Thursday, October 31, 2013

Focus and Leverage Part 273

In my last posting I said I would return to a discussion on how I use the Goal Tree to replace the other traditional TP Tools and how to develop solutions to improve the organization.  I want to emphasize again that the method I am proposing to you is not intended to replace the TP Tools.  I am presenting this method only as an alternative way to accomplish a similar end point especially when “time” is a factor.
Going back to our hypothetical company’s Goal Tree (refer to the figure below), let’s look now at several of the NCs that must be worked on to satisfy the CSFs.  For the first CSF, Highly Satisfied Customers, we see that the leadership team believes that three things must be in place to satisfy this CSF:
  1. They must have high on-time delivery rates and because it’s shaded in red, this probably isn’t happening or at least not to the level to highly satisfy their customers.  The team further stated that in order to have high on-time delivery rates, they must have buffer management in place and functioning.
  2. They must also have excellent quality and because this entity is shaded in green, the team believes that their quality is excellent due to their excellent quality systems.
  3. Finally, they must have a high perceived value by the customer and since it’s shaded in yellow, the team doesn’t believe this is the case.  The team believes that this is being driven primarily by the price of their products, but it’s probably also due to their poor on-time delivery rates.

In the second CSF, Throughput High and Growing, the red shading indicates that this company has significant room to grow.  This company had been through TOC training which included a section on Throughput Accounting and they now understand that their throughput is driven by managing the system constraint and by focusing their improvement efforts only on the constraint.  The team now believes that in order for constraints management to function well, they must have work synchronized to meet demand.  Similarly, if we look at each of the remaining CSFs and associated NCs we have a much better understanding of what actions need to take place in order to ultimately drive profitability higher.

The key to creating a focused improvement plan, using the Goal Tree, is to develop the improvement plan built around what the Necessary Conditions are telling us.  If we look at the figure below and scrutinize it, we see that there are four primary improvement projects which the team believes, if implemented correctly, will drive improvement to each of the five Critical Success Factors and ultimately achieve our goal.

1.  Implement TOC’s Drum Buffer Rope.  This project will impact two CSFs, Highly Satisfied Customers by improving the on-time delivery rate and Throughput High and Growing by synchronizing work to meet demand.
2.  Implement an integrated Lean, Six Sigma and Constraints Management, but only at the system constraint first.  In so doing, this will automatically drive throughput higher and will continue to do so until the constraint moves. When it does, we focus our improvement on it.

3.  Implement Active Listening.  Active listening is the process of soliciting and implementing solutions provided by the subject matter experts, the people building the product or delivering the service.  In my experience, this will also have an immediate, positive impact on the morale of the work force.

4. Implement Dynamic Replenishment.  One of the keys to profitability is to reduce inventory and avoid part’s stock-outs and by implementing a replenishment system based upon usage rather than a forecast.  In so doing, two dramatic improvements will take place.  Overall inventory will decrease by at least 40% and part’s stock-outs will virtually disappear.  These two benefits occur because part’s replenishment will now be based upon actual consumption and not a forecast.

Notice also that the direction of the arrows has been reversed.  When we created the Goal Tree, we did so from the top to the bottom, but when we identify the required improvement actions, the effects move from the bottom to the top of the hierarchy.  That is, when the identified improvement actions are implemented, the result will be improvement to the upper level NC’s, CSF’s and ultimately the organization’s Goal.

So here it is, a different way to utilize a Goal Tree which is both easy to understand and construct and a tool which permits the development of a very focused improvement plan.  In my experience using this approach, the team that develops it, will embrace it, simply because it is their plan.  And the good news is, from start to finish it only takes less than a day, rather than days or weeks to develop like the TP analysis does.

In my next (last) posting on the Goal Tree I will discuss other benefits of using the Goal Tree in this manner and summarize some of the key points.  I hope you have enjoyed this series of postings.

Bob Sproull


Wednesday, October 30, 2013

Focus and Leverage Part 272

In this posting I want to demonstrate how I use the Goal Tree to assess the state of the organization in terms of how well it is meeting its Goal, Critical Success Factors and Necessary Conditions.

I typically facilitate a critical discussion on the status or current state of the Goal, CSFs and NCs.  I use a simple Green, Yellow and Red coding system to describe how each of the Goal Tree entities exists in our current reality.  The figure below is a summary of that exercise for our hypothetical company.

Notice the key on the bottom right hand side of the Goal Tree and you’ll see that a box shaded in green indicates that the entity is in place and functioning, so no changes need to be made to that entity.  A yellow box indicates that there is something in place, but that it needs improvement.  A box shaded in red means that the entity is either not in place or that something is in place, but it isn’t functioning well.  It should be obvious that any entity shaded in red has a higher priority than one shaded in yellow.

In our example, because the company is at least minimally profitable, but not highly profitable, it is shaded in yellow.  If we look at the CSFs, four of the five CSFs are shaded in red meaning that each is either not in place or simply not functioning well enough to drive higher profitability.  In this hypothetical company it appears as though the only thing this company is doing right is their excellent quality and, according to the supporting NC’s, it’s because they have excellent quality systems in place.  But other than their quality systems, not much else is functioning well.

Dettmer tells us that “a well-defined Goal and Critical Success Factors provide the benchmarks for deciding what parts of the system need attention.  In other words, they can guide problem solving.  In order to figure out why a system may be failing to live up to expectations, those expectations must be established in the first place.”  Dettmer also tells us that “it’s important to establish a common understanding of the terms goal and critical success factors.”  In light of this, Dettmer defines the goal and critical success factors as follows:

“Goal:  The ultimate purpose for which the system exists (or was created) – the end to which a system’s collective efforts as directed.  In human systems or organizations, this is the outcome that the owners say is the preeminent or paramount objective of the system.”

“Critical Success Factor:  The limited number of high-level terminal outcomes without which the system’s goal cannot be achieved – the few necessary conditions which, if satisfied, represent goal attainment."
In my next posting, I will demonstrate how I use the results of the organizational assessment to develop not only solutions, but ultimately an organizational improvement plan.
Bob Sproull

Tuesday, October 29, 2013

Focus and Leverage Part 271

In my last posting I said I would return to the discussion on the Goal Tree and how I use it to replace the Thinking Process Tools when available time is a factor.  I want to state up front that I am fully supportive of the full TP analysis and I’m not advocating their elimination, but I do want to demonstrate a simple and effective way to use the Goal Tree.

As I said earlier, many people who have gone through a TOC Jonah training session have come away overwhelmed and sometimes feeling like they are unable to apply what they’ve learned.  Let’s face it, the TOC Thinking Process tools are just not easy for some people to grasp and apply (myself included), so we kind of put them on the back-burner rather than taking a chance of doing something wrong.  Let’s lay out the structure of the Goal Tree and see if we can make some sense of it.

The hierarchical structure of the Goal Tree consists of a single Goal, several Critical Success Factors (CSFs) which must be in place to achieve the goal and a series of Necessary Conditions (NCs) which must be in place to achieve each of the CSF’s. The Goal and CSFs are written as terminal outcomes as though they were already in place.    One other area where I depart from the conventional way of developing the Goal Tree is the direction of the connecting arrows.  When I’m developing this tree, my arrows point in the direction of flow, which in this case is downward.  You will notice in my final version where I insert improvement actions, the arrows reverse direction and point upward.  I do this because the actions at the base of the arrows impact the entity at the tip of the arrow.  Let’s look at an example of what a Goal Tree might look like.

Suppose that you were working with an organization who wants to become a highly profitable one.  You assemble the CEO and key members of his staff to develop an effective plan to achieve this goal.  In the Goal Tree drawing below, after much discussion, you agree on your Goal as “Highly Profitable Company” and place it inside the Goal box. You then think to yourself, “What must I have in place for our goal to be realized?” You think, “I know that we must have highly satisfied customers for sure and that our throughput must be high and growing,” so you place both of these in separate CSF boxes.  One-by-one you continue listing those things that must be in place in order to achieve your goal and place them into separate CSF boxes like the figure below.  In a Goal Tree you should have no more than 3 to 5 CSF’s.
Because the Goal Tree uses necessity–based logic, it is read in the following way: “In order to have a highly profitable company, I must have highly satisfied customers.  Directly beneath the CSFs are NCs that must also be in place to achieve each of the individual CSFs. So, continuing to read downward, “In order to have highly satisfied customers, I must have three different NCs as described in the Goal Tree above.  Remember, the CSF’s are written as terminal outcomes, as though they’re already in place.  You continue reading downward, in order to have, for example, a high on-time delivery rate, I must have buffer management in place and functioning.  The NC’s represent actions that must be completed in order to achieve each individual CSF and form the basis for your improvement plan.  In like manner, your team completes all of the CSF’s and NCs until you are satisfied that what you have in place on the Goal Tree will ultimately deliver the goal of the organization. Typically in a Goal Tree, there are three-to-five CSFs and no more than two-to-three layers of NCs.  OK, so what happens next?

Bill Dettmer recommends that your next step is to create a Current Reality Tree, but here’s the point at which I typically depart from the traditional TP tools.  And although I totally support Dettmer’s and other’s approach, when time is a factor (and it usually is with executives), I continue on with the Goal Tree in a different way.
In my next posting I will demonstrate how I have changed the usage of the Goal Tree in terms of not using the other TP Tools.
Bob Sproull

Monday, October 28, 2013

Focus and Leverage Part 270

Focus and Leverage Part 270

In my last posting I said that I would go back to the basics for those not familiar with the Thinking Process (TP) Tools and that I would also begin discussing the basics of how to construct a Goal Tree.  In this posting I will discuss the basics of the TP tools, but I also need to discuss the Categories of Legitimate Reservation (CLR).  Because of the addition of the CLR’s, I am postponing my discussion of the basics of building the Goal Tree to the next posting.  For those of you interested in reading more on the Goal Tree/IO Map, I encourage you to follow this link to Bill Dettmer's web site: or if you'd like to see more of Bill Dettmer's writings, as well as his colleagues, use this link:

And now back to our TP tools:

In many organizations, the people within the system encounter symptoms of problems and mistakenly focus on and attempt to solve them.  In effect, these organizations end up only treating the symptoms of much larger problems.  But in reality these symptoms are part of a logical chain of cause and effect relationships which eventually terminate at the true root cause or core problem.  This is where the Current Reality Tree unleashes its true power.  That is, if the organization would take the time to logically look for these interconnected symptoms and "connect the dots" so to speak, they would discover that if they could find the core problem and eliminate it, most of the negative symptoms they are seeing would simply disappear.  So let's look at the TP tools in a bit more depth.

The TP tools originally were comprised of five different logic trees:
-  The Current Reality Tree (CRT)

-  The Conflict Resolution Diagram (CRD a.k.a. Evaporating Cloud)

-  The Future Reality Tree (FRT)

-  The Prerequisite Tree (PRT)

-  The Transition Tree (TT)

The Current Reality Tree, the Future Reality Tree and the Transition Tree all use sufficiency based logic or cause and effect logic (i.e. If – Then statements).  The Conflict Resolution Diagram and the Prerequisite Tree both use necessity based logic (In order to have “x”, I must have “y”.  Originally the CRT was the entry point into the TP analysis, but Dettmer now uses the Goal Tree to do this because, according to him, it facilitates the development of the CRT.  Before we discuss the Goal Tree, let’s first discuss another subject, the CLR’s.

Although I’m not including an in-depth discussion on the Categories of Legitimate Reservations (CLR’s), no discussion about the Thinking Process tools would be complete without at least some discussion about these valuable guidelines.  The CLR’s are an extremely important factor when developing any of the TP logic trees.  The CLR’s are intended to provide a way to scrutinize any of the entity statements in the logic trees and the arrows connecting each of the entities.  For our purposes in this series of postings, I want to interject only the basic definition for each of the CLR’s.

The arrows between the entities encased inside the boxes of any of the TP tools are really the glue that holds the logic trees together.  The CLR’s help us determine if the tree is logical and correct.  As such, the CLR’s validate entity existence, causality existence, predicted effect existence, cause insufficiency, tautology and additional cause.  So let’s briefly discuss each of the CLR’s and the rules they establish for our logic trees.

Entity Existence – For any of the entities to be accurate and correct, they must be expressed as a full statement and must exist in our current reality.  It's not correct to "think" an entity exists, it must be substantiated.  The bottom line here is, if the entity does not exist, it simply cannot be used to develop the logic trees.

Causality Existence – Causality existence reservations can occur when the "If-Then" statement appears acceptable to one person while another person does not think it is.  It doesn’t mean that the cause is not valid; it simply means that the cause must be validated and agreed upon before moving on.

Predicted Effect Existence – The predicted effect existence is normally used to invalidate a cause.  In other words, if the cause does actually exist, then what else might you expect to see if it did?  If what you believe should also exist, but it doesn’t, then the cause is not actually the true cause and you must look elsewhere.  On example of this is, if the car battery is dead, then the car won’t start.  A good test for this is to check to see if other electrical components work.  If they do, then the cause of the car not starting is probably not a dead battery.

Cause Insufficiency – This CLR reservation challenges the assumption that a single cause is insufficient to cause a specific effect.  An example Bruce and I have used to demonstrate this CLR is to challenge the assumption that the cause of a downturn in sales is because your competitor has improved their product.  The fact is, there could be other reasons for the downturn in sales.  Maybe the competitor has lowered prices and not just because they improved their product.  The point is, the reason the sales have dropped is probably not only because the competitor has an improved product.  It might be part of the reason, but not the entire reason.  In other words you must demonstrate that the cause you have listed is enough, by itself, to cause the observed or predicted effect.

Additional Cause – There are times when a single cause is sufficient to cause a specific effect, but there can also be times when an effect can be caused by some other cause.  This means that each cause by itself can be sufficient to create the effect.  What you are looking for are the other reasons you might be seeing the effect.  It’s not an “and” but rather an either/or scenario.  The point here is, don’t add additional causes because you can, do so because you must.

Clarity – The clarity reservation can be used on both the arrows and the entity words contained in the entity box.  This CLR facilitates the best wording to describe the entity.  For example, instead of stating that “all” employees are unhappy with a new regulation, it would be better to state that “many” employees are unhappy.  By changing a single word, the meaning of the entity changes significantly.

Tautology – A tautology is also known as circular logic and is in particular the needless repetition of an idea using different words.  For example, the phrase “who died of a fatal dose of heroin” is clearly a tautology.

When a logic tree has been scrutinized correctly using the CLR’s, there is no doubt about the flow and clarity of the entity statements.  If you happen to notice someone with a confused or puzzled look when they are reading the entities in one of the logic trees, it’s probably because one or more of the CLR’s has been violated.  Ok, back to our logic trees.

The system analyst, with the help of others within the system, lists all of the system’s undesirable effects (UDE’s), or those “things” in the system that were holding back the organization from achieving its full potential (i.e. its Goal).  The analyst and the team are then instructed to work backwards to develop a chain of cause and effect logic which culminates with the identification of the organization’s core problem that was supposedly responsible for about 70 % of the UDE’s within the system.  Theoretically, if you could eliminate the core problem, then most of the other UDE’s would disappear.

The next step in the TP analysis is to use the CRD to flush out the underlying conflict or the one that was perpetuating the core problem.  This was done so by challenging the assumptions of the conflict and developing an injection or idea to counter it.  The output of this exercise becomes the basis for the Future Reality Tree.  The team then uses the Prerequisite Tree to identify the obstacles to implementing this key injection and to develop ways to move around the obstacles.  Last, but not least, the Transition Tree is intended to develop the step-by-step implementation plan.  I want to emphasize that the TP analysis is a brilliant concept in principle, but not easy for many people to execute.  In addition, the length of time required to complete a full TP analysis is quite long for most organizations to complete.  Company executives have difficulty focusing on this analysis because of this extended completion time.  So how can we use the Goal Tree to overcome this rigorous exercise?

According to Bill Dettmer, the Goal Tree is actually an adaptation of the Prerequisite Tree (PRT) in that the PRT, when used as part of a full TP analysis, is used to establish the benchmark of required  performance for whatever system is subjected to a TP analysis.  Dettmer goes on to say that, “the Goal Tree helps the users establish the goal, critical success factors, and key necessary conditions for any system – the standards by which success or failure of any system are measured.”  Dettmer now uses the Goal Tree as the first step in the TP analysis to develop more focused Current Reality Trees (CRT’s) that can be constructed more quickly.  In addition, the Goal Tree helps produce substantially more robust Conflict Resolution Diagrams (CRD’s).  And while I agree wholeheartedly with Bill Dettmer, it’s not how I have been using the Goal Tree these days, at least most of the time.

In my next posting, I will return to the Goal Tree and explain the basics of how to construct one as well as how I have used it to replace the other TP tools.

Bob Sproull


Sunday, October 27, 2013

Focus and Leverage Part 269

I have written about Goal Trees (a.k.a. Intermediate Objectives Maps) numerous times on my blog, but because I have some new thinking, or maybe thinking I haven’t written about here before, the next few postings will be a about how I am using Goal Trees.  I want to state up-front that H. William Dettmer (Bill) must be given the utmost credit for developing this wonderful tool and I encourage all of you to read some of the remarkable insights Bill has given to the world at large.  In my humble opinion, Bill Dettmer is probably the most knowledgeable person in the world today in terms of how the Thinking Process Tools should be effectively used.  This statement is not meant to diminish the rest of the TOC gurus, but rather to acknowledge that Bill’s thinking is more in line with how I approach improvement efforts.

I guess what I’m try to say is that Dettmer’s teachings have shaped my approach to organizational improvement more than anyone else in the world and I am forever indebted to him.  I also want to state up-front that I am a Jonah and not a Jonah’s Jonah.  A Jonah is someone who has gone through the Jonah training course and either did or did not become certified through the TOCICO certification process.  On the other hand, a Jonah’s Jonah is someone who is certified to teach the Jonah course.  I fall into the category of someone who has received the training, but did not become certified.  So if you are having trouble using the TP tools as part of a system’s thinking analysis, then this series of postings might be helpful to you.

I remember struggling through the Jonah course, but I finished it and felt good that I had done so.  I also remember struggling with using the TP tools in that it took so very long to run through a full TP analysis.  Like many others, I wasn’t very good at applying what I had learned.  I mean I used the Current Reality Tree (CRT) and the Conflict Resolution Diagram (CRD) routinely, but it terms of tying all of the tools together to undertake a full system analysis, I wasn’t very successful.  And as good as Bill Dettmer and my co-author of Epiphanized, Bruce Nelson are, they have both reported that the teams they taught had difficulty arriving at the same core problems.  Dettmer has reported that the big hurdle he has observed was that most people had a difficult time with the CRT. It seems as though he had different students from the same organization working on the same system problem independently and each of them saw their organization’s problems somewhat differently.  And although there were commonalities, they reached different statements of the organization’s core problem.  Dettmer goes on to say that “this is a problem for any method that purports to be rational and scientific because the CRT is all about problem definition.”  I witnessed these same problems during my TP training.

When I was first introduced to the Goal Tree, or as it was referred to then, the Intermediate Objectives Map, I breathed a sigh of relief.  I did so because I found the Goal Tree to be such an effective tool for not only strategizing, but also for tying together a strategic improvement initiative and system’s problem solving statement.  I have used it many times since those days and have even expanded its usage in other ways.  When I first began using the Goal Tree, I was working for a helicopter Maintenance, Repair and Overhaul (MRO) contractor to the United States Army.  It was such an easy tool to use and was easily learned and embraced by the staff of the MRO contractor.  In less than 2 hours, without any prior training, the contractor’s executive team had developed a strategic Goal Tree which was used to develop their improvement plan.  And we didn’t stop at the strategic level, as we had each subordinate department (e.g. Human Resources, Engineering, Quality, Maintenance, etc.) create their own Goal Tree.

Perhaps, before going any further, I should go back to basics and explain the Goal Tree in a bit more detail for those not familiar with it.  In addition, it would probably help the readers if I talked a bit about the original Thinking Process (TP) tools.  In my next posting, I will do both of these in more detail.

Bob Sproull

Saturday, October 26, 2013

Focus and Leverage Part 268

I received an email this past week from a reader who asked me to write about how I run an improvement event.  So with this in mind, this posting is my view of how I run an improvement event and some of the techniques I use to arrive at my implementation plan.  As always, feel free to leave comments or questions.

I recently completed two VSA’s for two separate healthcare facilities in two different states.  In both cases significant amounts of waste were found within each of the processes being evaluated. The focus in one event was a surgical clinic for a specific part of the body, while the focus of the other event was a general surgical process.  In both cases the biggest problem facing these two organizations was excessive patient wait times which resulted in both delays and cancellations of scheduled surgeries.  In this posting I want to demonstrate how the teams were able to identify and significantly reduce the apparent waste within their processes.

Both teams were comprised of the true subject matter experts, the people charged with making the process flow.  Neither of the teams had any sort of focused training on improving flow, so there were no preconceived notions about how the event should unfold.  I actually prefer it this way because I have found that more success happens when the team member’s minds aren’t “polluted” with techniques that may or may not work.

I always deliver “Just-in-Time” training to the team which is a blend of Lean, Six Sigma and Constraints Management.  The members learn about the various sources of waste and variation and how to assess the process in question in terms of value-added and non-value-added activities that currently exist.  They also learn about the importance of identifying and focusing on the constraint that always exists.  They learn about the importance of focusing their improvement actions on the constraint first.  They soon become aware, as a team, that if they are to improve the flow of the process, they must focus their efforts on the constraint because the constraint controls the throughput of the process.  They also learn that not all constraints are physical in nature, meaning that many times the constraint is a policy or procedure that limits the flow.

In both events we started by developing Current State Process Maps based upon how the team members believed the process normally flows.  One of the positive side effects of this step is a much better appreciation of each member’s role in the process.  This appreciation has a tendency to create a “bond,” if you will, between the team members and it is this bond that opens up their minds to the true process and a sense of unity of purpose.  In almost every event I have facilitated, it is this bonding that helps develop a true sense of team.  Yes, knowing the details of the process flow is very important, but being able to have the team come together as one is equally important.

Once the Current State Map is complete to the team’s satisfaction, they then assess it by looking at each individual step in terms of its value-added rating.  That is, they rate each step as either Value-Added (VA), Non-Value-Added (NVA) or Non-Value-Added but Necessary (NVABN) and color-code them as Green, Red and Yellow respectively.  One of the really “cool” things about facilitating events like this is the epiphany that always takes place with the team members, meaning that they rapidly become aware of all the waste that exists within their process.  The team members realize that this process, the one that they work in every day, can truly be improved.

The next step is the development of the Ideal State Map.  The Ideal State Map represents the high-level view of the process being improved with much of the waste removed.  Although most Lean Practitioners start this process with a SIPOC, I don’t always do this.  The Future State Map is the end product for these types of event, so depending upon how much time I’m given, dictates whether or not I have the team develop a SIPOC.  I suspect I’ll receive a lot of push-back from some of my blog followers on this point.  The intent of the Ideal State Map is to demonstrate to the team what the “ultimate” process flow would look like.

One technique I use, in the development of the Future State Map and the implementation plan, is to populate the Future State Map with star bursts with each star burst representing a change that must be made in order to achieve the Future State Map.  The figure below is the Current State Map for one of my teams before any changes were recommended.  In this map, the number of Green, Yellow and Red steps were as follows:

# of Greens = 39 # of Yellows = 15 # of Reds = 41 # of Hand-offs = 16

The next figure is the resulting Future State Map that the team developed with the star bursts indicated in yellow.  The most significant changes between the two maps were the number of yellow and red activities.  The current state had a total of 41 reds while the future state had only 1 red activity.  However, the number of yellow steps increased from 15 to 31.  The total number of steps decreased from 95 to 70 while the number of hand-offs decreased from 16 to 8.

# of Green = 38 # of Yellow = 31 # of Red = 1 # of Hand-offs = 8


As mentioned earlier, in this figure each of the yellow entities (star bursts) represents a change that the team believes must take place in order to make the Future State a reality.  In this particular example there were 28 changes that the team believed must occur if this future state is going to work.  For this event, the team used these starbursts to develop their implementation plan and based upon comments made by the team members, this technique made it much easier to develop their plan.

One final thought for this posting is the development of the team’s presentation to the executives.  For me, it is imperative to have the team develop and present it with minimal help from me.  I will develop the Power Point slides for them, but the content must come from them.  It’s important for the listeners (the executives) to not only hear what the team has to say, but to experience the passion within their words.  I typically start the presentation with a listing of the team members, what they were attempting to accomplish and then a lessons learned slide.  In the example above, here were some of the things the team felt they had learned.

- How to analyze a problem
- How to work together to solve a problem
- The realization that there are road blocks in all areas
- A better knowledge and appreciation of each other’s work
- How important accountability is (or lack thereof)
- Unbiased eyes looking at a process is good
- It’s hard to leave our comfort zones
- The importance of constraints management
- The knowledge to use the tools elsewhere in our jobs
- The importance of developing unity throughout

 Only time will tell if this team has successfully diagnosed and created a better process flow.  If you are a leader of an organization, you hold the keys to success in that unless there is a violation of company policy or safety, it is imperative that you not only support what the team recommends, but also break down barriers so that the changes can be made.  If you push back and say something like, “That will never work here….” then your credibility will be damaged and your employees will not feel good about participating on other improvement teams.  It’s up to you……..

Bob Sproull


Thursday, October 24, 2013

Focus and Leverage Part 267

Focus and Leverage Part 267

This is the final posting on The Cabinet Maker and we hope you have enjoyed it and learned from it.  Once again I want to thank Bruce Nelson for writing this wonderful piece of writing.

The Improvement Implementation Strategy

The improvement team made the initial presentation to the management team and shop floor personnel to share the findings and make the recommendations for moving forward.  To sum it up in a few words the management team, and some shop floor workers were “stunned” to hear the recommendations being presented.  Remember up front the management had wanted the improvement project focus to be on improving “efficiency” and reducing the “cost per part” even more!

The improvement team recommended that the “efficiency” measure be stopped immediately!  The team presented the evidence as to “why” the efficiency measure was causing chaos in the system.  Instead of efficiency, the recommendation was presented to move towards “synchronization.”  The improvement team used the reference environment of a marching band where each member of the band is marching, but they are out-of-step with those in front of them and behind them.

Both management and some shop floor folks presented arguments about “why” efficiency was so important and necessary to cost savings and cost-per-part reductions.  When asked to show “the evidence” of cost savings and reduced cost-per-part reductions, none could be provided.  They were ALL sure the money was there, but nobody could find it. In the end, management conceded to give synchronization a try. (NOTE: I honestly think that management conceded to give it a try, not because they thought it was the right thing to do but, rather because they wanted to prove us wrong!)

Because of the efficiency measure each work station was working to a different “drum beat” and therefore, totally out of synchronization.  By bringing order to chaos, and using synchronization, the improvement team felt like the system could move forward by orders of magnitude.

It’s a common situation in many companies where the first constraint is not necessarily on the shop floor, but rather in the policies and procedures used for management.  Such was the case for the cabinet makers.  The enforcement of the efficiency policy was creating untold consequences and chaos in the system as a whole.

Let’s go back through each work station and present the recommendations from the improvement team.

Step 1 - Planners

The basic job of the planners did not change.  The architectural drawing still needed to be converted to shop drawings.  However, the emphasis was shifted from the entire project to focusing on each room in the project.  Cut lists were modified to encompass each room, or building location.  The cutting and assembly instruction were now released one room at a time rather than a project at a time.  When all the rooms were complete then, the project was complete.

The planners slowed the release of projects to the project managers. Instead of releasing work when they could, they released it only when they should.  The WIP dropped dramatically.

Step 2 – The lay-up

Nothing at this work station changed.  The laminate (proper color) was glued to either MDF or plywood panels and moved to the saw.  The capacity was sufficient to maintain the new synchronization model.

Step 3 – The Saw

Needless to say, the saw operator was “furious” to learn that his efforts at efficiency were meaningless and actually the cause of the system chaos. However, he was on-board to give this “synchronization” thing a try.

The rules for the saw operator changed from efficiency to synchronizing the work flow through the system.  Instead of cutting the pieces that provided the highest efficiency, the saw operator now cut all of the pieces to provide the parts for a single box.  This meant the saw cutting instructions were changed several times for each box. (doors, sides, top and bottom).  As the pieces for each box finished cutting they were placed on a pallet.  Each pallet contained ALL of the pieces to build a single box, except for the back – they still came from a separate location.

Instead of moving a pallet of 30 pieces at a time, the pallet now contained all of the pieces for a single box.  Once the system kicked in, there were actually plenty of pallets to do the “one-piece-flow” concept.  In the case one piece equals one box.  We also assigned a person to move parts from the saw to the edge banding machine.  The saw operator was no longer required to move the parts.

Step 4 – Edge Banding

For the edge banding machine the process stayed the same.  All they needed to know was edge banding color and type (wood or plastic) and this information was provided in the production packed.  When the need to change banding color did happen, the set-up could be completed in 2 minutes of less.

In essence, they now banded all of the parts for a complete box (sides, top and bottom, doors and drawer fronts).  When the parts finished, they were placed back on the pallet and moved to the Morbidelli.  The same material mover assigned to move parts from the saw to edge banding also moved the pallets to the Morbidelli before going back to the saw for the next pallet.

Step 5 – The Morbidelli

The Morbidelli operator was also annoyed by the shift from efficiency to synchronization.  He too had more computer commands to be entered based on the parts being drilled (sides, dowel holes, and doors).  However, the transition was smooth and presented no real problems.

Step 6 – Kitting

In the previous system parts moved from the Mobidelli to the box press.  In the new system the Kitting step was added to prepare everything prior to the box press.  We discovered the need for this step by using an Interference Diagram.  At the center of the diagram we concluded “More box press time” and determined what the interferences were that stopped us from getting that.  One of the major interferences was the press operators were spending too much time looking for parts.  The injection was for the operators to spend less time looking for parts, and subsequently off-loaded that task to a new process step – kitting.

At the kitting step the boxes where checked to make sure ALL of the parts were accounted for compared to the project checklist.  If something was missing, or out of place, the job was placed in a “hold” area until the missing parts could be found.

The kitting team also moved the doors and drawer fronts to the final assembly area.  Doors and drawer fronts had no need to go through the box press.  The box backs were added to the pallet to make a complete kit and moved to the box press.

Step 7 – The Box Press

For the box press team life was wonderful!  Each pallet that arrived had ALL of the necessary pieces to press a complete box.  As one box was being pressed (3 minutes), the team did the rough assembly on the next box.  When the box is the press finished, the pressure was released and the box slide out into the receiving area for final assembly.  The rough assembled box was slid into the press, the pressure applied, and the next box was rough assembled.

Step 8 – Final Assembly

The rework and confusion for final assembly dropped dramatically.  They no longer felt the pressure to assemble a door ahead of time just to look busy.  The doors and drawers fronts for the box coming out of the press had already arrived a few minutes prior.  Now the proper assembly sequence could be conducted of hanging the hinges on the box first and then attaching the doors.  Door and drawer hardware (pulls) were added and the box moved to shipping.

Step 9 - Shipping

Although the actual process steps for shipping didn’t change much, the boxes they were getting took on a new meaning.  Shipping now understood they were receiving boxes based on a specific sequence.  The new sequence of receiving boxes based on a particular room and not just a job site helped in the loading sequence of the truck.

In order to reduce the build-up of WIP in the shipping area, a new policy for gaining truck capacity had been implemented.  Instead of buying any new trucks to increase the capacity, they instead rented the trucks, as necessary, to move product to the job site.  Even though it was an added operational expense to rent trucks, it was also much less expensive than buying a truck.  The throughput gained from the extra truck capacity far outweighed the expense.

Step 10 - Installation

The installers were a much happier group!  The change from efficiency to synchronization allowed them to receive ALL of the necessary boxes to complete the installation in a single room.  No longer did they have several rooms almost done and waiting for more boxes, but now they could complete a room and move to the next one.

The Results

As simple as all of this sounds, the improvement approach was not readily apparent to the management team.  Their focus, which they had for years, was in the wrong direction.  The primary focus of trying to maintain high efficiency, reduce the cost-per-part, and save money had not served them well.

The real improvement effort turned out to be exactly the opposite of what they were thinking.  Instead of a high energy focus on efficiency – forget about it!  Instead of trying to reduce the cost-per-part through efficiency – forget about it!.  Instead of focusing on trying to save money – shift the focus to “Making Money.”  The strategy to save money is much different than the strategy to make money.

The lead-time through the shop, from the time wood started lay-up until it ended up on the shipping dock, was reduced from 4 to 6 weeks to 4 hours?

There is good news and bad news about the final end results.  First, because of the improvements implemented and the results achieved, the competitors took notice.  This cabinet maker was eventually bought out by one of the competitor companies at a very attractive selling price.  The bad news is that shortly after acquiring this company, the new owners reverted back to standard cost accounting methods, including efficiency, reduced cost-per-part, and cost savings.  They filed for bankruptcy and went out of business about 14 months later.

Bob Sproull



Wednesday, October 23, 2013

Focus and Leverage Part 266

Focus and Leverage Part 266

In this posting Bruce presents the system analysis performed by the improvement team.  And like the last posting, Bruce asks you the readers a question at the end of this posting and we welcome all of you to post an answer to it.

The System Analysis – More information and Details

With the tour information in hand, it was time for the improvement team to go back and do a  more detailed system analysis and look for the cause-effect-cause relationships at each work station and determine what the improvement strategy should be.  Let’s go back through each process step (work station) and look for more detailed information and clues as to what might be causing the problem.

Step 1 – The Planning

The “beloved” optimization software was an add-on from management.  Management firmly believed the software could be used to improve efficiency and help them reduce cost per part and save on scrap material.  In isolation the software might have some benefits for a single panel, but when subjected to the number of panels required to complete a single project, the software did pose some drawbacks. The foundational logic of the software was to analyze and calculate optimization for a single panel.  However, the software did not take into account or calculate the effects on a total project.  Overall, the global negative effects of following the software recommendations did cause some problems!

Each project manager usually had several jobs assigned to them to manage.  At any given time the project managers could have three (3) or four (4) jobs at various stages of the planning or production process.  The current rules for the project managers were simple:

1) Keep everyone busy (Efficiency).

2) Release work to the floor as soon as it was ready to go (in hopes of getting it completed on time).

3) Keep pushing the job through the system.

Step 2 – The Lay-up

The lay-up process was pretty straight forward.  The capacity of the lay-up team (2 individuals) far exceeded the needs of the saw.  This work station was able to keep up or exceed the needs of any of the work stations including doors and drawer fronts – plenty of capacity!  The only observed issue for lay-up was sometimes a raw material non-availability.  It could happen that extreme laminate colors had been chosen, which required a special order and could delay arrival.  These kinds of things didn’t happen often, but they could.

Step 3 – The Saw

The saw operator was following the wishes of management by trying to extract the highest levels of efficiency that he could from the saw.  As such, the saw operator was totally focused on maintaining a very high “efficiency” at the saw, because he was measured to make sure the saw was always busy.  The internal mantra seemed to be; “If you don’t cut it, we can’t make it…”  Partially true, but also totally wrong!

Frequently, there were times (daily) the saw operator would “override” the optimization software and change the cutting sequence.  Several years of experience had taught him that the software was not always right and he had developed a better way to do it!

In the saw operators way of thinking, and also managements way of thinking, this was always a great opportunity to save money, if he could manipulate the process and change things to increase efficiency and reduce the cost per part.

In time, the operator had learned that the highest saw efficiency happened when he changed (overrode) the software to cut the panels differently.  Because of his experience the saw operator was able to look at the entire project cut sequence and determine the number of boxes that were all the same size.  As an example, in the case of a school project, it was clear that all of the boxes required, in all of the classrooms  basically the same size – in other words, each classroom was the same - almost.  Many times the boxes would vary in size because of a corner unit, or the length of wall, or some other variable but, he could still get very close in his calculations.  Besides, he would/could do the corner units and other various box sizes at a later time.  Right now efficiency was the most important measure.

When cutting pieces for the box, the left side and the right side are exactly the same. This could vary based on box height requirements, but even then, they were all the same. The tops and bottoms could be a different size depending on the width required and the sequence location (i.e., corner unit), but, for the most part the tops and bottoms were the same. 

The saw operator reasoned that if he went through the entire job and cut ALL the left and right sides before cutting the tops and bottoms, he would be able maximize the efficiency of the saw by reducing the number of times he had to change the setup and give new instructions to make a new cut.  By every measure of efficiency the saw operator was running at maximum efficiency.  The saw operator was very proud of himself for what he could accomplish and management was also proud of him!  He was highly efficient and saving the company a lot of money – or, so they thought.

Step 4 – Edge Banding

There were two operators at the Edge Banding machine.  One operator would feed the part into the machine and the other operator would take it out at the other end and send it back for additional edging or put it on the pallet for transfer to the next work station if it was finished edging.

For the Edge Banding operators it really didn’t make much difference which part they had - the process for edge banding was the same.  The only thing that really made a difference to them was the color of the edging or if it required wood banding.  The banding materials came in big rolls which made changing from one color to another very easy. Change-out was about two (2) minutes, or less.

Step 5 – The Morbidelli

The Morbidelli was operated by a single operator.  The Morbidelli work deck was actually about 40 inches off of the floor.  The set-up of the work deck allowed for two panels to be drilled at a time, sometimes more depending on the size.

The operator could drill either the flat sides (for the pins to hold the shelves) or drill the side edges for the dowel pegs.  The flat side took a bit more time because there were more holes.  The edges took less time because there were only two or three holes for the dowel pegs depending on the size of the piece.

It is interesting to note that the cutting sequence from the saw actually helped the Morbidelli achieve a higher efficiency.  The operator could set-up to do all of the flat sides first and then set-up to do all the edge holes when the tops and bottoms arrived.  So, in essence, by following the same cut sequence from the saw the Morbidelli work station also appeared to be highly efficient.

Step 6 – The Box Press

It was at the box press that the beloved “efficiency” model fell apart!  There was, at any given time, several pallets of inventory waiting in the holding area for the box press.  In some cases there were pallets stacked on top of pallets (with the help of a forklift), just to better utilize the space available.

There were two Box Press operators and they were stuck!  Considering all of the work in process (WIP) waiting in front of their work station, they DID NOT have enough of the right parts to build a single box!  What they usually had was ALL left sides and the right sides and the backs but, no tops or bottoms.  It wasn’t until the first tops and bottoms had completed the other processes and started to arrive at the box press that they could start assembly.

When the tops and bottoms did start to arrive, it was sometimes very difficult to match the pieces for the build.  The reason was, the width of the boxes had a much higher probability of changing then the height did.  At times, it was like putting all the pieces of a puzzle on a table and trying to figure out which pieces went where.  Even though most of the boxes were essentially the same size, it usually turned into a “hunt” to find the right pieces for assembly.  This problem existed because each piece was marked with job number and cabinet number.  Even though each piece was EXACTLY the same, the operators would spend considerable time trying to match the job numbers and cabinet numbers!

This matching of the necessary parts also played heavily into the slow production time of the box press.  The reality was the box press operators spent most of their time “looking” for, and not “pressing” parts.  By all measures the box press operators were very busy, but they just weren’t accomplishing the job of pressing boxes.

Step 7 – Final Assembly

The assembly crews in final assembly seemed to have the most down time.  I say crews because there was one crew who did the drawers and another crew who did the doors.  Sometimes the hardware could be mounted early for drawers and doors.  When the doors arrived they could have the hinges mounted on them prior to the boxes showing up.  However, taking this early action, to mount hinges on the doors, also generated a large amount of re-work.  The correct assembly process was to first mount the hinge to the box and then the door to the hinge.  This allowed them to do the proper alignment when the door was attached.

The door crew often assembled out of sequence just so they would appear to be busy.  They took this action knowing full-well they would eventually have to re-work it.  But, it did meet the measure of being busy and efficient “right now”!

Step 8 – Shipping

When the boxes arrived at shipping they were individually wrapped in plastic.  They had several different plastic rolls on applicators that they could use and there were, at most times, probably 3 or 4 folks in shipping area.  They had the capacity to keep up with the boxes coming from Final Assembly.

When the boxes were wrapped, the box number was checked-off of the project list and either loaded directly to the truck or placed in a holding area waiting for the truck to return.  The primary measure of shipping was to make sure the truck was fully loaded in order to maximize the load going to the job site and reduce the number of times the truck had to make a trip, reducing the fuel costs and saving money, and therefore being more efficient!  A truck was rarely allowed to leave for a job site only partially loaded, unless it was to take the last pieces required to hopefully finish the job.

As an added note, there were complaints from the installers at the job sites.  Even though lots of boxes were showing up at the job site(s) it consisted of only a few boxes in each room.  The installers had some pieces of the puzzle, but not enough of the right pieces to finish the installation.

The System Analysis

With the collection and observation of this additional information, the system started to reveal itself and subsequently take on a life of its own.  For the improvement team the necessary actions started to take shape for what actions were necessary to transform the situation.

By now, many of you might have concluded where you think the constraint is.  Based on what you have read (and your mental list of improvements) you’ve probably deduced which work station is slowing down the entire system. What do you think the constraint of this system is?  Where would you focus your improvement efforts?  Why would you pick that particular location or operation?

At first blush, many people might point their finger at the Box Press.  By using traditional system analysis techniques and protocol, i.e., looking for the slowest operation, looking for the point where the work seems to be backed up and the point that exhibits the highest level of work–in-process inventory, the box press would certainly be a plausible candidate.  But, is it really the problem area?  If the Box Press was able to produce at a faster rate, would the entire system get better?  Maybe!  Remember:  The Box Press has its own set of limitations.  Each box is required to stay in the press for at least 3 minutes to set the glue!  Can the Box Press go any faster than it already does with these limitations?  How?
Bob Sproull