Archives for category: benchmarking

In the book, How to Measure Anything, it is discussed how ranges are more preferable to a target number. I have had this discussion around annual planning time and I get blank stares. What I found was a better way, at least from my organization, to sell this concept and work through it with a team.

When working with a team around annual planning, we look at what the plans were for this year and what has worked and what hasn’t. We look at the gap from plan and last year and discuss what could have been done differently. This gives us some context on what should be worked on. The goal may or may not be known but either way we are focused on misses from last year.

The next step is looking at other opportunities. These are items that have not been covered or based on next year’s products or innovation items and processes that will be changed over the budget time horizon. These are captured with the current gap for further discussion.

Now that all the items are captured, a three dimensional matrix is developed. It is easy to hard, and simple to complex. There can be complex items that are easy because the organization is behind the initiative just as there are simple and hard items because though it is a simple item to fix, the organization isn’t aligned. The image of the process is below.

 

3 Dim Matrix

 

From this exercise the team now has a range of possibilities from Do it’s to moderate projects to major initiatives. This now becomes the range of values that the plan can encompass. What becomes the discussion now, is where in the range does the target land.

Does the target land within the range of values? If not, what needs to change on the financial side to fit it into the range? This can be a creative writing exercise more that hard science but at this point the dollars are a jumping off point anyway.

Does the target in the range but on the side of major initiatives? If so, how can the team makes some of those more doable? Is it by breaking them up into smaller projects? Is there a way to increase the impact of other projects? Is the target not realistic? That is a funny one I put in.

This has been a useful way to get leadership to understand and start thinking about ranges from the historical target focus. This may also giving the team the ability to treat the annual budget process closer to what it really is, an annual guess.

 

 

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I have done some work in job shops and there have been many creative ways of creating pull and flow. I just saw one that was pretty impressive to me. I am not able to share images but hopefully I can do the process justice.

The shop was tight but I think it was more of an issue with finished goods and raw materials than the actual WIP processing area. The building was oddly shaped as well but they used the space effectively.

The incoming raw materials came in and an individual set up the order and which flow lane to start with. There were only 3 general types and there were some shared operations. The raw material was put on carts with wheels. This made it easy to move the equipment around and from the ergonomics point of view, it helped the techs work with the equipment.

There were lanes that were color coded to guide the equipment to each work cell. Each work cell had between 1 and 3 techs performing their work on the units. 85% of their needed materials were stored at the work center and Kanban cards were used for reordering. The Kanbans were usually handled by an individual that checked and filled the individual storage areas.

Not only did the tape on the floor indicate by color and location the assembly line, there was also marks on the floor for parking lots and WIP cap. There were several spots in front of a work cell that would only let 2 units be parked in front of the process before the previous process would stop. There was cross trained techs who could follow the work in such a situation.

The leadership had been working on this process for several years and then review the process quarterly. They have found that not only is raw material lower and throughput up, but variation related to cycle time and quality defects have been reduced by 30%.

The visibility on the floor, though not immediate due to the size of the equipment, is very good and from the mezzanine one can see where there is pull, flow and bottle necks in less than a minute.

The team has done a great job on organization, pull and flow with very little spending for materials. The spending was related to time spent with techs and leadership working on the details, modifying as needed and developing the tools, such as wheel carts to safely and effectively moving the units. Like the old commercial stated – Money for materials, less than $100, developing pull and flow at the job shop – Priceless.

 

 

 

 

 

My family and I love to go fishing. Most of our weekends are spent fishing somewhere as well as our vacations. We normally go for whatever is available in the ocean, lake or river. Sometimes bass, sometimes walleye or trout or blue fish. We do catch and release fishing so others can enjoy the experience as well. I get several people offering me new techniques and lures to catch the big one. I just like fishing but I do try some of the lures. Below is an image of some of the different types lures.

Frogs for lily pads. Crank baits, spinner baits, rooster tails, shad raps which are not pictured below and others that are used in specific conditions. It is amazing how many options there are. And this is just for bass let alone saltwater blue fish or drum or any other species. With these lures comes the technique to use them. Some you just crank them in, some you just float and have them “hop” on the top of the water, some you let them sink and crank a turn and then repeat. Are these techniques and lures statistically significant in catching fish? I don’t know but I am working with others on that question. One thing I do know is that it gets you into the store and gives you options on the water when what you are currently using is not working.

Bass Fishing Lures

 

Then there is catfish. I am sure there is just as much variation and subtleties to catfish fishing as there is to bass or any other species. What I will say, in my families experience, is that a bass hook, a 1/2 to 1 ounce sinker and a hot dog will bust you some serious hogs!

Hot Dogs

We have caught catfish in several lakes and ponds with this “rig” and have never needed to go back to the bait tackle store for something else. We just go to the local grocery store and buy the doggers. We usually by double so that we can eat some over the fire after the fishing day is done.

I have friends and family that have been fishing for decades longer than I have and have all the experience needed to bring in what ever fish they want to catch. What I find interesting is that when someone gives me the inside scoop on a lure / technique combination and they give me some bright lure with an instruction manual ala Ikea, I feel funny handing over an 8 pack of Ball Park Franks and telling them just drop them on the bottom and relax until they hit. But whether they are impressed or not, it works. That’s what I find sometimes when I am working on a project that I could have some great tools that wows the crowd during a presentation and show them how smart the team is but I would rather just show them how easy it can be to accomplish their goals. Sometimes it takes ANOVA analysis to get to the bottom of an issue. Sometimes it takes going out into the field and watching the process and giving some suggestions or using what the employee feels as pain points to resolve and issue. Just because you have the statistical hammer doesn’t mean everything has to be a complicated nail.

 

 

 

I have been reading The 22 Immutable Laws of Marketing by Al Reis and Jack Trout. Some of the “Laws” are interesting and even though it is about marketing there are great lessons for the CI professional. One of the first ones I gravitated to was the Law of Singularity.

The Law of Singularity as explained by the authors is subtitled “In each situation, only one move will produce substantial results. This is focused on marketing strategies that are different than what the company has done in the past. I was taking this idea a little differently. When looking at it from the CI perspective, I was thinking about the output from a value stream mapping exercise or process mapping exercise. Everyone finds their pain points and opportunities but we are sometimes constrained by the goal, scope and metrics that drive the process. What if we looked deeper before mapping the process and really look at instead of a “better” process, a different, more strategic process? I realize this is part of the future state map exercise but rarely does the team, leadership or sponsor have the courage to truly blow-up the process and look at something totally new.

The other point to this chapter is to focus on the one element that will make the biggest impact. This means when there is a laundry list of pain points, focus on the one that makes the biggest change. There is no reason to try to fix everything since everything doesn’t matter all that much and you don’t have the resources to do it anyway. This one item can usually be the pivot point for a whole new process. This is helpful when the team is stuck on improving what is already there instead of envisioning the what could be.

Reducing waste by 30%, increase throughput by 1000 widgets an hour, improve “customer experience” by 10 basis points. Very inspiring. How about starting with, “If you opened your own business, would you even do this process?” or “If you have to do it, how would you do it, regardless of what systems and processes are in place?” Is it helpful to have this kind of conversation without the sponsor of process and leadership behind the potential changes? No. This just demoralizes the team and then the process suffers. Next thing you know you hear these types of phrases in the hallways – “The process didn’t work” or “We used to do that” or “We need a new team or new leadership.” This is the typical response. Culturally, is your business able to pull this off? If not, improve the process but understand you need to start sowing the seeds of fundamental change.

When looking at processes, let’s not just “improve” them, lets change them or destroy them for the better.

 

How many projects do you work on that the leadership ask you two quarters later if you are sustaining the gains? Hopefully, more than I have through my career. One tool that I find that is not used often enough are the 1-sided and 2-sided t-tests. These tests can prove that the team’s work has been statistically significant from the perspective. I will be setting up a Vlop shortly to explain, with an example of a t-test but below is a discussion related to the uses of the tool rather than the mechanics.

t-tests should be used when testing if there is a change. This is part of the baseline data / measure phase. This will show you when your pilots have a statistically significant change in the metric. Many statistically astute leaders know this but don’t use this as a tool to track process improvements. It is not as slick as DOE’s and ANOVA’s to see where there are issues but those tools aren’t as easy to understand and, from my perspective, limited in use.

t-tests can easily be shown throughout the process life cycle. From baseline data through control, the t-test can show improvement. This can be used for almost any audience too. I have used this with Finance teams to see if there has been sustained improvement that leads to an individual G/L account. I have used this with parts of HR organizations related to talent acquisition, Outsourcing effectiveness, and payroll transactions. I have had to explain this with some groups but I have not had any say that this doesn’t make sense or not a key part of understanding improvement.

t-tests as trigger points. As an example, every week we check downtime as it relates to production. If the t-test shows that the average downtime is greater than the standard, move into corrective action, root cause analysis, countermeasure.

t-tests should be used to recognize improvements during a project, report out findings at the end of an improvement cycle as well as a dashboard metric to know if the process is staying on track or not.

 

There is an increase drive to eliminate reports in large organizations. So much time spent putting them together and who is looking at them let alone is there anything actionable being address or even triggered. It goes without saying that as systems gain the ability to track more, the more is usually noise not signal. I have been in meetings and discussions about rationalizing reports but I find that the discussion looks at quantity and who receives it. All good stuff but I think there are other questions that need to be asked.

What are the metrics and information that drive the business? This is a different question than do you use this report and, if so, what do you look at. Driving the business and the risks to that business are the only items that should be tracked. This type of discussion, across the organization, will create metrics that everyone shares and needs to be focused on. This takes longer and multiple parts of the organization need to be at the table but this will create a discussion and understanding across the organization. Total Landed Cost is one that can unite multiple parts of the team. This will create better meetings and better decisions across the supply chain. This will eliminate 50% of the reporting requirements and streamline discussions.

How much time and/or resources are required to generate these reports? This is better than discussing the number of reports or different types. This recognizes the fact that reports aren’t free and that making them “personalized” for each “leader” is a waste. How many times have you experienced someone stating that they focus on this set of metrics or I like mine in columns versus rows? Does the leader have to defend this to the wider organization? Do they work with their peers to find the format that works? Rarely. What work does this eliminate? This is a question I ask before I put together any report. If it is going to be business as usual, I recommend that the report does not get developed.

What are you going to do with the information? What is actionable? This is better than what do you do this report. So many reports are related to FYI reports or nice to know. I know there are reports that leaders think are actionable. “Johnny, this number stinks. Fix it.” That is not actionable. Actionable means that you having triggers that once they are reached, there are corrective actions and countermeasures as well as root cause analysis that need to set up to support the report.

The report problem needs to be solved but not by making them easier or doing fewer of them. You need to decide what is important, track it and develop improvements when needed.

 

When performing Kaizen events as well as the traditional DMAIC processes, I have used Pareto analysis for multiple activities. I have also used it for daily report outs and period reviews on project status. The idea of focusing on the largest issue or those that constitute 80% of the output is a great tool to get a team up to speed and work on the biggest impact items. I have found that it is not always the best tool. In the three (3) types of uses above, there are other considerations that need to be taken into account.

Kaizen Events are critical to kick-start a process improvement. Going to the process and walking it, there is no better way to see the process in the quickest time possible. When it comes down to pick the best site to run the event, I run a Pareto Analysis on sites with the biggest opportunity or biggest volume or “most important” to the business. Using this criteria, you would think you could find the best place to run the project. What I also look at is the culture of the site and the team ready to make the potential changes. Without the site willing to move in a direction, it really won’t matter the “opportunity.”

The Analyze phase of DMAIC creates a priority list of root causes that are directly related to the goal. This is a classic use of Pareto and this will give you a good representation of the y is a function of x. What I find is that while this is good for the team to see and review the information / knowledge, there is also another aspect that needs to be thought through. This is the aspect of what can be implemented. I have had numerous occasions where the largest little x was so difficult for the organization to move on, that the root cause or potential benefit had to be curtailed and the Improve phase was dealing with the diminished returns on the top items and mitigating the overall project impact by adding smaller items to get the majority of improvement.

When reporting out results on a project or just informing the team on progress, the Pareto Analysis can show improvement and changes to the process easier than other tools and graphs can. Sometimes, though, depending on the data set, you need to scrub the data before the chart is run. This is because the “other” category overwhelms the other items. Until this is dealt with, the chart is of limited value.

Pareto Analysis is one of the best ways to represent data and help a team decide what to work on. One needs to be careful and follow some basic rules to using this tool effectively and ensure the tool doesn’t lead you down a path that doesn’t lead to real continuous improvement.