Evolving Excellence

Root Cause - Contain It First

I enjoy conducting training on root cause analysis because it's one of those areas where the production employees often "get it" before management.  They are the ones that have to live with the same problem reoccurring time and time again, creating vast amounts of NCMR paperwork.  However I just read of a case where a desire to immediately find the root cause may have actually created more problems.

Recall the problem reaction process:

1. Problem identified and defined
2. Problem contained and action taken to protect the customer
3. Root cause analysis process (many steps, including the "5 Why's")
4. Solution validated with data

The financial markets in Asia have been abuzz with the story of Mizuho Financial and J-Com on Thursday.  In this bizarre circumstance, at 9am a broker at Mizuho was asked to sell one share of J-Com for 610,000 yen (approximately $5,000).  However the broker mistakenly typed in an order for 610,000 shares at one yen. 

As reported in the weekend edition of the Wall Street Journal, this type of mistake isn't unheard of.  In this case an assistant noticed the error within two minutes, however he wasn't authorized to change an order of that size.  By 10:30am senior executives were involved, but they did not wish to publicly acknowledge the problem until 4:30pm, after the markets had closed.

The result is that the order was valid, and Mizuho is having to take a loss of approximately $233 million.  Not bad for a typo.

However the line that really caught my eye was "it took Mizuho until 4:30pm to acknowledge involvement as it focused on figuring out what happened , rather than trying to stem the repercussions in the market."  They were trying to do the root cause analysis before containing the problem.  Mizuho shareholders must be thrilled.

Performing a true root cause analysis to identify the underlying problem is great, however the first responsibility is to protect the customer.  Identify the problem and contain it, then start on the root cause.  Mizuho, and some presumably unemployed brokers, have learned the hard way.

Six Sigma and Lean... Optimizing Waste?

There has been a flurry of activity in the last year trying to integrate the concepts of Six Sigma and Lean.  A lot of it is driven by consultants looking for the next new thing and quick buck... and some have even trademarked variations of the words Lean, Six, and Sigma. 

But are the two concepts really compatible?

Toyota is the master of Lean, and focuses on stripping waste out of every possible business process, but does not embrace Six Sigma.  GE has made Six Sigma, and expensive green and black belt training programs, a must-have at many major corporations.  There are also examples on both sides of companies that implement the concept but still struggle... such as Motorola and its Six Sigma prowess.

Six Sigma optimizes every possible process to reduce potential failure rates.  This can create massive statistical exercises with results understandable to only a few people, and perhaps "analysis paralysis".  There is no doubt that it can improve quality... eventually.  Lean reduces the waste in all possible processes, but does not necessarily optimize.  The difference in character between companies that embrace these different concepts can be stunning... and sometimes difficult to manage as we've mentioned before.

One specific circumstance to avoid: using Six Sigma to optimize a process that Lean will determine to be a waste.  However the two concepts can be used together, as long as you recognize their specific purpose,design, and potential conflicts.  The Wall Street Journal had a recent article entitled "Rethinking Quality Improvement" that questioned the impact of Six Sigma on innovation.  The iSixSigma blog has some balancing thoughts.

Before embarking on a Six Sigma statistical optimization of a process, use Lean to ensure that process is not waste to begin with.

Lean Manufacturing Training - Seminars, Workshops, Books, Conferences, Videos, and PowerPoint Presentations

We have had several requests for help on designing a training program for organizations just starting out on the Lean journey.  Obviously every situation is different, however here's a path that we have used when working with several companies.

1. Initial education of the champion
2. Initial education of the executive team
3. Develop the Lean plan
4. Education of the team and organization
5. Execute the Lean plan
6. Ongoing education of the organization

This is very simplified, as the Lean plan and especially the execution component are extremely critical and can be very complex.  However from a pure training standpoint, it works.

Initial Education of the Champion - The Champion may be chosen by management or she may chose herself in an attempt to better the organization.  To learn about the fundamentals of Lean, we would recommend:

• Internet research at websites such as Superfactory
• Two great books: Better Thinking, Better Results by Bob Emiliani, which details the successful Lean journey of The Wiremold Company, and The Gold Mine, an entertaining novel about a company that turned itself around using Lean methods.

Initial Education of the Executive Team - As the Champion will soon learn, one of the critical components of a successful Lean transformation is the full support of the executive management team.  This team will want to know why and how Lean will be implemented... especially the why.  We recommend:

• The Lean Manufacturing Overview downloadable PowerPoint presentation at Superfactory, which details the major concepts and benefits.
• Reading Better Thinking, Better Results by Bob Emiliani.  Although it is often difficult to get some managers to actually read a book!

From this information the Champion and the executive team should put together the Lean Plan. 

Education of the Team and Organization - Now it's time to educate the entire organization.  Start with the core team responsible for Lean, then expand throughout the entire company. 

• Use the Lean Manufacturing Overview presentation as part of a "brown bag lunch" or formal training session.
• Watch the What Lean Means video from AME, also available at Superfactory.
• Supervisors, managers, and team leaders should read The Gold Mine, an entertaining novel detailing a lean transformation.

Execute the Lean Plan - This is the most complex component.  Most Lean Plan's walk through the core concepts of Lean, such as 5S, Value Stream Mapping, Kaizen, Total Productive Maintenance, etc.  For each concept, detailed training is necessary.  We recommend:

• The Champion goes through deeper, hands-on training at applicable workshops.  The Association for Manufacturing Excellence puts on numerous top-notch workshops throughout the year.  Other similar workshops can be found on the Superfactory Events Calendar.
• The Champion then trains the team and organization on the concept, perhaps by using the PowerPoint presentations available at Superfactory.
• An excellent workbook that walks you through the implementation of the various concepts is Implementing World Class Manufacturing, by Rubrick.

As the organization proceeds down the Lean path, the Champion, executive team, and entire organization will need ongoing training on new concepts.  It is also important that they stay up to date on new methods and concepts, and also share their successes with others.  For this we highly recommend the annual conference of the Association for Manufacturing Excellence.  This is generally the largest Lean conference in North America, if not the world.  It is also unique in that the presentations, workshops, and tours are all from practitioners... the people that actually executed Lean.  The real world.

Every organization will be a little different, however this is a rough outline of a Lean training program we have used successfully at a wide variety of organizations.

Download Lean Office PowerPoint Presentations

As mentioned in a post a couple months ago, we have been working on a series of downloadable PowerPoint presentations on the various components of Lean Office. 

Those presentations are now available at Superfactory.  The modules include 5S, Kaizen, Value Streams, Pull, JIT, Kanban, Poka Yoke and Mistake Proofing, Layouts and Cells, Total Quality Management, and Theory of Constraints (TOC).  These are similar to the modules in the Manufacturing Excellence Series, but the content has been modified to be applicable to administrative and office environments.

In addition, we added new modules on Statistical Process Control (SPC), Total Productive Maintenance (TPM), Job Design and Work Measurement, Design of Experiments, and E-Commerce to some of the other package series.

Download Lean Manufacturing Training PowerPoint Presentations

Superfactory's wide range of downloadable lean manufacturing training PowerPoint presentations continue to be very popular, and every day we receive requests for new presentations.  A resounding theme among recent suggestions has been "Lean Office", therefore we are in the process of developing a new Topics Series group of presentations to cover this concept.  The new Lean Office group will include Office 5S, Office Kaizen, Value Stream Mapping with an emphasis on office and administrative activities, etc.  Look for this new group by mid March.

We use the revenue from these products to help offset our increasing server and administration costs, with the remaining being used to help develop new knowledge and training products. 

Our first product, introduced in early 2002, was the Factory Toolbox.  This was a collection of brief presentations, Excel spreadsheet tools, and numerous procedure templates that our editors had used at their previous manufacturing management positions.  The popularity of this product led to the creation of the Fundamentals of Manufacturing Excellence Program in early 2003, which was a monthly presentation module on a new lean manufacturing concept.  All of the presentation modules were then bundled together into the Superfactory Excellence Program in January of 2004.  During 2004 we also introduced several Topics Series with groups of presentations on Quality, Design, and Safety.

All products can be downloaded immediately upon purchase, or a CD can be ordered.  You can view more information on the various products at the following links:

• Factory Toolbox - Over 300 procedures, presentations, forms, and tools already created by world-class organizations.  95% of the files are in native Microsoft Office formats and can be easily customized for use in your organization.
• Superfactory Excellence Program - 24 easily customizable PowerPoint presentations on Lean Manufacturing, 5S and Visual Controls, Kaizen, Value Streams, Pull, JIT, Kanban, Demand Flow, Poka Yoke, Quick Changeover, SMED, Cellular Manufacturing, Lean Accounting, Activity Based Costing, Theory of Constraints, Balanced Scorecard, Knowledge Management, Root Cause Analysis, Six Sigma, Human Factors, Outsourcing Strategies, Cost Accounting, Supply Chain Strategies, Capital Budgeting, Facility Location, Technology Assessment, Strategic Management, Forecasting, Planning, Scheduling, and Project Management.
• Quality Topics Program - 6 PowerPoint presentations on Total Quality Management, ISO 9001, Root Cause Analysis, Six Sigma, Poka Yoke and Mistake Proofing, and FMEA Failure Modes & Effects Analsysis.
• Design Topics Program - 6 PowerPoint presentations on New Product Development / DFM, Design and ISO 9001, Design for Environmental Impact, Design for Recycling, Design for Reliability, and Design for Remanufacturing.
• Safety Topics Program - 11 PowerPoint presentations on Electrical Safety, Ergonomics, Chemical Safety, Confined Space Training, Conducting Effective Safety Meetings, Hazard Communication Training, Lockout Tagout, Machine Guarding, Office Safety, OSHA Recordkeeping, and Slips, Trips, and Falls.

We are always looking for ideas for new knowledge and training products.

MIT Open Courseware

This is unbelievable. 100+ years of learnings from one of the world's most respected institution, available for free.

The idea behind MIT OCW is to make MIT course materials that are used in the teaching of almost all undergraduate and graduate subjects available on the Web, free of charge, to any user anywhere in the world. MIT OCW will advance technology-enhanced education at MIT, and will serve as a model for university dissemination of knowledge in the Internet age. This venture continues the tradition at MIT, and in American higher education, of open dissemination of educational materials, philosophy, and modes of thought, and will help lead to fundamental changes in the way colleges and universities utilize the Web as a vehicle for education.

MIT OCW is a large-scale, Web-based electronic publishing initiative funded jointly by the William and Flora Hewlett Foundation, the Andrew W. Mellon Foundation, and MIT.

MIT OCW's goals are to:

• Provide free, searchable, access to MIT's course materials for educators, students, and self-learners around the world.
• Extend the reach and impact of MIT OCW and the "opencourseware" concept.

MIT OCW would not be possible without the support and generosity of the MIT faculty who choose to share their research, pedagogy, and knowledge to benefit others. We expect MIT OCW to reach a steady - though never static - state by 2008. Between now and then, we will publish the materials from virtually all of MIT's undergraduate and graduate courses.