Sunday, March 28, 2010

Why Variation?

"What makes this metric change?  Why is it up and down?"

The senior executive was both adamant and insistent.  He wanted reasons.  Now.  

The question is valid.  The answer is elusive.  But NOT impossible.

Why DO the numbers go up and down?  Why does the yield seem good one week and lousy the next?  Why does the labor used for Process X change from day to day? Why do the same steps in the same work sequence yield differences in quality over time?  


As in many cases, Dr. Deming offers guidance here.  

His view of variation is captured in his description of common cause and special cause.  How does this work?

In short, he urges users to plot the metric and calculate the control limits of the data series, generally two standard deviations above and below the mean.   Inevitably, the data will move around.  How to explain the variability??

Dr. Deming says movement within the control limits is due to common causes, the inherent variability in any system, the noise, the general changes which read on any process.  How to improve it??  You work on the system, apply continuous improvement.  There is not a one-to-one correspondence between cause and change, however, much to the chagrin of the questioning executive.  

Conversely, movement beyond the control limits is due to special causes, one-time, traceable aberrations, both for good and bad.  Unit costs suddenly improve?  A one-time purchase of raw materials from a supplier who ran out of warehouse space.  A rash of late deliveries?  A broken, important piece of production equipment.  How to improve it?  Go to the source of these one-time issues and fix them.  You can also get a smile from the executive with your crisp explanation. 

Teaching about, understanding, charting and measuring the key variabilities in a system is a wonderful training tool for any organization.  It forces correct conversations about important issues.  It can turn opinionated arguments into data-driven solution-fests.  

One of the most concise discussions of this tool is in Marypat Cooper's excellent Kaizen Sketchbook.  I recommend it highly. 

Keep on learning.


Thursday, March 04, 2010

Lean Transformation Summit-Day Two

The second and final day of Lean Enterprise's major meeting was a good one.  Day One was very insightful for me.  Day Two went deeper into example and practice of effective leadership.  My initial highlights:
  • Mike Pulic of Grainger described his experience that a myriad of small, local improvement efforts trumps a few large projects. 
  • He offered one key quote:  "The central role of leadership is to foster candid conversations on the right topics."
  • Greg Peters of Goodrich, the aerospace firm, described his 15 years of experience driving Lean.
  • His summary of change?  "Awareness and Understanding can come through the brain but Commitment and Habit have to come through the heart."  An engineer by training and temperament, he nevertheless really understood the emotional component of the change process.
  • Jim Womack provided the final address with a measured and emphatic challenge to change how we manage.  I'll have much more to write about the topic as I try to absorb his emphasis.
It was a terrific time and I have much to mull and apply.  Stay tuned...I'll share my learnings. 

Wednesday, March 03, 2010

Lean Transformation Summit--Day One

I'm attending Lean Enterprise Institute's event in Orlando, the Lean Transformation Summit.  I've been hoping to get here for a couple years and it finally worked out this year.  It has been wonderfully challenging and helpful.  Highlights of Day One.
  • Lantech gave the most compelling presentation I've seen on building standardized management work.  They had striking demonstration of how this effort secured earlier gains and saw them through a very difficult 2009.  I have tools from this to allow us to save time and be more effective managers.
  • Jim Luckmen led a remarkable session on building Lean culture.  His insight on why culture changes, combined with Lantech's demonstration of specific management actions, was worth the entire price of admission.
  • I met fellow Lean Bloggers Mark Graban and Dan Markovitz.  A photo will follow as proof...but what a wonderful conversation with those two guys.  Dan offers insight on management work which is unique in the Lean community. 
  • LEI walks the talk.  The way they run this meeting exemplifies best practices in Lean.  I'm impressed with their attention to detail, customer satisfaction, waste-free efforts and rapid problem solving.  Very impressed.
More will follow in weeks to come.  I'm learning much.