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The following personal stories concern vehicles produced by the automaker that invented lean and is world-famous for its efficient manufacturing operations:
• My old SUV’s bright headlights don’t work. When I hit the switch for the brights, the headlights turn off completely. This will cost me $400 to fix because it requires replacing an entire steering wheel subassembly.
• My wife’s car needs a filter replaced; it’s routine maintenance. It will cost several hundred dollars because it requires extensive disassembly to get to the filter, which has to be done by going through the glove compartment.
• I once lost the key to my car. It was one of those keys with security features, and it opened the doors and trunk. It cost me nearly $300 to replace the key. (This was four years ago, when the dollar was still worth something.) I was told that if I lost my remaining key, it would cost me $3,000 to get a new key because the car’s computer security hardware would need to be replaced. As you might imagine, this would require extensive disassembly.
A couple of months back I was watching “Are You Smarter Than a Fifth Grader?”--one of the more enjoyable game shows in recent memory. The premise is that the contestants should be able to answer the questions, since it’s stuff we learned during or prior to the fifth grade--nothing deceptively clever or arcane; just facts and information, history, science, grammar, and current geography. The questions get harder as you move from the first to the fifth grade, with correspondingly higher monetary prizes.
This night the contestant made it to the $1-million level. If you win at this point, you get the million; if you lose you go back to a measly $25,000 and you have to face the camera and admit that you’re not smarter than a fifth grader.
The question was, “Who was the longest reigning monarch of England?” Well, I knew this answer hands down. Oh, how I wished I was on that stage. I’d become a millionaire. I would be smarter than a fifth grader. I was absolutely sure of it. Except… I was dead wrong. I would have lost thousands of dollars and I would have had to make the humiliating admission as to my diminished level of smartness.
By the time you read this, the new version of ISO 9001 should be out. ISO 9001:2008 is the result of years of work by an international team of volunteer experts. These dedicated men and women gave up hundreds of hours of their time and traveled to locations around the world, usually at their own expense, to revise the standard.
The revision process began almost as soon as the year 2000 version of the standard was published. In fact, work on the next revision of the standard--slated for the year 2015--has already begun.
Most people have three primary questions about the new standard:
• What’s new?
• When does it take effect?
• How long do I have to transition to the new standard?
One of the major causes of TQM and Six Sigma failures is selecting the wrong project. This selection is probably one of the most important decisions that management can make to support the improvement process.
There are many approaches that can be used to select projects. They range from management intuition to complex analyses of how the processes affect business opportunities. I will show you a weighted selection approach that is effective, using a health care example.
In this approach each opportunity is evaluated in a number of parameters. For example:
A) Changeability = 2 points
B) Reduce cost = 2 points
C) Decrease mortality = 5 points
D) Improve patient care = 4 points
E) Improve staff morale = 3 points
F) Reduce wait time = 1 point
Each of these parameters is weighted by a point score from one to five. A rating of one indicates that it’s low priority, and a rating of five indicates that it’s very high priority.
Although I’ve spent my entire career working in the quality and process improvement fields, my undergraduate degree is in economics. I learned that economic cycles are normal. Economic downturns result when there is an imbalance in the economy. Past recessions have developed when businesses overestimated future demand and overproduced. When businesses realized their inventory was large relative to actual demand, they cut production and used various means to sell their excess inventory. Thanks in part to quality professionals implementing lean and other improvement processes, this source of imbalance is less common and less severe. However, as is now obvious, there are other ways to screw up an economy.
Over the years I’ve lost count of how many times I’ve heard the lament, “We don’t have management support!” I sympathize. Lack of management support is without a doubt one of the prime causes of failed process and quality improvement efforts. Without leadership backing, any organizationwide initiative is ultimately doomed. This column will explain why it’s not enough to ask for support in general. If you’re not very specific, you might find that the management support you asked for ends up killing you with kindness. Consider the following ineffective strategies:
Strategy No. 1: Command people to act as you wish. People in less senior levels of an organization often have an inflated view of the value of raw power. In truth, even senior leaders have limited power to rule by decree. Human beings by their nature tend to act according to their own best judgment. The result of invoking authority is that decision makers must constantly try to divine what the leader wants them to do in a particular situation. This leads to stagnation and confusion as everyone waits on the leader. Even under the best circumstances, people will often misinterpret the leadership’s commands.
Although other aspects of controls required by ISO 9001 may be critical, none receives as much attention as subclause 7.5.1--”Control of production and service provision.” Almost every organization must develop processes for delivering services or producing products. Subclause 7.5.1 focuses on the key concept that processes must be carried out under controlled conditions. Considerations for achieving controlled conditions are clearly stated, along with the requirements to determine the extent to which production and service operations are planned, established, documented, verified, and validated.
These considerations begin with understanding the specifications for the product that the processes will produce. The organization must determine the production and service processes that should be controlled and the outputs that must be achieved at each stage of processing.
Also, the organization must consider the equipment necessary to meet the product requirements, including their sequence and operating conditions. In some cases new equipment must be designed or procured.
As I’m writing this column, the U.S. government is debating the approval of a trillion-dollar-plus stimulation package, the Dow Jones average has dipped into the 7,000 range, hundreds of thousands of people were laid off work last week, and poor-performing companies throughout the United States are looking to the government to take money from the well-managed companies so they can continue to perform poorly.
Our new president hasn’t learned from the mistakes made in the last stimulation package as he pushes for approval to spend the trillion-plus dollars of our money without a well-defined plan on how the money will be spent (i.e., given away). The Bush stimulus package went to the banks, many of which didn’t need or even ask for the money.
ISO 9001’s subclause 8.3 is intended to prevent inadvertent use or installation of nonconforming product. A primary requirement of this subclause is to ensure effective implementation of processes that prevent unintended use or delivery of product that doesn’t conform to requirements. This simple requirement makes business sense because one of the worst things an organization can do is unwittingly provide its customers with product that doesn’t meet requirements. Organization must devise processes to accomplish this objective in a way that encourages personnel to address product nonconformity rather than find ways to avoid identifying and controlling such product.
Decision-making with respect to improving performance is a matter of prediction. So is leadership. For example, was the energy crisis a rational, predictive event 30 years ago? Or was it random, unpredictable, and unpreventable? If it’s the latter, then we must believe that we are morons with no theory, knowledge, or predictive capability, and are powerless to influence our environment or future. No reasonable person accepts that.
People in business, education, and government make decisions to create positive outcomes for themselves and their organizations. There are basically three categories of decisions:
1. Decide to take some form of action. (We can cause a positive result.)
2. Decide to take no action. (The status quo is just fine, thank you.)
3. Decide not to decide. (i.e., management by paralysis)
To make better decisions and improve future performance, we need to understand what drives performance. There can only be two major components that affect performance independently, or interactively, and those are the systems that are being used in the creation of the business outcomes and the performance of people working in and around these systems. The diagrams in figures 1 and 2 show the possible basis of performance.
