Thursday, March 30, 2006

Sayings of Shigeo Shingo

"Get a grip on the status quo. The most magnificent improvement scheme would be worthless if your perception of the current situation is in error. We tend to think that fictitious facts are real. By this we do not grasp the real facts or simply hypothesize facts using guess work, or we ignore changes over time and assume things are the same as they used to be." - Shigeo Shingo

In other words, go to gemba often!

Monday, March 27, 2006

We have Quality Checks, but are they being done???

A recent quality issue occurred with one of our suppliers of pre-coated steel. This steel material has a designated specification for paint thickness with a typical +/- allowable tolerance. In our application, the coating needed to be just thick enough to deter rust yet thin enough to allow proper welding.

On a recent shipment, our welders were having a difficult time welding the steel. With our positector, a devise used to measure coating thickness, we quickly measured several samples and found that the coating thickness was all over the map. In some cases, the measured thickness was well over the tolerance range by 3 times the specification causing the welding problem.

We contacted our supplier on this problem. In response, our supplier provided their quality check data from this lot showing everything measuring within tolerance. They suggested that we change the specification if this was not working for us. Our supplier believed that their process was in control even though what we measured on the actual parts did not match their data. To help our supplier in their investigation, we returned several pieces of the nonconforming material.

A few days later, our supplier humbly apologized for the inconvenience caused by these nonconforming parts that were clearly out of spec. When they dug a little deeper in their investigation, they discovered that the quality check procedures were not being followed. The first shift operation was only making 2 checks instead of 10 checks while the second and third shifts were not doing any of the 10 quality checks. All the shifts just filled out the quality check sheet with random numbers to show that 10 checks were completed and within acceptable limits. When management reviewed the reports, everything looked good.

Our supplier assures us that the supervisor has been informed of the problem and that the quality checks are now being performed according to the proper procedures. To their credit, the next shipment was acceptable.

With clearly defined procedures in place, we assume people are doing their quality checks, but are they??? Maybe not! Worse yet, do you find out on your own or when your customer complains?

As a lean thinker, would you accept this suppliers corrective action? How confident would you be that these parts will remain within acceptable tolerance? What course of action would you take if you were this supplier?

Using lean manufacturing principles as our guide, here are several suggestions that may improve our suppliers quality checks.

The first course of action is to verify that the quality checks are being correctly conducted. Regular process audits and a solid verification process will provide the frame work of monitoring your "real" process output.

#2 Genchi Genbutsu
Follow the principle of genchi genbutsu which means "going to the place to see the actual situation for understanding". Management should not rely on reports to understand the process or determine how things are running in their operation. Go out to the shop floor and see for yourself.

#3 Poka-Yoke
Quality checks are fine however preventing the problems in the first place is a better course of action. Put poka-yoke or mistake proofing devices into place. Yes, the more poka-yoke devices the better. Make the process error proof and put countermeasures in place to improve the process.

#4 Keep it Simple
Increasing inspection and adding complex quality procedures will not solve the problem. Why did the employees not follow the original quality plan of 10 quality checks? Ask the 5 whys to get at the root cause. Maybe the quality check process was too complex. Work with the operators to develop a simple, easy quality check plan.

Wednesday, March 22, 2006

Six Sigma Opportunity for Lost Baggage

In yesterday's issue of USA Today, there was an interesting article by Dan Reed on Airlines losing a record number of bags last year. As a air traveler for many years, I have experienced the pain of losing my bags after a flight. It is not a pleasant customer experience. After quickly reading the article, I thought that of all problems that could be considered for a Six Sigma project, this would be one wickedly cool project!

Based on the numbers contained in the article, a major quality improvement by any airline in their lost bags metric would greatly improve customer satisfaction and boost the bottom line. What was the cost of this poor quality performance? The article estimated the cost to the airlines for loss bags to be $2.5 billion. With the current financial situation of the airlines, this would be a huge improvement opportunity.

According to the article, 30 million bags were lost out of 3.7 billion bags checked in last year. With less than 1% error rate, it was stated this 99% success rate would be considered good in many industries but basically is unacceptable for the airlines. OUTSTANDING quality viewpoint! Do not accept the 99% success rate as good enough.

Using these numbers, the airline lost baggage rate is 8,108 Parts Per Million opportunities defective(PPM rate). In the six sigma world, that would be under a 4 sigma performance level. Remember a six sigma level would be only 3.4 parts per million (PPM) defective.

Without many of the details, it would be difficult to analysis the problem. However, the article did help point out some focus areas. With about 61% mishandled bags occurring on baggage transferred from one flight to another (versus direct flights), I would obviously focus investigative efforts on this process. In addition, 15% of the errors were due to the airlines failing to load them on the proper fights. Sounds like there is some level of data to start a formalized problem solving investigation.

By asking the 5 why's, along with Pareto charts and cause/effect analysis, the airlines could begin to see the root causes for lost bags and start countermeasures to poka-yoke (mistake-proof) the process. With all due respect to the airlines, this improvement process sounds easy, when in fact, it is difficult to isolate these common cause variations and prevent them from occurring. Difficult but certainly not impossible!

My advice to the airlines, don't focus on layoffs and pay cuts that further erode your employee relations. That short term thinking to cut costs will not build your team that you need to be more competitive for the future. The negative price you pay is too high. Instead, work together with your employees and try a focused six sigma program. As a team, go after the $2.5 billion along with other process improvements. You need the money, but more importantly, a large number customers will be transformed into extremely happy passengers!

Friday, March 17, 2006

Kaizen Priorities Part 2

My post on Kaizen Priorities caught the attention of Bill Waddell over at Evolving Excellence blog that inspired him to write Lean Manufacturing providing his opposing view on this topic. In my opinion, Bill has excellent viewpoints on lean and provides passionate insights to lean manufacturing. However, I think just a little bit differently than Bill on this topic.

First, the points that I am promoting in Kaizen Priorities are simply to 1) avoid debates and arguments about lean like this one and just start improving, and 2) there are some weaknesses held against the lean approach and that targeted kaizen may yield visible results faster. I guess I failed on both points. The post did not in any way, shape or form pretend to describe the entire scope and the core essence of kaizen or the Toyota Production System. One short post could possibly do it.

Second, I am positive that we can all agree that any improvement in business is good. According to the Japanese business philosophy as described by Massaki Imai, "Whenever and wherever improvements are made in business, these improvements are eventually going to lead to improvements in areas such as quality and productivity."

So how can any suggestions for improvement be "wrong"?

As far as I know, it is correct to state that Taiichi Ohno and Shigeo Shingo did not directly promote looking at bottlenecks. It is well documented, Taiichi Ohno believed strongly that the starting point of kaizen is being aware or recognizing a problem first. See the need, then start at the problem. His definition of a problem took the form of a burden to people or inconvenience downstream to other employees or customers.

This point leads to the concept of kaizen. I was taught kaizen is more than just continuous improvement of a process or cycle time focused, it is about people. The meaning of kaizen includes the development, training and improvement of people along with removing the burdens that people deal with in work. This higher principle of kaizen is found in my suggestions to look at removing bottlenecks and improving the hardest job in the organization.

Shigeo Shingo stated, "There are four purposes of improvement: easier, better, faster and cheaper. These four goals appear in the order of priority." This viewpoint, again, starts with people. According to Bill's post, we must concentrate on compressing cycle time. This approach just focuses on "faster" and ignores "easier, better and cheaper." All my kaizen suggestions are aimed at easier, better and faster thinking cheaper will follow.

Finally, the disagreement with my suggested kaizen priorities could be just the differences between Japanese management and American management approaches. The Japanese management approach is geared towards long term thinking and process orientation whereas the American management approach is bias towards short term thinking and results orientation. Look at promotions, hiring and firing in America, it is all results based. Just look at nearly every management performance review in America, it's results that matter most( not attitude, effort, techniques or methods). We measure companies on the bottom line, we measure coaches on win-loss records and we measure people on getting the job done with results.

My kaizen priorities are an attempt to go from a process orientation versus results orientation conflict into believing both are equally important, its process orientation and results orientation. Just like the quality and cost goals should be equally important and not one versus the other. With this viewpoint, I attempted to stay true to the meaning of kaizen by removing burdens to people (bottlenecks, tough jobs, etc) while achieving visible results.

Repeating the words of Massaki Imai, "Whenever and wherever improvements are made in business, these improvements are eventually going to lead to improvements in areas such as quality and productivity." As I see it, the biggest problem that American management has with this is the "eventually" part.

Wednesday, March 15, 2006

Kaizen Priorities

One of the negative comments I hear about the lean approach is that it is unfocused or a shotgun approach that does not have an impact to the bottom line. Some will even argue that a Six Sigma approach is better because it focuses on high impact projects but takes too long to show results. Before long, a hybrid version called Lean Six Sigma is promoted as the best of both worlds. In my experience, if we spent all this energy in these debates towards any improvement actions at gemba, you would be miles ahead on your lean journey.

I will not perpetuate this debate here because that would be muda. However, I would like to help some of the lean leaders defend against the unfocused or shotgun approach attacks. To be fair, many companies that are just starting their lean journey have so many opportunities for improvement (visible evidence of the 7 wastes everywhere you turn) that we call these places "target rich environments". It's easy to just jump in and start making improvements without setting a priorities.

But before you jump, here are a few simple kaizen priorities that might make a difference for a bottom line impact.

Priority 1 Kaizen your bottleneck station first
If you don't know what is your bottleneck station, find it. There are many ways to find your bottleneck: all the inventory is piled in front of it, people downstream are waiting on it, it has the most overtime, it's a top maintenance priority, etc. By improving this station first, your value stream/throughput is immediately improved. Both the customer and bottom line are positively impacted.

Priority 2 Kaizen the newest bottleneck station next
The effects are the same as above. You should continue this cycle of improving your bottleneck station every time it is shifted by improvements to the previous bottleneck station.

Priority 3 Kaizen the hardest job in your operation
Like your bottleneck station, you should locate the hardest job in your operation. To find it, just check for some tell tale signs: the lowest seniority people are usually on it, this job has the highest turnover, this job has the most absenteeism, most employees' complaints can come from this job, the job may even be so tough that shop floor myths and legends surround it. If you still cannot find it, just ask each of your employees. A kaizen at this job will improve employee morale, improve quality at this station and also make a visible, bottom line improvement. Your goal is to make this job easy.

Priority 4 Kaizen the easiest job in your operation
At first, this may seem counter intuitive to priority 3. But take a closer look at your easiest job. This job is a candidate for combination with other tasks within the value stream. Everybody considers it the job to have or the highest seniority people flock to it. Your goal is to eliminate it as a stand alone task.

Priority 5 Kaizen your top seller
The 80/20 rule applies here. Go for for top seller, biggest service, your bread and butter product, the thing that makes your company stand out. By improving this top seller, you make a distinctive and highly visible impact. Your customer will benefit and your competitors will be running to catch up. One caution: This will make many people in your company extremely uncomfortable and they may have a strong desire not to mess with a winner. It might take some persuading to get support on this priority. But even Toyota improves the Camry!

Thursday, March 09, 2006

Easy Lean

The lean journey is a long, continuous process of learning, experimentation and improvement. So when I received an email today about some lean webinars, I took a quick look over the topics. Normally, I do not have a lot of spare time for webinars, but I will make the time if I find something of lean value. The one topic that caught my attention was about "Easy Lean."

Now, I did not take a closer look at "Easy Lean" because I was looking for a shortcut (There are NO shortcuts on the lean journey). I took a closer look to see how someone could possibly sell something called "Easy Lean."

As it turned out, the company selling "Easy Lean" is a software company. They promote "Easy Lean" as some proprietary, lean transformation, turn-key system. But wait, there's more. Not only do you get lean in 45 days or less, they have an "electronic pull system" to get even leaner.

Most of you are smart enough not to buy into this branding of lean. However, there are some short-sighted executives that might fall for this slick shortcut to "Easy Lean." That would be a shame. For those with limited lean enlightenment, I will provide a few short rules to get past the branding of "Easy Lean."

Rule #1 Lean is not easy.
It take persistence and hard work to follow the lean journey. The path is never ending with constant improvement. There are no shortcuts. Even Toyota with 50 years of lean experience is still working on it.

Rule #2 There are NO software solutions in lean.
Lean is about finding and eliminating waste in the process using teamwork, focus and creativity. There are no software packages anywhere that magically make your company lean.

Rule #3 Always Simplify first, Automate last (and automate only if needed).
Never seek to automate your complex processes or system. These attempts will result in failure. Any software packaged to automate a complex system will be custom made, expensive and complex on its own rights. Just work on making it simple.

Rule #4 If it sounds too good to be true, it is!
This rule is as simple as it gets and needs no explanation.

Despite these few basic rules to dispel the path of "Easy Lean." Some management will believe that they have found the right path. I guess these would be the same people that buy into the "Easy Diet" and "Easy Money" programs, too.

Tuesday, March 07, 2006

Best Lean Tool to Guide your Lean Journey

There are many helpful and simple lean tools to use on your lean journey however one tool stands out above all others. The basic stopwatch has proven itself to be the best lean tool available. Like a compass to a hiker, a stopwatch is to the lean practitioner.

The focus of lean manufacturing is to eliminate waste in your process and improve your value stream. The measurement of your success is found in your process timeline which is best measured with a stopwatch. Some might argue that a calendar is a better tool with some processes but I will save that point for another day.

What other tool is the best decision maker of a lean improvement where time is the key determining factor? A stopwatch is unbiased and simply tells you how much time an activity takes without playing favorites. In the past, I have found instances where people would spend hours arguing the merits of one method over another method. In most cases, either no decision could be agreed upon or one party gives up in frustration. A better approach is to put aside the power plays and let the stopwatch determine the best method. Instead of wasting time debating who's ideas is better, go to gemba and try both methods while the stopwatch measures the results. Let the stopwatch lead your way.

Helpful lean hint: Try to get in the habit of measuring time in seconds. If you use minutes or hours, people tend to think in those larger terms and believe 1 hour is quick. If you use seconds, it places emphasis on your lean journey that every second counts.

Thursday, March 02, 2006

Quality Plateau or Quality Ceiling?

There is an interesting quality article in today's issue of USA Today. The article is written by James R. Healey titled "Consumer Reports sees quality plateau". In the latest Consumer Reports testing and car owner surveys, the top reliability awards all go to Asian brands. In fact there are no Detroit models in the top 10. The top 10 are all Japanese brands.

That really did not come as a surprise to me based on past reports. But what surprised me the most were the comments by several individuals including Anne Stevens, COO of Ford Motors North and South American operations. These comment lead me to the conclusion that domestic car manufacturers, namely Ford, have already lost the battle against the Japanese manufacturers!

The biggest problem I have is the mental attitude that we are as good as we can get and that "it's impossible to manufacture a product as complex as a car or truck with zero defects". With this attitude at the top how the heck can they improve? I see the words of Ms. Stevens that despite the fact that they (Ford) "have reached a difficult level to break but that doesn't mean don't keep trying", but I sense that even she does not believe they can really get any better.

On top of that, Consumer Reports adds their opinion based on the results that "It could indicate that the most reliable new cars have reached a practical limit as to how trouble free they can become". Another opinion from Jim Hossacks, AutoPacific consultant, states that "the cost benefit ratio might have maxed out and improving much more would cost the manufacturer more that its worth. It might not be a technical issue but a practical, economic limit".

I believe that they are collectively selling out to the notion that we-are-as-good-as-we-can-get. They must not truly understand the power of continuous improvement and lean principles along with poka-yoke! Do you really think that Toyota is saying that they can not improve?

I love data so let look at some of the facts presented in this article. In 2002, the Japanese car manufacturers on average posted 15 problems per 100 new vehicles. In 2006, they improved to 12 problems per 100 new vehicles. That is a whopping 20% improvement! Over the same period, Detroit car manufacturers were stuck at 17 or 18 problems per 100 new vehicles. No improvement. WOW!

Sounds like Ford could reasonable expect to meet at minimum the Japanese level of four years ago (15 problems) for a roughly 16% improvement. It is possible! Mentally, you must accept the possibility to make it happen. That should be Ford's first target. No excuses, just make it happen.

As for zero defects, it is possible! Just like breaking the four minute mile barrier, for years it was universally believed that it was humanly impossible. After the barrier was broke, other runners started to run the mile in under four minutes soon after. The same goes for zero defects, the barrier will be broke and most likely by a Japanese car manufacturer.