What Did Deming Really Say?

There is a really great Quality Digest Article by Davis Balestracci entitled “What Did Deming Really Say?”

An extract is below.

The 1980 NBC television show, “If Japan Can, Why Can’t We?” introduced the teachings of W. Edwards Deming to U.S. viewers and caused a quantum leap in awareness of the potential for quality improvement in industry.

Those of you familiar with Deming’s funnel rules (which shows that a process in control delivers the best results if left alone) will smile to realize that his rule No. 4—making, doing, or basing your next iteration based on the previous one—also known as a “random walk,” has been in operation for the last 30 years.

Jeff Liker, professor of industrial and operations engineering at the University of Michigan, beautifully describes the random walks that have taken place within the time spans of Six Sigma and Lean. In a private correspondence with leadership expert Jim Clemmer, Liker writes:

“Originally Six Sigma was derived from Toyota Quality Management (TQM) by Motorola to achieve six sigma levels of quality, and then through Allied Signal and GE it morphed to projects by Black Belts based on statistics to become a cost-reduction program – every project needs a clear ROI. In other words, we denigrated the program from a leadership philosophy to a bunch of one-off projects to cut costs. It was a complete bastardization of the original, and it rarely led to lasting, sustainable change because the leadership and culture were missing.”

“A similar thing happened to Lean when it got reduced to a toolkit (e.g. value-stream mapping, KPI boards, cells, kanban).”

“Lean and Six Sigma in no way reflect the original thinking of excellent Japanese companies or their teachers like Deming.”

Clemmer also cites multiple studies from 1996–2007 concluding that about 18 to 24 months after these various quality systems are launched, 50–70 percent of them fail. Liker concurs and feels that the four key failure factors, in this order, are:

  1. Leadership lacking deep understanding and commitment
  2. Focus on tools and techniques without understanding the underlying cultural transformation required
  3. Superficial program instead of deep development of processes that surface problems solved by thinking people
  4. Isolated process improvements instead of creating integrated systems for exceptional customer value

Virtually everyone agrees that the No. 1 barrier to improvement is still top management’s inability to be visibly committed to quality. Is this the “elephant in the living room” or as Clemmer calls it, “the moose on the table”?

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We Are Beyond Your Mindset

Your firms are built on the Taylor model. Even worse so are your heads. With your bosses doing the thinking while workers wield the screwdrivers, you’re convinced deep down that is the right way to run a business. For the essence of management is getting the ideas out of the heads of the bosses and into the heads of labour.

We are beyond your mindset. Business, we know, is now so complex and difficult, the survival of firms so hazardous in an environment increasingly unpredictable, competitive and fraught with danger, that their continued existence depends on the day-to-day mobilisation of every ounce of intelligence.

Konosuke Matsushita founder of Panasonic, Technics

14 Principles, 5 Principles, 5 Pillars, Which do you use?

I have read various books, articles, blog posts, slide decks, or attended presentations, or have spoken to Lean practitioners who tell me about Lean’s 14 Principles, or Lean’s 5 Principles, or the 5 Pillars of Lean. This can become very confusing and typifies our lack of understanding of the TPS. Which do you use?

Dr Peter Middleton (coauthor of the book Lean Software Strategies) writes

There is no pure lean approach as demonstrated by the different descriptions of lean in the literature, which identifies a range of overlapping lean principles.

For example, Liker [1] has 14 principles, Womack and Jones [2] have five principles,  Shingo [3] also has five but different principles, and Anderson has five pillars [4]

Ohno’s [5] focus was to reduce the time from customer order to product delivery by eliminating waste. Arguably he preached many principles, even though they are not laid out as such.

The complexity of analysing lean is due to the specifics of each lean implementation being context dependent.

When Toyota was setting up a new plant in America, Liker and Hoseus noted that Toyota ‘‘. . .were not interested in teaching us to copy. They were trying to teach us to think and act in the Toyota Way’’ [6, p. xxii].

Therefore, for Toyota, it was more a philosophy of management combined with their experience of what was successful that was important.

Ohno was never keen on codifying method for the above reasons. John Seddon says

Ohno said “Don’t call it anything. If you call it something, managers will expect it to come in a box. He was right.”

Deming reminds us about the hazards of copying in his book Out of the Crisis.

Improvement of quality is a method, transferable to different problems and circumstances. It does not consist of cookbook procedures on file ready for specific application.

It is a hazard to copy. It is necessary to understand the theory of what one wishes to do or make. We are great copiers. The fact is that the Japanese learn the theory of what they wish to make, then improve on it.

This idea of copying reminds me of a great story from Deming, again in his book Out of the Crisis.

The management of a company that makes furniture, doing well, took it into their heads to expand their line into pianos. Why not make pianos? They bought a Steinway piano, took it apart, made or bought parts, and put a piano together exactly like the Steinway, only to discover that they could only get thuds out of their product. So they put the Steinway piano back together with the intention to get their money back on it, only to discover that it too would now only make thuds.

[1] J. K. Liker, The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer. New York: McGraw-Hill, 2004.

[2] J. P. Womack and D. T. Jones, Lean Thinking. London: Touchstone Books, 1997.

[3] S. Shingo, A Study of the Toyota Production System. Portland, Oregon: Productivity Press, 1981.

[4] David J Anderson, Is Kanban Just a Tool? http://agilemanagement.net/index.php/Blog/is_kanban_just_a_tool/

[5] T. Ohno, Toyota Production System: Beyond Large-Scale Production. Portland, Oregon: Productivity Press, 1988.

[6] J. K. Liker and M. Hoseus, Toyota Culture: the Heart and Soul of the Toyota Way. New York: McGraw-Hill, 2008.

Lean is About Eliminating Waste Right?

Waste Elimination

Some people think that waste elimination is what Lean is all about. This is music to managers ears. What manager or leader would not jump at the chance of finding waste in their organisation, having it removed, and reducing costs as a result? As a consequence Lean consultants enter an organisation, waste is found; for example staff are found sat around doing nothing or waiting for something or not “behaving” efficiently, and the waste is removed (often as a consequence FTEs are removed) and success is claimed. But does this lead to being more effective?

This has bothered me for sometime. I have met many Lean consultants who talk only of waste elimination, they know nothing about the need for understanding customer demand and have little appreciation of the differences between being effective vs being efficient. Many have only read books written about the TPS, and have little or no knowledge of Taylor, Ford, Sloan, Deming, Taguchi and Ohno.

Here is what I’m often told by Lean consultants

  • Work = Value Adding Work + Non Value Adding Work (waste)
  • Lead time = Value Adding Time + Non Value Adding Time (waste)
  • Reducing non Value Adding time will increase efficiency

Is this correct? Here is an interesting extract from a recent post by Jim Womack (co-authored the book “The Machine that Changed the World”).

“20 years later, it’s striking to me how much effort we’ve expended on eliminating muda (waste) and how little attention we have given to mura (unevenness) and muri (overburden).”

“In short, unevenness and overburden are now the root causes of waste in many organizations. Even worse they put waste back that managers and operations teams have already eliminated once.”

“I have the following advice for managers — especially senior managers — trying to create lean businesses: Take a careful look at your mura and your muri as you start to tackle your muda.”

A powerful post. Jim is articulating what I have felt uneasy about.

Jeffrey Liker has also recently published an article “Why Lean Programs Fail”

A large survey conducted by Industry Week in 2007 found that only 2 percent of companies that have a lean program achieved their anticipated results. More recently, the Shingo Prize committee, which gives awards for excellence in lean manufacturing, went back to past winners and found that many had not sustained their progress after winning the award. The award criteria were subsequently changed.

Effective vs Efficiency

Dr. Keivan Zokaei from the Lean Enterprise Research Centre (founded by Daniel T Jones who co-authored the book The Machine That Changed the World) has much to say on the subject.

Efficiency thinking is setting the quality level as “good enough” we don’t need to strive for perfection. Effectiveness thinking is thinking about the lifetime of a product (and the effects on the whole organisation “system”) which in the long run will cost less. If we do it right first time (which might be more costly at the outset),  it actually saves our organisation money in the long run). Effectiveness is doing the right thing. Efficiency is doing things right.

Many “Lean” organisations could be doing the wrong things righter. Making things efficient that shouldn’t be done in the first place. Doing a lot of efficient things but not effective things. This is what Toyota turned on its head, following the work of Taguchi. Let’s do the right thing first, THEN we will make it efficient.

TPS is about being more effective. Focusing on quality first. This is where Toyota fell down recently. Volume (being number 1 by volume) became the goal. It used to be Safety, Quality, Volume. Toyoda has now returned the priorities back to the original order. [side note: NASA has recently released its highly anticipated report about the Sudden Unintended Acceleration (SUA) charge in Toyota vehicles. The verdict was that Toyota’s electronic throttle control system is fully exonerated. The ten-month study by 30 NASA engineers found “no evidence that a malfunction in electronics caused large unintended accelerations”]

Variation in Demand

With the focus on waste removal we are not looking at variation in demand. There are times in the process when sometimes demand increases capacity and other times it doesn’t. The problem with focusing only on waste removal, and not understanding demand, is that after waste removal, when a high level of demand comes in, the organisation cant cope, we clog up the flow, we introduce waste that we tried to remove in the first place!

Toyota bizarrely built in up to 50% extra capacity into their system. They called it 8-4-8-4 (8 hours of work, 4 hours to do other things). 50% waste built into the system! If a Lean consultant, who didn’t understand variation of demand, went into that organisation they would remove that “waste” and claim it as a success The result? Toyota wouldn’t be anywhere near as successful as they are now.

Rather than utilising capacity it is better to be responsive, to be able to respond when demand arises; keeping spare capacity.

What would your boss say if you asked to have 20% spare capacity for times when demand might exceed your capacity? In the West its all too predictable what the response would be.

But, It’s what Ohno told us to do

Is it? What’s confusing is that Ohno did talk about Muda (waste); idle machines and idle people, which all looks like waste on the surface. But he also talked about having machines (and people) available when demand comes along, he talked about resourcing to the upper level (we are guaranteed to have someone/machine available when the work comes), which means that at times they would have to be idle.

Muri, Mura, Muda

Ohno talked about Muri (overburdening of people and equipment) being a root cause of waste. He talked about Mura (unevenness in operations) and the need for understanding fluctuations in demand, that variation needs to be understood well within the system. Ohno explained this is why Toyota went out to the dealerships to study that demand, with the aim of producing cars at the rate of customer demand.

Capacity

Dr. Keivan Zokaei informs us that this is what Ohno really said, and he states that this isn’t in most Lean books or in Six Sigma training

Capacity – Load = Gap

  • Capacity = work + waste
  • Load = value demand + failure demand
  • Variation is the key, especially as utilisation approaches 80%
  • Work: not faster, but taking time to do good, error free, work that satisfies customers
  • Understand variability (Mura) in capability
  • Is there sufficient system capacity to handle the load?
  • Waste: not all waste elimination adds to capacity
  • Gain intimate knowledge about your demand, smooth and get rid of unevenness (Mura)

This is counter intuitive, most managers want to sweat their assets, they want them to work 100%

They think we have x number of people, and they can do y number of jobs in a day, so that means they can get z amount of work done.

So, if they are thinking 100% what happens if your utilisation of your capacity, or capability, exceeds 80% ? You get a traffic jam effect. You have no buffer for any variation. When something comes through the system, everything just gets clogged up and stuck, and nothing moves effectively. Queues start happening, or you start multitasking without getting anything done. Cycle time goes shooting up. Even 80% is high, If you target anywhere around 80% of your capacity the chances are that things just fall apart. We know this scientifically, mathematically we can prove this, yet mangers ignore it.

If you work faster you are going to reduce quality. Instead we want to produce error free work, doing things right first time. This might prove more costly up front but saves us costs in the long run. This is exactly what Taguchi taught (the nominal value curve), what he won the Deming prize for, and what turned Toyota on its head where they redefined their definition of quality.

We want to avoid what Deming called making toast the American way

You Burn it and I’ll Scrape.

We need to understand variability or Mura. We need to understand the relationship between capacity and demand, by  studying demand being placed upon us and the variation in cycle times. We need to work on unevenness by going into the work (the shop floor) and experimenting.

Ohno taught rather than utilising capacity its better to be responsive, to be able to respond when demand arises; keeping spare capacity. [side note: Interestingly Ohno fought battles in Toyota to adopt this and first had to try it in Brazil to prove it worked, to then return to Japan.]

Ohno vs Efficiency Thinking

Efficiency Thinking: Traditional

  • Input / output. At a given input level (given capacity) maximise utilisation to increase output.

Effectiveness Thinking: TPS

  • Focus on delivering fast, responsive flow of service which will in turn reduce your Work In Progress (WIP) and improve profitability
  • Focus on “right first time”
  • You have to have “spare” capacity

What is the Real TPS (Lean)?

This is how Dr. Keivan Zokaei sums it up

  • Effectiveness thinking as apposed to efficiency thinking
  • Quality and safety first
  • Continuous improvement is a virtue in itself
  • Changing people’s thinking through doing if you want improvement

The Core of Lean is NOT about reducing waste, its about increasing capacity.