Thursday, October 21, 2010

A Commonly Found Project Cycle That Creates Troubles



“The Project Management strip communicates how important it is that all concerned departments in an organization understand customer requirements thoroughly before designing a product or executing a project”.

Source Link -  http://www.andysowards.com

Sunday, October 10, 2010

"A Lean Office Eliminates Waste and Saves Time" An Article By Willie L. Carter


Lean goes way beyond the shop floor:

Higher customer expectations, cost-cutting pressures, thinner margins, and shorter lead times are some of the daily challenges that organizations face. A management system built around lean processes enables companies to achieve operational excellence, while providing flexibility in the way processes are managed.

Organizations need robust, waste-free, flexible office processes that meet their customer needs and help them survive in the global marketplace. 

Considering that 60 to 80 percent of all costs related to meeting customer demand are administrative or office-related functions, it doesn’t take rocket science to conclude that applying lean principles to streamline and eliminate waste from your office and administrative processes will result in bottom-line savings. 

The benefits of a lean office

A lean office management system can affect administrative processes at all levels of your organization. 

Enterprise-level processes—The processes that touch your external customers and suppliers: order entry, customer service, accounts payable, accounts receivables, marketing/sales, research and development, product development, and distribution. Lean management tools can streamline and speed up these processes. 

Organizational-level processes—The key support processes in your organization: information technology, human resources, engineering, and purchasing. Lean will streamline these processes and improve process efficiency. 

Department-level activities—Lean reduces activities that add time but little or no value. It can help create flow at the pull of the customer, reduce hand-offs, and improve departmental quality.
Individual-level tasks—Lean can reduce the paperwork, manual entries, and errors within standardized work procedures; help improve workplace organization; and clarify individual roles and responsibilities. 

Getting started

Before applying lean tools to the office environment, we must understand the flow of work. Just as we map the value stream and focus on reducing lead time and eliminating waste in manufacturing, we must map administrative processes to better understand them and eliminate waste. 

Processes such as order entry, quoting, planning, purchasing, product development, and others are full of waste. As a matter of fact, 75 to 90 percent of the steps in service and administrative processes add no value—the lean definition of waste. These wasteful steps cause delays and customer dissatisfaction.

Because one of the key principles of lean thinking is to minimize the time between the receipt of a customer order and fulfilment of that order, it's crucial to look at the entire lead time. To see the waste in these processes, we must map them. After we identify the waste (non-value-added steps) and what needs to be worked on, we can apply the traditional lean tools such as pull systems, point-of-use storage, continuous flow, 5S, visual controls, and mistake proofing. 

Second, you must collect data. If you are like most organizations, you collect very limited data on your administrative processes. Office lean is not like manufacturing lean—it is based on data-driven decision making. For office and administrative processes, determining what data to include depends on the questions about your value stream you want answered and how you define the product or service produced by these processes. For example, if your objective is to reduce the number of engineering change orders (ECNs), it would be helpful to define ECNs as the product and identify the total number of ECNs issued, cycle time and queue time for processing, and total cycle time. From this information, you can determine where constraints most likely occur and can eliminate areas of waste in your “future state” process. 

Examples of lean office applications

A steel fabricator’s value-stream map indicated that out of a total lead time of 22 weeks, only one week was spent doing true value-added work. This steel fabricator found that a large part of the non-value-added lead time was identified as “waiting for approval.” Approvals were built into many stages of the order fulfilment process, but were the responsibility of management staff, which was often unavailable. The steel fabricator standardized the work procedures to eliminate the need for many of the approvals and reduced its lead time by two weeks. 

In reviewing the order entry process for a client, we found that a significant amount of time was used to acknowledge an order. Whenever an order was entered, an acknowledgement was automatically printed and then manually sorted and mailed to each customer. The first question we asked was, “Did the customer really want these acknowledgments; in other words, does it add value?” It turned out that only a few of their customers wanted an acknowledgement, and those that did said they would accept an e-mail response. The client changed their order processing system to code any customer seeking an acknowledgement, and then automatically acknowledged these customers via e-mail at the end of the order entry process. This resulted in freeing up overworked office staff to allow them to spend more time on value-added activities. 

A loudspeaker manufacturer discovered that much of its lead time was attributed to delays in obtaining customer approvals during the design and prototype cycle. There was no effective means of managing the customer approval process. It seemed that once the information was given to the customer, it disappeared into a "black hole.” We suggested to the client that they develop a visual management system (a centrally located schedule board) that shows the status of every job in-house. This provided visibility for every step of the process and reduced lead time in the design and prototype process by 50 percent. 

As you can see by these examples, lean solutions are surprisingly simple and don't require great capital expenditure. 

Lean is a proven, systematic approach for eliminating or minimizing waste that results in the production of goods or services at the lowest possible cost. It goes beyond the shop floor. Lean is every system, every process, and every employee in the company. ________________________________________________________________
Willie L. Carter is the president of Quantum Associates Inc., Northbrook, Illinois (USA)

Monday, October 4, 2010

Self-Discipline and Consistent Quality are Inseparable Twins.

Self-Discipline  and Consistent Quality are Inseparable Twins.

As a quality consultant, I often hear these words:
  •  “You see our business is very different, will ISO 9001 work for us?”
  •  “Will Six Sigma work in our country?”
  •  “Lean management might work well for Japanese firms, but will these  tools work for us?”
My answer is “Yes, if the processes are performed right, the results are surely going to be right”. So, nature of the product or nature of the business or country in which we conduct the business is not a critical issue. The focus needs to be on performing the processes correctly.

Lets consider a simple example. I have to reach office daily at 8.30 am. I know that to reach at 8.30 am, without stressful driving, I must leave my house at 7.45 am. Then, doing my process right would mean that I must wake up at 6.45 am so that I can leave my house at 7.45 am. If I want to spend 30 minutes on reading the newspaper before leaving for office, then I must wake up at 6.15 am. And, if I have to wake up early I must sleep early. (If I sleep late, I get up late, I leave my house late and there is every chance that I will reach my office late).

Another example would be of a student who is a top-performer in school. It is generally seen that such a student continues to perform well in higher studies, irrespective of whether he pursues a career in engineering or management or accountancy. Why is it so? This is because he has developed certain practices (or way of doing things) which ensure that he continues to achieve good performance till the end of is studies.

ISO 9001 or Six Sigma or Lean Management are all methodologies that help us to improve processes and standardize the ‘way of doing things’. Once we standardize a process then if we keep repeating it in the same manner, we are should get the same (consistent) results again and again. But why does this not always happen this way? Why do mistakes still occur? Does the fault lie with the ISO 9001 system or with Six Sigma or with the tools of Lean Management?

Not really! All these systems / methodologies work on building preventions in the processes and there is a definite logic in the way they work. Then where does the problem lie? Repeated studies show that the problem does not lie in finding solutions to preventing problems, nor is it really difficult to find ways to improve processes. The problem lies in sustaining the improvement.

In other words establishing a new system or improving a process is not the challenge. The real challenge lies in sustaining the improved system / process. For this reason we bring in Standard Operating Procedures (SOPs) and audits. But still, we observe non-compliance during the audits. Why does this happen?

In most cases where a set of procedures has been established, it is seen that mistakes occur mainly because “someone overlooked a step in the procedure”. Even the “best system or ideal process” could end up in mistakes if people performing the process do not adhere to the SOPs. We all understand that it is unsafe to talk on the mobile phone while driving. We also know that many car accidents do occur due to the driver speaking on the mobile phone, yet we overlook the procedure (and maybe even the law)!

If we have to sustain the performance of improved / standardized processes, what is needed most is “self-discipline”. The self-discipline that helps us to overcome the urge to adopt a short-cut in our work and the self-discipline to stick to doing things as defined in the SOP.

It is a proven fact that out of a thousand principles for success, the one quality that helps an individual to succeed is the habit of self-discipline. The same is true for organizations. Organizations run and sustain on the basis of self-discipline.

Often the cultural or political climate around us discourages us from being self-disciplined. People tend to think “when everyone else is indisciplined, why should I follow discipline?” “Everyone throws litter around, so why shouldn't I?” But, if everyone in an organization or in a country starts thinking this way where will we reach? And what is the use of standardizing processes / systems if we do not possess the self-discipline to follow them?

Toyota has been a rare example of an automobile company that made profit consistently for 50 years!! Then what has gone wrong with Toyota now? Why did they have to announce a large number of recalls?

In the words of their CEO Mr. Akio Toyoda, “Toyota's priority has traditionally been the following: First; Safety, Second; Quality, and Third; Volume. These priorities became confused, and we were not able to stop, think, and make improvements as much as we were able to before…….. We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that. I regret that this has resulted in the safety issues described in the recalls we face today”.

Toyoda may express regret but the question is where did Toyota go wrong as an organization? They were very small when they started. They strictly followed the “14 Toyota Principles” for 50 years and went on to be known as the world’s best car company. But in the quest for fast results their managers and dealer network seem to have ignored some of the time-tested principles like ‘long-term philosophy’, ‘stopping to fix problems’, and ‘do not let problems remain hidden”.  The price Toyota had to pay for this ‘lack of self-discipline’ in following their established principles is anybody’s guess.

At times, I have seen people working in large reputed organizations operating under beliefs like “I am a knowledge worker, all these rules / SOPs are not meant for people like me” or  “I am a senior person, these rules / SOPs are meant for the juniors”. Also there are instances, when a senior manager suggests that “we bend the rule, just in this case”. What these persons overlook is that juniors usually consider the seniors and the knowledge workers as “role models” and they very soon copy what they learn from the role models.

For example, our office / factory procedure requires that my bag is checked while entering or leaving the premises. Then I may be the CEO or the Managing Director or the Security Officer, I must stop and get my bag checked. This kind of example-setting (and respect for procedures) demonstrated by the seniors goes a long way in conveying the message to everyone else in the organization. 

It would therefore be evident that if our organization desires to deliver consistent performance on an on-going basis, the managers must create a culture for strict adherence to procedures and a strong sense of self-discipline. If Toyota could fail after 50 years of consistent performance, this could happen to any one of us!

The Japanese have referred to self-discipline as the “Fifth S” in the 5-S habits of good housekeeping. But when it comes to ensuring consistency in quality, we can say that self-discipline is the “First S” and it applies to each and every member of the organization. If we wish to achieve consistent / sustained performance over a long period of time, the foremost requirement is to create a culture of self-discipline throughout the organization.