A key theme woven throughout Spear’s work is the world today is orders of magnitude more complex than it was even 10 or 15 years ago. Where, in the past, it was feasible for a single person or small group to oversee every aspect of a system, today that simply isn’t possible except in trivial cases. Where, in 1965 it was possible for one person to understand every detail of how an automobile worked, today it is not.

My interpretation goes something like this:

Systems are composed of nodes, each acting on inputs and triggering outputs. In the past, most systems were largely linear. The output of upstream nodes was the input of those immediately downstream. You can see this in the Ford Mustang example that Spear discusses in the webinar.

Today nodes are far more interconnected. Cause and effect is not clear. There are feed-back and feed-forward connections and loop-backs. Interactions between processes impact the results as much as the processes themselves.

Traditional management still tries to manage what is inside the nodes. Performance, and problems, come from the interconnections between nodes more than from within them.

The other key point is that traditional management seeks to first define, then develop a system with the goal of eventually reaching a steady state. Today, though, the steady state simply does not exist.

Product development cycles are quickening. Before one product is stable, the next one is launched. There is no plateau anymore in most industries.

From my notes – “The right answer is not the answer for very long. It changes continuously.”

Therefore, it is vital that organizations be able to handle rapid shifts quickly.

With that, here is the recorded webinar.

A couple of things struck me as I participated in this.

Acknowledging that Spear has a bias here (as do I), the fact that Toyota’s inherent structure and management system is set up to deal with the world this way is probably one of the greatest advantages ever created by happenstance.

I say that because I don’t believe Toyota ever set out to design a system to manage complexity. It just emerged from necessity.

We have an advantage of being able to study it and try to grasp how it works, but we won’t be able to replicate it by decomposing its pieces and putting it back together.

Like all complex systems, this one works because of the connections, and those connections are ever changing and adapting. You can’t take a snapshot and say “this is it” any more than you can create a static neural net and say you have a brain.

Local Capability

One thing that emerges as critical is developing a local capability for this creative experimentation.

I think, what Spear calls “creative experimentation” is not that different from what Rother calls the “ improvement kata.” Rother brings more structure to the process, but they are describing essentially the same thing.

Why is local capability critical? Processes today are too complex to have a single point of influence. One small team cannot see the entire picture. Neither can that small team go from node to node and fix everything. (This is the model that is used in operations that have dedicated staff improvement specialists, and this is why improvements plateau.)

The only way to respond as quickly as change is happening is to have the response system embedded throughout the network.

How do you develop local capability? That is the crux of the problem in most organizations. I was in an online coaching session on Tuesday discussing a similar problem. But, in reality, you develop the capability the way you develop any skill: practice. And this brings us back to the key point in Kata.

Practice goes no good unless you are striving against an ideal standard. It is, therefore, crucial to have a standardized problem solving approach that people are trying to master.

To be clear, after they have mastered it, they earn a license to push the boundaries a bit. But I am referring to true mastery here, not simple proficiency. My advice is  to focus on establishing the standard. That is difficult enough.

An Example: Decoding Mary – Find the Bright Spots

Spear’s story of “Decoding Mary” where the re-admission rate of patients to a hospital directly correlated with the particular nurse handled their transfer reminded me of Heath & Heath’s stories from Switch. One of the nine levers for change that they cite is “ find the bright spots.”

In this case the creative experimentation was the process of trying to figure out exactly what Mary did differently so it could be codified and replicated for a more consistent result independent of who did it.

The key, in both of these cases, is to find success and study it, trying to capture what is different – and capture it in a way that can be easily replicated. That is exactly what happened here.

A lot of organizations do this backwards. They study what (or who) is not performing to determine what is wrong.

Sometimes it is far easier to try to extract the essence what works. Where are your bright spots for superb quality? Does one shift, or one crew, perform better than the others? Do you even know? It took some real digging to reveal that “Mary” was even the correlating factor here.

Continuous Improvement Means Continuous Change

Since “continuous improvement” really means “continuously improving the capability of your people,” now perhaps we have “to do what.” I have said (and still say) that the “what” is problem solving.

What you get for that, though, is a deep capability to deal with accelerating change at an accelerating rate without losing your orientation or balance.

It is the means to allow the pieces of the organization to continue to operate in harmony while everything is changing. That brings us back to another dilemma: What is the ROI on learning to become very, very good? You don’t know what the future is going to throw at you, only that you need the capability to deal with it at an ever quicker pace.

But none of this works unless you make a concerted effort to get good at it.

Here is the original link to the MIT page with the video, and a download link for PDFs of the slides:

http://sdm.mit.edu/news/news_articles/webinar_010912/webinar-spear-complex-operating-systems.html

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

Steve Spear on Creative Experimentation

When talking to her last night, she mentioned she would like to network with other people who are trying to apply these concepts in non-traditional arenas.

In response, I created a new forum on The Lean Thinker’s Community. It is called “Outside the Factory” and is intended as a gathering place for practitioners and others who want to discuss how to apply TPS in non-manufacturing environments.

I would love to see some synergy develop there, and intend to fully participate as well. Stop in and say “Hello.”

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

New Forum Area: Outside the Factory

The more quickly something can be built or mocked up, the more quickly it can be tried and tested, and the more quickly we learn what improvements can be made.

We are seeing the beginning of a revolution in fabrication technology as 3D printing starts to move out of high-end prototyping shops and into the mainstream.

This (very entertaining) video tells about an open source(!) 3D printer design that can be had for about a little over a grand. (USD$1250)  ( makerbot.com)

Open source means that you can grab the technology and scale it if you want to.

The step from one-off prototyping to full mass-customization is a small one. It is just a matter of time. The ultimate die change is none at all.

So – rather than looking at the limitations of this technology, look at the possibilities.

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

3D Printing as a Kaizen Tool

The post, Is the MRP Algorithm Fatally Flawed, gets a lot of search hits because of the title. The post discusses an obscure PhD dissertation that asserts that the underlying logic of MRP systems share defining characteristics with a debunked model for computational intelligence. The researcher makes a compelling case.

The comment, from Indonesia, said “please send for example”

Assuming I did not misinterpret the comment, I believe the writer was asking for examples of what does not work.

Here is what got me thinking.

In order to refute Dr. Johnston’s thesis, we have to find a non-trivial case where an unaltered application or the MRP algorithm works as intended. Just one. Then we would have to carefully understand that instance to determine if it was truly a case where MRP is working as intended, or something else.

Ironically, the working examples I have seen have gotten there by combining work centers into value streams with pull and systematically turning off the inventory netting and detailed scheduling functions of their MRP. In other words, they are migrating the system toward something that directly connects supplying and consuming processes with each other. These systems are far more able to respond to the small fluctuations that trip up the MRP logic. Those examples, however, confirm, rather than refute, what Dr. Johnston is saying.

Considering that the vast majority of factories are still trying to make the MRP algorithm work, does anyone have an example of where discrete manufacturing order scheduling of each operation actually gives a workable production plan that can be followed without hot lists and other forms of outside-the-system intervention? Just curious now.

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

Evidence of Success with MRP?

One of the features of the GPS is that the voice turn-by-turn can be set in multiple languages. I (reasonably) set it to “American English.”

I have got to say that I have not heard such creative mangling of German street names since I was stationed over here in the Army.

Here is the irony: This little device, by the nature of its basic function knows exactly where it is. How about, people, programming it to speak the directions in English, but the street names in the local language.

Perhaps it would help if the designers actually tried to use the product in different countries.

This is a safety issue because I should not be having to suppress so much amusement when I am trying to navigate German traffic.  :)

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

Voice Interface Fail

I have noticed that, generally, when people describe the culture they are trying to create they do so in terms of what people do.

• Leaders support the changes.
• Team members take initiative.
• People “see waste and eliminate it.”
• People engage in problem solving.
• Team members are fully engaged in improving their own work.

All of these things are true, but they miss the mark.

They are all the actions of individuals, sometimes interacting with a process.

But what is “culture?”

I would contend that “culture” is composed of the norms and rituals of how people interact with each other.

For example, prolonged direct eye contact (“staring”) is rude in some cultures, but not in others. Cultural norms define how subordinates interact with their bosses, where people sit, whether they bow or shake hands when they meet. Cultural norms define how problems are brought up – by whom and to whom – or if they are brought up at all. In some cultures, “losing face” is a disaster, in others, openly blunt honesty is highly prized.

Within a company, of course, there are additional layers. In addition to the social norms of the society at large, there are rituals and norms about how people interact at work.

Therefore, I would contend that “culture” is something which emerges from the pattern of interactions between people.

Why is it important to understand this?

Because if we are trying to change the culture, we should not be focusing so much on individual behaviors as we are coaching those interactions.

In “ Toyota Kata,” Mike Rother describes structured, practiced behaviors that are the building blocks of a culture of continuous improvement. Like kata in martial arts, more sophisticated moves are built up from these fundamentals. But if you really look at it, the behaviors he describes are actually interactions.

What this means is that if we are trying to coach toward change, we need to be simultaneously coaching at least two people at once. In each of these interactions there is a request or stimulus, and there is a response. Each has a specifically defined “way to do it.”

Stepping back a bit, if I look at Steve Spear’s “rules-in-use” from “ Decoding the DNA of the Toyota Production System” I see the same patterns. The rules actually define structure for how people and processes are interacting with one another in a way that drives continuous improvement.

Just a thought for the day.

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

Where Is “Culture” Created?

NWA (soon to be Delta), on the other hand, is somewhat less transparent. Thus, I had to call the “Elite Reservations” number, and talk to a human being to confirm the 24 hour cancellation policy. Of course I could have gotten this from their web site, I suppose. Maybe it is somewhere in here. Could this be any less clear if had been deliberately obfuscated? What purpose is served by serving up confusing information in the most difficult-as-possible to read format? How does this help their business? Or do they feel they have to trick their customers into buying the product?

I often wonder about things like this. Some companies just seem to get a thrill out of making it difficult for their customers to do business with them.

Penalties

CHANGES ANY TIME CHARGE USD 150.00 FOR REISSUE. NOTE – DOMESTIC TICKETS ARE VALID FOR ONE YEAR FROM DATE OF ORIGINAL PURCHASE. THE TICKET MUST BE EXCHANGED AND THE NEW ORIGINATION DATE MUST BE WITHIN ONE YEAR OF THE ORIGINAL PURCHASE DATE DESIGNATED ON THE ORIGINAL TICKET. . TICKETS MUST BE REISSUED WHEN ANY VOLUNTARY CHANGE IS MADE. THE NONREFUNDABLE VALUE SHOULD BE PLACED IN THE ENDORSEMENT BOX ON THE REISSUE TICKET . IF MULTIPLE CHANGES ARE MADE AT THE SAME TIME ONLY ONE CHANGE FEE WILL APPLY. IF FARES WITH DIFFERENT CHANGE FEES ARE COMBINED ON THE SAME TICKET THE HIGHEST FEE OF ALL THE CHANGED FARE COMPONENTS WILL APPLY. . GDPR – GUARANTEED DAY OF PURCHASE RULE DECREASE IN FARE AFTER TICKET PURCHASE. . IF A DECREASE OCCURS AFTER A TICKET IS PURCHASED AND PRIOR TO ANY TRAVEL ON THE TICKET OR A NEW FARE FOR WHICH THE PASSENGER QUALIFIES BECOMES EFFECTIVE THE DIFFERENCE IN FARE MAY BE CREDITED. FOR COMPLETE DETAILS SEE PARAGRAPH VI BELOW. . I. PRIOR TO DEPARTURE A. 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CONTINUING/RETURN FLIGHTS MAY BE CHANGED TO A LATER DATE FOR THE CHANGE FEE WITHOUT REGARD TO THE ADVANCE RSVN REQUIREMENTS PROVIDED THE CHANGE MEETS ALL OTHER FARE RULES. . CONTINUING/RETURN FLIGHTS MAY BE CHANGED TO AN EARLIER DATE FOR THE CHANGE FEE PROVIDED THE CHANGE MEETS ALL FARE RULES. THE ORIGINAL TICKET ISSUE DATE MAY BE USED TO MEASURE THE ADVANCE PURCHASE REQUIREMENT. . B. IF A CHANGE IS MADE TO A BLACKOUT DATE OR THE NEW DATE VIOLATES THE DAY/TIME/ROUTING /TIME/FLIGHT/SEASONALITY/TRAVEL DATES OR BOOKING CODE REQUIREMENTS TRY THE FOLLOWING OPTIONS. . B.1 THE CONTINUING/RETURN PORTION SHOULD BE RE-PRICED WITH AN APPLICABLE FARE IN EFFECT ON THE DATE THE ORIGINAL TICKET WAS ISSUED. ANY DIFFERENCE IN FARES PLUS THE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE NO RESIDUAL VALUE WILL APPLY AND THE FULL CHANGE FEE SHOULD BE COLLECTED. . B.2 REPRICE THE CONTINUING/RETURN PORTION WITH A CURRENT FARE. ANY DIFFERENCE IN FARES PLUS THE APPLICABLE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE THE DIFFERENCE IN FARES LESS THE CHANGE FEE MAY BE RETURNED IN THE FORM OF A NONREFUNDABLE MCO. THE MCO MUST BE EXCHANGED FOR WITHIN ONE YEAR OF THE MCO ISSUE DATE. . B.3 IF THE RESULTS OF B.1 – B.2 ABOVE RESULT IN MULTIPLE PRICING SOLUTIONS THE LOWEST SOLUTION WOULD APPLY. . V. AFTER DEPARTURE – CHANGES TO CONTINUING/ RETURN FLIGHT WHEN THERE IS A CHANGE TO ORIGIN/DESTINATION OR STOPOVERS. . A. REPRICE THE CONTINUING/RETURN PORTION WITH A CURRENT FARE. ANY DIFFERENCE IN FARES PLUS THE APPLICABLE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE THE DIFFERENCE IN FARES LESS THE CHANGE FEE MAY BE RETURNED IN THE FORM OF A NONREFUNDABLE MCO. THE MCO MUST BE EXCHANGED WITHIN ONE YEAR OF THE MCO ISSUE DATE. . B. IF THE CHANGE IS TO A CO-TERMINAL THE DIFFERENCE BETWEEN THE APPLICABLE FARES MUST BE COLLECTED IN ADDITION TO THE CHANGE FEE. 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A WHOLLY UNUSED NONRFND TKT MAY BE APPLIED TOWARDS THE PURCHASE OF A NW/KL DOMESTIC/ INTERNATIONAL FARE/TICKET. -PROVIDED TRAVEL ON THE NEW TICKET ORIGINATES WITHIN 1 YEAR OF THE ORIGINAL PURCHASE DATE AND THE TICKET IS EXCHANGED NO LATER THEN 365 DAYS AFTER THE ORIGINAL TICKET ISSUE DATE. . -ANY NONREFUNDABLE VALUE IS CARRIED FOWARD IN ALL SUBSEQUENT REISSUES. THE NONREFUNDABLE VALUE SHOULD BE PLACED IN THE ENDORSEMENT BOX ON THE REISSUE TICKET. . -LIMIT OF ONE TKT MAY BE APPLIED TOWARDS A NEW TICKET. -APPLICABLE CHANGE FEE APPLIES. . C. TICKET VALIDITY AND CANCELLATION FEE . 1. TICKETS WILL BECOME INVALID/EXPIRED 366 DAYS AFTER THE DATE OF THE FIRST UNUSED COUPON AND MAY NOT BE USED OR EXCHANGED FOR TRANSPORTATION AFTER THAT TIME AND DATE. . 2. ONCE THE TICKET BECOMES INVALID – THE FARE AND RELATED TAXES AND FEES WILL BE REFUNDED. SIMULTANEOUSLY WITH THE REFUND NW WILL IMPOSE A CANCELLATION FEE EQUAL TO 100 PERCENT OF ALL AMOUNTS COLLECTED BY NW FOR ISSUANCE OF THE TICKET – INCLUDING – THE FARE AND APPLICABLE TAXES/FEES AND ANY OTHER CHARGES. – SEE GENERAL TARIFF RULE 105 – . D. EXCEPTION TO FEE COLLECTION. . IN THE EVENT OF THE DEATH OF THE PSGR A REFUND IS PERMITTED. THE CHANGE FEE WILL BE WAIVED.

This, of course, is the example of communications they let the customers actually see on their “award winning web site.” Therefore, I have to assume this is communication at its very best. I wonder what the pilots and crew have to deal with – and how much it distracts them from getting the job done safely and efficiently.

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

Clarity for the Customer

The joint venture was developed to have American workers learn Toyota’s production methods, which were much leaner and more efficient. [emphasis added]

Maybe that was GM’s intention – to “fix” the workforce. This fits in with the judgment I developed about GM’s leadership over the last decade, and especially the last year – that they see their problems as something other than them.

Toyota’s intention in the plant was to determine the best way to teach Toyota’s methods to the leadership. The test is to see how well the leadership teaches the line workers. To that end, Toyota pretty much succeeded. They learned how to open a plant outside of Japan.

Who didn’t learn as much as this opportunity presented them?

Aside from GM’s top leadership (a topic which has been pretty well dissected here and elsewhere on the web and in print), I think the other big missed opportunity here was for the UAW.  What if their stewards and business managers were experts in coaching and continuous improvement? Think about the possibilities for them.

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

NUMMI (again)

Part of the aftermath of GM’s implosion is that Toyota is left holding the bag on the NUMMI joint venture. The plant primarily built vehicles for GM (the Pontiac Vibe), but was essentially managed by Toyota as a Toyota operation. A lot has been written about GM’s failure to truly learn from this opportunity, but that is now in the past.

What is in the present, and the future, is the fate of the plant itself. Toyota does not need this factory. And if Toyota were being run the way U.S. automakers are, there wouldn’t have been a decision. As soon as GM backed out, the layoff notices would have been issued, and the gates locked. Period. Politically, that probably would have been the best move for Toyota. Let GM make the decision, and reluctantly go along. They had a great opportunity to do that last week when the press was preoccupied with the death of a high-profile celebrity.

But they didn’t do that. Enough time has passed that the plant is now 100% associated with Toyota. (Remember, in our 24/7 news cycle, a week or two is an eternity.)

So now they are stuck. The fate of this plant is Toyota’s and Toyota’s alone.

Here is a thought.

GM is not the only auto manufacturer with something to learn from Toyota, and almost anyone could (if they set about doing it right) learn more than GM ever did. Maybe someone can step up and seize what is, in my mind, a golden opportunity.

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

Toyota’s Dilemma over NUMMI

In physics, a black hole is a singularity – a point where time and space are collapsed to a zero-dimensional point. Any singularity in space has, at some distance, an “event horizon.” This is a point of no return. Once anything crosses the event horizon, it cannot escape. Not even light. Everything will end up being sucked into the singularity… eventually. Thus, no information about what is inside the event horizon can ever be known outside it. Because of this information blackout, the term “singularity” has a meaning in general language to define a point in time through which the past cannot be extrapolated to a prediction of the future. Such is Monday, June 1, 2009 for General Motors.

I don’t think there was any doubt to anyone some months ago (except, perhaps, Rick Wagoner and the board of directors) that Monday’s events were inevitable – the “event horizon” had been crossed.

The question is: When was the point when there is nothing they could have done?

I am asking because I look at Jim Collins’ model of collapse, and it is clear to me that GM followed the model, but it took decades, not just a few years.

This article in Business Week Online, How Rick Wagoner Lost GM is pretty damming of several CEOs, back to Roger Smith, and perhaps further. But Rick Wagoner is particularly called out. In the end:

Wagoner continually went before the American public and Congress unprepared and angry, demanding taxpayer support without ever being able to articulate why he wanted $25 billion, how the company would use the money, and what GM’s vision was for a future viable enterprise.

But the last few months’ theatrics aside, up to what point could they have pulled it out?

While our “lean” community has been busy comparing GM to Toyota, I want to suggest a different, more comparable, model: Ford.

Both companies dealt with exactly the same political landscape, the same union issues, the same cost structures. Their range of products was comparable, and by and large, over the years, they made many of the same mistakes.

But right now, Ford continues. Sure, they are hurting, but they don’t seem to be mortally wounded.  When did Ford say “Hey! This isn’t working anymore” or more precisely “Hey! If this continues, we are going to be out of business!” In other words, when did Ford get off the Denial track? And more importantly, are they beginning to develop a fact-based learning culture? It’s too early to tell, to be sure, how all of this is going to play out.

However, I predict that it will be no easier for Barak Obama to get-in-get-it-done-and-get-out of GM than it was for George W. Bush to do so in Iraq. Both jumped based on rationalized emotional justifications, with inadequate resources and no clear exit strategy . (And there, to be sure, the parallels end.)

The political quagmire is only just beginning. Whether anyone likes it or not, because “the people” are majority shareholders, the U.S. Congress is the de-facto board of directors. No matter what the President wishes about maintaining “hands off” management, that isn’t going to happen once the corporate constituents realize they can use all of their lobbying tools to influence corporate decisions. I hope I’m wrong about all of that.

Fed from: The Lean Thinker. Copyright © 2012, Mark Rosenthal

GM’s Singularity