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Dealing With High Turnover

Jim left a great post on The Whiteboard way too long ago.

His problems seem to sum up to these statements:

Every valve is hand made one by one in batches through several processes.

…about a 10% turnover rate…Consequently we are always training new people…the supervisor needs to make sure the worker understands the job

My inclination is to somehow explain to the owners how their employee turnover rate is hurting their production and quality.

He titled his post  Hitting The Moving Train which seems appropriate on a number of levels.

Keeping in mind that I have not done my own "go and see" so I don’t have facts from the ground, only what is reported, a couple of immediate things come to mind. Other readers (especially the couple of dozen of you who never leave comments!), feel free to chime in here.

Short term: Stop the batching. Or, more specifically, flow the batches. The key point here is that just because you run batches doesn’t mean you can’t run one-piece-flow. (Pardon the double negative.)

What does that look like here? For each batch of valves, understand all of the assembly operations, set up an ad-hoc flow line that sequences all of the steps, then run them all through.

This does a couple of things, first and foremost, it gets them off the shop floor and shipped a hell of a lot quicker because now they are DONE. The downside is the supervisor needs to teach more than one person his particular sequence steps, but it eliminates all of the routing, traveler paperwork, tracking, prioritizing, and other stuff associated with having those 50 incomplete valves sitting out there. Scheduling becomes "Which jobs are we going to set up and assemble today?"

What about the parts? Don’t start assembling until you have all of the parts.

"Wait a minute, what about just-in-time?" One thing at a time. Let’s not launch a job until we have the capacity and capability of actually doing it for now.

Next, (Intermediate Term): is make the supervisor’s job a bit easier. I am assuming that, since he is training the workers, that he understands the tasks. But does he have formal training on how to break down work into steps and instruct in a way that someone remembers how to do it? Rather than reading a book about it, I would strongly suggest contacting the TWI Institute and getting, first, a handle on Job Instruction. This is, essentially, standard work on how to break down a job and teach someone to do it. The method has been taught unchanged since mid-1944. Not surprisingly, it is bread-and-butter at Toyota… and their material is pretty much verbatim from the 1944 material.. and it is the origin of standard work as we know it.

As jobs are broken down, the inherently critical tasks should emerge. These are the things which must be done a certain way or the thing just won’t go together (bad) or will go together, but won’t work (very, very bad). Those key points are where to start instituting mistake-proofing, successive checks, etc. This will start driving toward stomping out the quality issues.

For each quality issue that comes back to bite, take the time to really understand how it was even possible to make that mistake, and focus a problem solving effort on that key point to (1) incorporate it into the teaching and (2) mistake-proof and successive-check that particular attribute. Defects discovered in the plant are bad enough. Defects discovered by your customers are another story. Do what you must to keep the defects from escaping, then work on preventing them. Don’t cut out inspection just because it is muda.. unless you are 110% certain that your process is totally robust, and any problem that does occur will be caught and corrected immediately. Anyone who thinks Toyota "doesn’t do inspection" has never seen the last 60 or so positions on their assembly line… nor have they seen the checks that are continuously being made during assembly.

And finally – the turnover issue. A couple of things come to mind. First, with the right attitude and approach, the things described above can make this a lot more interesting place to work… especially if the Team Members are involved in finding the solutions to escaping quality issues, etc.

The same goes if supervisors continue to hone their leadership skills. Employee turnover is typically caused as much by the relationship with the first line supervisor and working conditions in general as it is by wages, etc. Southwest Airlines would not exist were that not true. Neither would a couple of other companies I can think of. Go look at "The 100 Best Places to Work" and see that relatively few of them cite "the highest pay and best benefits in the area." This isn’t to say that they do not offer fair, competitive compensation. But compensation, in general, is a relatively poor indicator of job satisfaction. Far more important is a daily demonstration that someone cares and is committed to the Team Member’s success.

If they really like TWI Job Instruction, they might be attracted to Job Relations – standard work for supervisors (first line leaders) for people issues. The TWI Institute has also just launched a new program called Job Safety. This isn’t one of the original TWI classes, but it was put together by experts I know and trust, and from what I have read, it follows the same reliable method format.

With all of that, perhaps the owners will be convinced that a competitive compensation program is a way to say "Thank you" to a great team that busts their butts to keep the customers happy.

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Queue Management

Although my experience of late has been with a particular “red tail” airline (soon, I hear to be part of the “triangle” airline..), this applies to any service counter.

I fly a lot. As such, I find myself in front of the Sea-Tac airline counter a lot. So much that I recognize most of the people working there. Not so much that they recognize me, but then, I haven’t made a pain of myself either.

Because I fly a lot, I have accumulated the privilege of checking in with the first and business class folks, even if I am in one of the cheap seats, rather than dealing with the little kiosks then waiting for my luggage tag to print out somewhere and hoping that, in the chaos, my luggage tag actually ends up on my luggage. (Another story.. but, take my advice – learn the airport code of where you are going and physically check before your bag goes down the conveyor!)

Anyway, twice in a row now I have been waiting patiently as the single person who is supposed to be providing personal service to the best customers is dealing for a dozen+ minutes trying to re-ticket someone who has had a problem.

I certainly sympathize with the people being re-ticketed, been there, done that, but the question I have is this: Do they really intend for all processing of their very best customers to grind to a halt when this happens?

I would imagine that, if you asked the question of an executive somewhere, the answer would be “Of course not.” But then again, I would also imagine that their corporate executives don’t have to wait in line – even with the very best customers – to check in to their flights, so they never actually experience what their customers do.

Here is how you keep things moving in an administrative process:

  • Set a takt time – the standard time that should be suffecient to process a normal transaction.
  • Keep track of actual time.
  • When actual time hits some alarm threshold – which you get to set, perhaps 110% of takt, then trigger some kind of andon. You have an exception. Processing is now not normal.
  • When this happens, in order to maintain throughput, the exception must be processed as an exception, and the routine should resume its normal pace.

This is how you beat Goldratt’s marching Boy Scouts problem. It is also how you demonstrate to your customers that you understand the very basics of managing queues.

Interesting sidebar – the customer surveys that are available on board the aircraft don’t ask anything about the experience prior to getting into your seat.

Sidebar #2: Today we pulled away from the gate, then went to a parking space and sat for half an hour with the engines shut down. The pilot explained that there was a weather system out there, and air traffic control was increasing spacing. Even though this information was (likely) known prior to boarding, the measurement of “on time” is “pull away from the gate” not “leave the ground” so in order to get an “on time” departure, they will load the plane as scheduled, then go sit on the tarmac rather than delaying the passenger load. A great example of “management by measurement” not getting exactly the intended results.

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Hospital Error – Heparin in the news again

Corpus Christi, Texas: Hospital error blamed for more infant overdoses – Yahoo! News

Key points of the story are:

  • 14 babies received heparin overdoses while in intensive care.
  • Two premature twins died, though it is unknown if this was the cause.

…pharmacy workers at Christus Spohn Hospital South made what the hospital called a "mixing error." The two workers went on voluntary leave.

The heparin, which was 100 times stronger than recommended, was given to 14 infants in the hospital’s neonatal intensive care unit on July 4.

As I have cited on previous posts, medication errors are one of the most common ways hospitals unintentionally injure or kill patients in their efforts to treat them.

I am reasonably certain that the two workers who went on "voluntary leave" (yeah, right) will absorb more than their share of blame as the system solves the problem by asking the "Five Who?" questions.

The article then goes on to cite a history of similar incidents in hospitals all over the country, though it is sometimes unclear in the writing if it is talking about this case or a previous one.

So what should happen?

First, determine where the actual root error occurred. If the manufacturer shipped mislabeled product, for example, then the problem happened THERE, not in the hospital. That isn’t to say we can’t do a better job in the hospital catching those things, but that isn’t the root cause in this case.

Any investigation should center on an assumption that the workers were operating in good faith, paying as much attention as can be expected of a normal human being, and were positive that they were doing this right. They did not want to injure or kill their customers.

Somehow, then, the process of mixing (either in the hospital or at the manufacturer) allows a 100x error to go by without SCREAMING for attention. And scream it must. Humans doing routine things in routine ways operate on an assumption that everything is routine until presented with overwhelmingly compelling evidence to the contrary.

Any hunt for "who did it" is motivated by extracting retribution rather than solving the problem. Once again, I refer the reader to the great work by Sidney Dekker on human error. We can all learn and apply it to everything that people need to do correctly – safety, quality, any other process or procedure.

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The Power of Vision

In the last post I brought up the advantage of having a long range plan vs. quarter-to-quarter thinking. I’d like to explore the concept a little more by way of an analogy.

Put yourself in the spring of 1961.
The USSR, by all demonstrative measures, is ahead of the USA in human space flight, and seems to be increasing that lead. On April 12, Yuri Gagarin orbited the Earth. On May 5, Alan Shepard went up, and came down on a 15 minute trajectory.

At the time, there were important geo-political reasons for establishing a public perception of technological leadership, and space exploration seemed to be the place to do it.

On May 25, President Kennedy made a public commitment to regain, and maintain, that leadership. He could have done it with corporate-speak:

This nation will become the world leader in space exploration.

But he didn’t. He said:

“I believe that this nation should commit itself, to achieving the goal, before this decade is out, of landing a man on the moon, and returning him safely to the Earth.”

Only the second statement is actionable. Only the second statement carries the possibility of failure. And only the second statement galvanizes action. In pursuing that goal with that degree of commitment, it achieved the first – to demonstrate world leadership in space exploration, not with words, but with action.

Of course the first statement carries no risk, since there is no actual performance requirement. Perhaps that is why corporate-speak carries that kind of language today. The shareholders can’t fire the board for not achieving something that was never articulated. The statement leaves open the capability to re-define the goal so that it matches what was actually done – something that happens all too often in today’s world.

So when one company says “We are going to sell more products next year.” and another says “We are on year 2 of our 10 year plan to be #1 in sales with 15% market share.” which one do you think can align actions of the people in the company?

To continue, when Kennedy made that speech:

  • The United States had a human space flight experience totaling 15 minutes.
  • The world had human space flight experience totaling under 2 hours.

Nobody actually knew, for sure, what the moon was made of.

To be sure, the visionaries within NASA had been thinking about sending someone to the moon for a long time. And in May, 1961 there were competing strategies in play at NASA for getting it done. They either involved an unimaginably HUGE rocket (think twice the size of the one that actually did it), or two or three Saturn class rockets to launch and assemble the lunar spacecraft in orbit. But when faced with a deadline of “before this decade is out,” the challenges were immense. Another strategy, considered a bit crackpot at the time, was named “lunar orbit rendezvous.” It involved a smaller (but still huge) rocket to send a throw-away lander on the moon along with a re-entry capsule. The capsule remains in lunar orbit, the lander lands, takes off, docks with the capsule. The crew transfers to the capsule, and they head home. As each piece fulfilled its intended purpose, it would be discarded.

It became increasingly clear, in the months that followed the speech, that neither of the “mainstream” approaches would get the job done with the time and resources available.

During the summer, consensus formed around the lunar orbit rendezvous scenario.
Key Point: Once they decided to pursue that option all further pursuit of the others was stopped. They committed. They did not have the resources to do otherwise.

In the corporate world, how often does that happen? Once a project, or even an idea, has any kind of resourcing or momentum behind it, stopping it is incredibly difficult. More things to do get added, but it seems that nothing gets taken off. This is equally true of “improvement schemes.” I recall a company that had active people in various improvement initiatives. There was the “Workout” group. There were the TQM people. There were the Six Sigma folks. (It took me a while to realize that the TQM and Sigma people considered each other competitors, where I had initially lumped them in together.) Then there were the “Lean guys” who had just come in. There were also pockets of Theory of Constraints believers, the agile guys, everyone saying they had “the answer.”

Back to NASA.

Landing a person on the moon by the end of the decade was a clearly articulated vision for accomplishing the high level mission of becoming “the world leader in space exploration.” That was the hoshin.

After a round of “catchball” a strategy was selected from the options available. Note that the catchball didn’t negotiate the goal. That was stated. The question was not whether to do it, but how to do it. The strategy was Lunar Orbit Rendezvous (LOR). They committed to the strategy and ceased all distracting activity to focus 100% of their energy on getting it done.

To make LOR work, they had to learn three things:

  1. Can people stay and work together in space for the 10-14 days required for the trip?
  2. Can people work outside the spacecraft in protective suits?
  3. Can one space vehicle locate and dock with another?

We do these things routinely today, but in 1961 nobody knew the answers.

These three things were the ONLY major objectives of Project Gemini.

The fourth big task was to develop the Saturn V as well as the facility to assemble and launch the rockets.

This goal is very sticky.
Any time one of the hundreds of thousands of Team Members working at NASA and in the contractors had a decision to make, the criteria was simple: “Will this action help the effort to put a man on the moon by the end of the decade?” If the answer was “No” then don’t do it. Great idea. But don’t do it. We don’t have the time or energy for the distraction.

The second thing it did, and this is even more important, is in the face of major setback – the Apollo 1 fire in January 1967, the organization was able to recover, regroup and stay on course because they had a sense of destiny. There was a clear goal, and they were working to meet it. It provided a compass that pointed the way when all other navigational references were blacked out.

Contrast this with the way NASA has been run during the Shuttle era. The massive amounts of energy involved in space travel mean this is, and is likely to remain, a risky business. But in the shuttle era, the tragedies seem to have created doubt and loss of confidence. There is no higher purpose other than space flight for its own sake. They are running it like a business.

“But we ARE a business! you may say. Sure you are. But the truly excellent businesses, those with the ability to adapt to changing situations quickly and recover are the ones whose sense of “self” transcends quarterly profits and financials. They are successful because they stand for something more.

A few years ago I remember standing outside in the Seattle area during an earthquake that lasted close to a minute. It was an unsettling experience because the ground itself was moving. Leadership’s job is largely providing a sense of solid ground so everyone else can operate without feeling off balance. This is done with very clear goals that are

  • Simple to understand.
  • Unexpected – they compel attention
  • Concrete – they can be seen, touched, felt.
  • Credible – they make sense in the larger context.
  • Emotional – they appeal to people’s feelings and
  • have Stories – they can be communicated in a way people can visualize.

Kitchen sink “KPI” lists don’t do this.

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Long Term Vision vs. Short Term Thinking

Gabriela asked some good questions in a comment on “More Short Term Thinking.”

One of her questions was about Toyota’s apparent lead in hybrid cars. Was it luck, or was it planned?
One answer to that question is in Liker’s book The Toyota Way when he discusses their product development system, specifically using the Prius as an example. They didn’t set out to build a hybrid car. Rather, the goal was to radically improve fuel economy. A lot of things were tried, and hybrid technology just emerged as the way to go. It was, without a doubt, a huge risk.

In 2005, the analysts were skeptical.
May 11, 2005, in The New York Times:
Profit Plunges at Toyota as It Vies for Market Share
From the article:

High gas prices have helped Toyota sell more small cars, like the Corolla sedan and the compact cars in the Scion line. And sales of the gas-sipping Prius hybrid sedan have more than doubled in recent months compared with last year. But analysts say the added sales have not helped Toyota’s bottom line as those vehicles tend to be less profitable than S.U.V.’s and big sedans.

“Even though Toyota’s market share is growing fantastically, Toyota’s profitability is actually in somewhat of a stagnant period,” said Takaki Nakanishi, an auto analyst at UBS Securities Japan.

and from another section:

But Toyota’s heavy investment outlays and its focus on smaller, less profitable vehicles raise questions about whether Toyota managers are more concerned with gaining market share than with increasing profits, said Mr. Nakanishi of UBS, who noted that Toyota’s profit margin had fallen for each of the last three quarters.

Clearly, the profit focused analysts were questioning the heavy R&D commitment to fuel economy when the big profits were clearly in the big SUVs and trucks.

Keep in mind, of course, that this “plunging profit” was still 2.5 billion dollars for the quarter at a time when GM and Ford were showing record sales and recording record losses.

OK – now fast forward
Today, all indicators are that Toyota’s profits are down, just like everyone else’s. But they aren’t recording losses, just earning less than they had. The demand for the Prius has outstripped their battery supplier’s ability to produce, at least in the short term, and they have been able to raise prices on it and other high-mileage models.

Honestly, my opinion is that they developed the hybrid more as a long term commitment to pushing “greener” transportation technology, and as a platform from which to develop other things. I don’t think anyone honestly saw the surge in fuel prices.

Nevertheless, I would contend that Toyota’s generally conservative approach and keeping their eye on the long term serves them better than trying to please the analysts. What we have here is simple: They bucked what the analysts were saying. GM did exactly what they were saying. GM put all of their proverbial eggs into the high-profit big trucks and SUV’s, and they don’t really have a Plan B right now.

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More Short Term Thinking

When pickup sales dived, automakers changed plans – Yahoo News

A couple of interesting things about this article. The first is that there is no mention of the other major player in this market – Toyota. Maybe that is because, inexplicably, they manage to continue to make a profit, and are executing their plans.

Sure, their big truck sales have tanked. Last week a friend of mine went shopping for a mid-SUV and got such a good deal on a full size Tundra that he bought that instead. The dealers are looking to unload them. But the same dealer told him there is a 10 year plan to be #1 in trucks with a 15% market share. As an interesting sidebar, this long-time loyal Ford customer (he has an F-250) said “As soon as they make this in a diesel, I’ll buy it.”

But that isn’t the story here. The story is the difference between quarter-by-quarter thinking which catches leaders flat footed vs. having a 10 year plan. With a 10 year planning horizon, these are things which can be adjusted for. With a 3-12 month planning horizon, these are major disruptions that require changing everything.

The analogy – one strategy is looking at climate, and knowing that there will be storms, the other is looking only at tomorrow’s forecast and trying to cope.

Oh – and just to be sure everyone understands, the Toyota Tundra is not “imported” in spite of what the marketing people in Detroit want you to think.

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Who’s Your Coach?

In a few weeks, the best athletes in the world will assemble in Beijing for the 2008 Summer Olympics. Just being there means these individuals are performing at a level that the rest of us can only watch and appreciate.

Each of these world-class top performers has a coach.

Ironically, their coaches are not capable of performing at the same level as the athletes themselves. If they could, they would be competing, not coaching.

To be sure, some of the coaches are former world-class athletes. But most of them are “just” world class coaches. They have the skill to watch the athlete perform, to compare what they observe against a standard of perfection and to see very subtle things which might make a difference in the athlete’s performance.

World class athletes all know they only perform at a world class level because they have world class coaches. It is the coach who takes them from “very good” to “Olympic contender.”

A coaches credibility is based on his ability to observe and teach. His success is built on the success of the people he coaches.

For business leaders:
Do you believe you can perform at a world-class level on your own?
Is your insight into your own performance good enough to pick up nuance and detail that could make a huge difference?
Do you believe that, because you have more experience, that no one below your level could teach you anything?
Do you believe that, because you have been successful, only someone who has had more personal success could teach you anything?
Do you measure “competence” by hierarchy level?

Who is your coach?

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Beyond the Value Stream

As I mentioned a long time ago, Art Smalley’s web site, http://artoflean.com, is an excellent resource for learning. His thinking is cutting edge – he has kept up in the field.

I am mentioning it here because he has a couple of really good resources available.

Learning From Toyota is a presentation that challenges some of the conventional thinking about what “lean” is… or better, contrasts the current “lean industry” from Toyota’s thinking and approach.

The Eight Basic Questions of TPS is a longer article on the same topic.

In both cases, Art emphasizes that the classic approach of mapping value streams and implementing flow cover only a very small fraction of what makes up the system. Indeed, in my opinion, those steps will uncover (e.g. confront) many more previously buried problems than they resolve. Yet so many practitioners, many of them even taking your money as consultants, never go beyond these basic steps.

Look at the “classic” questions and Art’s questions, and see for yourself how different the path is.

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Belts, Jonahs and Senseis

Jim’s comment in the last post on “Lean Certification” rhetorically asks “…why are there Six Sigma Black Belts?”

Interesting question. It brings up one of the very fundamental differences between the Toyota Production System and a couple of other popular disciplines, notably Six Sigma and Theory of Constraints. Both of these other disciplines have certified practitioners.

Six Sigma certifies “Black Belts” plus five other flavors under a program defined by the ASQ.

Theory of Constraints has “Jonahs” which are certified by the Goldratt Institute.

I am emphatically not going to get into a discussion about the relative merits of these systems. They are all based on the same fundamental principles, and will all deliver exactly the same results if they are applied consistently and universally. Many of the debates come from people trying to compare sub-sets of understanding. Many of those debates are fueled by the fact that people have considerable time and possibly money invested in “the way.”

But one key difference between the Toyota Production System and the other two is the origin of knowledge about them.

Theory of Constraints was deliberately designed.
Six Sigma was deliberately designed.
The Toyota Production System organically evolved.

That is not to say that TOC and Six Sigma are not evolving. They must evolve if they are to deal with problems that were not anticipated by their original designs. But those seeking to understand them go to the official repository, and learn the official, latest, version. There is a definition of “complete knowledge.”

Contrast this with Toyota’s system. It was not deliberately designed, it evolved. Certainly there are people with very deep understanding, and certainly if you visit a Toyota operation there is a system in place.

However those seeking to understand it must learn by study and research. Academics study Toyota and application of their system, trying to figure out how and why it works. They ask questions like “What is different about Toyota’s application and everyone else’s?”

In order to answer those questions they must make observations, develop hypotheses, make predictions and test them.

As a result, our understanding of why the Toyota Production System performs as it does has evolved over the years. There is no standard for complete understanding, there is only “keeping up in your field.”

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“Certifications” – Buying Credibility?

There has been an uptick in chatter about “lean certifications” in various forums lately. For anyone considering getting some kind of certification, I’d like to pose some things to think about, especially before you pay a lot of money to someone to “certify you.”

There is no standard definition of what “lean” is. Anyone claiming to certify you in “lean” is simply certifying to their own standard.

Toyota does not “certify” people. They mentor, they train, but do not “certify.”

Anyone making a big deal over calling themselves a “sensei” probably isn’t. There are a few exceptions, mostly people who spent 15+ years working directly for Taiichi Ohno, or perhaps some next generation people. The term “sensei” in those cases is one of respect, not a title or defined level of understanding.

There is no test you pass to become a “sensei.”

It is, in my opinion, totally impossible to demonstrate the necessary knowledge and skills with any kind of written exam. It is much more about how well someone interacts with people to teach and guide them through solving problems than it is knowing how to calculate takt time of a feeder line.

How good a certification looks on a resume depends on who is reading it.
I suppose there are hiring managers out there who buy this. I have certainly seen more than a few “Help?” posts by people hired for expertise who don’t know how to break down a value stream and figure out where to put a pacemaker.

When I am reviewing resumes of someone claiming lean expertise, I look at the whole story. A “certification” means you have gotten some formal education, but doesn’t tell me you can actually put any of it to use. I will use that certification as a starting point for questions. My questions try to draw out:

How did you learn this stuff? Are you still learning? Or do you think you already know it all?
I will try to get you to tell me some stories about how you have taught people, and what you learned in the process.
I will ask questions trying to draw out your understanding of jidoka, andon and problem solving as critical components to the management system. What I am looking for here is where you are on a continuum of understanding from “implement the tools” to “creating a deep culture.”

A certification, by itself, does not add to or detract from your credibility – unless you come in believing that “being certified” automatically means “being qualified.” If that is the case, you probably didn’t make it in the door, and if you did, my bullshimeter is likely to peg about 90 seconds into the interview. I’ll keep at it, because sometimes people don’t know what they know and I give the benefit of the doubt for a long time, but if a “certification” is all there is, then there really isn’t much.

On the other hand, if you are looking for your own professional development, and look at a program for what it is: An academic education, and possibly an opportunity to establish professional network, then go for it. Just don’t go in believing that “being certified” means a whole lot else.