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Knowledge Management – Management is Prediction

Posted on January 21, 2007 by John Hunter

This presentation web video discusses the idea of managing corporate information: Seamless Information Capture and Discovery for Corporate Memory [the broken link was removed]. The video focuses on discussing technical solutions.

The most important factor to me, is the value to improving management. The technology discussed here eventually could help lead to the adoption of Dr. Ackoff’s ideas on capturing corporate decision making. Then that will allow evaluating decisions for systemic weakness and strengths to improve decision making. Ackoff’s ideas in this area tie very closely to Dr. Deming’s ideas on the theory of knowledge and the importance of prediction to management.

There are several reason these ideas have not been adopted but one is that they require some effort to document and then evaluate (and often those are missing). So many see any time spent improving the system as waste (based on their actions not that they would say such a thing) – they are only happy when producing today or fire fighting to enable producing today.

This video touches on some ideas that might help better adopt Ackoff and Deming’s ideas. A good deal of thought is needed on how to use the technology tools to implement the ideas, but new technical solutions are providing options. Blogs, Wikis, improved search for stored data, the ease of creating intranet applications…. are some additional tools that can be used to improve.

The technology itself is fine but not itself the important factor in my opinion. The potential to better apply the management improvement ideas using the technology is where I see the power. My initial idea is to use an understanding of Deming’s ideas on theory of knowledge and Ackoff’s decision documentation process and then figure out how to use the technology to create a practical process (that is easy to use and get the desired benefits).

Posted in Creativity, IT, Quality tools, Systems thinking | 5 Comments

Reacting to Product Problems

Posted on January 20, 2007 by John Hunter

Previously we posted on recalls at Toyota and Sony. Recently Toyota announced another large recall. Investor’s Business Daily writes on the topic in: The Ups And Downs Of Doing Product Recalls – Japan-Style [the broken link was removed]:

Kitayama also said Akio Toyoda, grandson of Kiichiro Toyoda, Toyota’s founder, played a key role by opening a direct line to suppliers that had supplied defective car parts. He stressed that quality comes before meeting delivery deadlines.

Interesting. The article also discusses a commitment to zero-defects. I agree with Dr. Deming that this is not the right strategy, but Toyota’s actions around that concept seem reasonable. Many other companies actions around a “zero-defect effort” are not effective in my opinion. See our previous post reacting to Norman Bodek’s post on zero defects. Toyota is doing well but as they say themselves, over and over: Toyota still has plenty of room to improve. The key is to not only say so, but act on it (which I believe they are doing, the recalls give one indication of the continued need to improve).

Shinji Kitayama, an analyst at Shinko Securities in Tokyo, stressed that one of the biggest problems was that Toyota hired hundreds of less-experienced temporary factory workers to cut production costs at some plants. Toyota’s new quality control head, Shinichi Sasaki, divided factory workers into teams of four to five people and assigned a veteran leader to each team to teach production know-how. The idea was to check closely for small problems before they became bigger, Kitayama says.

The bottom line, in my opinion? You must improve the system to improve the value to the customer (which includes reducing defects). And you must continually monitor your systems and react when you discover weaknesses (or find new ways to improve the system through PDSA).

Posted in Deming, Management, Manufacturing, Systems thinking, Toyota Production System (TPS) | Tagged Deming, Manufacturing, problem solving, Systems thinking

Performance Measures and Statistics Course

Posted on January 20, 2007 by John Hunter

Performance Measures and Statistics Course [the broken link was removed] – free course materials from a 2 day training course by Steven Prevette. Topics include: Dr. Deming’s red bead experiment, operational definitions, selecting performance targets, SPC, theory of variation, case studies, control charts, pdsa, pareto charts, histograms…

Posted in Education, Statistics | Tagged Data, Quality tools, Statistics | 1 Comment

Think Long Term Act Daily

Posted on January 17, 2007 by John Hunter

Great stuff from the DailyKaizen [the broken link was removed]:

Over the last three months we have been working to incorporate PDCA discipline into our Model Line planning process. We are quite literally building a new management system in the organization and it is fascinating. There are many attributes of this system including developing standard work for managers, redesigning the strategic planning process, developing a strategic deployment process and most important formalizing the checking process at all levels. It will take several years to fully put in place, but by year end I think we will show great progress.

So few organizations can think beyond the current urgent need (often this day or week or month, not even quarter). Thinking long term is not about waiting around. But it is about constancy of purpose. The powerful gains from any management system are not those in the first year. The benefits possible in the 5th year or 10th year… are not possible in first year. The capacity to take advantage of management improvement needs to be developed and it is a multi-year effort (if it is done well – otherwise it will abandoned after the initial hype for the next new fad). The gains should grow and compound over time.

Related: Lexus: Long Term Thinking

Posted in Deming, Management, Process improvement, Systems thinking | Tagged Systems thinking | 1 Comment

Management Improvement Carnival #3

Posted on January 16, 2007 by John Hunter

More links to interesting management improvement blog posts.

Lean IT – what comes first, technology or waste reduction? by Kent Blumberg – “rather than pushing technology on people and processes (the traditional top-down approach), Toyota looks to the people and processes to pull the technology they need to support their decision making.”
Who Is GM’s Customer? by Dan Markovitz – “The average car buyer can’t calculate the cost of GM’s excess inventory, of course, but they don’t need to. That cost manifests itself in higher prices, or cheaper materials, or fewer features in the actual cars.”
Top 5 Lean Manufacturing Books for Beginners by Jon Miller – Taiichi Ohno’s Gemba Keiei, The Toyota Way, Toyota Production System, Today and Tomorrow by Henry Ford, The Sayings of Shigeo Shingo
Rube Goldberg Takes On Supply Chains by Kevin Meyer – “Is manufacturing in Everett really that difficult that flying tons of aluminum around the world makes more sense than to reemploy all those workers?”
Technology Must Not Rule by Rob Berg – “Technology enables, but even the best technology absent good management leads to failure. As such, genuine Business Process Management expertise must precede BPM technology”

Continue reading →

Posted in Books, Carnival, IT, Management | 2 Comments

UK National Health System Management

Posted on January 15, 2007 by John Hunter

Another article on the UK national health system using lean thinking: In the drive to save the NHS, I’m choosing a Toyota by Simon Caulkin:

So the lessons of Toyota come out rather differently from what you might expect. Large size is no barrier to efficiency – although smaller than the NHS, Toyota’s 264,000 employees make it large by any other standard. You don’t need a market to lower transaction costs, but the opposite: trust and cooperation, which also lifts morale by restoring control to the front line. (Toyota swaps largely anonymous leaders with as little fuss as changing a light bulb.) And far from being dependent on the profit motive, its method – flow – is as applicable to the public as the private sector. What’s not to like?

Posted in Deming, Health care, Management | 1 Comment

Performance Appraisals – Is Good Execution the Solution?

Posted on January 15, 2007 by John Hunter

Performance review proponents say the way it is done matters most[the broken link was removed] (based on reaction to: Performance appraisals get low marks[the broken link was removed]):

Deming, it seems, has many fans. His view of performance reviews? He included them in his catalog of the “seven deadly diseases” afflicting U.S. management in the late 20th Century. Byrne referred to Deming when he wrote: “The ‘report card’ type of yearly review [does] more harm than good. Review the person and their work all through the year and skip the sit-down review. Everybody ‘needs improvement,’ so [provide feedback] daily.”

Good execution of performance appraisal is not the solution. More people are realizing that improving how performance appraisal are done is an attempt to do the wrong thing better. If you insist on doing the wrong thing, I suppose you might as well do it better but how about just not doing the wrong thing at all? What should be done? See: Performance Without Appraisal and read chapter 9 of The Leader’s Handbook.

Posted in Deming, Performance Appraisal, Systems thinking | Tagged Deming, managing people, Performance Appraisal, Psychology, Systems thinking | 3 Comments

In-house Health Clinics

Posted on January 14, 2007 by John Hunter

Big Companies Turning To In-house Health Clinics (article removed – poor usability – so link removed)

Today a new wave of clinics is opening, driven largely by a motive that was less of a factor in the past: employers’ desires to reduce their health insurance premiums by taking care of workers before they need to see outside doctors. More than 100 of the nation’s 1,000 largest employers now offer on-site primary care or preventive health services – a number forecast to exceed 250 by the end of the year, according to David Beech, a health benefits consultant.

This is partially a sign of the failure of the health care system and companies willingness to takes risks to find some way of coping.

The biggest primary care clinic so far opened Jan. 2 in Texas, when Toyota workers and their families started using a $9 million, 20,000-square-foot medical center alongside a new truck assembly plant in San Antonio. Unlike most of the new medical offices — which are staffed by nurse practitioners and in some cases a part-time doctor — Toyota’s San Antonio health center has two-full time doctors, a part-time physician, a blood-test lab and an X-ray center.

Continue reading →

Posted in Health care, Management, Systems thinking, Toyota Production System (TPS) | 1 Comment

Manufacturing in Asia

Posted on January 13, 2007 by John Hunter

The Economist explores the trend to manufacture in Vietnam, Indonesia, Malaysia… instead of China in: The problem with Made in China:

helping China’s share of the world’s exported goods to triple to 7.3% between 1993 and 2005. In comparison, every member of the G8 group of rich nations, with the exception of Russia, saw its share fall. It is a similar story with manufacturing output. Whereas China doubled its share of global production to almost 7% in the decade to 2003, most of the G8 saw their shares fall. Interestingly, only the United States and Canada saw their shares rise

It is nice to see this reported properly. The USA manufacturing share of global output has risen, not fallen, as we have stated numerous times: Manufacturing Value Added Economic Data – Manufacturing Jobs Data: USA and China – Global Manufacturing Data by Country. The most fundamental facts of global manufacturing – Global output is increasing. Jobs are decreasing (everywhere, not moving from one place to another – decreasing everywhere). China’s output is growing rapidly. The USA is still by far the largest manufacturer, USA output is growing faster than global output and much slower than China’s output. Japan is the second largest manufacturer with China third, by a fairly large margin though China is growing very rapidly.

Posted in China, Economics, India, Manufacturing | 2 Comments

Innovation Examples

Posted on January 11, 2007 by John Hunter

image of the North Face Endurus XCR Boa Trail Running Shoe

Two examples from 37signals: first, Pioneer Theater. Good idea. I am stretching to call it innovation, today, maybe 5 years ago it was. Today I think any reasonably sized theater should have something like this in place. The interface is a bit confused. At first the views didn’t seem to correspond to what I would expect when I click on various seats [the broken link was removed]. Then I read a little closer and the view you see is shown where the “back wall” of the seating chart would be. Seems like it would be better to flip the seating chart around to me.

The The North Face Endurus XCR Boa Trail Running Shoe has a new lacing system. Doesn’t seem that remarkable to me, but “This unique closure automatically micro- adjusts with foot movement to eliminate pressure points, kind of like a suspension system. The resulting fit is unique and unattainable with shoelaces. Plus the mechanical system never loosens or changes.” It seems reasonable that is important to their customers and something that required a new lacing system.

Posted in Customer focus, Innovation, IT, Management | Tagged Innovation | 2 Comments