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Evidence of Success with MRP?

An old, very esoteric, post got a four word comment today that sent my mind thinking. And because the topic is esoteric, this post is as well – my apologies.

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

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

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

Here is what got me thinking.

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

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

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

 

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How Do You Deal With Marshmallows?

Yesterday, Kris left great comment with a compelling link to a TED presentation by Tom Wujec, a fellow at Autodesk.

Back in June, I commented on Steve Spear’s article “Why C-Level Executives Don’t Engage in Lean Initiatives.” In that commentary, Spear contends that business leaders are simply not taught the skills and mindset that drives continuous improvement in an organization. They are taught to decide rather than how to experiment and learn. Indeed, they are taught to analyze and minimize risk to arrive at the one best solution.

Tom Wujec observes exactly the same thing. As various groups are trying to build the tallest structure to support their marshmallow, they consistently get different results:

So there are a number of people who have a lot more “uh-oh” moments than others, and among the worst are recent graduates of business school.

[…]

And of course there are teams that have a lot more “ta-da” structures, and, among the best, are recent graduates of kindergarten.[…] And it’s pretty amazing.

[…] not only do they produce the tallest structures,but they’re the most interesting structures of them all.

What is really interesting (to me) are the skills and mindsets that are behind each of these groups’ performance.

First, the architects and engineers. Of course they build the tallest structures. That is their profession. They know how to do this, they have done it many thousands of times in their careers. They have practiced. Their success is not because they are discovering anything, rather, they are applying what they already know.

In your kaizen efforts, if you already know the solution, then just implement it! You are an architect or engineer.

BUT in more cases than we care to admit, we actually do not know the solution. We only know our opinion about what the solution should be. So, eliminating the architects and engineers – the people who already know the solution – we are left with populations of people who do not know the solution to the problem already. This means they can’t just decide and execute, they have to figure out the solution.

But decide and execute is what they are trained to do. So the CEOs and business school graduates take a single iteration. They make a plan, execute it, and fully expect it to work. They actually test the design as the last step, just as the deadline runs out.

The little kids, though, don’t do that.

First, they keep their eye on the target objective from the very beginning.

Think about the difference between these two problem statements:

  • Build the tallest tower you can, and put a marshmallow on top.

and

  • Support the marshmallow as far off the table as you can.

In the first statement, you start with the tower – as the adults do. They are focused on the solution, the countermeasure.

But the kids start with the marshmallow. The objective is to hold the marshmallow off the table. So get it off the table as quick as you can, and try to hold it up there. See the difference?

More importantly, though, is that the kids know they do not know what the answer is. So they try something fast. And fail. And try something else. And fail. Or maybe they don’t fail… then they try something better, moving from a working solution and trying to improve it. And step by step they learn how to design a tower that will solve the problem.

Why? Simply because, at that age, we adults have not yet taught the kids that they are supposed to know, and that they should be ashamed if they do not. Kids learn that later.

Where the adults are focused on finding the right answer, the kids are focused on holding up a marshmallow.

Where the adults are trying to show how smart they are, the kids are working hard to learn something they do not know.

Third – look what happened when Wujac raised the stakes and attached a “big bonus” to winning?

The success rate went to zero. Why? He introduced intramural competition and people were now trying to build the best tower in one try rather than one which simply solved the problem.

Now – in the end, who has advanced their learning the most?

The teams that make one big attempt that either works, or doesn’t work?

Or the team that makes a dozen attempts that work, or don’t work?

When we set up kaizen events, how do we organize them?

One big attempt, or dozens of small ones?

Which one is more conducive to learning? Answer: Which one has more opportunities for failure?

Keep your eye on the marshmallow  – your target objective.

Last thought… If you think you know, you likely don’t. Learning comes from consciously applied ignorance.

Edited 2 August 2016 to fix dead link. Thanks Craig.

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What Have You Learned?

“What have you learned?” It is a question I hear often at the end of kaizen events and other improvement activity. The key points of a typical report-out, though, seem to be on how much was accomplished, and what was learned comes as an afterthought.

A typical week-long kaizen event is organized like this:

Monday: There may be some classroom type training followed by studying the process. This study is often collecting cycle times and building spaghetti charts.

Tuesday: The team develops their vision or target state – they decide what they are going to do.

Wednesday / Thursday: Make some pretty dramatic changes to the process.

Friday: Report the results followed by pizza for everybody.

The pre-planning often includes some targets for cycle time or inventory, and sometimes even qualifies as a “target condition” that is focused on larger level objectives. But equally often, it doesn’t. The target results are vague or simply “Look at this process and improve it.”

Here is a question – how many coaching cycles – instances where a situation was understood, a target was established, an attempt was made to hit the target, and learning was assessed – actually happen in the course of this week?

In the worst case, zero. Those are the instances where the Friday report-out is followed on Monday by leaving work team to bask in their newly improved process. There is no attempt at all to see what they are struggling with, or if there is, it is an “audit” with the idea of “ensuring compliance” with the new process. No learning at all takes place in this situation. There is only blame shifting.

Nearly as bad is when the answer is “one.” That is, there is some attempt prior to Friday to see if the target condition is achieved, and to understand what new issues have emerged. The problem here is that it is usually too late to do anything. The improvement experts are moving on to planning another event, and whatever is left behind is usually an action item list of incompletes from the week.

That doesn’t work very well either.

Neither does trying to capture “learnings” on a flip chart at the end of the event. That is a nice feel-good exercise, but rarely translates into improving the process of process improvement

So if the above is a “current condition” then what is the target?

How can improvement itself be organized so that we learn how to do it better?

One thing would be to structure kaizen events to cycle through the coaching process many more times during the week. Take the five day agenda, and carry it through EVERY day. That is a start. How would your kaizen events be different if you did five one-day events in a row rather than one five day event? Isn’t that close to one-piece-flow?

What would be the next  step after that?

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What Failed Today?

Now and then, usually when coaching or teaching someone, I get what I think is a flash of insight. Then I realize that, no, there is nothing new here, it is just a different way to say the same thing. Still, sometimes finding a different way of expressing a concept helps people grasp it, so here is one I jotted down while I was working with a plant.

One of the myths of “lean production” is the idea that, at some point, you achieve stability in all of your processes.

Nothing could be further from the truth.

Failure is a normal condition.

The question is not, whether or not you have process breakdowns.

The question is how you respond to them. Actually, a more fundamental question is whether you even recognize “process failure” that doesn’t knock you over. Our reflex is to try to build failure modes that allow things to continue without intervention. In other words, we inject the process with Novocain so we don’t feel the pain. That doesn’t stop us from hitting our thumb with the hammer, it just doesn’t hurt so much.

But think about it a different way.

“What failed today?”

Followed by

“How do we fix that?”

Now you are on the continuous improvement journey. You are using the inevitable process failure as a valuable source of information, because it tells you something you didn’t know.

There is a huge, well established, body of theory in psychology and neuroscience that says that we learn best when three things happen:

  1. We have predicted, or at least visualized, some kind of result.
  2. We try to achieve that result, and are surprised by something unexpected.
  3. We struggle to understand what it is that we didn’t know.

In other words, when we (as humans) are confronted with an unexpected event, we are flooded with an emotional response that we would rather avoid. In simple terms, this translates to “we like to be right.” The easiest way to “be right” is to anticipate nothing.

This takes a lot of forms, usually sounding like excuses that explain why stability is impossible, so why bother trying?

Why indeed? Simple – if you ever want to get out of perpetual chaos, you first have to embrace the idea that you must try, and fail, before you even know what the real issues are.

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British NHS Executive Talks About Lean

Lesley Doherty, the Chief Executive at NHS Bolton in the U.K. was recently interviewed by IQPC as a precursor for her being a keynote speaker at a conference IQPC is sponsoring in December (Zurich). In the spirit of full disclosure, IQPC had invited me to participate in a “blogger’s panel discussion” (along with Karen Wilhelm, author of Lean Reflections) earlier this year in Chicago.

The Chicago conference turned out to be very Six Sigma centric – in spite of having Mike Rother as a keynote. But that is history.

I want to reflect a bit about this podcast. I invite you to listen yourself- it is an interesting perspective from a senior executive who discusses her own learning and discovery. I will warn you that you may have to “register” on the web site – though you can uncheck the “send marketing stuff” box. I will also say that the interview’s sound is pretty bad, so it is hard to hear the questions, but I was able to reconstruct most of it from context.

What is interesting, to me a least, is that the methods and experiences are pretty standard stuff – common to nearly all organization undertaking this kind of transformation.

A summary of the notes I took:

They have to deliver hard budget level savings on the order of 5% a year for the next several years. That is new to them as a government organization.

They started out with an education campaign across the organization.

Initial efforts were on increasing capacity, but those efforts didn’t result in budget savings. In one case, costs actually increased. They don’t need more capacity, they need to deliver the same with less.

They have identified process streams (value streams), and run “rapid improvement events.”

Senior people have been on benchmarking or study trips to other organizations, both within and outside of the health care arena.

They are struggling to sustain the momentum after the few months after an “event” and seeing the “standard” erode a bit – interpreting this as needing to increase accountability and saying “This is how we do things here.”

“Sustaining, getting accountability at the lowest level is the biggest challenge.”

In addition, now that they are under budget pressure, they are starting to look at how to link their improvements to the bottom line, but there isn’t a standardized way to do this.

They believe they are at a “tipping point” now.

There is more, having do to with Ms. Doherty’s personal journey and learning, and knowledge sharing across organizations who are working on the same things, but the key points I want to address are above.

Please don’t think that this interview is as cold as I have depicted it. It is about 20 minutes long, and Ms. Doherty is very open and candid about what is working and what is not. It is not a “rah-rah see what we have done?” session.

As I listened, I was intently trying to parse and pull out a few key points. I would have really liked it if these kinds of questions had been asked.

What is their overall long term vision? Other than meeting budgetary pressure and “radically reviewing” processes, and “transformation.” What is the “true north” or the guide point on the horizon you are steering for?

What is the leadership doing to set focus the improvement effort on the things that are important to the organization? What does the process have to look like to deliver the same level and quality of care at 5% lower costs? What kinds of things are, today, in the way of doing that? Which of those problems are you focused on right now? How is that going? What are you learning?

What did they try that didn’t work, and what did they learn from that experience?

When you say “local accountability” to prevent process erosion, what would that look like? What are you learning about the process when it begins to erode?

The “tipping point” is a great analogy. What behaviors are you looking for to tell you that a fundamental shift is taking place?

As you listen, see if you can parse out what NHS Bolton is actually doing.

Is their approach going to sustain, or are they about to hit the “lean plateau?”

What would the “tipping point” look like to you in this organization?

What advice would you give them, based on what you hear in this interview?

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An Open Letter to John Shook

Congratulations on your assumption of leadership at the Lean Enterprise Institute.

The Lean Enterprise Institute has a deservedly unique place in the community of people working to learn and apply the Toyota Production System. The LEI, and the precursor work at M.I.T., by Jim Womack and others, has been largely responsible for moving the Toyota Production System from the domain of a few consultants into mainstream thought. The term “lean,” for better or worse, is now firmly established all in discussions about business management and production efficiency.

From my perspective, though, the LEI is at a crossroads. While what I am offering here is my opinion alone, this platform has given me great opportunities to connect with people across the spectrum of the “lean community.” This is only my opinion, but it was not formed in isolation.

Background

In the early days, the LEI – and Jim Womack especially – took on an almost evangelical role. The initial workbooks – Learning to See, Creating Continuous Flow, Creating Level Pull, Making Materials Flow, had the effect of creating a near canonical definition of “lean.” We could (and did) debate it, but it was pretty clear what the LEI meant by the word.

The message of those early workbooks, carried forward from Lean Thinking, was clear: “We are still learning this, and sharing it with you as we go.”

Perception

Today, however, out here in the world of steel-toe shoes, safety glasses (and yes, scrubs and surgical masks), the LEI has developed a reputation for being insular – not particularly open to the idea that people outside of the LEI’s inner circle might have gained deeper knowledge that moves beyond the message of 1999-2001.

In addition, the LEI seems to have drifted from being a standard bearer with a crisp message to becoming a specialty publisher, much like the Productivity Press of the late 1990’s.

If the role of being a specialty publisher is what the LEI is striving to become, then that is great. But it is nothing special and, over time, I feel the brand will dilute and the LEI’s name on a book will mean little more than McMillan, Wiley or Free Press. Even today, I (and others) no longer assume that just because the LEI is publishing a book that it is automatically worth reading or using as a reference.

But the biggest tragedy is lost opportunity to lead.

Today, even though the founders coined and popularized the term, the Lean Enterprise Institute no longer represents the final word of what “lean” means. Nobody does.

Is “lean” a synonym for the Toyota Production System or Toyota’s management system? With all of the reference to Toyota, I would think that is the intent. But there are many well qualified experts out there who make a good case that the LEI’s publications and message are, at best, a subset of TPS. Others argue that “lean” and TPS are fundamentally different in some way.

The result is that “lean” means whatever someone with an opinion says it does.

The LEI has chosen not to engage in this debate. That is well and fine, but at the same time the message emerging from Cambridge is increasingly unfocused – as the shift (drift?) is made from “standard bearer” to “publisher and promoter.”

Therefore, I believe that in the eyes of the world, the LEI no longer owns “lean” and chooses (by action and inaction) to not define it.

Other organizations, such as the AME and SME, are claiming to hold canonical definitions as they work to establish formal “certification” programs to compete with the ASQ’s ownership of “Black Belt.” (I often wonder if Taiichi Ohno would have been able to get a “lean certification” by the standards offered by these organizations.)

The original academic discipline of continuously developing, testing, pushing, revising the current understanding – the very foundations of the LEI out of M.I.T.-  seems to have frozen in place – as though the initial research that led to the LEI’s formation is regarded as the end-all.

Challenge

So I have some questions.

One of the central tenants of “The Toyota Way” is challenge.

What is the challenge for the LEI? What is that ideal state that the LEI is striving to become?

Is it to be a successful publisher and promoter of books? Or is there still a sense of a higher purpose?

If it is the later, then I would like to suggest that this higher purpose is not felt “out here” in the world.

I, for one, would like to see the LEI return to a position of being the baseline authority. But this means giving up the idea that there is a static understanding which has already been grasped and simply needs to be put into practice. There is simply too much new knowledge being gained for that position to hold.

Ironically, the Toyota management system itself is built on foundation of striving to learn what is not yet understood. It would be appropriate for the LEI to embrace the same thinking. Just as “no problem is a big problem,” I would argue that “We already know” means “we have stopped learning.”

Ideas

So what would that look like?

Define “Lean” in non-abstract terms.

To regain leadership, the first step would be to describe the target of “lean” as a testable (and refutable) model. When we say “Lean,” it should define what are we striving for.

What does it look like when the organization is truly engaged in continuous improvement? This isn’t about describing tools, or results, but rather the key elements of a system and how they interact with one another – including the process of management and leadership.

What if we put John Shook, Mike Rother, Steve Spear, Jeff Liker, Michael Ballé, Art Smalley in a room – real or virtual – with a skilled facilitator and a task to try and isolate the five or six key operational elements that are in place in an organization that is truly “getting it.” Each of these people brings a significant piece of the puzzle. Could they fit them together?

The idea would be to develop a solid, testable, working theory of what “Lean” means as a general-case model of the Toyota Production Management System. This would be the LEI’s official position. Sure, others have their views, but this is ours, and this is how we are testing it. Put a stake in the ground, then be willing to continuously test it, review it, and update it.

I certainly have my own ideas on what those key elements are are, but would  love to facilitate that conversation and see the results.  🙂

Let’s acknowledge that we learn about TPS by continuous application of the scientific method – research, developing and testing hypotheses, and this is not static knowledge. We have nothing but our best current understanding, and as we apply it, we learn what we do not know. True senseis are those who have mastered, and teach, the process of learning.

Define a process.

Having a theoretical base is not enough. For it to be practical, we also must learn how to put it into practice. We are dealing with two separate things here.

One is the working theory of how TPS works as a management system.

The other is the approach used to deploy that process into an organization that has a long history of not doing it. In this, we must move outside of Toyota’s world and into the very messy world where the people who are practicing these things are isolated from one another, and have little or no coaching or even emotional support.

This means developing another theoretical base – one for deployment.

Lean Thinking outlined a sort-of process with five steps, but I contend those simply describe a sequence of tool deployment and do not address a management system. In those five steps “Pursue perfection” is a core tenant, but has never been well described – at least not until the publication of Toyota Kata. It is time to reflect on the last 15 years, review the approach, and incorporate what has been learned since.

Further, enough companies have tried the sequential-tools-implementation approach over the last couple of decades, that we have a pretty good idea that it doesn’t work very well. But have we truly examined why, beyond the platitudes of blaming “insufficient management commitment?”

Learning to See actually started this process. It outlined a pretty good process for gaining “current condition” understanding. I would certainly be comfortable in saying that if this process does not work to that end, it is more because of flawed application than a flawed process. But subsequent workbooks started down the path of describing the mechanics in ways that largely left out the people and the leadership processes.

So let’s return to the original concept of setting out a path for learning.

Then continuously test

Now comes the tough part. There must be an acknowledgement that, as much as this process captures what we have learned, it is likely imperfect. But we do not know where or how the flaws will show up. They will only become apparent in practice and application.

The only way to widely and continuously test a theoretical base for deployment is to fully engage a population of practitioners. These are the people who are taking the TPS theory and applying it to uncontrolled environments “in the wild” – the actual factories, hospitals, service providers out there.

To be a TPS-based process, the deployment process itself has to have mechanisms for built-in checks, both in application (are we doing it right, if not what is stopping us?) and outcomes (did it work, if not, what actually happened?).

The community of practitioners are going to be the ones on the virtual assembly line, with one hand on the andon cord. How quickly can the community be engaged to respond to issues, swarm the problem, restore to the standard, and then seek to understand what was not previously understood?

What I do know is that the LEI has one of the most active technical discussion forums out there. A webinar attracts thousands of listeners. An email with a link generates a huge spike in hits to the target site. How can that network be organized, focused and harnessed?

I don’t actually know. But if the LEI were to assume a position of leadership and establish a good vision and progressive target conditions to develop the community of practitioners into a team, I am willing to wager that the kaizen process, if properly applied, would work for that as well.

Paradigm shift

This is much more than organizing conferences, webinars, and publishing books written by consultants. Truthfully, anybody can do that, and frankly, there are more than a few who do those things better than the LEI does.

But the fleeting opportunity is one to regain a position of leadership, and truly engage people in ways no one has ever done. But isn’t that the core challenge of the Toyota approach in the first place?

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Voice Interface Fail

I am in Germany, with a rental car, going places I have never been. To make this a little easier, I got a GPS unit.

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

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

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

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

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

 

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Trusting the Process

Here is an “ah-ha” or even one of those “oh s#!&” moments I had as Mike Rother was talking about his Toyota Kata research last week.

  Solution How Solution is Developed
Toyota / “Lean” Left Open Very specific – guided and directed.
Traditional Management Given / Directed Not specified, left to “empowered” employee.

When confronted with a problem, “traditional” managers have been taught to direct a solution, and leave details of putting it into place unspecified – “empowering” people to find the best way to work the details, solve the problems, and get it done.

“Toyota” or “Lean” managers, on the other hand, (if they are following the kata model – rare outside of Toyota I think), are going to be quite open about the solution, but very specific about the method used to develop and deploy that solution.

The result?

The two populations learn quite different things.

One learns to bypass obstacles, put the directed solution into place quickly.. git-r-done.

The other learns, through repetition, a thorough, adaptable, reliable and universal process for diagnosing a situation, seeing the root cause, and developing countermeasures that sustain.

The line I circled in my notes is “Kata must be content free.” meaning that if the method is carried out correctly, the solution will work to deal with the issue at hand. It is not necessary to specify a solution, only to hold the “true north” of what constitutes improvement and ensure that the process to develop the solution is carried out correctly.

An unworkable solution is a sign that the problem solving process was not applied correctly, not a flaw in the process itself.

OK – that all sounds good. What is the “ah-ha?”

How have many of us been “implementing lean” and “engaging people” by giving them targets in the form of specific tools to implement, and then leaving it to the “engaged team” to work out the details of how it will function in their situation? Which of the above two models am I using if I do that?

If I were to set an appropriate target, that takes the process closer to one-by-one, etc. and then to correctly guide the team through the process of understanding the current state, evaluating what problem(s) are blocking progress in that position, and methodically solve them they might or might not arrive at the tool I have in mind as the answer. Just to be clear – this approach is a lot tougher because there is another skill involved than just knowing how to make kanban work, or set up a u-shaped work cell.

There is a fine line as well between giving the team the solution and advising them on some things to try that will help them reveal more issues.

But in the end, if their solution works to close the gap, but uses a totally different approach, I have to be open to that possibility.

We lean “experts” have to play by our own rulebook.

Otherwise I am simply holding a wrench and looking for a screw to pound.

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What Is The Problem (Again)

I am looking at a visual status display board. It has all of the usual things, safety information, 5S audit score, quality metrics.

The quality metrics display is pretty typical – there is a target trend line heading down, and a provision for bars representing actual. There is only one bar right now – it looks like this:

Clearly there is a target for next week that is lower than the results from this week.

Equally clearly is a desire to reduce defects by about half over a couple of months.

This is an effective way to display results.

But results of what?

As a manager, when I look at this board, there is one critical thing that is missing:

What are we doing to impact the outcome? What problems are keeping them from reaching the target now?

What problem are they working on at the moment?

What do they understand about that problem?

What reduction do they anticipate achieving if that problem is solved?

In a “Problems First” culture, we want focus to be on what problems we are working on right now. The results follow.

Even if the bars were marching along, ever lower, under the trend line, I am not satisfied unless I can understand why. What problems are being solved? Are they being solved the right way? Because I know it is impossible to measure yourself into different performance, I have to seek out understanding of what, exactly, is impacting these numbers. To do otherwise is to neglect my responsibility to verify that the issues are being addressed in the right way.

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When Can I see?

One of the issues Mike Rother says he has had with the coaching questions in Toyota Kata is question #5 “When can we go see what you have learned?”

In the west, inevitably it seems, once the word “When” is uttered, everyone in the conversation leaps to hear “When will you be done?” no matter how the question is actually framed.

As I am understanding it right now, the actual intent is for the coach to establish two things:

  1. The PDCA cycle needs to be turned rapidly. “When…”? is meant to establish a time fame that might be measured in hours, or even minutes, rather than days or weeks. The more quickly the PDCA cycle is turned, the more thoroughly the problem is understood and the more robust the countermeasure.
  2. “What we have learned…” means “What surprises did you encounter?” “What went differently than you expected?” “What didn’t work the way you thought it would?” this part of the question is intended to drive home the point that it is these things, not the success, that drive deeper understanding plus give clues about the next problem that must be addressed.

Based on Rother’s experience with this question, I am tinkering with how to re-frame it so I can use it more effectively. Ultimately the behavior I want is an invitation to jointly observe how the proposed countermeasure has changed the process. We want to understand the actual effect vs the intended effect.

That, of course, requires that the intended effect is understood and explicitly stated before trying. That does NOT mean that every little step is documented on paper such as an A3. That is far too cumbersome at this level of granularity. We want this process to cycle faster than the time required to write this stuff down. It does mean that I would have evidence that it has been thought through rather than just blindly trying something.