Tag Archives: GBMP

Profitless Part Proliferation

leadwireI wrote a post a little more than five years ago about Variety Reduction Program (VRP), an amazing but little known product design optimization tool.  At the time I referred to VRP as an idea whose “time had not yet come.”  Last week, as I gave a short presentation on VRP, I realized that five years later its time apparently still has not come.  In the interest of creating more interest around this significant technique, the following post expands on my epistle from 2011 and provides a couple of tangible examples of that significance from my own experience.

First, I think the technique deserves a new, mnemonic and alliterative moniker:  Profitless Part Proliferation.   I suggest this clarification because the word “variety” has an unfortunate positive connotation in the sense of greater customer selection, and therefore turns off sales and marketing folks before you can explain that VRP is not about product line trimming.  That was my initial experience in my own company many years ago.  “Just another anti-customer maneuver by operations,” I heard.  In fact, VRP aka P3 is about trimming needless part variety and all of its associated costs (e.g. drawings, inspection, purchase orders, stocking locations, etc.)

Secondly, I would like to call attention to the false sense of profitability that is often created through the addition of new parts and assemblies.   Minimizing the functional cost of material (the one that shows up on variance reports) for a single product looks good on paper, but almost always creates huge overhead costs arising from complexity.  Engineers and cost accountants typically focus on the apparent profit from product X, but ignore the resulting system costs.   They can’t see the forest for the trees, so to speak.   The following two examples for common part commodities, one a purchased part and the other a sub-assembly, speak to this problem:

O-rings.  A project was initiated to examine O-ring specifications and dimensions – things like durometer, chemical resistance, temperature range, ID and OD.   The first thing we realized was that there was no single repository for this information.  Our computer part master record contained dozens of fields to support ordering and costing, but most important design information was squished unintelligibly into a description field.  After cataloging specs and dimensions for O-rings, we realized that twenty-nine different O-rings were stocked.  Our discoveries:

  • Our information system made it difficult for designers see what was already available when they were choosing parts. It was just faster and easier to go to a supplier catalog. An alarming amount of part variety arose simply from poor design tools.
  • Once we were able to view O-rings as a part type from a design standpoint, we realized there was considerable overlap in specs and dimensions. Of the twenty-nine O-rings we cataloged, we determined that all production needs could be handled by only five O-rings.
  • Of the five remaining O-rings, one had metric dimensions because of unanticipated tolerances with mating parts. Rather than deal with correcting the mating parts, a unique O-ring was selected as a “bushing.”  Incidentally, that particular new part required the addition of a new supplier.

The rub was that the most robust O-rings cost a few cents more than marginally acceptable specifications.  Cost accountants argued that using the most robust  O-rings would increase product cost, ignoring the additional costs of maintaining two-dozen unneeded parts.  In fact, as we were a low-volume high-variety producer, we pretty much had to order months of supply for every one of the different O-rings anyway.  Finally, engineers argued that the cost of an engineering change – particularly a drawing change – was too great.  “We have better things to do” I heard.   Fact is, engineers are typically not rewarded for fixing up old parts; they are recognized for designing something new. Ultimately, however, some concessions were made in the interest of experimentation and the O-ring variety was reduced.

Lead wires.  A more egregious example of Profitless Part Proliferation was the variety of lead-wire assemblies. As a manufacturer of electro-mechanical products, my company built thousands of different lead-wire assemblies to support perhaps three dozen product families. At one point we dedicated a full bay of ASRS storage to lead-wires.  Still, lead-wire assembly stock-outs represented a major cause of late customer deliveries. Lead-wires were cut and terminated in large batches owing to the long set-ups on the machine.  While working on set-up reduction of the lead-wire machine, a production team lead astutely wondered why many lead-wires differed by insignificant lengths, as little as 1/32”.  During a project launched to catalog the variety in gauges, stranded or solid, terminations, insulation color and material – and many other specs – we did in fact identify an important opportunity just in lead-wire length variety.  This variety, we suddenly realized, stemmed from a single statement regarding the length of the connection leads outside the end item enclosure.  Sales and technical literature read something like this “Lead-wire length:  12” outside enclosure.”  In fact, our customers would have been happy with “at least 12” outside enclosure.”   Twelve and one-half inches would have been fine, as would twelve and one-thirty second inches, and so on.  The authors of VRP advised us to be clearer regarding which dimensions should be fixed and which could be variable within a range.   Once the product specification was changed to reflect “at least 12 inches outside,” the number and type of lead-wire assemblies plummeted!  So did the stock-outs.

These are just two of many specific examples where parts proliferation was pointless and profitless.  Now, before you say to yourself, “Oh that would never happen in my factory,” I’d encourage you to choose a common commodity of a purchased or manufactured part, and investigate the variety.   Please share a story for our readers about your discoveries. (One lucky commenter will be selected to attend GBMP’s 12th annual Northeast L.E.A.N. Conference coming in October to Worcester, MA. I am delighted to reveal our four exceptional Keynote presenters will be: Art Byrne, John Shook, Steven Spear & Dr. Eric Dickson (not to mention the forty other educational, informative, motivational and fun breakout sessions).

Shigeo Shingo was quoted as saying “The worst waste is the waste we cannot see.”   Help us to see by sharing an example from your experience.   I’d hate to think that I’ll be reflecting again in another five years on an idea whose time still has not yet come.

O.L.D.

BTW: GBMP’s calendar of Shingo Institute workshops is jam packed through October. Check it out here and join us for a workshop (or two) soon.

lfxAlso, I’m happy to share that GBMP’s online streaming video subscription service which we launched in March and call Leanflix  is receiving terrific reviews. We are so glad that we have been able to provide convenient, low-cost, on-demand video training content to meet the varied and ongoing training needs of so many in our Lean community. If you haven’t checked it out, I hope you will set aside a little time this week to do so.

– Bruce

 

Eye of the Beholder

kanbaMany moons ago when I was just getting started on my lean journey, I visited a large automotive supplier to benchmark pull systems.  My own factory had started a pilot kanban between two work centers and I was hoping to gain some insight from a more experienced source.  To my disappointment, when I was escorted to the factory, the aisles were crowded with pallets of kitted orders.  “What is this inventory?” I asked my tour guide.  “That’s Kanban,” he said.  “How so?” I asked. “Every day the stockroom pulls stock for the floor,” he explained, emphasizing the word “pull.” I thought to myself that this particular material looked just like traditional factory orders, launched before they were needed.  The floor of this benchmark facility was more crowded with inventory than my own.   Not wishing to be rude, I tactfully inquired, “Isn’t the kanban supposed to stay near to the supplying work center?”   The factory manager confidently responded, “Oh yes, we have a central Kanban area.  I’ll show you.”  With that, he led me to large storage area that looked just like my stockroom only larger. “We pull from here,” he reiterated, once again emphasizing the operative word, “pull.”

“Amazing,” I thought to myself, “the factory has just swapped its STOCKROOM sign with one that reads “KANBAN.”  (Thirty years later, by the way, that factory has been closed.)  The point here is not to focus specifically on the tool, in this case kanban, but rather to highlight the difficulty that arises when the concept behind any tool is misunderstood.  If we don’t understand “what good looks like,” we could be doing exactly the wrong thing.

Two days ago, for example, I heard a machinist jokingly describe his factory’s use of Andons:  “When there’s a problem with my machine, I set the Andon to red and that signals everyone that I’m away from the machine hunting for the maintenance department.”    Unfortunately, while the front line employee knows this not how Andons are supposed to function, the details are less well understood elsewhere.  There is not a single Lean tool I can think of which is not burdened by misconceptions.  Here are six common ones.  Perhaps you can add to the list in the comments section below and we’ll keep a running tally (think we can get to 50?):

  1. Ganging up shop orders with similar set-ups regardless of due date in order to amortize set-up time, and then calling it “set-up reduction.” This is set-up avoidance. The whole idea of reducing set-ups to “build the customer’s exact order immediately” is lost when orders wait their turn for the right set-up.
  2. Creating dedicated “cells” which sit idle 80% of the time. People tell me, “We don’t have room for cells.”  No wonder.
  3. Moving the stockroom to the factory and then referring to months of stock on hand as “point of use inventory.”
  4. Referring to work instructions as “standard work.” In fact, having a clear work standard and job instructions build an important foundation for standardized work but too few sites understand standardized work as a dynamic choreography matching supplier capability to customer rate.
  5. A subset of the above, confusing Takt time with cycle time.
  6. One of my favorite misconceptions came from an engineering manager who let me know that he appreciated the “8th waste” (loss of creativity) because he was tired of his engineers wasting their creativity on production problems.

Confronted by these kinds of mis-perceptions, I’m reminded of an old Twilight Zone episode, Eye of the Beholder.   Watch the two-minute clip to see how ugly things can get when we don’t have a good understanding of the concepts behind Lean tools.  In the last several years, a great deal of attention has been given to creating a Lean culture rather than just implementing the tools.  This is an ideal I subscribe to wholeheartedly so long as we define culture as an environment favorable to continuous improvement, and recognize that a proper understanding of the tools by both workers and managers is a key part of the culture.

O.L.D.

PS I’d be remiss if I didn’t remind folks that the Early Bird price for The 12th Annual Northeast L.E.A.N. Conference  – “Lean-By-Doing: Accelerating Continuous Improvement”– ends May 31. It’s a great event and all the better if you can save your company some dough when you register your group. (It’s still a really affordable event even if you wait until the summer to register, no worries.) I am really looking forward to it and hope you are making plans to join us. There will be keynote presentations by John Shook, Steven Spear, Art Byrne & Dr. Eric Dickson, plus more than 30 interactive, educational, inspirational and fun breakout sessions rounded out with networking socials, yokoten in the Lean Lounge and much more. Here’s the agenda. See you in October, I hope!

As an added incentive to add to my kanban misconceptions list, one commenter will receive a free registration for the whole event! Good luck! BEH

 

 

 

Indefinite Postponement

Today’s post isindefinite inspired by the politically charged gobbledygook we call presidential primaries.   This battle of principles turned battle of wills reminds me that the role of the change agent can be as much theater as science.  But, at least in a public forum the positions of the opponents are plainly laid out for us to see.  We expect them to take a stand on important issues.

In the less public day-to-day business of politics, there’s a subtler tactic exercised by opponents to put the kibosh on ideas that don’t appeal to them.   In the parlance Robert’s Rules of Order, it’s called “indefinite postponement”, intentional procrastination to avert debate and deadlock.  In fact the decision “not now” is more effective than “not ever,” because the merits of the change take a back seat to arguments regarding scarcity of resources.

On their face, these arguments may seem reasonable and sincere, but my cynical side suggests to me that our resistance to change can be as much a matter of lining up the data points to fit our prejudices as they are reasoned conclusions.  Whether intentional or subliminal, the not-now tactic can be extremely effective at both starving good ideas and deflecting the short attention spans of managers.   In no special order, here is a Top Ten List of reasons for indefinite postponement that I hear pretty regularly, each with a brief counter argument to prevent your Lean transformation from withering on the vine: They all begin with “I’m in favor of Lean, but . . .

  1. . . . we should wait until we move to the new building.” This is a big mistake, because the opportunity to improve for the move rather than just moving every process in situ is lost when we wait.  In fact, after improvement you may realize the new building was unnecessary.
  2. . . . we’re too busy right now.” To be sure, balance is everything and sometimes getting the orders out must take precedence, but this lack of commitment can be like Waiting for Godot (from a post I wrote five years ago).
  3. . . . we can’t afford it at the present time.” More than 25 years ago Phil Crosby taught us that Quality is Free and more recently Alan Robinson pointed out that Ideas are Free.   In fact, the best improvements cost little or nothing and quickly accrue to the bottom line.
  4. . . . there are a few key hires we need to make first.” This is a surprisingly common cause for indefinite postponement.  Would the same argument be offered if, say, the issue concerned providing a product or service delivery to an external customer or for dealing with a safety hazard in the factory?   I understand there are proportions to consider, but the proportions for continuous improvement are often very small.  In fact, sometimes the postponement may be intended to await a new hire who is less interest in Lean.
  5. . . . we need to get our deliveries back on track first.” This is a variant of “too busy right now.”   Who can argue that customer does not come first?   On the other hand brute force delivery tactics only perpetuate the problems that lead to late deliveries in the first place.   Firefighting is a very tough habit to break.  Our body memory and the ‘high’ of overcoming the odds, impede the application of less exciting root cause problem solving.
  6. . . . let’s wait until vacations are over.” This is perennial  condition that will never end.  Rather than capitulating to vacation schedules and losing twenty-five to thirty percent improvement time each year (not to mention the loss of momentum), why not seek countermeasures to levelize the improvement process?
  7. . . . we’ll have to dollarize the impact first.” Here is veiled starvation technique using traditional cost accounting measures as the reason for postponement.   Taking a machine down, for example, to practice set-ups, will not look good on paper, nor will building or buying smaller quantities.  Lean is a learned by doing.  It’s not a paper exercise, especially not one bounded by non-Lean measures.
  8. . . .we’ll need to first figure out how to modify our sampling policies to accommodate small lot and one-piece-flow production.”  This is a circular argument sometimes advanced to defend sampling.  Rather than thinking about how 100% quality can be confirmed at the source, we postpone smaller lots by thinking about how it can’t be done.
  9. . . . we have to finish our computer system implementation first.” This is the granddaddy of excuses because it sucks up so many resources for such a long time.  It seems reasonable, except that if time were spent first to simplify before automating information flow, both the IT system and the business would reap huge benefits.
  10. . . . ISO-xxxx must come first.” As with IT implementations, quality systems will be greatly simplified after Lean improvements.  At the very least, the quality system (ISO) and the quality culture (Lean) should be implemented concurrently.  They are two sides of the same coin.

I think this is the short list.  Do you have any other reasons for indefinite postponement?    Please share a few.

O.L.D. 

Quick note about GBMP’s schedule of upcoming Shingo Institute workshops. Several new ones have been added to the line-up – including May in Minnesota and June in Puerto Rico. See the schedule.

Ten Posts for Ten Shingo Principles

Hurrah!  Today is the first day of Spring, if a little snowy, in the Boston area.  And the 28th Annual Shingo Prize Conference is fast approaching in just one month.   GBMP will be there and I’ll be teaching the Shingo Institute IMPROVE Workshop on April 24-25.  In honor of the conference, I’ve dug into the archives of my blog, going back to 2010, to find posts relating to each of the ten guiding principles from the Shingo model.  For those of you who’ve started reading my posts more recently, I invite you to peruse a sometimes humorous, sometimes serious potpourri of posts from the last six years.

Looking for a five-minute break from your work?  Each post takes about that long to read.  Follow the links and enjoy – and hope to see you at the Shingo Conference in Washington, D.C.

ogg

Lead With Humility

Humility may be seen as a sign of weakness.  This post from early in 2010, entitled Lead with Humiliation is about a couple of my fellow managers struggling with the concept of humility.  Leading with humility can be scary for managers.

Respect Every Individual

I wrote this post, Invisibility, about the unfortunate assumptions that are often made regarding the value of formal education or lack thereof.  The 8th waste is definitely the worst and unfortunately the most prevalent.

Focus on Process

Inspired by a scene from Casablanca, this post, The Usual Suspects, from 2011 reminds us to focus on the 5 Why’s rather than the 1 Who.   When we rush to judgment without understanding root causes we poison the quality culture.

Embrace Scientific Thinking

In 2010, I had a funny experience with a young engineer’s interpretation of ‘direct observation.’  This post, entitled Being There was written with millennials in mind, but probably applies to all generations.

Flow and Pull Value

My personal experience trying futilely to satisfy customer demands with push production is described in this recent post, Bump and Grind.  The message is that a bad system cannot be fixed with workarounds.

Assure Quality at the Source

As suppliers we often feel that zero defects is impossible or at least impractical; but as customers we demand zero defects.  This post from 2013, titled Cracked, is about a familiar product for which most of us as customers will accept no defects.

Seek Perfection

Managers are often encouraged to choose easy targets, a practice that limits professional challenge of team members and stymies Lean transformation.  This post, Target Practice, was written in 2010 about an experience at customer from several years earlier.

Create Constancy of Purpose

Here are some good Lean lessons I learned while coaching my kid’s soccer teams.  Last year I wrote a post called Up, Back and Around as a reminder that when the goal is clear, we may adjust our tactical decisions will also be clear.

Think Systemically

Watching repairs to the UMass Boston campus library last June, I reflected on the criticality of improving a system, not just its parts.  Failure to do this will have negative consequences.  Long Term Sinking is a result of short-term thinking.

Create Value for the Customer

In 2012, I wrote a post about my experience many years ago accompanying a salesman to a customer site to learn some lessons about the importance of understanding value to the customer.  The post: A Salesman’s Gemba.

I hope you’ll find a few of these stories and video links helpful.  As always, your responses are a welcome indication that there is somebody there.  Want to learn more about the Shingo Principles?  Come to the Shingo Conference in Washington next month!

O.L.D. 

Hey!  Would you like to be able to see Toast Kaizen any time on demand as well as ninety-nine other classic GBMP Lean videos, podcasts, plant tours and conference keynotes?  Become a Gold Level GBMP member today for only $895 and receive streaming capability for our award-winning videos as well as 15% – 30% discounts on our annual conference, public training events and products.  Click here to learn about LEANFLIX and see all the membership benefits.

lfx

www.leanflix.org

Ludicrous Speed

speedMel Brooks fans will remember Spaceballs, his jocular jibe at the Star Wars epic. In pursuit of a rebel ship, evil Lord Dark Helmet (Rick Moranis) orders his crew to accelerate their craft beyond the speed of light to “ludicrous speed.” While time travel remains science fiction, our ability to process and transmit data has proceeded apace since I was a young lean dude. In college we expressed data transmission speed as a baud rate, a unit of measure roughly equivalent to one alphanumeric character per second. Geeks like me sat at Teletype machines watching our computer programs transmit programs at the blazing speed of 32 baud (i.e. 32 characters per second) to a shared computer at Dartmouth College, which then processed that information at a rate expressed in IPS, instructions per second.   Information speed was severely limited by the transmission and processing technology of the day.  By the time I graduated college however, speed had progressed to MIPS, millions of instructions per second, then to billions, and more recently FLOPS.   The trend continues today, bounded only by theoretical limits, towards ludicrous speed.

Fascination with information speed has been with us since 1953 when the first commercial computer was sold. At that time UNIVAC (Universal Automatic Computer) processing speeds averaged 0.002 MIPS. Only a handful of the world’s largest corporations could afford the million-dollar price tag for the twenty-nine thousand pound device that filled a four hundred square-foot room.   UNIVAC was the device that coined the term “real-time” defined as the “actual time during which something takes place” plus a few more MIPS for processing.   No doubt, the technological breakthrough was amazing, if only visible to a few persons.

However, compare UNIVAC’s real-time stats to the iPhone 6, weighing in at less than five ounces, and fitting easily in a jacket pocket. In a sixty year span, the speed of real-time has increased by nearly 130 million percent. Ludicrous speed! Moreover, smart phones are ubiquitous. Now everyone can have real-time information, not just a few large corporations. So what’s so ludicrous about that?

From a Lean standpoint, there are a number of challenges:

  1. First, is the barrage of media presented to us every minute of the day. How many emails must I routinely delete each time I handle my smart phone?   How many videos do I need to see on, for example, Kanban? YouTube lists 56,600 entries. Which of these is valuable to me? Which represent misinformation?   How can I confirm? In reality anybody can post any video today – with ludicrous speed.  No doubt, some of these videos will be excellent. But I could sort and sift through the YouTube haystack forever looking for good information.
  2. Second, the promises of automating Lean are alluring but insidious. For example, say some, do away with those pesky cards (kanbans) and replace with them with real-time kanban. This, unfortunately, separates the information from the material, assuring that the two flows will be out of sync. Moreover, the ‘instantaneous’ information becomes invisible.   Cyberspace is not a Gemba. We can’t go there to see queues or delays or problems.
  3. There is a paradox in the lack of connectedness that has derived from this ludicrous speed of information flow. An increasing number of persons labor under the delusion, for example, that texting is “talking to someone.”   At a time when we are finally acknowledging the importance of social science to real Lean transformation, we are at the same time interposing a tool that isolates people, that creates only the illusion of human interaction.
  4. The ludicrous speed with which we can all whip up professional-looking presentations today has blurred the distinction between looking good and being good. In the immortal words of Dave Lee Roth, “It’s not whether you win or lose, it’s how good you look.”   PowerPoint, the original “baffle-them-with-B.S.” application has been around for twenty-five years, but it is quickly being supplanted by a plethora of smartphone apps for 5S, standardized work , Kanban, Kamishibai, and..well…you name it! Why do we do this? Because we can.   The words of my old-school TPS teacher are ringing in my ears.   Responding to my PowerPoint-drawn value stream map, he replied “Don’t make it pretty, make it accurate.
  5. Finally, as with material flow, when we focus primarily on cycle time, those nanoseconds of computer processing and transmission, we lose sight of the often huge stagnation time of computer queues, the automated over-production of information (produced before it is needed), and the total elapsed time for information flow, which includes the batching of information before input and after output. Those times can be truly ludicrous.

I’m admittedly a participant in the information age and I benefit from its ludicrous speed.  I use the Internet, for example, to write my posts and revel in the opportunity to pull in links to humorous video, historical background and scholarly articles.   But I worry that the ludicrous speed with which I send and receive information today may not be leading to more wisdom.

Please share your thoughts. Do you agree or disagree with the challenges I’ve posed? Can you think of other challenges?

O.L.D.

P.S. GBMP has lined up several Shingo Institute workshops this winter and spring. For those who wish to learn how to create and lead sustainable cultures of excellence based on the Shingo Model and its Guiding Principles, we hope you can join one of our exceptional Certified Facilitators at an event near you soon. Read all about the courses and our faciliatators here.

Also, it’s long been a part of my organization’s mission to help build a community of passionate lean practitioners, leaders and learners and we at GBMP are proud of our Membership Mission and program. You can read all about it here. After more than a decade without a change in the annual fee to belong (which has always been an astonishingly low $495 per year for a company-wide membership),  dues are going up in March of 2016. Not without additional benefits, we promise. And not without the option to pay the current price to keep the current level of benefits (plus a few new ones). Beat the increase by signing up for or renewing a current membership now so you’ll get all the benefits of our GOLD Membership for the old price.