Author: Mark

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Design Innovation Example

This post on the Fastcompany.com blog shows a clever desktop manufacturing invention.

But what really got my attention was the development process that starts at 3:40 in the video. It shows the process of developing it. They may not call it “3P” but, by and large, this is what it looks like.

As they develop ideas, they try them out in simulation, learn, improve, try, learn, improve. As the design matures in stages, they are moving forward, step by step, with concepts that are solid. This process is fast, flushes out problems early, while they are cheap to fix, and fun.

Contrast this with what might be created by a traditional process with the assignment of making a “tabletop NC cutter for cardboard.”

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Is This a Problem – Part 2

Last week I posted a story of a failed freezer, ruined food, and a customer support experience that could be summed up as “That’s how we do it.” I invited comments and asked:

“Is this a problem?”

And when I say “problem” I mean, is this a “problem” from the standpoint of the company’s internal process?

There are some interesting comments, some about the internal culture of the company, others about the support process itself.

But I promised to offer my thoughts, so here they are.

The key question is “What did they intend to happen?” While we can speculate, unless we have the process documentation or are otherwise privy to that internal information, we really don’t know what they intended in this case.

Let’s assume, for the sake of argument, that Frank’s experience was exactly as the company intended it to be. Then, from the point of view of their internal process, there is no problem.

“Wait a minute!” I can hear, “Nobody wants  a customer to never buy the product again.”

And here is my point. We don’t know. This company may be perfectly willing to accept that consequence, i.e. “fire the customer” to preserve their warranty cost structure. They certainly would not be the first. Whether that is good business or not is a totally separate issue. The question is “Did they produce this result on purpose, as a logical, foreseeable outcome of the process as they designed it?.” If the answer is “Yes, they did” (and only they can know), then there is no problem. It might be bad business, but the process is working just fine. (I acknowledge that “bad business practices” can result in unintended results – like bankruptcy. But my point is the results are the outcome of a process, and the process is the result of a decision, even if that decision was to “not care.”)

The key point here is that only after there is clarity of what should happen, can the process itself even be addressed. Until the intended result is clear, then there is no way to see if the process works or not.

Was there a problem here? I don’t know. But this is what I would like people to take away from this little story.

Whenever something in your company seems “not right” ask this really powerful clarifying question:

“Did (or would) we do this on purpose?“
If the answer is anything other than an unqualified yes then it is likely you have a problem.

Here is a tougher position: If something was unpleasant for your customer, and you don’t intend to fix it, then embrace the truth that you did do it on purpose. Take responsibility for your decisions, look in the mirror, and say “We meant to do it exactly that way, and will do it the same way next time.” If you can’t stomach that, then go back the the first question.

Here is an extra credit question for this little case study in customer support.
What, exactly, did the customer want here?

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Looking at the wrong stuff: America’s Best Hospitals: The 2009-10 Honor Roll

This news piece, America’s Best Hospitals: The 2009-10 Honor Roll, originally got my attention because I hoped someone might be actually be paying attention to the things that make a real difference in our national debate about health care.

Unfortunately, it looks like more of the same.

This survey looks at things like technical capability – what kinds of specialty procedures these hospitals can perform, and their general reputation  and then ranks them accordingly.

But where are we asking about the basics?

Which hospitals kill or injure the fewest of their patients? What is the rate of post-operative or other opportunistic infection? How about medication errors? These are the things that all hospitals should be “getting right” and yet the evidence is overwhelming that most don’t. Further, nobody seems to be paying attention to it except tort lawyers.

Now take a look at this post on Steven Spear’s blog, and especially the Paul O’Neal commentary that he links to.

Tell me what makes a “good” hospital?

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Is this a “problem?”

This morning I got an email from a friend that recounts a (still ongoing) story of a failed freezer.

We arrived home Tuesday from a week away to find the “extra” freezer in the garage totally kaput…..much of the stuff inside already ruined but some still partially frozen. It’s only 4 years old and within warranty, so [we] go on line and schedule an appointment with GE service for the next day, and spend hours sorting what [food] might be savable, getting bags of ice to try and bridge the time until (you would assume) they will exchange this unit with a new one. Tech comes out the next day, announces that the compressor is fried, and that he’ll order the part and see you in a week to install.

Needless to say, the customer is not exactly happy here. What could be saved now cannot. When they elevate the problem to “Customer Care” on the phone, the answer is basically holding the line to the warranty terms which give the company the option of replacing or repairing the unit.

Aside from speculation that the response would be different if this had been a commercial unit for a large corporate customer, this story brings up some interesting issues.

Clearly the company here is well within their agreement with the customer. That is (apparently) spelled out in black and white in the warranty, all approved by the legal department. And repair of the unit is the logical economic choice for the company.

But equally clearly, the customer here is not happy with the response.

All of my protestations about how an exchange unit shipped from their warehouse in Kent today would allow my wife to save her food falls on deaf ears. Not even a transfer to a “supervisor” for exception resolution could be arranged. If you don’t like it, tough luck..not buy another GE product? “hey, your choice” hard to believe!

And a customer with a technical problem has likely been turned into a customer for the competition.

So here is the question.

“Is this a problem?”

And when I say “problem” I mean, is this a “problem” from the standpoint of the company’s internal process?

I have my thoughts, and I’ll share them in a day or so. But I’d like to hear what you think.

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Thinking About Improvement

Although it caters to the I.T. community, Tech Republic sometimes publishes pieces could have that have a wider application. Here are two of them.

In Five ways of thinking that can fell I.T. leaders, author Ilya Bogorad lists some limiting beliefs that can result in the I.T. folks being marginalized in the company. She says:

I often encounter situations where I can’t help but feel that an IT department could be a runaway success within its organization if it weren’t for the beliefs that their leader seems to hold. I want to share with you a small collection of such limiting beliefs. There are five in this list but I could have just as easily added another twenty.

Reading those five things, my feeling is that I could easily substitute the term “Continuous Improvement” where ever “I.T.” appears, and maybe a couple of other very simple edits, and most of the article really strikes home.

Read it, tell me what you think.

That article, in turn, links back to another called Costs and benefits of projects: Looking beyond the dollar sign. Same point. In this world of seemingly having to put up a positive short-term ROI for every idea, we deprive ourselves of so much innovation it isn’t funny. Just what is the ROI of “getting it right every time?” It’s pretty hard to calculate, but I’m pretty sure the opposite is more expensive.

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Toyota’s Dilemma over NUMMI

Toyota says it may shut Fremont’s NUMMI auto plant – San Jose Mercury News

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.

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Paying the Bills vs. Dealing with the Costs

House Dems want to tax the rich for health care – Yahoo! News

The health care debate in the USA is increasingly focused on how to pay (meaning who will pay) to operate a dysfunctional system with costs out of control.

I fully acknowledge that in government circles, this is about the only thing they can address.

But the real question is not “How do we pay?” but “Why does it cost so much?”

The care delivery system itself is error prone, dangerous for the patients (and psychologically dangerous for the providers). The net effect is much of the effort of the dedicated, but overworked, staff is siphoned off to deal with problems and chaos that shouldn’t be there in the first place. But there is no system in place, at least not in any operation I have ever see (including some claiming to be “lean”) that systematically detects, responds, corrects, and solves those thousands of little issues that occur every day. People seem too focused on the “big stuff” that creates lots of press.

The financial system is worse. The processing of payments and claims is inefficient (which is a kind word), error prone, chaotic, unresponsive to issues and problems, and treats the patients as though deciphering the “THIS IS NOT A BILL” statements is the only thing they have to do.

Honestly, I don’t have any ideas here. I just see that we are in a political quagmire debating how to pay for a system that shouldn’t be costing half of what it does… and it isn’t about controlling over payments or sharpening pencils on the billing.

What if one major HMO actually “got it” and became the Toyota of health care. Any takers?

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Dennis Goethals, Learning and Leading at DesignOnStock Furniture

During my visit to The Netherlands, I had the pleasure to spend a couple of hours with Dennis Goethals, Managing Director and CEO of DesignOnStock, a furniture manufacturer in Tilburg, The Netherlands. What I saw and heard were all of the critical elements I have seen in organizations that pull this off in a spectacular fashion.

It starts, as always, with leadership. DesignOnStock, like every other success story I have experienced, has a leader who dedicated to his personal learning and understanding – at a level way beyond the common, but hollow, statements of “committed.” He is down on his shop floor, exploring the flow, looking for the next problem, and working the organization through a solution.

The results? He can deliver a custom order in 1/10 the time of his competitors. In these hard times, his business is increasing because he can offer quick turn-arounds to his customers who don’t want to keep a lot of inventory in anticipation of sales. They can sell one, order one, and have the replacement in a few days.

Rather than trying to recall the details myself, I asked Dennis to share his story as an interview.

How did you first get into the furniture manufacturing business, and what was your experience there?

Dennis: I studied Economics at Erasmus University in Rotterdam. My father had a small upholstery company. When he got sick, we agreed I would come and we would work together. My experience was that the furniture making industry is very traditional. No real partnership between companies. Very small companies in the whole industry. (the biggest in Holland is 350 people, on average 10-20 people per company). As I am an entrepreneur I thought this is the perfect industry to work in. High prices, some volume and not so much really strong competition. We worked like crazy and in 4 years time we grew from 5 to 25 people and from 300.000 usd to 6.000.000 usd. Sales was not our problem, we had great difficulty organizing our production. So much difficulty that at some stage I decided to sell the company and move the factory to Turkey.

Ed. Note: To fill in a gap in the timeline here, Dennis formed a partnership and opened another factory in Tilburg which was being set up traditionally when he then encountered “lean manufacturing.”

When did you first encounter “lean manufacturing?”
What was your initial reaction?

Dennis: Steven Blom introduced Lean manufacturing to me on 6th of December 2006 at 11.30 in the morning. I thought it was the most brilliant thing I had ever seen in my life! I realized I knew nothing about production, only what I had seen at other companies. And I was amazed not everybody is doing this.

What kind of problems did you have to overcome as you tried to implement flow?
How did you go about solving those problems?

Dennis: We had 2 big problems implementing flow:

First, when you implement flow it becomes very clear what everybody in the production line is doing. We had to replace some operators who didn’t like the idea of the ‘flow’ of their work to be visible. We ended up replacing almost 1/3 of the workforce because they didn’t want to leave the idea of batch production. This was very hard to do, letting people go is always difficult. But for us this was the only way.

And second, when you implement flow you have to make sure that the supply of parts is well organized, otherwise your line is down most of the time. We started to use kanban to order our parts to solve this. In ordering materials for your production line, kanban is the most brilliant thing I have ever seen.

What has this done for your business and your competitiveness up to this point?
How have you been effected by the global economic conditions?

Dennis: It has been an amazing experience. We reduced our lead time from 30 days to 3 days. We reduced inventory 60%. Our product quality has increased, our profit has tripled. We are the only company in the Netherlands who can ship a custom build sofa within the week! Due to the economic crisis a lot of our customers have cash flow issues. We are the only player in the market who can generate cash within 2 weeks. A lot of customers focus on selling designonstock.com products to improve their cash position. We increased turnover by 10% and due to further cost reductions we increased revenue by 60%.

Where do you think you are now on the “lean journey?”
What are your next steps?

Dennis: We have just begun our lean journey. The first thing we did was to implement one piece flow. This was the big breakthrough. Now we are fine tuning the tools you need to do one piece flow. I think we can double the output without increasing our workforce. We will do a lot of work ‘upstream.’ In his visit Mark explained this to me and this has brought a lot of new energy to us. We will try to further reduce inventory, simplify our system and we will have a very big focus on visualization and standardization in the months to come.

Do you have any advice for people who are wondering if this will work for them?

Dennis: I would use the Nike slogan: Just do it! When you first start to hear about lean, WCM (World Class Manufacturing), one piece flow, kanban etc. it all sounds a bit strange. Start with something really small. Like buy your groceries with a kanban system. That is how I learned it. This is a way of thinking, not a system you implement and then go back to business as usual. When you really get this, it will change all!

To conclude I would like to quote Lao Tze: Show me and I will look. Tell me and I will listen. Let me experience and I will learn.

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I would like to offer thanks, again, to Dennis for taking his valuable time both to show me around his plant, and to respond with his own words for the story of his experience. What I appreciate most, I think, is that he is not resting on his accomplishments. Rather, he sees what he has done so far only as a foundation.

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“Creativity” vs “Opportunity for Error”

One of the things I often hear when we start talking about mistake-proofing and standardizing operations is that we are taking away people’s “creativity.”

“Creativity” in this case is usually the challenge of figuring out how to make a broken process function, or figuring out how to make the product work when, as designed, it doesn’t. “Creativity” means knowing what Julie actually keeps a stash of the parts that are always short, and knowing how to interpret vague, contradictory or obsolete drawings and work instructions. Nobody can look me in the eye and honestly say that a workplace like that is fully respectful of people.

Honestly, the very last thing I want to do is take creativity out of the workplace. But on the other hand, how much creativity is totally wasted on things that should be simple and straightforward?

As long as people’s mental energy must be expended to simply get the process to do something useful, there is none left for them to figure out why is doesn’t work and fix it.

The illusion, I think, is that once things are standardized that there will be nothing left to do.

Nothing could be further from the truth. There is plenty of work to do.

First, “standardizing” is simply setting down what we believe is our best shot at what should work. Once reality sets in, there are nearly always things nobody thought of – opportunities to learn. Capturing those moments is impossible if there is no consistent baseline in the first place.

And, just for the sake of argument, let’s say that the process, as designed, works pretty well. The question must then be asked: “Are we able to provide our customers exactly what they need, exactly when they needed it, on demand, one-by-one, perfect quality, in a perfectly safe environment?” If the answer to that question even includes a hesitation, then it there is work to be done.

Respect your people. Simplify the things that should be simple. Let them focus their creativity on something that matters, not on how to get through the way without screwing up.

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How Many Production Decisions?

Whether in service delivery (including health care delivery), manufacturing, or any other production environment, your team members are likely having to make lots of decisions under perceived time pressure. Even with great visual aids, many of these processes are mistake-prone.

One of the reasons I like pre-kitting parts for a specific option configuration is that it separates the process of deciding which parts to pick from the process of installing them.

This might not seem that big a deal.

Fortunately, if you have a copy of Windows Vista, it comes with a great simulation that shows just how this can feel on the line.

Look under “Games” and start the “Purple Place” game. Select the building in the middle of the screen, and you will find yourself in a cake factory.

cakes

The idea is to look at the TV monitor on the left, and produce a cake that matches the picture. You can move the belt forward and back to position the cake under the various applicators. Then you simply select the correct choice. Seems pretty simple.

Go ahead, try it.

This screen shot is from the “Advanced” level, but even the “Beginner” is pretty easy to screw up unless you are focused and paying attention all of the time.

So – if you find yourself saying “All the employees need to do is look at the picture, and follow the directions – why is that so difficult?” then see how well you do on this game. Play it from the start of your regular work shift until the first break, say two hours, and see how many mistakes you make.

Now consider that your production environment is likely orders of magnitude more complex than this game for little kids. And you are expecting people to work all day, every day, without ever making a mistake.wrongcake

If you are in health care delivery – think about the picture of the finished cake as the physician’s instructions, and the production line as the actual process of filling the prescriptions, administering medications, protocols for preventing infections, record keeping procedures, and ask yourself if there aren’t many more opportunities for error – that are far better concealed – than the ones in this little game.

Just a thought for the day. Meanwhile – enjoy finding a work-related reason to have “Games” loaded onto your Vista machine! 🙂