Utah Open Source Planet

Peter Abilla
no nic
shmula

» Fast Food Congestion

Every system has constraints — sometimes several — minor bottlenecks and major bottlenecks. What makes managing constraints even more challenging is that bottlenecks move: up-and-down the process paths.

I saw this phenomenon recently during a visit to a fast food restaurant, which I discuss in this post — but, my application of the Theory of Constraints, Lean Manufacturing, and Six Sigma as applied to a Restaurant can be applied to any Dynamic System.

One of the key lessons in The Theory of Constraints is that the contraint or the bottleneck determines the throughput for the entire system. This means, then, that if we optimize and improve a non-bottleneck, then those efforts have almost zero impact on the overall throughput of the system. It is only when we improve and optimize the contraint that we will see improvement in the throughput of the entire system.

Every system has a constraint — that is neither good nor bad — but just a fact of dynamic systems. Once you’ve identified the constraints in your system, then the next step is to manage it.

I was able to obtain some empirical volume data for a Burger King. The data below is taken from one Burger King restaurant. I imagine the numbers would be significantly different if we were to average the volume by geography, restaurant size, or by other factors. Now, consider the following process map for a typical Burger King:

Click on the image for a larger view.

For this restaurant, over the course of an average month, Burger King produces 34227 sandwiches. This means, then, that for an average hour, Burger King produces 198 sandwiches per hour during normal hours.

But, on Friday and at 12:00PM, Burger King experiences higher-than-normal volume and so we add a “Peak Multiplier” of 18% and 17.9% to arrive at 256 sandwiches during Peak Hours. The “Peak Multiplier” is not completely arbitrary, but a quasi-educated guess at the volume increase during those hours. In both cases of Fridays and Lunch Hours, we add a ~20% multiplier.

Now, let’s take a look at the process map above. We see the Assembly Step producing 200 sandwiches an hour. We consider the Assembly to be the constraint in the system. The upstream processes produces more than 200, but when we arrive at the Assembly, the capacity of that step is lower than its upstream processes. So, the maximum throughput of the entire system above is 200 sandwiches per hour.

Under normal hours, the constraint functions reasonably well. Since normal hour demand is 198 sandwiches per normal hour, the Assembly Step can produce at least at that amount — but, it’s cutting it close. Under peak volume, the constraint is not able to fulfill demand.

How To Manage a Constraint

Under normal hours, it appears that the Assembly Step can produce at expected demand. But, there are several things that could put burden on the constraint and cause it to producing less than capacity. Here are some of those items:

Rework: Having to Re-Assemble sandwiches adds undue burden on the system and exaggerates the effects of the constraint, leading to a potentially higher-than normal work-in-process, or build-up.
Set-up & Changeover: If all the parts aren’t immediately available in the Assembly step, then it could lead the operator to slow down which could lead to build-up and higher-than-normal work-in-process.

It’s easy enough to see that the Assembly Step needs some help. Here are several things Burger King — or any system with constraints — can do to better manage the natural constraints that are in every system:

Eliminate Defects at the Constraint: This means that all waste is eliminated or reduced at the constraint.
Have the Quality Steps in Front of Constraint: In support of the first bullet, make sure that the parts entering the Assembly step are free of defects.
Support the Constraint: Add labor to the constraint or more lines, if that is prudent.
Appropriately use Buffers: Systems with Constraints exhibit a feast/famine phenomena. To avoid having too much coming into the constraint or too little coming into the constraint, have a buffer of parts large enough that the constraint stays appropriately busy. Put another way, reduce the variation in front of the constraint as much as is possible. A Drum-Buffer-Rope system might be appropriate for some systems.
Evaluate the overall system: How much of the steps in the system are really value-add to the customer? What is the process-cycle effeciency of the process?

Conclusion

All systems have constraints. Identify what they are, quantify the effects, then manage it. The above Burger King example shows how this can — with some effort — be done. What are the constraints in your systems? What can you do to better manage those constraints?

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by psabilla at 5:40 PM under 5s , a3 report , bottlenecks , bullwhip effect , business , complexity , drum-buffer-rope , dynamic systems , efficiency , gemba , genchi genbutsu , heijunka , ishikawa , it at toyota , kanban , lean , lean consumption maps , lean manufacturing , metrics , muda , obeya , operations , pareto principle , process measures , productivity , quality , root cause analysis , six sigma , supply chain , takt time , theory of constraints , the visual factory , toyota , variation , waste (Comments)

Peter Abilla
no nic
shmula

» Do Not Run From Your Customers

I’ve spoken extensively about the unheralded — but, arguably, the most important — Pillar of The Toyota Production System: Respect for People. Today, I want to highlight an interesting company that appears to have done an amazing job at Participative Management and in eliminating fear and mediocrity in the workplace: Semco Group.

I was first made aware of Semco Group after watching this amazing video on the MIT website. I sought to learn more about Semco and found some pretty amazing case studies such as the following:

Semco appears to have operationalized a very humane workplace and has also produced some impressive results, proving that fear and intimidation and mediocrity are not necessary ingredients to do well in the corporate world:

Reforms implemented during that time led to 65% reduction in inventories, a marked reduction in product delivery times and a product defects rate that fell to less than 1%. As the business climate improved, Semco’s revenues and profitability improved dramatically. As of 2003, SEMCO had annual revenue of $212 million, from $4 million in 1982 and $35 million in 1994, with an annual growth rate of up to 40 per cent a year. It employs 3,000 workers in 2003, as opposed to 90 in 1982.

Semco publishes and collectively live by the “Semco Survival Guide”, opting for something much simpler and thinner than a big, thick manual. Here are two points that I personally appreciate:

Our People: We avoid using terms like “employees”, “staff”, “collaborator” and similar terms. We are a team and we only have “people”. This is what we call everyone who works with us. Try as hard as you can not to use terms which are so common, but which do not express equality.

Customer Services: This is very important. Never fail to serve a customer well; do not run away from the customer, and do for the customer exactly what you would expect if you were in their position. Be honest about deadlines, prices and service conditions - never promise something you cannot deliver.

I find “never run away from your customer” an interesting thing to say — I think this point requires some reflection:

Do we — as an act of omission — run away from our customers — either in action or mentally or emotionally?

Below is their survival guide, taken directly from their website:

Leadership
We believe that organizational structure is required to ensure good business processes. However, only people who have respect for their followers can be leaders. Situational leadership will always be stimulated and respected.

Position
At the Semco Group, it makes no difference whether someone has a high ranking or a humble position. The most important thing is to always try to learn and teach new things.

Job Rotation
Whenever possible we rotate people: Some people change area and other people change business unit. This is another development opportunity offered by the company.

Freedom
There is no space at the Semco Group for formalities. The doors are always open and people should say what they really think, without worries or inhibitions.

Honesty
Everything at the Semco Group is based on trust. Whenever there is dishonesty, and there is always the possibility that there will be somebody dishonest, the company takes hard action.

Accusations
The company does not encourage people to accuse others - this should only occur when you believe you have access to concrete facts that somebody is benefiting while harming everybody else. Anonymous letters are not considered.

Gambling
No gambling of any type is permitted within the company.

Weapons and Violence
It is completely unacceptable to carry weapons inside the company. Any type of violence employed by one person against another is seen as an extremely serious event.

Unions
Unions are an important method of protecting workers. Unionization is free within the company. The Semco Group believes that constant relationships with unions are healthy for the company and the employees. The presence of union members at the company is always welcome.

You… and the Others
Based on the fact that everyone can say what they think, rumors and gossip should not be stimulated. Any attempt to harm another person is looked on very seriously. Take part and speak openly of what you are thinking in order to improve things.

Sales at the Company
The entry of salespersons to deal with personal issues is only permitted when scheduled by the interested party.

Loan Sharking
Any employee lending money to another while charging interest is considered abusive and this is dealt with by the company as a serious matter.

Discrimination
The Semco Group does not permit discrimination based on sex, colour, religion, politics etc. Everybody must have identical opportunities at the company - help to make this a reality.

Use of Authority
Many positions of the company involve the use of authority. Pressure, tactics that involve people working while afraid or any type of disrespect are considered incapable leadership and improper use of authority.

Working Hours
The Semco Group has flexible working hours where possible. This is a method of meeting the needs of each person, without harming the company.

Employee Timesheet Control
At the Semco Group, each person controls their own working hours. This is a method of transferring responsibility to each person.

Commissions
People at the Semco Group usually create commissions to deal with issues of collective interest. Take part to ensure that the commissions are active channels which effectively defend your interests, which may often not coincide with the interests of the company. Here, this conflict is seen as healthy and necessary.

Internal Promotions
At the Semco Group, people already working for the company are given preference when a new position or a promotion appears, as long as they fill the requirements for the job.

Vacations
The Semco Group does not believe that anyone cannot be replaced. Everybody must take their annual vacations, always. This is fundamental for the health of the people and the company as a whole - no excuse is good enough to justify accumulating vacations.

Recruitment
Where there is recruitment or a promotion, people in the department have the chance to interview, analyze and take part in the decision to choose the candidate.

Evaluation by Subordinates
Every six months you will fill in a questionnaire and say what you really think about your immediate superior. Be open and honest, when filling in the form and during the discussion that should take place afterwards.

Retirees
We have no restrictions on active or part-time work for retirees or people of an advanced age. Nobody is too old for us - on the contrary, we believe that experience comes with age.

Everyday Participation
The Semco Group philosophy is based on active involvement and participation. Do not sit back. Have an opinion, put yourself forward as a candidate, always say what you think - do not be just another cog in the wheel. State your opinion about everything that interests you, even if you weren’t asked for it. Be active about your feelings.

Suggestions
We want everybody to participate; opinions will always be welcome and should be spontaneous. The Semco Group does not use and is not wish to implement suggestion box programs. Whenever there is a need or interest, we can institute campaigners that encourage specific suggestions.

Dynamism
The Semco Group is normally a company that implements major changes from time to time. Don’t be scared - we think this is positive. Look at the changes without fear - these are typical characteristics of the Group.

Salary Policy
The Semco Group seeks to involve people in discussions regarding what is a fair salary for each employee. Of course, there are times when people think their salaries should be higher and the company believes it cannot pay more. What is important is to always provide an opportunity for discussions regarding this type of issue.

Strikes
The decision to take part or not in this type of event is an individual one. This is part of democracy and is respected by the company.

Personal Life
Each person’s life belongs to themselves and the personal life of each person at the Semco Group is sacred. Providing it does not interfere with the work of the environment, the company is not interested in what each person does with their own life. The human resources area is available to provide support in any area, but the company will never get involved in people’s private lives.

Former Semco Employees
Whenever anybody leaves the company, they are always welcome back - we have nothing against former Semco employees. On the contrary.

Severance
Whenever there are dismissals the company spends hours and days carefully considering the case (or cases). The company avoids dismissals as much as it can and is extremely involved in protecting justice - we must all take this line - dismissals are very serious and must be dealt with carefully by everybody.

Occupational Safety
This is not only a company responsibility. Keep your eyes open, always avoid accidents, use safety equipment even when it is bothersome - we cannot take risks with our health. Make a special effort along these lines, demand that the company do its part and do not let CIPA become a pro forma commission.

Statement of Results
On a periodic basis you’ll find out the results for your unit and for the company, and will be able to discuss them. Watch the results closely and ask any questions you want - there are no issues that cannot be discussed. Very few companies offer this - take advantage!

Profit Sharing Program
The Profit Sharing Program at the Semco Group is for real. This is a participation in which each unit wins. Each company and the Group have its own program, according to the characteristics of each business.

Relations
In order to avoid injustice or embarrassment, close relations do not work at the same unit, workplace or with the same leader, except in special cases. In completely different and unrelated locations, there are no formal restrictions.

Hourly/Monthly Workers
At the Semco Group there is no discrimination - Here everybody is a salaried worker and everybody is treated the same.

Our Personnel
We avoid using terms like “employees”, “staff”, “collaborator” and similar terms. We are a team and we only have “people”. This is what we call everyone who works with us. Try as hard as you can not to use terms which are so common, but which do not express equality.

Use of Company Resources
Do not mix company work and resources with personal services. During working hours, nobody should provide services to other people only for personal benefit, which does not stop people using a colleague’s services outside business hours, agreeing the conditions between themselves, without involving the company.

Customer Services
This is very important. Never fail to serve a customer well; do not run away from the customer, and do for the customer exactly what you would expect if you were in their position. Be honest about deadlines, prices and service conditions - never promise something you cannot deliver.

Communication
The Semco Group and its people must communicate openly and honestly. You must be tranquil and believe what is said in company notices – demand transparency when you are in doubt.

Pregnancy
Pregnancy is considered a time of great importance and happiness by the company. Never allow an injustice to be committed with one of our pregnant women – they deserve our respect and care.

Informality
Having a birthday party at the end of the working day or using nicknames is part of the company culture – don’t feel intimidated, and don’t stick to formalities.

Pride
It’s only worth working for someone you are proud of. Create this pride in the quality in what you do. Never deliver a product or service that fails to meet customer expectations, do not write a letter or communiqué that is not honest, and do not let the company’s stature fall – always fight for your pride.

Respect to Visitors
Give our visitors all of your attention and respect. Never let anyone wait more than 5 or 10 minutes. Meet everyone with courtesy, be they a supplier, customer or anyone else.

From the little I’ve seen, I’m quite impressed with Semco. If there are any that would care to chime-in on what they know of Semco — I’d love to hear about it in the comment section. Below is an interview with Ricardo Semler, the CEO of Semco.

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Articles on Ethnography and Design:

Articles on Leadership:

Please articles on Queueing Theory below:

Articles on Operations, lean and six sigma, please visit the links below:

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by psabilla at 11:16 AM under a3 report , business , customer obsession , gemba , genchi genbutsu , heijunka , ishikawa , it at toyota , kanban , leadership , lean , muda , obeya , operations , participative management , philosophy , productivity , quality , respect for people , ricardo semler , root cause analysis , semco , six sigma , strategy , takt time , teaching , theory of constraints , the visual factory , toyota , toyota production system , variation , waste (Comments)

Peter Abilla
no nic
shmula

» Necessary but Insufficient

motorola in big trouble Motorola (MOT), the inventor of Six Sigma, is in big trouble. Even though it invented Six Sigma, this is a clear example that shows how Lean or Six Sigma are not a cure-all for corporate woes, but that good leadership and a winning strategy are key in a competitive world — Lean or Six Sigma is necessary, but not sufficient.

The Art of Exclusion

Michael Porter (Porter’s Five Forces) argues — I believe correctly –, in his seminal work, What is Strategy, that Operational Excellence is necessary but not sufficient. What is needed — even still and always — is a winning strategy. In his article, he argues that the essence of strategy consist of two related propositions:

strategy is engaging in activities that are different than the competition
strategy is engaging in activities that are similar than the competition, but perform better than the competition

Regarding (1), Porter argues that, regarding (1), the firm must choose a position — one that sets the firm apart from its competitors; a position that makes the firm and its products or services uniquely and competitively different and leads to a sustainable and profitable competitive advantage. Porter then claims that an important aspect of strategy is deciding what NOT to do — the art of exclusion.

Regarding (2), a firm will undoubtedly engage in activities that are similar than the competition. For example, take a traditional internet retailer — a firm in that space will usually have a front-end store and a fulfillment back-end. To set the firm apart on similar activities from its competitors requires that the firm perform those activities better — with better quality, lower costs, with better service, and deliver quicker than the competition.

Deploying a Lean or Six Sigma culture within your firm is essentially an activity borne from (2) — but it is not a panacea; by itself, a culture of Operational Excellence will find itself lacking in a hyper-competitive world.

Necessary but Insufficient

While Motorola might remain one of the hallmarks of Operational Excellence, it has, over the years, essentially failed to engage in activities that are uniquely and competitively different than the competition. Speaking as an outsider, it appears that Motorola has continued to run an efficient business, producing products and services with few defects and delivering on-time, but products and services in a market that has changed to demand less and less of Motorola products, in favor of competitors products, such as the Apple (AAPL) iPhone.

The Need for Leadership

The theme, I see, with most corporate problems, overwhelmingly points to Leadership. The OPPOSITE of long-term thinking, inspiring, visionary, humane, collaborative, reflective, selfless, nurturing, interested, responsible, and mobilizing is what seems to be what most companies elevate to the Chief Executive position.

Emulating Gary Convis

Gary Convis was recently brought in to be the CEO of Dana Corporation (DAN), an $8.7 Billion manufacturer of auto parts. Convis is a 40 year veteran of the auto industry and a former executive at Toyota. Dana Corporation is a struggling giant, currently in bankruptcy. When asked what words of wisdom he has to impart to his new team members at Dana Corporation, he said this:

“manage as if you have no power”

For me, that statement elegantly summarizes the the essence of Leadership — the type of Leadership that is capable of satisfying both (1) and (2) above.

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Articles on Leadership:

Please articles on Queueing Theory below:

Articles on Operations, lean and six sigma, please visit the links below:

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by psabilla at 6:33 AM under 5s , a3 report , apple iphone , business , gemba , genchi genbutsu , heijunka , iphone , ishikawa , it at toyota , just-in-time , kanban , leadership , lean , lean consumption maps , muda , obeya , operations , pareto principle , poka-yoke , process measures , productivity , quality , regression analysis , root cause analysis , six sigma , statistical process control , strategy , supply chain , takt time , theory of constraints , the profit tree , the visual factory , toyota , variation , visual management , waste , zero defects (Comments)

Peter Abilla
no nic
shmula

» Reducing Customer Service Contacts

In some organizations, the Customer Service function is largely viewed as a cost center, draining resources of the firm. I maintain that this perspective is what less mature companies support. More mature companies and, subsequently the more successful ones, understand the strategic fit of Customer Service in the overall value chain and it’s functional role in the supply chain.

In what follows, I’ll take a hypothetical iPhone defect case and show how customer service in this example plays a pivotal role in the overall iPhone supply chain — a key player in the overall product value chain.

Strategic Fit of Customer Service in the Supply Chain

In a supply chain network, the Strategic Fit of Customer Service is often the voice-of-the-customer post-release of the service or product. The phrase “start with the customer and work backwards” is really a misnomer. Why? Well, in most products or services, it really starts with the customer and ends with the customer — that is, the customer’s voice is heard at the level of product design and then the voice-of-the-customer is heard at the market monitoring level, post-release of the product or service.

We know — through pretty accurate anecdotal evidence — that the supply chain of the iPhone looks like the following:

From a high-level, we speculate that the following are the material suppliers of the Apple iPhone:

Samsung: The Singapore facility manufactures CPU and Video processing chips.
Infineon: The Singapore facility manufactures Baseband Communications hardware.
Primax Electronics: The Taiwan facility manufactures Digital Camera Modules.
Foxconn International: The Taiwan facility manufactures internal circuitry.
Entery Industrial: The Taiwan facility manufactures connectors.
Cambridge Silicon: The Taiwan facility manufactures bluetooth chipsets.
Umicron Technology: The Taiwan facility manufactures printed circuit boards.
Catcher Technology: The Taiwan facility manufactures stainless metal casings.
Broadcomm: The U.S. based facility builds touch screen controllers.
Marvell: The U.S. based facility builds 802.11 specific parts.
The Apple Shenzhen, China facility assembles the hardware, holds inventory, and handles the pick, pack, and ship steps of the fulfillment process.

If I am correct in any of my research and assertions above, it’s easy to see that if there is any disruption in material flow of any supplier into the Apple Shenzhen, China facility, then production either slows or halts altogether.

We also know that the Austin, Texas Apple Operation is largely where Apple Care physically sits, with another office just outside of Sacramento, California. So, for any contacts into their Call Center, then that is most likely where the contacts will enter (they also have, we understand, outsourcing partners, but Texas Apple Care is the headquarters).

So, more completely, then, the high-level iphone supply chain may represented like this:

Market Monitoring, Defect Data

When a product is released into the market, there can be many channels of market monitoring of the health of the product. In the medical device or pharmaceutical industry, where I once worked, the Market Monitoring phase of the product lifecycle represents a large portion of the product, especially in how it meets regulatory concerns, etc. Marketing and Public Relations also have an especial interest in market monitoring since the voice-of-the-customer post-release can and, usually does, help the firm improve their product or service.

Let us assume the following:

Apple Care (Apple iPhone Customer Service) has a program for collecting product health, post-release, of the product. These can be from inbound contacts to the Apple Customer Service or through blogs or through message boards.
In this program, Apple has a simple and elegant way of making that information actionable, involving collecting data, stratifying of the data, root cause analysis, then practical countermeasures to improve the iPhone through upcoming releases of the product.

iPhone Defect Data

Extending this hypothetical iPhone case, let’s say that Apple Customer Service collects inbound iPhone Defect Data using a very simple check sheet, like the following:

The first column shows very broad defects as reported by the iPhone customers. On the right column are the simple counts. This is called a check sheet. Other variants of this simple quality tool are to collect by day, time, shift, product color, version, etc.

The next step to make this data actionable is to visually render it in a way that points to an healthy area of opprotunity. Below might be a picture that can help us — an iPhone Pareto of Defects:

The above picture is a Pareto Chart, showing the check sheet data, in visual format. As a consumer of this data, the Apple Customer Service folks might want to pay closer attention to the first and second bars of the Pareto, because those two bars represent “iPhone Touch Screen” defects.

The Pareto above naturally leads the consumer of this data to ask “Why?” — “What’s going on with the Apple iPhone Touch Screen?”

The next step, then, in the lifecycle of product monitoring and improvement is to conduct a Root Cause Analysis, focused on areas where the opportunity trade-off is good. In other words, to truly get-to-the-heart of Touch Screen defects, Apple must meet with the suppliers of the iPhone Touch Screen technologies. Based on the Supply Chain network drawn above, Apple should meet with BroadComm, the supplier of the iPhone Touch Screen technologies.

In that meeting, both Apple and the supplier can look over the data, go to the Gemba, and conduct root cause analysis on what’s going on with the Touch Screen.

iPhone Defects Root Cause Analysis

There are several tools that can aid in the process of Root Cause Analysis. Basically, it is a simple approach of asking “why” several times until you arrive at an atomic but actionable item. To visually view the process of the “5-why’s”, a tool called an (Ishikawa Diagram) or a (Cause-and-Effect Diagram) or a (Fishbone Diagram) is often helpful — this tool is referred by either of these names.

ishikawa diagram

Main Components of an Ishikawa Diagram

At the head of the Fishbone is the defect or effect, stated in the form of a question.
The major bones are the capstones, or main groupings of causes.
The minor bones are detailed items under each capstone.
There are common capstones, but they may or may not apply to your specific problem. The common ones are:

People

Equipment

Material

Information

Methods/Procedures

Measurement

Environment

After completing your Fishbone Diagram excercise as a group, it is helpful to test your logic by working the bones: top-down OR bottom-up like:

this happens because of g; g happens because of f; f happens because of e; e happens because of d; d happens because of c; c happens because of b; b happens because of a.

The excercise above is crucially important — you must test your logic so that it makes pragmatic sense and that the atomic root cause is actionable — that is, you can do something to correct it, reduce it, or eliminate the root cause.

Once you or your team arrive at a root cause for a specific capstone, then you typically “cloud” it to identify it as a root cause. A good rule is that there is typically *NOT* 1 root cause for a problem, but potentially several. Below is a diagram of one fishbone, decomposed:

ishikawa, fishbone, shmula.com

Once the Apple folks and the Apple iPhone Touch Screen supplier arrive at the root causes of the iPhone Touch Screen defects, then the supplier needs to put-in-place countermeasures so that the next shipment of the Touch Screen — perhaps in the next version of the iPhone — won’t have this defect anymore.

In fact, there can be much Public Relations and Marketing campaigns from this effort: Apple can show the public that it has listened the concerns of the market; Apple has done this by fixing the defects that most pains that market, in relation to the iPhone product. There can be much branding from an effort like this.

Conclusion

Customer Service plays a key role in the value chain of a product or service. Some firms view and, consequently behave, as if Customer Service were simply a cost center. These firms miss the point altogether: Customer Service is a major vehicle for hearing and learning about what the market is perceiving and feeling and experiencing from our products or services. This data and information can be made actionable through the strategic and smart utilization of Customer Service.

Disclosure

The data above is only hypothetical. The process above works and, if done strategically and with an eye toward the customer, then Customer Service can be a major player in how our products and services can be improved and how we can shape the signals we send to the market and, consequently, how the market can begin to perceive the firm.

I love Apple, but I don’t own an iPhone. I would love an iPhone and would gladly accept a free iPhone from Apple and/or other free Apple products. Apple can join the other companies that have sent me free stuff here.

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Please find originally-written articles on Queueing Theory below:

For a few articles on Operations, lean and six sigma, please visit the links below:

Managing Constraints Under Peak Volumes

Order Pipeline of Events

On Game Theory

Series on Queueing Theory

Applied Regression Analysis

5S

Click-to-Ship Processes

Kanban Sizing and “Pull”

Lean at Krispy Kreme

Theory of Constraints and Camping

Lean for Software Development

Don’t Waste the Customer’s Time

Featuritis and the Focus on the Customer

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by psabilla at 7:36 AM under apple , apple iphone , business , customer service , general , iphone , ishikawa , lean , lean consumption maps , lean manufacturing , lean thinking , metrics , operations , pareto , root cause analysis , six sigma , toyota , variation (Comments)

Peter Abilla
no nic
shmula

» It’s the People also, not just the Tools

I spoke at a Lean Six Sigma conference last week, held in Chicago. The conference was packed with Supply Chain, Logistics, Fulfillment, Manufacturing, Transportation, Healthcare, and Service executives.

During the conference, I heard a lot of chest-beating, neutron-jack-welch type of comments and also a lot of focus and emphasis on the “tools” of Operational Excellence. I truly found this part to be quite disappointing, given that the audience and speakers were mostly executives from large Fortune 500 companies.

I thought and expected that people knew better but that’s okay — this represents a challenge and opportunity to do good.

How has Lean Manufacturing and Six Sigma gotten to the point where it has forgotten its roots and become a subculture all in itself? Lean Manufacturing hinges upon 2 pillars — (1) Respect for People and (2) Continuous Improvement. Why do people focus on (2), but completely forget (1) Respect for People?

L.A.M.E

Mark coined the term L.A.M.E a while ago and I mostly agree with it. One aspect I’d add is that the term ‘misguided’ also applies to an overfocus to one dimension of Lean and forgetting the other dimensions. The ironic thing about this is that each dimension of Lean actually supports each other and WAS built from each other.

Another thing as way of background: the work ‘Lean’ was a term coined by MIT’s International Motor Vehicle Program, led by Jim Womack. The term was coined to explain how Toyota got by with “half of everything” — how they did so much with so little — fewer people, less space, less inventory, less effort, less safety incidences, less defects, and less capital investment and cash.

I hear people use “Toyota Production System” and “Lean” separately. In fact, during the conference I heard a number of people say things such as “We use Lean, Six Sigma, and The Toyota Production System.” That’s like saying “I drink water, liquid, and H2O”.

Not L.A.M.E

Toyota describes its system as a combination of (a) Philosophy, (b) Management, and (c) Technical. Each was built upon the other and exist to support each other.

For example, some people consider ‘Kaizen’ a tool, often referring to this as ‘Kaizen Blitz’ (which is really ‘Jishuken’, but people confuse the two), which is a team-based, rapid activity that explores a production line or problems in an operation, drive to root causes, and then brainstorm countermeasures to reduce or eliminate those root causes.

What most folks forget is that ‘Kaizen’ was truly build upon the philosophy that “Toyota builds people and then cars” — that is, Kaizen came from the notion that the collective intelligence of your line workers is valuable and that people, if given the training and the chance, can truly do amazing things. This is an example where the Technical came from Philosophy — the tools and methods used in Kaizen are supported and even stems from the Philosophy of ‘Respect for People’.

Good Leadership versus Just Tools

I’d venture to say that if there is good, visionary leadership in place, then I’d take that over any ‘Tool’. But, that is the elegance of the Toyota Way that most people don’t know, understand, or convienently forget: true Lean Manufacturing hinges upon building Leaders throughout the company — people who know and live the principles of Operational Excellence and also know how to apply the Tools that support those Principles.

It is possible to implement a tool like Kaizen or suggestion boxes, but if your organization doesn’t respect people or if participative management is not valued, then your Kaizen activities will be mute and your suggestion boxes will be empty.

sidenote: here are a few articles on leadership –

The Andon of Fear

andon cord, lean manufacturing Here’s another illustration of the subtle, but important difference between Respect for People and Tools.

An Andon is a cord that hangs on both sides of a production line. It is to be ‘pulled’ when a problem happens on the line and, when pulled, the line stops. The activity that ensues should be that the team gathers together, conducts root cause analysis (5-why’s), implements countermeasures, then the line start again.

Now, suppose your organization breeds fear in its people and that questioning the status quo is viewed as bad. In this type of environment, implementing the ‘tool’ of an andon cord will not work. The principles at play here are the following:

Speak-up if you see a problem
Don’t pass problems up or down the value chain
Improve the way you work, the service, and the product
There is an end-customer, but the person upstream and downstream from you is also your customer

If an organization doesn’t subscribe to these basic principles, then no matter how many Andon Cords are available at your company — nobody will pull them.

Emulating Gary Convis

Gary Convis was recently brought in to be the CEO of Dana Corporation (DAN), an $8.7 Billion manufacturer of auto parts. Convis is a 40 year veteran of the auto industry and a former executive at Toyota. Dana Corporation is a struggling giant, currently in bankruptcy. When asked what words of wisdom he has to impart to his new team members at Dana Corporation, he said this:

“manage as if you have no power”

For me, that statement elegantly summarizes the the essence of Lean Manufacturing: we teach people principles and the tools that support those principles, then we coach, teach, provide leadership, and trust them to do the right thing.

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Please find originally-written articles on Queueing Theory below:

For a few articles on Operations, lean and six sigma, please visit the links below:

Managing Constraints Under Peak Volumes

Order Pipeline of Events

On Game Theory

Series on Queueing Theory

Applied Regression Analysis

5S

Click-to-Ship Processes

Kanban Sizing and “Pull”

Lean at Krispy Kreme

Theory of Constraints and Camping

Lean for Software Development

Don’t Waste the Customer’s Time

Featuritis and the Focus on the Customer

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by psabilla at 3:10 PM under a3 report , gemba , genchi genbutsu , heijunka , ishikawa , kanban , leadership , lean , lean consumption maps , toyota (Comments)

Peter Abilla
no nic
shmula

» After the “Place Order” Button

What happens after the customer clicks the “Place Order Button”? For some customers, this is a large black hole. But, wise companies understand that customers need to be informed and aware of the steps after the “Place Order Button” is clicked. In fact, customers want to be involved in the end-to-end transaction. In this article, we’ll discuss how we can better satisfy this critical customer need, thereby ensuring repeat-business, loyalty, and also good, old fashioned, customer happiness.

It’s critically important in any transaction to be able to answer the question “where’s my stuff” or “where are we in the process?” This requirement is often referred to as Traceability and Visibility; sometimes, people refer to this overall process as Click-to-Ship.

Almost all transactions have Traceability and Visibility as a requirement. From the customer’s perspective, they ought and need to know the status of the transaction. The company, then, needs to provide feedback and status to the customer whenever she needs it. Take, for example, the following transaction types:

Library Book Check-out: User physically searches for books; user check books out; for each book checked-out, there is a 10 business day expiration date; when there is 2 days left in the check-out timer, an email notification is fired to the customer as a reminder.
Online Subscription: User follows the sign-up process; user pays with credit card; credit card is verified; user is admitted to full subscription access page; an email is sent, notifying the customer of the amount charged on credit card and that the transaction was successful.
Online Ordering System: User searches online; user selects items and places items in shopping cart; user pays with credit card; credit card is verified and an email is sent to notify the customer the amount charged and the items bought and an estimate of when the items will be delivered.
You order the #4 meal at McDonald’s; you wait for a really long time and nobody behind the counter comes to tell you the status of your order.
etc., etc.

We’ve all experienced transactions where a notification is sent and feedback is delivered to help us know exactly where we are in the process and, for hard-good transactions, where our stuff is and when we’ll receive it.

Traceability and Visibility

But, there are some processes where Traceability and Visibility are not available. Often, we hear of statements like “I entereed my credit card number and nothing happened. It felt like a black hole.” Statements like this point to the fact that users’ need to know status and receive feedback — they want to be involved in the transaction.

Diagramming Traceability and Visibility

Below is a hypothetical map of what an order system might look like. This system involves a front-end store, credit card verification, and warehousing or fulfillment activities:

Click on the image for a larger view.

Because time is an element in any process, we can collect time-based data and, because the time-based data can be approximated by a statistical distribution, we can approximately predict when the transaction enters a process and when it might exit the process; this line of argument can be extended from start-to-end and this type of traceability and visibility allows the firm to provide accurate feedback and status to the customer.

But, it also allows the firm to do something else: it allows the firm to collect natural metrics and then improve its operations. For example, if we see a large backlog and items begin to queue in front of a process, that might signal management to transfer labor to that process to drive-down the backlog, or for management to implement improvements in front of that process so that items don’t queue there in the future. The ability to make improvements is only possible when we can follow and visually see the how the process and operation is performing.

Do you know how your company is performing? Is your operation a black hole to the customer?

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Please find originally-written articles on Queueing Theory below:

For a few articles on Operations, lean and six sigma, please visit the links below:

Managing Constraints Under Peak Volumes

Order Pipeline of Events

On Game Theory

Series on Queueing Theory

Applied Regression Analysis

5S

Click-to-Ship Processes

Kanban Sizing and “Pull”

Lean at Krispy Kreme

Theory of Constraints and Camping

Lean for Software Development

Don’t Waste the Customer’s Time

Featuritis and the Focus on the Customer

ShareThis

by psabilla at 5:56 AM under click-to-ship , customer obsession , customer service , design thinking , dynamic systems , gemba , genchi genbutsu , heijunka , ishikawa , kanban , lean , lean consumption maps , muda , obeya , operations , poka-yoke , process measures , root cause analysis , six sigma , strategy , supply chain , toyota , variation , waste (Comments)

Peter Abilla
no nic
shmula

» Visual Mismanagement

A few months ago we adopted our baby girl, Mylie. During that hospital experience, I had an encounter with a faucet fraught with featuritis and one that wasn’t humane and, during that same time, I noticed a piece of visual management in the hospital room that wasn’t effective in its intention to provide or share information. This involved a sign in one of the cabinets, where the sign indicated in text the contents of the cabinet. Below is a picture of what I saw:

In the context of the entire cabinet, below is a picture of what a typical user might see:

The taped signage is small, doesn’t distinguish the writing from the wood-colored background very well, and is confusing since there are 3 signs on the same cabinet.

I wonder if the nurses or doctors can easily tell what is in the cabinet? If the more seasoned hospital staff know the contents of the cabinet from experience, then I wonder if new hospital staff could easily tell what was contained in the cabinet? My hypothesis is that new staff would have to open the cabinet in order to see what was contained inside. If that is true, then the intention of the signage fails to meet its promise.

Why Visual Management?

As I indicated in this post regarding Visual Management and teaching kids the principle of work, effective Visual Management can be a control as well as a display:

Visual Management as Control: As a control, effective Visual Management can prevent defects or warn of defects. For example, the noise of metal-to-metal screeching in car brakes is a signal to change your brakes — the machine is warning the human that there is a defect (audible management). Effective Visual Management as Control answers the question: "If I am doing something wrong, how will I know?"
Visual Management as Visual Display: As Visual Display, effective Visual Management can aid in effective information sharing or encourage standardization in processes. For example, a Standard Operating Procedue (Standard Work or SOP) is an instantiation of this principle. An SOP answers the following questions: "Am I doing this right?" and "How do I know that I am doing this right?"

Back to the Hospital

The signage on the hospital cabinet was an attempt at information sharing — sharing with hospital staff the contents of the cabinet. Unfortunately, it wasn’t effective. Below is an example of a simple and effective Visual Management as Display (courtesy of mike):

This is a simple shadow board that displays pictures of the items. As a display, the above is pretty good. But, it misses the point of the principle of display. How? Well, a shadow board is meant to inform the human that an item is missing; which is why a simple outline of the item with text is more effective than the picture of the actual item. Nevertheless, the above is a good attempt and a step better than the hospital cabinet.

Here is an effective and simple example of Visual Management as Display (courtesy of my friend jon miller):

The horizontal stripe across the binders presents a quick and easy way to realize and discover that a binder is missing or a binder is not in the proper sequence. For example, if the top-left binder was on the top-right side, then the user would immediately know that it is is out of place. This simple Visual Management technique supports the principle of informing the user if something is wrong. It’s simple and elegant.

Back to Principles

It’s easy to get caught-up in the language and "tools" of the Toyota Production System, popularized in America as Lean Manufacturing. But, it is about principles, concepts, and how "tools" support those principles. The tools change and are improved, but the principles remain.

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Articles on Ethnography and Design:

Please find originally-written articles on Queueing Theory below:

For a few articles on Operations, lean and six sigma, please visit the links below:

The Gemba is the Dojo

Order Pipeline of Events

On Game Theory

Series on Queueing Theory

Applied Regression Analysis

5S

Click-to-Ship Processes

Kanban Sizing and "Pull"

Lean at Krispy Kreme

Theory of Constraints and Camping

Lean for Software Development

Don’t Waste the Customer’s Time

Featuritis and the Focus on the Customer

ShareThis

by psabilla at 10:08 AM under 5s , a3 report , customer obsession , design thinking , ethnography , gemba , genchi genbutsu , heijunka , ishikawa , it at toyota , lean , lean consumption maps , muda , obeya , simplicity principle , six sigma , the visual factory , visual management (Comments)

Peter Abilla
no nic
shmula

» Black Holes and Supply Chains

It’s critically important in any transaction to be able to answer the question “where’s my stuff” or “where are we in the process?” This requirement is often referred to as Traceability and Visibility; sometimes, people refer to this overall process as Click-to-Ship.

Almost all transactions have Traceability and Visibility as a requirement. From the customer’s perspective, they ought and need to know the status of the transaction. The company, then, needs to provide feedback and status to the customer whenever she needs it. Take, for example, the following transaction types:

Library Book Check-out: User physically searches for books; user check books out; for each book checked-out, there is a 10 business day expiration date; when there is 2 days left in the check-out timer, an email notification is fired to the customer as a reminder.
Online Subscription: User follows the sign-up process; user pays with credit card; credit card is verified; user is admitted to full subscription access page; an email is sent, notifying the customer of the amount charged on credit card and that the transaction was successful.
Online Ordering System: User searches online; user selects items and places items in shopping cart; user pays with credit card; credit card is verified and an email is sent to notify the customer the amount charged and the items bought and an estimate of when the items will be delivered.
You order the #4 meal at McDonald’s; you wait for a really long time and nobody behind the counter comes to tell you the status of your order.
etc., etc.

We’ve all experienced transactions where a notification is sent and feedback is delivered to help us know exactly where we are in the process and, for hard-good transactions, where our stuff is and when we’ll receive it.

Traceability and Visibility

But, there are some processes where Traceability and Visibility are not available. Often, we hear of statements like “I entereed my credit card number and nothing happened. It felt like a black hole.” Statements like this point to the fact that users’ need to know status and receive feedback — they want to be involved in the transaction.

Diagramming Traceability and Visibility

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