Monthly Archives: October 2007

Fooled by Randomness

This is a nice article discussing how people are often fooled by thinking there must be special causes for patterns in random data. I still remember my father showing my classes these lessons when I was in grade school. Playing At Dice – What That “Weekend Exercise” Was All About:

Yes, that’s more or less the point. If the system is behaving statistically, it will show apparent sequential trends that in reality are mirages. The dice experiment demonstrates that – and if you look at statistical and sequential temperature data, you see the exact same behavior!

When people are asked to explain random variations in data they will make up special causes (that they often even believe are special causes even when they are not) but you can improve management a great deal by just stopping the requirement to “explain” common cause variation (which in practices mean to claim a special cause for the common cause variation). Use that time instead to standardize processes. Create control charts for critical processes. Run experiments using PDSA cycle

Related: Seeing Patterns Where None ExistsUnderstanding DataOperational Definitions and Data CollectionRed Bead Experiment

Traveling for Health Care

From my post on the Curious Cat Investing and Economics blog: My guess is that traveling for health care is going to increase greatly in the future. Health costs in the USA are enormous. Costs in Europe are different – often in wait time (or costs to avoid waiting) but another option is available – travel. Countries would be very wise to focus on building up this industry in my opinion. The economic benefits could be huge.

The market is huge and growing. And the rich countries do not appear to be doing very well – especially the USA. The country needs to invest in a rigorous system to ensure world class medical care. It is almost certain the first attack will be attempts to frighten customers by saying your country is unsafe…

On this management improvement blog I continue to encourage the USA to improve the health care system. And some great strides are being made. But, Dr. Deming named the excessive health care costs a deadly disease decades ago and it is much worse today. So much so that the odds of avoiding a huge increase in overseas travel for health care is very unlikely in my opinion – even if we make better progress than I expect toward improving the USA health care system. It is an macro-economic problem and not one easily solved in 5 years or 10 years. The results (as long as countries step in to fill the market need – as has been happening) is people will travel to get health care.

Related: USA Paying More for Health CareChange Health CareHealth Care Crisis

Bringing Lean Principles to Service Industries

Bringing ‘Lean’ Principles to Service Industries by Julia Hanna

“One of the important lessons we’ve seen on the ground is how Wipro approached the launch of this lean initiative,” Staats says. “They didn’t come out with big banners and say, ‘OK, today your work is lean work, and yesterday it wasn’t.’ They started with a small group and recruited other people from there. It was a very controlled experimentation.”

In their research, Staats and Upton document how the use of lean principles affected the workflow at Wipro. The concept of “kaizen,” or continuous improvement, for example, resulted in a more iterative approach to software development projects versus a sequential, “waterfall” method in which each step of the process is completed in turn by a separate worker.

By sharing mistakes across the process, the customer and project team members benefit individually and collectively from increased opportunities to learn from their errors; the project also moves along more quickly because bugs are discovered in the system earlier in the development process.

Iteration is very important. It is important in proper use of the PDSA cycle – many quick iterations are much better than one long slow one. And for software application development it is an excellent strategy.

I think iteration is even more important in software application development than most other areas (for now anyway) because many stakeholders cannot visualize what they need from software. Therefore attempts to force rigid requirements up front fail. No matter how much effort you put in the stakeholder just doesn’t know until they see it and use it – then they can tell you what they want changed. so design a system that works given this – iteration and agile development work very well.

Related: lean thinking articlesExperiment Quickly and OftenManagement Consulting (what does the consultants web site show?)Indian Firms Learning From Toyota (on Wipro posted here in 2005)posts on improving software developmentNot Lean Retailing

IT Operations as a Competitive Advantage

Operations is a competitive advantage… (Secret Sauce for Startups!)

The example above is the tale of two Web 2.0 startups scaling to 20 systems during their first three months. The first team starts writing software and installing systems as they go, waiting to deal with the “ops stuff” until they have an “ops person”. The second team dedicates someone to infrastructure for the first few weeks and ramps up from there. They won’t need to hire an “ops person” for a long time and can focus on building great technology.

In my experience it takes about 80 hours to bootstrap a startup. This generally means installing and configuring an automated infrastructure management system (puppet), version control system (subversion), continuous build and test (frequently cruisecontrol.rb), software deployment (capistrano), monitoring (currently evaluating Hyperic, Zenoss, and Groundwork). Once this is done the “install time” is reduced to nearly zero and requires no specialized knowledge. This is the first ingredient in “Operations Secret Sauce”.

This is a nice short article discussing startup IT operations. On that topic it is interesting. It is also a good example of how a bit of up front planning can help any organizations. Make plans on realistic options – which often means not expecting everything to be perfect. Expect to have to make do with fewer resources than you would like but are what you will likely have… At work, I use subversion, Ruby on Rails (and practice continuous build and test – I’ll take a look at cruisecontrol.rb) and we are setting up Capistrano. I’ll let our system administrator know about puppet (it looks useful) and take a look at the monitoring options (we have something in place now, I forget the name).

Related: Better and DifferentThe IT Iceberg SecretSub-OptimizeIf Tech Companies Made Sudoku

Strategic Deployment: How To Think Like Toyota

Strategic Deployment: How To Think Like Toyota [the broken link was removed]:

Hoshin kanri is fundamental to Toyota’s success today, says Dennis, currently an instructor at the Lean Enterprise Institute. He says Toyota’s ability to grasp the situation, identify two or three obstacles, develop meaningful plans to address those obstacles, and deploy them “is outstanding.”

Another company using strategy deployment, HNI Corp., has used a policy deployment mechanism for more than a decade. The office furniture manufacturer, an IndustryWeek Best Manufacturing Company for five consecutive years, deploys its strategy companywide using a Plan-Do-Check-Act (PDCA) sequence that moves from a three-year corporate plan to a unit-level development process that creates one-year plans with action steps. Progress reviews and annual reviews evaluate progress and then the cycle starts again, explains Todd Murphy, vice president and general manager of The HON Co.’s Cedartown, Ga., facility, a 2005 IW Best Plants winner. HON is the largest operating company within HNI Corp.

Also central to policy deployment at HON is rapid continuous improvement, or RCI, a company culture focused on making breakthrough improvements. Further aligning policy deployment at HON is its reward system, which is linked to the achievement of policy deployment goals.

The Google Way: Give Engineers Room

The Google Way: Give Engineers Room

Google engineers are encouraged to take 20 percent of their time to work on something company-related that interests them personally. This means that if you have a great idea, you always have time to run with it.

These grouplets have practically no budget, and they have no decision-making authority. What they have is a bunch of people who are committed to an idea and willing to work to convince the rest of the company to adopt it.

Consider the collection of engineers who wanted to promote “agile programming” inside the company. Agile programming is a product development approach that incorporates feedback early and often, and was being done in a few scattered parts of the organization.

The Agile grouplet formed to try to take this idea and spread it throughout the organization. It did so by banding together and reaching out to as many groups as it could to teach the new process. It created “Agile Office Hours” when you could stop by and ask questions about the process. It handed out books and gave internal talks on the topic. It attended staff meetings and created the concept of the “Agile Safari,” in which you could volunteer to work for a time in groups that were using Agile, to see how it ticks.

Related: Google Software EngineeringAgile Software DevelopmentAgile ManagementManaging InnovationLarry Page and Sergey Brin WebcastGoogle: Ten Golden Rules

Manufacturing Takes off in India

Manufacturing takes off in India by John Elliott:

The sleek, clean factory in the Delhi suburb of Noida seems more Taiwan than India. Engineers in white overalls and goggles watch over an automated production line that spits out four billion state-of-the-art DVDs and CDs a year. To get to the factory floor, you have to pass through three air-cleaning passages – a process that makes it clear you’re no longer in crowded, dirty Delhi.

This is not some futuristic vision of India. It’s the main factory of Moser Baer, a 24-year-old Indian company that was one of the first in the world to make high-definition DVDs and is now starting on flash memories and solar panels. And while not typical of most Indian factories, Moser Baer is one of a number of companies utilizing the same brainy ability that fueled the country’s IT boom to remake its manufacturing landscape.

The second problem is India’s infrastructure, especially power shortages and the grossly inadequate highways and ports that make it difficult to transport goods. New highways are helping, but growing urban congestion is making the problem worse, and there are seemingly endless bureaucratic and physical delays at ports.

India has a great deal of potential for manufacturing. The roadblocks are largely economic I think. Poor infrastructure is a huge problem that requires huge investments be made. China has made huge investments in infrastructure and they have paid off. Another incredible drain on India’s progress in manufacturing is the government bureaucracy.

Related: Manufacturing in AsiaHopeful About India’s Manufacturing SectorTop 10 Manufacturing Countriesarticles on manufacturing management

How Curiosity Empowers Toyota

How Curiosity Empowers Toyota [the broken link was removed] by Keith McFarland:

As I read Magee’s book one idea kept surfacing in my mind. Throughout its history, Toyota appears to have put an emphasis on an important but oft-overlooked characteristic: Curiosity. You can trace Toyota’s institutionalized curiosity back to its founder, Sakichi Toyoda (1867-1930), who became interested in improving the effectiveness of weaving looms, and who went on to revolutionize weaving technology in Japan and secure more than 100 patents on his ideas. You might say Toyota’s founder was “loopy” for looms. Not content just to build the best looms in Japan, Toyoda traveled to Europe, toured leading Western loom makers, and carried key ideas back to Japan. Son Kiichiro Toyoda carried on his father’s tradition of curiosity—and a visit to a Detroit auto plant in the 1920s inspired him to move a renamed Toyota into the car business.

For more than 70 years, Toyota’s curiosity has allowed it to build, brick by brick, a commercial fortress. It has scanned the globe for the best ideas—from styling to manufacturing to quality management—and imbued those ideas with a power that often surprises even the people who came up with them in the first place.

Curiosity seems like just what a cat (or company) needs to grow and learn and improve 🙂

Related: Curious Cat management articlesposts on the Toyota Management Systemlean manufacturing portal

2007 William G. Hunter Award

T.N. Goh received ASQ Statistics Division’s 2007 William G. Hunter Award. He sent me this email:

You may not realize that I first met Bill 38 year ago, when he was in Singapore helping us set up the first school of engineering in the country. He persuaded me to go to the graduate school at UW-Madison and I daresay that’s the best advice I ever got in my whole career. Now when I come to think of it, what Bill stood for in his lifetime has not been, and never will be, out of date. He had advocated the use of statistical thinking and the systems approach, which if anything is even more critical today in handling issues such as global warming and government effectiveness.

Also, statistical design of experiments has assumed an increasingly important role in performance improvement and optimization in the face of constrained resources, again something always in the minds of engineers, managers and business leaders. From time to time there are others who package statistical tools under labels Bill might not even have seen himself, such as “Design for Six Sigma“, but the underlying idea is still the same: recognize the existence of variation, and the earlier you anticipate it and do something about it, the better off you will be in the end.

Bill’s zeal in spreading the message and sharing his knowledge and expertise with people in other parts of the world is well known; I would even say that he had recognized that “the world is flat” way before the likes of Tom Friedman discovered the reality of globalization!

So that’s to share my thoughts with you, having being honored by the Bill Hunter award. I am copying this to Stu, also to Doug who chairs the committee for this award. I reality enjoy the professional association and friendship with you all.

I had not realized Dad was helping set up the first school of engineering in Singapore. This is the kind of thing I mentioned in, The Importance of Management Improvement, where I mention people telling me the positive impact Dad had on their lives.

Related: Curious Cat Science and Engineering BlogStatistics for ExperimentersSingapore Research Fellowship

Deming Prize 2007

India continues to shine with Deming Prizes (and of course there economy and stock market have been doing pretty well too). Companies based in India took home both Deming Prizes this year and the Japan Quality Medal. Countries of organizations receiving the Deming Prize since 2000 (prior to that almost all winners were from Japan):

Country Prizes
India 14
Thailand 8
Japan 4
USA 1
Singapore 1

The 2007 Deming Prizes went to Asahi India Glass Limited, Auto Glass Division and Rane (Madras) Limited. Three different divisions of Rane received awards in the previous the last 4 years, making this Rane’s fourth prize in 5 years.
The 2007 Japan Quality Medal went to Mahindra & Mahindra Limited, Farm Equipment Sector.

The 2007 Deming Prize for Individuals went to Mr. Masayoshi Ushikubo, Chairman, Sanden Corporation. The Sanden International portion of Sanden was the third USA based organization to win a prize in 2006 (prior winners were: Florida Power & Light Company in 1989 and AT&T Power Systems in 1993). I mentioned India’s economy and stock market above, China’s economy and stock market are doing amazingly well also and then have yet to have a Deming Prize winner. I hope China, USA and many another countries can follow India’s current performance in this area. Deming Prizes are not awarded on a quota or forced ranking basis – any deserving applicants in any year can receive a prize.

Learn more about the Deming Prize.

Related: Deming Prize 2006Deming Prize 2005Deming Prize 2004Top 10 Manufacturing CountriesToyota Chairman Comments on India and Thailand2006 Deming Medal presented to Peter R. Scholtes