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Bruce Hamilton

Six Sigma

Shigeo Shingo’s P-D Ratio

If ‘frenetic’ describes your work atmosphere, take the higher path to just-in-time production

Published: Monday, June 8, 2015 - 14:37

The last few weeks for me have been all things Shingo, including a presentation at the Shingo Institute’s International Conference three weeks ago in Provo, Utah, followed by four days of Shingo Institute workshops at Vibco in Richmond, RI. Questions at both events about assessing for enterprise excellence caused me to reflect on a basic framework that Shigeo Shingo used to explain the progression of what we refer to today as “lean maturity.”

The P-D ratio was Shingo’s comparison of the time required to produce a product to the time given by the customer to deliver the product.

A higher P-D ratio, for example, was indicative of an organization that took much longer to produce a product than desired by the customer. In 1985, this was the condition in my business. We attempted to match the customer’s short “D” time by stockpiling inventory. Our push production method, as Shingo called it, was “speculative,” that is to say we built to forecast. Unfortunately our forecasts were wrong much of the time and there was an abundance of muda in our production system. The atmosphere in the plant was one of frenetic expediting, particularly at the ends of months and quarters. I don’t recall using the word “culture” at the time, but in today’s terms we did not yet have a culture of improvement.

Shortly after I took a job as materials manager, a question posed to me by a buyer from one of our largest customers, a compressor manufacturer, summed up our P-D ratio: “Welcome to your new job, Mr. Hamilton. Can you explain to me why your company takes 16 weeks to fill an order for a product the size of my fist, while my company can make a product as big as a house and deliver it in a week?”

That mortifying question may very well have been the trigger for my first study of the Toyota Production System (TPS). A read of Robert Hall’s Zero Inventories (Dow Jones-Irwin, 1983) led via a footnote to Shigeo Shingo’s A Study of the Toyota Production System (Productivity Press, 1981) and this is where the epiphanies began. The book was such a bad translation from the Japanese that it has become a collector’s item. (It was translated again in 1989 to a more readable but less authentic form.)

Using Shingo’s ideas, we began to shift our production from “speculative” to “authorized,” which were Shingo’s words to describe the shift from push production to pull production. Little by little, we reduced those 16 weeks to 10, then five, and eventually, over a period of years, to two weeks for our customer’s product. With starts and stops and a lot of TPS-learning opportunities, by 1990 we’d reduced the P-D ratio from 16:1 to 2:1, not exactly just in time, but improved enough to be recognized in 1990 with the Shingo Prize for Manufacturing Excellence.

By the fall of that year we were asked to tell our TPS story at the annual AME conference in Boston. A team of seven people from my company attended, and each person told a piece of the story: what we’d learned technically, and how we worked together to overcome challenges and develop an improvement culture. After our presentation, each team member sat at a different lunch table, anxious to hear from other participants. As I seated myself for lunch, the gentleman to my right was already talking about shorter lead times, inventory reductions, and lower costs. Not to be outdone, someone across the table talked about same-day delivery. Another told a story of enormous cost reductions. “These are really impressive results,” I thought to myself.

I broke my silence by announcing that although my company had worked very hard to improve, our results were not nearly as compelling as those described at the table. Hoping to capitalize on the experiences of my lunch mates, I then asked, “What companies are you with?” To my complete surprise, everyone was a consultant. One was pushing the theory of constraints, another was into total productive maintenance, and a third knew all about material resource planning. The rest were lean consultants, a relatively new idea at that time. All had business cards in hand. Suddenly their improvement claims seemed a bit less credible.

In 1985, there had been almost nothing written about TPS, and the only lean (TPS) consultants were from Japan. It was hard to find companies that had even heard of TPS. But by the 1990 AME conference, lean consultants were apparently multiplying like lab rats. “Lean is good business for consultants,” I skeptically thought to myself. “But what about their customers?”

Image courtesy of Weird Al’s “Mission Statement”

Revisiting Shingo and his ideas during the last few weeks, I’ve concocted a whimsical P-D ratio for us to keep an eye on: the ratio of pundits to doers. (Yes, I am now a pundit, too.) Today’s pundits have titles superior to consultant: lean expert, lean practice expert, sensei, master sensei, Six Sigma Black Belt, guru, and so on. We’re even on Weird Al’s radar! My unscientific application of this pundit-doer ratio leads me to believe that while there are many more doers now than in 1990 (the good news), the pundit-doer ratio is getting larger (the bad news.) There are more of us pundits, both internal and external, than there are doers.

During a recent discussion with my board of directors, the question was posed: “What do we want Greater Boston Manufacturing Partnership (GBMP) to look like in 10 years?”

“Perhaps we should ask, ‘What do we want our customers to look like in 10 years?’” answered one astute board member.

Where is your company on Shingo’s P-D scale? Where do you want to be in 10 years? Please share a thought.


About The Author

Bruce Hamilton’s picture

Bruce Hamilton

Bruce Hamilton, president of the Greater Boston Manufacturing Partnership (GBMP), brings hands-on experience as a manager, teacher, and change agent. Prior to GBMP, Hamilton led efforts to transform United Electric Controls Co.’s production from a traditional batch factory to a single-piece-flow environment that has become an international showcase. Hamilton has spoken internationally on lean manufacturing, employee involvement, continuous improvement, and implementing change; and he has contributed to numerous texts ranging from visual control to variety reduction. Hamilton’s blog, Old Lean Dude, is an on-going reflection on lean philosophy and practices with an emphasis on keeping good jobs close to home.