One-by-one, As Requested, When Requested

The world continues to move toward meeting customer’s true demand of one of something, when they want it, where they want it.

3D printing is one area where we can see the beginnings of a disruptive technology curve.

Laser printing has been around even longer.

Books are an area where the traditional mass-printing model is under assault from a number of directions.

Now On Demand Books is offering their Espresso Book Machine, fully automated production technology for a copy of a traditional paperback book. Check out the video.

Yes, the costs are higher for now, but in a niche market (which is where disruptive technology matures), that is less of an issue.

The trend is inevitable – it isn’t how fast you can go, it is how slow can you go while preserving the economy of scale. That is the challenge.

As Requested; When Requested; Where Requested

Amazon.com’s competitive advantage over regular retail has typically been around good prices with the thing you are looking for being available. In essence, they are an online, extreme extension of the big box store.

The downside has been that if you want it now, you have to either pay extra for expedited shipping, or get it somewhere else.

Meanwhile, retailers have been attacking Amazon’s price advantage by working hard to put them in a position where they have to collect local sales taxes, leading to a number of court cases plus Amazon actually pulling their presence OUT of states to avoid having economic nexus.

Now Amazon has reversed this trend, and is starting to build very local distribution centers, promising, not next day delivery, but same day delivery – as in order it today, get it today.

The analysts out there are all saying this is the “death of retail” – assuming, I suppose, that although Amazon can change its strategy, brick-and-mortar retailers are, somehow, frozen in theirs. “Death of retail” really means “We analysts, while certainly not admitting we never saw this coming, can’t think of how we would respond.”

Ultimately someone will figure it out.

But I digress.

The point is this:

Short lead times AND high variety of offering AND good prices are what customers want, and that is what anyone in the business of fulfilling customer needs should be striving for.

The ultimate transaction is “I’d like one of these.” followed by “Here you go.”

Just because you can’t figure it out doesn’t mean others aren’t trying to.

Where does this ultimately lead?

This video speculates what would will happen when Amazon figures out how to deliver what you order the day before you order it. Enjoy. Smile

 

The Process of Caring

Vance left a really good comment on the recent Travel Tales post. He said, in part:

Having worked in the airline business, it’s really a matter of having employees that CARE (most due to their own pride, not by management) We many times had weather and mis-connected passengers to deal with. It only took a few minutes of extra time to send a message to the destination station and let them know what to expect or which passenger was going to be disappointed to not get their bag. Today’s situation is exacerbated by under-staffing, stressed employees, passengers with sometimes unrealistic expectations, checked bag fees, etc it’s ugly and very little relief in sight.

He brings up some really interesting points. In most of the airline industry, like most industry in general, “caring” is thought of as something the people have to do.

“The employees don’t care” or even “management doesn’t care” are pretty common statements.

Let’s turn it around.

How was the original process designed?

Continuing on the theme from the original post, I would speculate that most players in the airline industry see themselves as providing transportation to people and their stuff.

The process design is, logically, going to center on what things have to happen to get people and their stuff from their point of entry into the system through to their point of exit at baggage claim. (the fact that the trip doesn’t actually end at baggage claim is another topic – one which has been discussed by Jim Womack in Lean Thinking, among other places.)

In traditional thinking, improvements in that process will involve making those things happen cheaper, usually by doing less.

What if, though, we start with a different question:

“What experience do we want the customer to have?”

Describe, first and foremost, the things the customer has to do to get herself and her stuff from the point of departure to (sadly) baggage claim. (Bonus points if beyond, but let’s not stretch the fantasy too far.)

Even better, act it out. Simulate it. Try it on. Work out the kinks, from the customer’s perspective.

Next, design the interface between your customer and your process. What does the customer-touching part of your process have to look like to deliver that experience?

(I often wonder if airline executives ever see their own web reservation systems.)

Now, only when you know what the “on stage” part of your process looks like can you design the rest of it – the back stage parts that make it all happen.

Economics come into play at this last stage. This is where you have to get creative. If the solution is too expensive, work on the back-stage part to make it cleaner and more streamlined. The customer facing part of the process is the target condition. Your problem solving works to deliver that experience in continuously better ways.

What does this have to do with “caring?”

Remember, this is from the customer’s perspective. When we say “our employees care” do we not really mean “our customer’s feel cared-about?” Since we started with the customer’s experience, if that is what is desired, it was built into the process specification from the beginning.

Once there is a process that we predict will result in customer’s feeling that people care about them, then your market surveys make sense. You are not soliciting complaints about things to fix, you are validating (or refuting) your design assumptions. Every bit of customer feedback will be a learning experience.

Don’t forget Murphy.

In a complex business like airline travel, sometimes luggage doesn’t get to baggage claim at the same time as the customer. It happens. But this is the time to really apply the above process design. What do you want the customer to experience when things go wrong?

Ironically, in the customer satisfaction world, a spectacular and surprising recovery actually generates more loyalty than flawless delivery of service. This is the moment for your company to shine.

Whatever happens, though, make sure it is something you would do on purpose rather than relying on chance or a random team member’s disposition. Build “caring” into the process itself, and you will embed it into the culture.

Travel Tales

One of the advantages of having a business performance blog is I have a ready place to rant complain share my customer experiences with the air travel industry.

It all started Monday. I had a flight from Seattle to Raleigh-Durham NC, connecting in Newark. It was only a two day trip, so I was traveling pretty light.

As we were boarding the 737 the bins filled up fast and everyone forward of about Row 15 was required to check their bags all the way to the destination. “We apologize for the inconvenience” (after pointing out how it was the customers’ fault because they had offered a chance for people to volunteer to check their bags, and not enough people did.)

OK, I checked my bag through to RDU. (Forshadowing)

Once on board, the pilot let us know that there were air traffic control delays enroute, but we were going to pull away from the gate anyway, and park on the tarmac until cleared. (This, by the way, lets them get credit for an on-time departure.)

That wasn’t too bad, only about 10 minutes. “We apologize for the delay.”

As we got to about the Great Lakes, the plane banks left. And banks. And banks. The shadow is gliding over the engine cowling, and returns to its previous position, the plane levels off. Yup, we just did what they call a “racetrack.”

Then we do another.

And another.

And some more.

We land at precisely the time my connecting flight is scheduled to depart. Not gonna make it. “There will be an agent waiting at the gate. We apologize for the inconvenience.”

Well – maybe everything is delayed, and I can still make the connecting flight. It wouldn’t be the first time I have lucked out that way.

Nope. Well, not quite. It hasn’t left because the plane never left RDU. Flight cancelled. “Head down to Customer Service at Gate 105.”

Wait in line, pretty surprised actually. Rebooked on a 7:32 flight, delayed to 9:51. Ugh. Got a few hours in the airport. “What about my luggage?” “It will be on the plane with you,” I was assured. More foreshadowing.

9:51 comes and goes. No plane. We’re told the inbound plane is enroute. OK.

I am having a nice chat with the pilot for our eventual flight to RDU. He is actually quite interested in the TPS. “Can you do this with airlines?” he asks, half seriously. He asks for a card. I know enough about aviation to have a very articulate conversation with a pilot about planes, flying, and the business, so that was nice. “No, I am not a pilot,” I answer his question,  “but working at Boeing Flight Test for five years, you learn a thing or two about how airplanes work. I know what all the noises are.” He smiles.

Woo hoo. A plane shows up. Bombardier –8 Q400. We board.

And wait.

And wait.

11:15pm The (other) pilot gets on the P.A. and explains that they are overweight and working on how to handle it. He goes on to explain that due to the fog earlier in RDU, they have extra fuel on board. Further, the alternate airport is back at Newark. (Which means they need enough fuel for a round trip PLUS the reserve.) We wait. 11:45. A passenger (two, actually) volunteer on their own to be “bumped” to a flight tomorrow. Apparently that “solves the problem.” But the pilot had mentioned that part of the excessive load was “excess baggage from an earlier flight.”

“We apologize for the delay.”

“We are just as frustrated as you are.”

I should mention at this point one of the games that gets played here. By declaring the departure airport as the alternate airport, the airline can either land the plane at RDU with enough fuel for the return trip, or return it all the way to Newark and avoid a deadhead ferry flight from an alternate landing if they can’t make it into RDU.

At midnight the propeller begins to turn.

It is about a 90 minute flight.

I glance out the window and notice the propeller spinner is now white at the tip. Leading edge of the wing also turning white. In my brain fogged state I start thinking about this airline’s last accident.

We land at RDU at 1:40 or so. The airport is pretty much buttoned up except for us.

Head down to baggage claim. A few bags come out, then the sign flashes from “unloading” to “completed.” There are twenty people still waiting.

I was one of them. It seems that a lot of the passengers on the plane were the ones whose baggage was left behind because it was just bags from an earlier flight.

Our little cluster heads over to the airline’s baggage office. There are two people there, and it clear from their body language (and verbal language for that matter) that this was not in their plans for the evening. We customers with no baggage have, apparently, really inconvenienced them.

It turns out that, of the two, only one of them “can operate the computer.” so they are processing one person at a time, with a cycle time of roughly 10 minutes per person.

The non-computer one comes out. People ask her when they can expect their luggage to get here. She, in an annoyed “I already-told-you-I-can’t-do-anything” tone carefully explains that only her computer-literate co-worker can find out, and only when they scan the ticket and search for things on the computer.

She asks if we would like the 800 number. Sure. She goes into the office and comes out with the number written on a scrap of paper and reads it off while people try to type it into their phones. (Tape it up on the window? Nah.)

I manage to get through, “All of our representatives are currently serving other customers.” (Yes, I can actually SEE them right now.) “The wait time is approximately TWENTY minutes.” I am reminded multiple times that all I need to do is go to www.(Houston based airline name).com, click here, click there, enter this, enter that, and I can do all of this myself. Not exactly helpful in an airport terminal at 2:15am.

A human answers. She asks for my case number. Huh? I have the baggage claim number. It seems she is actually there to handle follow-up rather than initial calls. Nevertheless, she is very helpful, takes my information, and offers to authorize me to spend $75 if I need to buy something for my client meeting in the morning. “Thank you,” I say sincerely, and laugh with her that there isn’t a lot I can buy at 2:30 in the morning.

Head for the rental car counter. I still have a 90 minute drive ahead of me.

The only thing in the “Emerald Aisle” is a big pickup truck. I don’t feel like taking it, so I go into the office. A very nice gentleman at the National counter is surprised about the number of people showing up all of a sudden, I explain a late arrival. He asks if I want an SUV, I said sure, he tells me where it is.

I get in, start it up, punch in my hotel address into my phone (I LOVE Android GPS), and start out. Once I clear the gate, there is a 20 mph speed limit, and one of those radar signs that says how fast you are going. I see the sign, and immediately slow down. My speedometer is dropping down under 40, as the radar sign is dropping down under 20. Huh? Take a good look through the foggy brain. Kilometers Per Hour. Yup. I have a Canadian vehicle. So driving through rural North Carolina having to run metric conversion in my head. No big deal, but the final irony.

I arrive at the hotel at 4:30. The night clerk is on the phone, “Just a minute sir, they are doing an night audit.” I mention that I have been on the road for 22 hours. She takes the hint and interrupts the auditor to check me in.

4:45, I get to the room, take a shower, and settle down for my 75 minute nap before meeting my client in the lobby at 7am for a great day on site.

Good news – the suitcase showed up the next day.

Of all of the places that I have “gotten ahead of my luggage” this was actually the least exotic. The last three were Berlin, Glasgow and Tunis. Danville, VA just doesn’t seem that exciting by comparison.

So this was 20 hours of hearing airline employees begin every other statement with “we apologize.” (Except the baggage claim people who were quite UNapologetic). I suppose this was catching up with the law of averages for a series of very smooth and uneventful travel adventures lately.

What if a key airline performance metric was how many times their employees use the words “we apologize” during a given day? If they actually meant it, the number should steadily decline.

 Smile

Hopefully the flight home will be less of an adventure.

All humor aside, this experience revealed a couple of obvious breakdown points.

First, I normally try to avoid any connection in the NYC area. The airspace is just too crowded for things to work under less than ideal conditions. But faced with the client’s requirement to use their travel booking, and unable to gerrymander arrival / departure times to force a decent fare-competitive alternative out of the system, I kinda had to take this one.

Let’s talk about the baggage thing. At the departure airport, we have the aircraft service process that loads fuel, calculates weights, generally gets the plane ready for a safe flight within regulatory guidelines (and consistent with airline economic objectives).

We have a separate process that takes luggage with “RDU” tags and loads them onto a plane headed for RDU.

And yet another process for getting the passengers manifested and loaded.

I surmise that there are three separate processes here because there were ample opportunities for cross-process communication that obviously did not happen.

The pilot was apparently surprised by the overweight condition. Yet the airline knew, hours before the plane even arrived at the airport:

  • How much fuel they planned to load.
  • How many passengers they planned to load.
  • How much luggage (and, if they really wanted to, the weight of that luggage) they planned to load.

What if they started to work the problem of overweight condition before just tossing the problem into laps of the newly arrived flight crew?

Based on the way the pilot spoke of the “excess baggage” it was not clear to him, or the gate agent, that the “excess baggage” belonged to the “excess customers” that were on the plane. I am not sure if that knowledge would have made any difference if they knew they were flying people without their bags, but at the minimum it would have set up a far more appropriate process at RDU.

As you recall, the baggage office at RDU was surprised (and apparently annoyed) that all of these passengers showed up, and now they were understaffed to deal with them.

Imagine, if you would, an alternate scenario.

The airline KNOWS which passengers are on board the plane. They KNOW which bags are on board the plane. (This is a true statement.)

What if their system cross-correlated bags with passengers.

What if, upon flagging the condition where they had a passenger in a seat, but no luggage in the hold, they notified the baggage office at the destination airport.

What if, upon receiving this information, the airline’s employees, using information they already have in their system, traced the bags and made plans.

What if, upon arrival at the destination airport, those passengers were greeted by name. What if “Mr Rosenthal, we are sorry, but your luggage didn’t make the flight. It is still in Newark. If you let us know where you are staying, we will get it here on the first available flight in the morning and have it delivered. Is there anything else you need?”

The net effect would have been the same, the airline would have done what they ended up doing anyway, except the customers would have received a little empathy. No extra cost, just a little more service. The baggage claim people could have gone home two hours earlier, and although inconvenienced, the customers might be left with the impression that somebody actually cared.

But, for those of you who remember the old Saturday Night Live Steve Martin Theodoric of York skits – First the soliloquy about how wonderful a situation could be then the punchline:  “Naaaaaaah.” as he returned to his medieval ways.

Oh – and I finished reading the Liker book I have been discussing, so look for a couple of more write-ups and then an actual review as I get some keyboard time.

Steve Spear on Creative Experimentation

On Monday MIT hosted a webinar with Steven Spear on the topic of “Creative Experimentation.”

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.

(Edit: The original flies have been deleted from the MIT server.)

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

A Customer Experience Story

This has nothing to do with lean production except at the touch point of the customer experience.

Mrs. LeanThinker was looking for a replacement for her well-worn 5 quart stock pot. We were in Macy’s home department browsing.

She found one she really liked, a Circulon Symmetry model, full retail $140, sale priced at $69.95. Only this one was a brown color, and she wants black to match everything else she already has.

“Does this come in black?” A reasonable question.

“Yes” was the answer.

“Can you get it?”

“Let me check.”

The answer was that, yes, they can get it but because Macy’s didn’t stock it, they would “have to” sell it at full price. They do, it was offered, match online prices except Costco and Amazon.

We fired up the Droid, got online, and found this (click the image for full size):

pricematch

See the second line there?

That’s right. Macys.com has the same item at the “sale” price.

So Macy’s ended up price matching to their own web site. Oh – and they are shipping it to our door for no extra charge. Go figure.

Some things I just leave in the “perplexing” column. Yes, I know, they are two separate business streams and all, but really?

Then there is the Best Buy debacle that is brewing. Cancelling Black Friday orders on people three days before Christmas, but offering the item they ordered at full price in the store? I’m guessing there are lawyers involved faster than you can say “class action.” Where were the lawyers when the decision was made? What were they thinking?

Metrics and Customers

Metrics are a fairly common topic of discussion on the various lean manufacturing forums. One theme that comes up fairly frequently is how to determine “what counts” in this-or-that measurement.

For example, a recent post asked about measuring lead times. The way they were measuring lead time only counted the time from when the order was actually started on the shop floor. But it didn’t include the latent time between the time the customer placed the order and when processing it actually started.

A rule of thumb I like to apply in these cases is “What is the customer’s experience?”

In this case, the customer starts waiting on the order the moment he informs the company he wants something. The customer really doesn’t care whether the order is waiting in order-entry, waiting for the computer to run its batch process, or whether it is stuck in production queues. Time is time from the customer’s viewpoint.

Of course this doesn’t mean I would ignore the internal components of the lead time… but I would include all of them because that is what the customer experiences.

While I am on the topic of metrics, I want to reiterate the importance of also having a specification or standard. It is not enough to simply measure something and graph it. That does nothing but consume people’s time. Each instance must be compared against a specification. “Lead time” doesn’t tell me anything. What I want to know is “Was this order on time?” Yes or no? How late was it? What delayed this one? Why? Then launch into the problem solving process.

Once a standard is being consistently met it is appropriate to then ask whether you want to set the bar higher. But to try to simply measure your way into excellence, without regard for stability and sources of variation, is an exercise in frustration.

As you look at the various things you measure, ask yourself if your metrics are reflecting the experience of the internal or external customer. That can help reduce some of the questions about what is “in” or “out” of the measurement.

Clarity for the Customer

I have come to expect very little from most airlines, especially for the parts of the “service” that doesn’t involve actually sitting in the airplane. Still, some airlines make their policies more clear than others. Alaska Air, for example, is explicitly clear that I can hold a reservation for 24 hours and cancel with no penalty. They say so on the web site during the online booking process.

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. CHANGES TO DEPARTING FLIGHT ARE PERMITTED FOR APPLICABLE CHANGE FEE PROVIDED THE CHANGE IS MADE TO THE SAME ORIGIN/DESTINATION AND SAME TICKETED TRAVEL DATE AND SAME BOOKING CLASS. . B. CHANGES TO DEPARTING FLIGHT INVOLVING A CHANGE TO ORIGIN/DESTINATION OR DIFFERENT TICKETED TRAVEL DATE OR BOOKING CLASS ARE NOT PERMITTED. SEE CANCELLATIONS . II. PRIOR TO DEPARTURE – CHANGES TO CONTINUING/ RETURN FLIGHTS WHEN THERE IS NO CHANGE TO ORIGIN/DESTINATION OR STOPOVERS. . A. 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 CHANGE VIOLATES THE DAY/ROUTING/ FLIGHT /SEASONALITY/TRAVEL DATES OR BOOKING CODE REQUIREMENTS TRY THE FOLLOWING OPTIONS . B.1 RE-PRICE THE CONTINUING/RETURN PORTION WITH FARES IN EFFECT ON THE DATE THE ORIGINAL TICKET WAS ISSUED. ANY DIFFERENCE IN FARES PLUS THE APPLICABLE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE NO RESIDUAL VALUE APPLIES AND THE FULL CHANGE FEE SHOULD BE COLLECTED. . B.2 THE ENTIRE TICKET SHOULD ALSO BE REPRICED WITH CURRENT FARES. ANY DIFFERENCE IN FARES PLUS THE CHANGE FEE SHOULD BE COLLECTED. IF THE TICKET PRICE IS LOWER WITH CURRENT FARES THE DIFFERENCE IN FARES LESS THE CHANGE FEE MAY BE CREDITED TO THE PASSENGER IN THE FORM OF A NONREFUNDABLE MCO. THE MCO MUST BE EXCHANGED 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. . III. PRIOR TO DEPARTURE – CHANGES TO CONTINUING/ RETURN FLIGHTS 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. THE ENTIRE TICKET SHOULD BE REPRICED WITH CURRENT FARES. ANY DIFFERENCE IN FARES PLUS THE 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. . IV. AFTER DEPARTURE – CHANGES TO CONTINUING/RETURN FLIGHT WHEN THERE IS NO CHANGE TO ORIGIN/ DESTINATION OR STOPOVERS. . A. 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. FOLLOW- THE POLICIES LAID OUT ABOVE ON HOW TO RECALCULATE THE DIFFERENCE IN FARES. . VI. GDPR – GUARANTEED DAY OF PURCHASE RULE . DOMESTIC PASSENGER TRANSPORTATION IS SUBJECT TO RULES/FARE/ROUTINGS AND CHARGES IN EFFECT ON THE DATE/TIME THE TICKET IS ISSUED/PTA PURCHASED UNLESS SPECIFIED IN THE FARE RULES. . DECREASE IN FARE AFTER PURCHASE . IF A DECREASE OCCURS AFTER A TICKET IS PURCHASED AND PRIOR TO TRAVEL ON THE TICKET OR A NEW FARE FOR WHICH THE PASSENGER QUALIFIES BECOMES EFFECTIVE THE DIFFERENCE IN FARES WILL BE CREDITED PROVIDED . 1. THERE ARE NO CHANGES TO ORIGIN/DESTINATION/ STOPOVER POINTS/FLIGHTS/DATES. . 2. ALL CONDITIONS OF THE NEW/REDUCED FARE MUST BE MET. THE ORIGINAL TICKET DATE OF ISSUE MAY NOT BE USED TO SATISFY THE ADVANCE RESERVATION/TICKETING REQUIREMENTS. THE BOOKING CODE OF THE NEW/REDUCED FARE MAY DIFFER FROM THE BOOKING CODE ON THE ORIGINAL TICKET. . . FOR TICKETS ISSUED ON/BEFORE 11NOV08 THE PASSENGER WILL RECEIVE A NONREFUNABLE MCO LESS A 50.00USD ADMINISTRATIVE SERVICE FEE. . FOR TICKETS ISSUED ON/AFTER 12NOV08 – THE PASSENGER WILL RECEIVE A NONREFUNDABLE MCO LESS A 150.00USD ADMINISTRATIVE SERVICE FEE . THE MCO CAN BE USED FOR FUTURE TRAVEL PURCHASE. THE MCO MUST BE EXCHANGED FOR A TICKET WITHIN ONE YEAR OF THE MCO ISSUE DATE. CANCELLATIONS TICKET IS NON-REFUNDABLE. NOTE – 1.CUSTOMERS FIRST POLICY. . 1. WHEN RESERVATIONS ARE MADE AND TICKETS ARE PURCHASED ON THE SAME DAY REFUNDS EQUIVALENT TO THE AMOUNT PAID WILL BE PERMITTED UP TO 1 DAY AFTER THE TICKET IS PURCHASED AT NO CHARGE. ANY CERTIFICATE OFFER WILL BE DEEMED USED AND WILL NOT BE REPLACED. 2. FARES ARE SUBJECT TO CHANGE AND NOT GUARANTEED UNTIL A TICKET IS PURCHASED. . B.WHOLLY UNUSED NONREFUNDABLE TICKET POLICY. . 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.

The Lean Manager: Part 1 – Customers First

Click image for Amazon.com listing

I just started reading this book, and my initial feeling is that it is a winner. Rather than producing a batch review of the whole thing at the end, I thought I would employ “one chapter flow” and share my impressions with you as they are formed. As I write this, I honestly do not know where it is ultimately going.

I am excited about this book because it is challenging the decades-old paradigm of kaizen events run by specialists (while simultaneously trying to justify the change activity to the people who hired them in the first place). In its place is a leader who knows what he is doing, and appears to be starting to lead by asking tough questions.

Even with that initial endorsement, this book appears to be following the standard formula established by Eli Goldratt in The Goal.

  • Manager finds out factory is being closed. News is devastating to his personal life.
  • The Jonah character emerges and teaches him how to save the operation.
  • He applies what he learns and saves the day.

While there is nothing wrong with this structure, it is wearing a bit thin, at least to me. So I hope that the authors are going to find an interesting twist that surprises me. Still, because this is a novel with a point, vs. an attempt at classic literature, I’m not going to spend much time on the literary style.

The two main characters (so far) are Andrew Ward, the manager who finds out his plant is being closed, and Phil Jenkinson, the new CEO, with the double role of bringing the bad news (closing the plant) as well as filling the role of the Jonah (or sensei in this case, I suppose).

In the opening chapter, Jenkinson’s style is authoritative, bordering on confrontational. Without knowing the culture of this fictitious company, I can’t say whether his blunt, direct approach is from necessity or because he simply doesn’t have the skills to ask tough questions without pushing people back. I’ll hold judgment on that part. My hope is that the book doesn’t teach this approach as how it has to be done, because in my experience, it doesn’t have to work that way.

The message, though, is crystal clear. The old way isn’t cutting it. Leaders, not staff, are responsible for results (safety, quality, delivery, cost). Leaders are expected to know the hot spots in their operations. Leaders are expected to be involved in the details – not to micro manage, but to develop the capabilities of others. (That last one is a bit of an extrapolation on my part.) “Lean” is not a program, not projects run by a staff of specialists, it is how we will manage the company.

The notable quote from this chapter comes in a shop floor lecture given by Jenkensin and nicely sums up the relationship between process and results.

Results… are the outcome of a process. What we want are good results from a controlled process because they will be repeatable. Bad results from an uncontrolled process simply mean that we’re not doing our job. Good results from an uncontrolled process…only mean we’re lucky. Today, bad results from a controlled process just says that we’re stupid: We expect different results from doing the same thing over again.”

Based on that, I sketched out this little matrix that captured my response and the key points.

process vs results

But the technical nuances aside, this story is clearly developing into one about leadership. The key issues, so far, are:

  • Safety, quality, delivery, cost, are line leaders’ responsiblity, with assistance from technical staff – who are also experts.
  • Though it is certainly a culture shock, the leader is teaching by asking questions.
  • The various character’s reaction to the confrontive authoritative style is predictable. I am uneasy, at this point, with that approach being held up as an example of the best way to get this done. But it is only Chapter 1.

GO TO PART 2

First: Define Value

A couple of days ago, in “The First Steps of The Lean Journey,” I said that there really is no first step, only the next step from where ever you are right now.

I admit that I left out a big assumption there – that you know where you are trying to go.

More specifically, that you really know the value you create.

Bas Mathijsen has posed the question here on The Whiteboard, as well as in a post in the LEI Forums where asks (paraphrasing) “Who defines customer value?” and “What is customer value?”

Good questions, and we don’t spend enough time there.
I have seen a lot of “improvement” effort dissipated because there was no clear idea of what the process was supposed to actually deliver.

As obvious as it seems, customer value is defined by no one but the customer. The transaction need not be monetary, or even commercial. A volunteer for a non-profit organization gives up time (and possibly money) and gets something in exchange. Usually that is some level of emotional satisfaction. A nonprofit that needs to attract volunteers needs to be conscious of this.

Since it is subjective, different customers are going to define “value” in different ways. Dan Sullivan once put it really well with this analogy (paraphrasing):

My neighbor has a really nice lawn. When he buys a lawnmower, he is interested in features like evenly cutting, ease of starting, how well it manages the clippings. But maybe I am looking for different things in a lawnmower. Maybe I hate mowing the lawn. I might be looking for a lawnmower that cuts the grass just below the roots.

Clearly these customers define “value” in different ways.

The other factor to keep in mind is that this isn’t a black-and-white thing. The value the customer finds in your product or service can be enhanced or diminished by an almost infinite matrix of circumstances. These include the magnitude of the (customer’s) problem you are solving, the degree of emotional satisfaction that is gained from your product or service, how easy (or aggravating) your sales and customer support processes are, the customer’s perception of your quality and a host of other intangibles. All of these translate into what (if anything!) the customer is willing to part with to get your product or service. Indeed, we have all heard of things that couldn’t be given away, or that had negative value.

The only real way to know what the customer truly values is to be the customer. This great little piece by Dan Markovitz on Evolving Excellence clearly shows how not to do it. Read the article, then do the opposite.

So, the customer defines what is valuable to him. What does the company do?

The company has to take their best information about customer value and translate it into specifications for the product and service they are going to provide. QFD is one formal way (though not the only way) to do this. Ultimately that becomes the product design. It is now up to production to actually deliver it at the target cost.

All well and good. Where this comes apart is (as always) at the seams.

Marketing and engineering “know best” and provide the “voice of the customer” when the customer actually isn’t even in the room.

The product may be specified, but the details aren’t worked through. There is only the most casual system to ensure that what is specified is actually what is built and delivered. Do you have a specified go/no-go outcome defined for each intermediate step in your process? Does that go beyond the product, and into the conditions required for success?

Delivery dates are given in terms of a range of time. In the USA the “cable guy” is famous for telling you he’ll be there between 9:00am and 4:00pm. We all laugh at how aggravating that is. But then think nothing of quoting “4-8 weeks” for a delivery window. WHEN is it supposed to be there?

Is your product support “leave it on the doorstep and run?” Do you follow-up with the customers and see what is, and is not, meeting their expectations? Do you solicit complaints (not simply collect them)?

All of these actions (or lack of them) will diminish your customer’s perception of value. Reputation and brand can carry past some transgressions, especially if there is really good follow-up. But even a 100 year old brand can be damaged, and the company is likely the last to know (not for want of clear signals).

The first step is “define value” but, to be clear, that means understanding what each and every step is doing to provide value to the next step in a long chain that both begins, and ends, with the customer.