Are the Seven Measures of QCD Enough?

I have just chaired a Masterclass which was focussed around scoping process improvement in manufacturing processes.  It was apparent that a narrow application of the seven measures of QCD could lead the wrong areas being concentrated on for an couple of reasons:

1. The process industries have a very important measure which is Yield which could be of a much greater opportunity than OEE.  A process could operate at 100% OEE with a poor yield and be losing a great deal of money!

2. The seven (or eight including yield) measures do not tell the full story.  Understanding the financial performance and the funding sources for a business will give further clues as to how to approach an improvement programme.

I think we have to be careful in the field of Lean that we do not forget the bigger picture of where our efforts contribute to the business performance.

A difficult consultancy project

I recently visited a client in northern Finland with extreme issues. The whole issue started with demand planning. Virtually all of the demand seemed to centre around one day of the year - the 24th December. At least demand was spread across all time zones but it was still quite a spike to contend with. The next issue seemed to be around logistics. I could only see one delivery vehicle which seemed to me to be pretty old but the despatch guy assured me it could do the job. He outlined to me how the MD actually delivered the goods himself, overcoming considerable difficulty, with many premises being shut.

Manufacturing looked chaotic with little flow. It seemed like orders were arriving from mid-November onwards with no forecast and no smoothing of orders into the process. As soon as orders arrived, they were passed to the workforce who appeared to be working hard but there were some swear words flying around in a high-pitched language I couldn't understand. I assumed the workforce were contracted from another country as they looked very small compared to the business owner, who like most MD's looked well fed and watered. If demand was not being met, it appeared more workforce was recruited with no consideration of cost.

I did notice that some subcontracting of difficult orders was taking place, especially to the far east. There was much moaning that the quality of the goods just wasn't as good as those manufactured in-house but it was so difficult to compete on price.

I got the senior team together and came up with some proposals. I have to say there was much shaking of heads during this difficult meeting but I find this is not unusual when trying to change a broken process which the company owners wish to hold onto. The key ideas:

1. Spread the delivery dates throughout the year and hence smooth demand in the process
2. Subcontract delivery to a logistics company who are skilled at getting goods to the customer at the right time. There was some cynicism as to whether the demand could be met but I assured them it was a tried and tested method.
3. A complete cease in manufacturing to assembly and wrapping, where I felt value could be added. Upskilling of the purchasing department to be strategic rather than buying simply on cost.
4. Training of some of the taller workers to become team leaders and arrangement of the operation into cells with performance boards and team briefs.

I felt I'd pretty much got them in the palm of my hand then the MD, who had obviously been reading Lean Thinking in his many spare months during the year, said, "Haven't you forgotten about the first principle of Lean, understanding customer Value? My customers expect On Time In Full on the 25th December only - you ask them! I have to arrange my value stream to deliver this and it works pretty well as it is. My second cousin twice removed, Dan Jones, would give you a good talking to, melad." I have to say this pretty much floored me. I hadn't really thought about involving the customer in the discussion of Value before jumping to my conclusions.

Of course, in the real world, we would never implement changes without understanding customer value.


Would we?

Change Agents - Eight Arms Useful......

I often get asked about the requirements of a good change agent when implementing business improvement techniques such as Lean. Eight arms (or legs) would be useful but they aren't a prerequisite. But some other characteristics of an octupus would be useful:

- Intelligence - the octupus is the most intelligent of all vertebrates and the ability to analyse potential using data for a change agent is essential - if the change agent does not know the end point the group will be left floundering

- Colour changing - well, the ability to tailor a message depending on your audience anyway - being able to converse with shop floor and management alike

- Adaptability - Octupuses can swim with either their arms or by using jet propulsion or I guess by grabbing onto a passing boat. Sometimes the unconventional route is the one that gets you there!

- Skilled hunter - some Octupuses have been known to eat small shark - sometimes a tenacious attitude is needed to bring the more obtuse members of management to heel and embarass them into action

- Ability to 'hide' - Octupii squirt black ink to fool a pursuer - I'm not suggesting a change agent should do that but time management is an essential quality. If a change agent gets pulled in all directions then nothing will be achieved

- Empathy - Octupii have three hearts and sometimes a change agent needs to bite their tongue and offer unconditional help and coaching to a trainee to improve. A quick temper has no place in this role.

So next time you're looking for a change agent look under the nearest rock - the best candidate may well be there....

The Value of 'Free' Training

A great deal of training in the UK is part or fully funded via agencies such as train to gain with the laudable aim of helping businesses to become more competive while improving employee skills.



However, the issue with 'free' training is how well it is valued by the business and thus how well the knowledge gained by the employees is actually leveraged to achieve business success.

Free training is often brought into the business without board sign-off simply because it does not need financial authorisation. However, because it does not have the profile and has not been discussed at board level, the risk is that it does not receive the back-up it deserves.

For any business considering funded training, especially of a large level of intervention, I would argue that a board level team should consider:

1. The real internal cost of the training in terms of release, staff cover, lost efficiency etc...

2. Consider what the ultimate benefits should be. These might not be pure cost saving but may well be a mixture of hard and soft benefits but should be a mixture of internal benefits and customer benefits in terms of improved quality, cost and delivery measures.

The process itself of discussing this is an important method of building commitment to worthwhile training and filtering out initiatives which are actually going to be more hassle than they are worth.

Will Terminal 5 Flow?

This article was spotted extolling the virtues of Lean process design in Terminal 5.

Lean is starting to enter the vocabulary of wider business away from its typical manufacturing base which is to be welcomed. But the article on Terminal 5 talks about 'operational efficiency leading to cost reduction'.

This leads us to wonder if lean is really being used in the right context. Where is the customer in all this? Well, the end of the article quotes a BA exective as saying, “T5 is opening up Heathrow to a new passenger-oriented experience.”

So the jury is probably out.

If you want to be part of the jury, BAA is asking for volunteers to test the systems at T5. It will be interesting to see if some of the new systems and techniques have really been designed in terms of the customer pathway or designed top-down.

Line Balancing is a black art, right?

Well, no and no.

A first tier auto supplier was struggling to meet demand from a particular line with OEE's running at around 50%. It had decided to invest about £40,000 on a new automated end of line inspection device since its management information was telling it that was where the majority of downtime was originating (which indeed was correct at face value).

However, process mapping and going to the Gemba (workplace) revealed that a much bigger problem was being caused by the work content at the three semi-manual assembly stages. In this case, it was not 'Rocket Science' to understand the reduction in average line speed was being caused by uneven work content and lumpy flow. As is so often the case, the lowest skilled (agency) workers were at this stage despite it being the bottleneck.

The work content was assessed using video and content analysis and the tasks at the three stations were radically changed. A trial was done showing incredible increases in OEE (towards world class 85%!) and the team leaders at the company quickly installed mistake proofing for the new operation (without prompting, we hasten to add).

The value to the company in increased output was over £700,000 per annum.

OK, it may be rare to find such amazing increases in throughput for a relatively small resource input, but ask yourself;

• Are there any semi-automated lines in your workplace where the data you are collecting is actually leading you to the wrong conclusions?
• Is the bottleneck in a different place to where you suspect it to be?
• Have you been to the Gemba and understood the reality?

Process Data Measurement

We see a lot of automated shop floor and process data capture going on, especially with larger companies. For example, OEE (Overall Equipment Effectivess) measurement is often reported in great detail and with great certainty ("Our factory OEE increased by 0.7% last month!").

Usually when Kaizen teams start to look at the data, they see that reported data through automated collection systems is at best unreliable and at worst downright misleading. The best way to understand line performance is to see and understand it for yourself and to collect data to support what you are seeing. Once you understand what you need, you can then turn again to automated systems to support you.

Time and again, challenging a team to turn away from 'analysis paralysis' and focussing on the key 'real' data leads to big jumps first in understanding and then to real progress in problem solving and problem resolution.