The cost of preventing errors
Prevention of waste is a core tenet of lean thinking, and has been systematically used to optimise processes of all types.
However, it is not universally useful.
Prevention of errors in an existing process is one thing, you have the process established, and can map the manner in which the process is applied, and the outcomes achieved. However, when dealing with a new product, or process, things are a little different.
There is no known path towards an outcome, you are in effect telling the future, and that is an occupation with a high failure rate.
In order to tell the future with anything approaching an acceptable level of certainty, you need to experiment, try things, see what works, ask customers, deploy the ‘Lean start-up’ type mentality to the development of the process.
This means there will be many false starts, errors, failures, or more accurately, opportunities to learn.
Established businesses often do not accept errors. Promotion, salary reviews, and all the other trappings of corporate success are usually based on not making mistakes, so guess what, nobody tries anything new that just might not work, just in case.
An effort to remove these errors will end up costing more, as the implication is that the product or process will be developed until it is seen as ‘Completed’ before launching. As we know, not all new products work, so the losses involved in such an exercise can be huge
Remember ‘New Coke,’ the new improved taste of new coke that nearly destroyed the brand? With the benefit of hindsight, it was obviously a dumb idea, but at the time, I am sure Coke management had market research coming out their ears that confirmed this was a great idea. Pity they did not pick a small test area, and put the change into the market, similar to a Minimum Viable Product, (MVP) to see what Coke consumers in real life rather than is some contrived market research environment said. Such a ‘waste’ would have saved them many millions of dollars, and being head of the queue in the greatest marketing blunder of all time list.
The lesson here is to encourage experimentation, each being an opportunity to learn, and improve your fortune telling skills, substituting small errors that do not compromise the business, for the big blunders that will.
How to get really big, important stuff done, and win!
40 years of observing business and life, success and failure, has led me back to a conclusion that smarter people than me reached thousands of years ago, and winners in all sorts of fields keep using today.
Follow the process.
Achieving big goals is what we are all pushed to do, but often it is overwhelming, simply too big to contemplate, so mostly we hide, in our own particular way. We watch in wonder while others achieve their big goals, and put that success down to luck, circumstances, or a dozen other things.
We would be wrong.
Whenever you see someone achieve a big goal, they have done so by applying discipline, and following a process. They have broken the big goal progressively into smaller more manageable chunks, until they are concentrating just on what is in front of them, right now. Get that right, embed it into the ‘muscle memory’ and then move to the next one, which is an incremental and cumulative movement towards the big goal.
Several of my children were successful elite level athletes. While the big goal was always there, in the background, providing a reason why they were working so hard, what they concentrated on, every day, was what was in front of them.
Another set of reps of a specific move that provided another brick in the foundation of their performance, as they cumulatively built the wall.
The chaos that exists in all our lives, the big things we face can similarly be broken down into simple, progressive steps to be taken. Simple is not easy, simple is in fact very hard, but necessary. Break down the difficult big thing into its component parts, and tackle each one in turn, succeed at it, and move on to the next one.
Improving productivity of a factory process is no different.
Break down every job into its component parts, and get done the one in front of you.
As I work with factory management, one of the best ways to improve without trying to make the big changes all at once which leaves people out, is to have a daily ‘WOT’ meeting, (What’s On Today). Depending on the factory, it may be the whole staff, or it may be individual work cells, the process is the same. Agree the priorities for today, ensure the resources needed are available, and do it, knowing the other parts of the process are doing the same thing, and they all feed into each other.
Excellence is just a matter of steps, excelling at, and continuously improving each one along the way before moving on to the next.
When it comes to getting stuff done, distraction, disorder, and uncertainty leads to failure.
A process is something that goes from A to Z, we lose the game when we focus on Z, forgetting the B to Y steps in the middle.
Play what is in front of you, without losing sight of the wider context, the next step, and overall objective.
What is the most universal and useful management tool of all?
Easy question. ‘5 whys’.
5 Whys was first articulated by Toyota’s architect of the TPS, Taiichi Ohno in the 50’s, but it was not new.
Anyone who has had children has been on the receiving end of a form of the ‘5 whys’ from about two and a half years old, to 6 or 7, by which time they have learnt that the question is not always appreciated or answered fully, so they stop asking.
The process is deceptively simple, keep asking ‘Why’ until you get to the root cause of the problem, well past the symptoms, so it can be fixed, and the problem not recur.
In a previous life managing a manufacturing business, we had a recurring problem with an automatic box erector that seemed intractable despite huge efforts. The whole line stopped every time the erector spat the dummy, causing serious production losses.
While it took months to find the right cause, after chasing a lot of rabbits down holes, we finally nailed it using 5 why.
- Why did the erector jam?
One of the arms was out of alignment to the flat box
- Why was the arm out of alignment?
One of the flat box ends was slightly crooked
- Why was the box end crooked?
The box end was slightly out of specification
- Why was the box end out of specification?
The purchasing manager had changed suppliers for a significant saving, and the new suppliers actual operational control allowed variations outside the erectors demanding requirements, resulting in an occasional mechanised ‘dummy-spit’.
This example in fact only took us ‘4 whys,’ but the trick was to ask the right questions in the first place, in the right sequence. This took us several months and cost a huge amount in lost production, and maintenance resources as we eliminated possible causes of the problem before anyone thought to examine if a 1 mm variation outside the spec of the flat box size was significant.
Once identified that it was, the problem was quickly fixed by moving back to the previous supplier with whom we had encountered no problems.
Subsequently, we evolved a process that used 5 whys as a matter of course in search of improvements in the factory, and later, admin processes, and found that our problem resolution times dropped dramatically.
The process is pretty simple, just challenging to implement:
- Institute a ‘5 whys’ meeting in response to a problem.
- Invite (read insist) everyone involved and/or affected by the problem to attend the meeting.
- Agree a ‘chairman’ for the problem who will take overall responsibility.
- Proceed to ask ‘Why’ until you get to the root cause of the issue. It almost never takes more than 5 ‘whys’ hence the name. This step can take time and often takes several meetings as possible answers to the ‘why’ are considered.
- Assign responsibility to install, test and validate the solution
- Document and disseminate the solution which has been broken into a written process to ensure compliance, or easier further investigation should a similar problem arise.
The whole objective is to get to the root cause of the problem, a process that is applicable not just in industry, but in your life, when you think about it.
Diagram courtesy Mindtools.com
Why Operational improvement and change initiatives usually fail.
How do you make short term operational and process improvements ‘stick’ for the long term?
Most change initiatives fail to deliver on their early promise. You get some short term improvement, some changes made, but the effectiveness of the process dwindles with time.
I often see failed improvement initiatives, usually labelled ‘Lean” or ‘6 Sigma’ by those involved, that leave a pile of paper, some awareness and knowledge, and from time to time some useful results, but nothing like the promises of the expensive consultants as they signed you up.
Why is that?
Nobody goes into a change process expecting it to fail
In my observation, the single most common reason these initiatives fail is because they ignore one of the basic tenets of Lean: respect for people.
Lean gets a start because management sees problems they have failed to solve, or do not know how to solve. So they bring in some Lean consultants who reach into the tool box and come out with some of the common tools, go through an education process, implement, and get some quick and sometimes impressive wins, and victory is declared. After that declaration, the focus moves elsewhere, and the process slowly deteriorates.
Why is that?
Everyone was so committed, excited at the early results, the consultants were paid a shedload, so it should have worked.
In 30 years of doing this stuff, there is always one dominant reason they fail.
The initiative is top down, not bottom up.
Those at the top see problems manifest in the P&L. Their motivations are financial, operational and strategic. They talk about alignment, and people being the most valuable asset, then ignore them.
By contrast, building initiative from the bottom, asking those doing the work how to improve it, then giving them the tools to improve, and rewarding them with acknowledgement as well as a more secure job and maybe a pay rise, is where the action is.
However, for managers, they are trained to see their job as managing. Having some stuff bubbling up from the factory that has not gone through the formal approval processes and subjected to the discipline of the accountants mandatory NPV and ROI analysis is uncomfortable and challenging to their authority as managers.
This is where the distinction between managers and leaders comes in.
Managers, usually unwittingly, kill off the grass roots enthusiasm to make their workplace safer, more interesting, and more productive because it makes them uncomfortable, less in control. By imposing rules, they interrupt the productive flow evident in successful initiatives. By contrast, leaders encourage and promote the ambiguity that sometimes results, and works with it.
Which are you, Manager or Leader?
The simple 4 letter word that underpins every improvement initiative.
Improving the performance of businesses is often like being set loose in a commercial kitchen without a recipe. Random ingredients, absence of some staples, disaffected staff, erratic processes, and severe cost pressures, but still being expected to produce an experience people are prepared to pay for.
Not easy
However, every time I look back on a project, the common factor that has made the most difference is not what you would expect.
It is not the financials, or the marketing plan, or how well the sales force performed, it is more basic than all that, and enables all those things:
Flow.
Simple word, and an idea at the core of all performance improvement.
The concept of flow emerged from the work done to improve manufacturing processes by W. Edwards Deeming, Joseph Juran, and others, and was first widely implemented and documented by Toyota, then spread around the world as ‘Lean thinking’ and the ‘Toyota Production System’.
At the core of Lean is Flow, and at the core of any improvement in any process, physical or otherwise, in any context, is flow.
The basic confusion is between being busy, and being productive. Jumping up and down in one spot may be busy, but it is hardly productive unless you are killing ants.
Optimising flow in manufacturing operations requires the configuration of all the lines such that work passes unobstructed from job centre to job centre through to completion. The faster and more uninterrupted the flow, the higher the output.
Flow optimisation always requires the counter intuitive decision to leave unused capacity at points in the process, to avoid building Work in progress inventory, which act as ‘rapids’ in the flow metaphor. It usually feels wrong to leave available capacity unused, but the slowest work centre will be the limiting factor for the whole process, and to keep the flow steady, the flow rate is limited by that slowest point. In addition, shit always happens, something breaks, an item spec ‘wanders, ingredient fails to come in as required, so there is always downtime of some sort. This means that some spare capacity in the system is a requirement for the flow to be matched to demand, or ‘Pull’ in Lean parlance.
A key component of flow is the orderly release of work into the process. A schedule is written based on priority and optimal flow, and is then executed without change. Queue jumping, to meet unscheduled customer expectations, is a common distraction from the plan that multiplies, disrupts everything, and often results in total turmoil in the flow. It is deadly to process optimisation.
These days, not as much manufacturing is done, after all many of us are told we are now knowledge workers.
Exactly the same principals apply. While it may be harder to see because there is no physical product moving down a production line, the thought process is identical.
The trouble with these non physical tasks, is that they come at us from every direction, often with little warning and lead time, and with ambiguous importance and priority. Unscheduled demands on our time.
How do you sort through the mess to optimise your productivity?
A now standard method is the scaling of Importance and urgency into quadrants. When analysing how our time is spent, most of us find that too much is spent in the not important/urgent quadrant, when we should be focusing on the important items, urgent or otherwise. It is almost always the important/not urgent tasks that get shuffled aside, and it is these items that have the greatest long term impact on the performance of an enterprise.
An alternative means to allocate time is on an ‘Impact/Effort’ continuum. Tasks that are high impact, low effort are the quick wins so beloved of consultants, by contrast, high effort, low impact tasks are just thankless tasks, and not worth doing.
Everyone is in charge of managing their time to some extent, the further away you are from a time driven physical process, the greater the amount if discretion you will have. It behoves you to work the tasks in front of you in order of priority. Responding to that email may seem important, after all it has come in, the ‘new email bleep’ (Pavlov would love this one were he still alive) has sounded, there is a sense of urgency generated, but in 99% of cases, what does it really matter of the email goes unopened.
In everything you do, consider the impact and benefits of optimising Flow.
Photo credit Dirk Veltkamp: Thredbo river.