, so I apologize for not having a greater insight.  I strongly recommend you view it.  It answers the question posed above, in that you need to build quality more than reading it in charts and reports.

Obviously you still need to back check performance of the system with numbers.  You do not want to wake up one day and find you went in the red and are closing the doors.  However, it is just that, a back check.  Knowing you need to satisfy the customer by providing a quality product, service, or information is at the forefront.  Having targets to back check are at the end.  In the middle is control of the process that was planned when you selected the type of product, service, or information to meet the customers, needs-wants-desires.

So, to say the company does not have metrics may be correct, and also incorrect.  They may not have the traditional metrics people work to meet, setting up silo processes of “I made my numbers”.  However, the metric that counts, that grows the business, is customer satisfaction, building quality as defined by the customer, then following up (back checking) that you indeed succeeded in customer satisfaction.  And of course continually improve.

Saturday, August 13, 2011

Food for thought . . .

There is an aspect of business that I believe gets lost in the shuffle.  Business is created and sets off with good intention, however does business constantly remind themselves as to why they are in business?  I believe there is a question to be asked periodically when reviewing the "plan".  And that is, "Why are we in business?"



Without customers there is not a business.  If we do not develop customer loyalty there is not a business.  And finally, if we do not satisfy the stakeholders (notice I am not stating shareholders), the employees who create the value, then there is not a business.  I cannot help but reflect on the show Kitchen Nightmares.  I see the restaurant owners basically stating “I know what the customers want better than the customers do.”  Nobody to my recollection has stated it just like that, however after each episode I come away with that.  Remember, the person with the money determines the value.  You can try all you want to persuade them, but probably at the sacrifice of customer loyalty.

The next question to ask is, "What are we doing to maintain the Why?"



I am not suggesting the above is a necessity or even all inclusive.  Let us just say all of us think of these at times.  (I unintentionally left out improved delivery - will integrate that later.)  Notice the odd one in the group is “increase profit”.  If you do not increase profit you cannot grow the business.  If you do not grow the business you stand that chance of being overrun by the competition.  To be better than the competition you need to provide quality.  By eliminating waste you improve quality.  As you improve quality you increase profit.  So now you see the connection.  


And to be successful we need Tools to help solve some of the problems in the What.




The above is not an inclusive list.  There are many tools to choose from and I would like to hear from everyone as to the tools they believe should be noted and are not.  The key to any tool is to know where they came from, why they were developed, and the context they were meant for.  That is right, meant for.  Once you understand that you can play with it and adapt it to your needs.  

In simpler terms, what was the problem being solved at that time the tool was needed and developed?  To understand that you need to know who the Gurus were / are and how they defined the problem and developed the solution.  Much can be learned from them.  You do not need to reinvent the wheel, but rather understand how the wheel turns and put it on something that needs to move.  Oh, and once again, remember to choose the right wheel for the terrain.  So, who are some of the Gurus?



The bottom line is, we are in business for the customer.  Without a focus on satisfying the customer we will fail.  Stay focused if you want your next meal.

Saturday, August 6, 2011

Let us make this "Common Knowledge" - Part 2


In an earlier blog titled “Can we call it Common Sense?” (now called "Let us make this Common Knowledge") I commented on how the “flavor of the month” pops up at times within a company or an industry claiming to be the “cure all” for your pain.  My argument being all of the flavors share the same values if they are worth the grain of salt they claim to be, and that the only difference is the degree in which they emphasis a particular view on quality.  Okay, perhaps what I wrote was not in that exact thought, however I am trying to clarify here.

Systems Thinking, Lean, Six Sigma, BPM, TQM, TPS, and more I consider quality models that have been successful for the industries that developed them.  All of the models, like Six Sigma, were adopted by other industries.  For any of these to succeed it takes knowledge of the customer, support of management, and execution from the people who add the value.

My contention is choose one, or better yet choose them all.  If your industry is so focused one may do.  If you are in a dynamic industry, your customer changes, competition is driving change, then perhaps more than one is needed.  After all, is it not common knowledge to satisfy the customer, to meet and/or exceed the customer’s needs and wants?

I have created a basic 4-circle Venn diagram to illustrate the relationship between TQM, TPS, Lean, and Six Sigma.  You can add more, leave the four circles and change the title, it doesn’t matter right now.  The important thing to note is that IF all of these are customer centric, they will have to overlap at some point at the VOC (voice of the customer).


Now, if you take a given industry, say healthcare, you will find some hospitals may follow Six Sigma while others TPS.  This does not mean they do not stride into TQM or Lean because they do.  They just do not know it.



Call it what you want.  I now believe this should be "common knowledge".  You choose from the tool box what you need to solve Your problem.  It does not matter what flavor it came from.  Just know how to apply it and that you are applying it for customer satisfaction.


8/12/2011 Update
Reading through some LinkedIn forums I came across a post "Six Sigma in 3 words is?" by Lee Jones.  It was Very nice to see the responses were coinciding with my "Common Knowledge" approach, in that everyone was covering all of the possibilities that overlapped or maybe even engulfed areas like TQM, TPS, Lean, and more.


(Common Knowledge - Part 1)    (Common Knowledge - Part 3)

Wednesday, August 3, 2011

You need to "See" to make change . . .


Someone asked me the other day would I hire someone with a TPS background who had worked in a Japanese owned company for 12 years, or would I pick someone with Lean or Six Sigma certification.  My quick response: I would hire a person with a TPS background and only 5 years experience working at a Japanese owned company over anybody.

Now, I am not knocking certification.  I have several degrees myself that I obtained late in life, and this person has an MBA I believe.  A formal education combined with TPS experience should put you at the top of the list in my book.  However when you are out job hunting or looking to change career paths, it is very challenging trying to understand all the why’s and what fore’s a potential employer may look down on someone that is not certified in Lean or Six Sigma.

For me the basic traits to hire a Lean engineering type person (and this may count for other professions as well):
  • Communication
  • Problem Solving with any PDSA format
  • Understanding Value
  • Being a Change Agent never accepting status quo
  • Seeing with “New Eyes”
  • And understanding the closer a person is to the customer, meaning the people touching the product creating the value, the more they are your true internal customer, and that the further you are away from the customer, the more you are there to serve.

People from a TPS environment, whether absorbed through osmoses or hands on application, learn to see waste in the value stream.  Bottlenecks jump out at them.  They treat Kanban as a necessary evil because one-piece-flow has not yet been figured out.  They see a problem from the visual factory and resolve it.

The dissatisfaction I have with Lean/Six Sigma is the project time.  TPS is incremental improvements, looking for and eliminating waste.  People in TPS are not fearful of pilot studying what might happen if you remove one level in the Kanban (with predicted outcome - not tampering) in a moments notice, so you can observe interruptions to the flow, the process, the value stream, and either correct them on the spot, or put the Kanban level back until you have a fix.  Value added is still value added.  It does not add up any other way.  You add to the bottom line when you focus on eliminating waste and leaving the value.  Consider it a law of nature.  Or can I call this the "Law of Wes"?

This is not to take away from a Lean or Six Sigma certification.  I am an ASQ Certified Six Sigma Green Belt and want to become proficient as a Master Black Belt.  I find many of the tools beneficial.  However, I find TPS gets the job done quicker and with, in my opinion, greater customer satisfaction and bottom line return.  “I’ll gladly pay you Tuesday for a hamburger today”, as Wimpy would say.  People holding the money do not want to wait for tomorrow.  Nor does TPS.

Case in point:  A heart failure hospital had asked me to help them with their outpatient department. This facility embraces Six Sigma, as they should.  I have to step back for the moment and say there is a push to reduce the number of patients readmitting within 30 days of discharge.  The medical insurance industry is driving this.  Think of this as the insurance industry looking for a warranty. If it breaks within 30 days, you fix it for free.  So the hospital had a Six Sigma team that included a Black Belt heading the project as to why patients were readmitting for heart failure within 30 days after discharge.

Here was the interesting part.  The Six Sigma team consisted of all the department heads or head nurses.  They were all on a mission to collect all the data on patients to look for a correlation to the re-admittance within 30 days.  Let us just keep this short in that they were following the DMAIC process and it was taking time.  I was invited to one of their meetings several weeks after I had made some observations of the outpatient department.  After hearing all this discussion I had to ask, “Are you telling me the patient symptoms were not managed at the time of discharge?”  Something to that affect anyway.  I knew this was not the case however I wanted them to stop and listen to what they were saying and how it related to the problem they were trying to solve. Nobody got the hint.  There focus should have not been on their process with respect to managing symptoms if they truly believed the patient was being discharged correctly.  It should have been what was taking place between discharge and readmitting within 30 days.

After those few weeks, before I attended the Six Sigma meeting, I realized there was a huge lack of customer focus.  Everyone in the system was satisfying the system, but doing nothing to change the patient’s outcome or experience after discharge.  When the patient was readmitted, the patient was just put back through the process again.  The bottom line was the patient not being compliant with their own healthcare after discharge.  A lot of it being enablers you and I would tend to surround ourselves with when we are not feeling well, meaning family, friends, perhaps a different doctor.

This sort of gets back to my “Poka-Yoke or Not to Poka-Yoke” blog.  We see so many ads on television for medication, weight loss, and whatever else is out there relating to personal health, that we tend to not believe the information because it never seems to work.  We believe we know better.  So we ignore the information given to us and move on.  (Obviously much of the ads on television we do need to ignore.)

The biggest example was the outpatients who kept coming in after having a high sodium meal, drinking lots of water in the belief it would flush out the sodium.  Not true.  The actual result is much more stress on your heart because of fluid retention caused by the sodium, hence the requirement for heart failure for a low sodium diet and restricted fluid intake.  For the normal public this is against what we believe we know.  Hence the patient does not follow it, and with the support of their enablers.

Trying to make a long story short, the department and I developed a patient quiz.  This quiz asked the questions that would be asked during the outpatient visit.  It was also what they need to be doing at home for themselves.  It gave the patient time to reflect on the truth and the nurse to understand what the patient was not doing.  The focus was put back on the patient, not the system, with the intent to change the patient’s outcome and experience.  As we tracked the grades on the white board for all to see, the grades improved along with the patient’s outcome of managed health.  The patients that would typically readmit seemed to reduce. (The department closed so I could not collect the data to give you a percent change.)

The Six Sigma team was still doing their thing, evaluating their internal process, not making a connection to our findings in outpatient, and when they heard we developed and started a quiz they were a bit upset because they wanted us to hold off on all of our improvements for a roll out later, when their Six Sigma project was ready.  Hmm, what was wrong with that picture?

So, yes I would hire a TPS person that has at least breathed the air even in a 5 year period, over most of the certified people out there.  If for nothing else, a TPS experience allows them to “see” and make immediate change.