Wednesday, April 07, 2010

We can't Handle the Truth

In the movie, A Few Good Men, Jack Nicholson playing the role of a hard-core, old-school, tough-as-nails Marine Colonel delivers the famous line in a military court, “You can’t handle the truth” in answer to Tom Cruise’s cross examination demanding the truth about a code red.

This is a problem for many of us. We can’t handle the truth. Maybe our huge egos prevent us from seeing the truth. Perhaps it is rooted deep in our survival genes to protect us from harm both physical and non-physical. Maybe it is our arrogance from our over-the-top self-image or self-importance. Whatever the reason, we can’t handle the truth if it is not in alignment with our thinking.

We all believe in truth however the truth is not always easily believed. What blinds us from seeing the truth? What in our minds automatically blocks us from seeing the truth? Why do we not want to believe the truth? How do our perceptions create different lenses in seeing the truth?

According to Jon Miller in How to scold like a Kaizen Sensei, the role of the Sensei is “to speak truth to power in ways that a member of the organization could not.” This honest, insightful and raw truth telling skill has very powerful results depending on the delivery by the sensei and the reaction of the learner. Regardless if you are an outside consultant or inside the company, there is a risk in truth telling.

It is easy to see why this truth telling skill does not work coming from within an organization. Unfortunately, the proverbial “kill the messenger” is alive and well in American business. People who speak the truth are often labeled as a non-team player, a disrupter, a trouble maker or the current tag of being “not a good fit”. End result the person either quits or is fired.

Have you ever compromised the truth to keep your job? What about keeping silent? How does your company leadership handle the truth? How do you handle the truth?

It doesn’t take much to see that the truth can get watered down, altered or hidden entirely inside a company, especially as it moves vertically up the ladder. We may believe, at least in the short term, that this is the best way considering the risk, political correctness and social politeness but at what cost? In the long term, is the cost greater? Doesn’t this render our problem solving capabilities as impotent? Isn’t our continuous improvement quest towards perfection halted without seeing the truth?

“New knowledge is the most valuable commodity on earth. The more truth we have to work with, the richer we become.” Kurt Vonnegut, Breakfast of Champions

Tuesday, April 06, 2010

Management Magical Mystery Tour

I strongly believe that one of the keys to a successful lean transformation is management involvement, not just management support. Involvement means full contact, hands-on, go and see for yourself approach. Involvement means leadership. That means more time away from the comfort of your desk and spending this time on the shop floor, in the office areas, in the warehouse, or going to customer sites.

Company executives have gotten so comfortable with seeing their company through the lenses of reports, emails, charts, graphs, boardroom meetings or what their staff tells them that many never venture out for a first hand experience. Charts and graphs are fine tools however I would prefer to know about my operation by experience. Which gives you a better understanding of Hawaii – a) reading travel brochure, looking at pictures and hearing stories by people who went there or b) by your own travel adventure walking on the warm sands of Maui, taking in a deep breathe of ocean air and seeing the waves crashing onto the shore?

Unfortunately, we get distorted glimpses of C-Level executives going “undercover” in TV shows to see first hand what is going on in their company as some great revelation. Kevin Meyer has a great post, MBWA is not a Gemba Walk, that I tend to agree with.

Closer to reality is the planned visit by the high level leader to a site which turns into huge parade of leaders trying to look their best, normally part of a Management Magical Mystery Tour. It’s just like if you invited your priest or pastor over for dinner, you get your house all cleaned up and a special meal is planned and prepared (not a typical night at home, right?).

The plant is notified well in advance so the facility is cleaned up (even to the extent of hiding stuff out of view until after the show) along a pre-determined tour route. Everybody practices and rehearses their lines for the presentation. The smell of fresh paint is hanging in the air. We are ready. Places everyone.

The show usually starts in a conference room with a presentation by the plant staff. If the plant manager is cunning, he will give the executive time to pass on some words of wisdom which can easily take up some of the time for the planned tour. At best, the tour will be rushed which minimizes the chance for problems to surface. It is even possible that the tour is canceled because the meeting, which there was great discussion, took all the time allocated for the visit. Then the C-Level and his entourage travel to the next site.

The only thing missing is the official tour t-shirts. What a wasted opportunity.

How can we get out of this management magical mystery tour routine. First, the C-level executives should visit so often that the event is not special. Second, a visit should not always be a planned event that prompts a show and tell. Third, the C-level executives should not make it a visit to punish but a visit to learn, teach and mentor. Fourth, visit with a purpose and not make it a social hour. It’s nice to talk with people but don’t let that become the mission. If a problem is found, help by coaching and not seeking to blame someone. This would be a good start.

A true lean transformation changes the way the entire business operates from sales to the shop floor. This requires a hands-on, personal approach that cannot be delegated to staff or outside consultants. It is a new way to run the business that requires behavior changes. It is not a project or event. It demands leadership based on first hand experience and it must start at the top.

Friday, April 02, 2010

Cats and Dogs in Manufacturing

Many times in manufacturing career I have struggled in dealing with the dilemma of producing the cats and dogs. The cats and dogs are those parts or products that are typically the small volume, hard to make, mainly less profitable, or generally the pain in the ass parts that cause us headaches and disrupt the harmony in our manufacturing flow.

Since our lean manufacturing focus is to improve flow, how do we deal with our cats and dogs?

Do we outsource our cats and dogs so we can maximize our internal efficiency by producing only our high runners? Do we discontinue making the cats and dogs entirely if they are not profitable? Do we outsource some of our high runners to work on the cats and dogs? Do we separate the cats and dogs from the rest of the pack?

It would be easy for us to take the path of least resistance and either outsource them or drop them from our product offering. Life is too short so why struggle with the headaches day after day. With our short term thinking and pressure for quick results, we can present convincing arguments to get rid of these cats and dogs and do it fast. Especially if we are not making any money on them, it should be a slam dunk to get rid of them. Let’s just focus on our core competency and we will be more profitable.

Sounds logical or not?

From my experience, I do not completely trust our accounting systems in determining the profitability of individual parts or products. With the typical standard cost method, erroneous data, estimated inputs based on some formula or worse, some average and our sometimes strange allocation of costs; how can we really make good decisions on true profitability on a part by part basis? Just take a stopwatch to gemba and do a simple random audit to see that our data is as reliable and trustworthy as a celebrity in rehab.

If we outsource these cats and dogs, passing the headache on to others to deal with, we will only add additional waste to our overall process. We will need to increase our efforts to insure the quality of these parts now on the outside, increase our inventory levels to protect our delivery to our customers and most likely soon end up paying more for these parts. Before long, we will end up dropping them because they will be deemed unprofitable.

In the book, The Birth of Lean, Taiichi Ohno faced the same dilemma at Toyota; his thoughts on this issue were described as follows:

“A lot of people in the company thought that we should outsource small-volume parts to low-cost contractors and make the large-volume parts on our own, like bicycle manufacturers did. They figured that we could build an export business by getting the contractors to supply parts on a just-in-time basis and by assembling vehicles from those parts and from the parts that we made in-house.

I argued for taking the opposite approach. I insisted that we should produce low-volume items in-house and buy large-volume parts-stuff that anyone cold make inexpensively-from outside suppliers. Making the low-volume parts in-house would mean high unit costs, and that would pressure us to tackle kaizen improvements and cost reductions.”

What a great viewpoint, to send out the easier, high-volume parts and keep the hard ones in-house to pressure our kaizen efforts. Think about that for a moment. Do we trust outside suppliers to kaizen better than we can internally? Do easy, high volume parts present the same kaizen opportunities that low-running parts provide? Which would challenge us to be better problem solvers? As for our customers, which kinds of products are growing in demand, the generic, high-volume products or the custom, low-volume products? How about the trend in the future?

What do you think?