Tag Archives: management tools

Messiness is Good?

Time to get organized? Not so fast [the broken link was removed], interview of David Freedman on Marketplace. Marketplace is a great show on PBS that covers economics and related matters. This interview, though, fails to inspire me.

RYSSDAL: Is it expensive in a corporate sense to be neat?

FREEDMAN: It’s extremely expensive. I mean let’s start off with the fact that U.S. corporations spend some $45 billion a year on management consultants. They come in and they help companies figure out what’s the best way to organize your work processes and your work force.

Ok, first what does hiring consultants having to do with being neat? Basically it seems the interviewee has a book with the gimmick that being a mess is good – creativity and all that. Yes, I am sure sometimes messiness helps (and I am sure having a easy, catchy, gimmick is a good marketing idea). But as a management strategy it seems lousy to me. 5s is the correct strategy (even if I fail to do so – my desk tends to get messy as I get busy and… which is often 🙁 See: Planning 5s? First Know Why!

On the point of hiring consultants haphazardly being a waste of money – true. Bob Sutton wrote the excellent: Management Advice: Which 90% is Crap? [the broken link was removed]. What percentage of books fit that bill – over 90% I would say. And I have a guess where the interviewees book fits.

Quality Customer Focus

Delivering Two Kinds of Quality [the broken link was removed] by Keith McFarland, Business Week:

What do the Japanese take for granted when it comes to quality? They take for granted that things should work as they are supposed to, and they even see an elegance to things working properly — whether it’s cars, subway schedules, traditional flower arranging, or the famous tea ceremony.

Japanese manufacturers were so obsessed with taken-for-granted quality that they created a constant stream of innovations that built on renowned quality-management consultant Ed Deming’s original concepts: lean manufacturing, just-in-time industry, and design for quality. In today’s competitive markets, manufacturers need to be very far along this quality innovation curve — or moving along it very quickly.

Related ideas:
Kano model of Customer Satisfaction: Kano saw three types of customer satisfaction: required (basic quality also threshold requirements), more is better (performance quality) and delighter (excitement quality).

Customers expectations change over time. Often what was once enough to delight a customer (remote control for a TV) becomes expected. Once a feature is expected the organization gets no credit for providing it they only risk a negative reaction if they fail to provide it.

Voice of the Customer

Control Charts in Health Care

This post is an edited version of a message I sent to the Deming Electronic Network.

I find the “control charts in health care” thread quite interesting.

From Mike Woolbert’s post [link broken, so I removed it]
> I have read many comments about the 8 minute ambulance trip.
> This doesn’t seem to be a system measure, but a result measure.

It seems to me the 8 minute (90% of the time) measure is an attempt at a process measure (in a sense, you can see it as a result measure, but it is also a measure that will have an impact on overall results and as such can be used a process indicator). For it to be a process measure rather than than a process target however, it should actual be a measure of what has happened not a statement that we want to have 90% arrive within 8 minutes.

Jonathan Siegel’s comments [link broken, so I removed it] on this topic were excellent.

The control chart was developed to aid in process improvement. A control chart helps monitor the process (to aid in putting in place counter-measures, when needed, and for identification of special causes). The control chart can be used to see if the process is in control and what the expected results from the system are.
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Taguchi Loss Function

Topic: Management
Written in response to this post on the Deming Electronic Network (DEN) [broken link removed]. The responses on this topic show the strength of the DEN.

1) thoughtful responses that should help the person posting the original message
2) thoughtful responses that are of interest to many of us
3) the chance to explore concepts in some greater depth than we may otherwise

Relating to the 3rd item in my list I would like to explore part of Myron’s response. “Loss functions are highly personal. To ascribe a loss function to society requires plenty of hutzpah!” I think, the Taguchi Loss Function is meant to show the loss to society as a whole. My understanding, is that the Taguchi Loss Function is meant to show the overall quantifiable loss to society.

I must say that while viewing the overall loss to society is worthwhile, I think it is often more useful to see (or think of) the losses to each of the various parties. I believe this for the following 2 reasons.

First, to ascribe the loss to society, as Myron notes, requires plenty of chutzpah and I think is often going to lead to attempts to quantify impacts that are difficult to quantify. My understanding is that the Taguchi Loss Function limits the losses to quantifiable losses. If the losses are actually quantified then it should be a simple matter to include whatever losses you choose to get a picture of the factors you wish to focus on, which is good.

However, in practice, I have seen the concept of the Taguchi Loss Function used quite a bit. I have never actually seen any losses quantified and totaled and shown on a graph. I think focusing specifically on who suffers a loss and what that loss could be, can help. I think actually quantifying the losses to society can be daunting. So, while I see the value in framing the concept that way I think to actually get the losses quantified you are best served by starting with those closest to the process and then adding additional loses to those results.

Second, if you attempt to use the concept to help you manage (as a guide in decision making) the impacts to society are a factor, but, I think the loss to your company, the customer and perhaps the end user are most important. A negative impact to society at large is not going to have the same impact to a decision maker as the same negative impact to the customer. The decision maker will likely be willing to invest more to reduce the loss to a customer than to society at large (and that seems logical and sensible to me).

I believe the Taguchi Loss Function is a great conceptual model. I also think it is important to understand that the shape of a loss function in any situation depends on that specific situation. A parabola does a good job of illustrating the concept that loss is normally not binary and often increases somewhat slowly very close to the optimal result and more dramatically as the deviance from the optimal result increases. The loss is often not equal on either side of the optimal result in which case a parabola would not be the best model.

The important factor when making a decision, in a specific case, is to look at the losses that actually exist for that case. And, in my opinion, knowing where the loss is felt matters – so only viewing the overall loss to society is not sufficient. However, this concept is not part of the Taguchi Loss Function, but rather, is my opinion of how the concept can be applied most effectively. And while the concept of the Taguchi Loss function does a great job of showing why specification limits are not sufficient to good management, it is true that is some situations the loss can be pretty much binary, good (no loss) or bad (100% loss) with little, or no, “grey area.”

John Hunter