Can Lean and ISO 9001 be integrated?

photo credit: ClockworkGrue

In a word: yes. However, you must take care; from Wikipedia:

• “ISO 9000 guidelines provide a comprehensive model for quality management systems that can make any company competitive.”
• “A survey by Lloyd’s Register Quality Assurance indicated ISO 9000 increased net profit… Another Deloitte-Touche survey reported that the costs of registration were recovered in three years.”
• “Good business judgment is needed to determine its proper role for a company.”
• “The ISO registration process has become a mountain of paperwork. Opponents claim that it is only for documentation. Proponents believe that if a company has documented its quality systems, then most of the paperwork has already been completed.”
• “Registration… unfortunately has become a vehicle to increase consulting services… Studies show that the majority of certifications derive from customer demands, such as a vendor qualification checklist, instead of internal needs to improve quality.”
• “Is certification itself important to the marketing plans of the company? If not, do not rush to certification.”
• “Even without certification, companies should utilize the ISO 9000 model as a benchmark to assess the adequacy of its quality programs.”

Properly implemented ISO9001 provides for the success of Lean programs with provisions for:

• Management vision, direction, authorization and involvement
• Resource evaluation and application, inclusive of personnel qualification and training, processes, etc.
• Planning functions
• Qualification and control of designs, technologies, processes, materials, products and services
• Review and analysis of results, application of decision-making processes and initiation of needed changes.

The intent of ISO 9001 is to improve business processes. Lean tools are process-focused and provide the means to remove non-value activities from both the manufacturing and transactional processes. It helps improve the efficiency of the organization, its operations and its economic performance as well as the quality of its products and services. ISO 9001:2000 item 8.5.1, continual improvement, states that; “organizations shall continually improve the effectiveness of the quality management system.” A key requirement to comply with this clause, the organization must develop a process to measure, monitor and continually reduce process and product variation (evaluated by process sigma levels). Kaizen” translates into “Continual Improvement” and by reduces waste and non-value added activities. Infact, Pheng argues that the integration of ISO 9001:2000 requirements with 5-S would lead towards TQM (PHENG, L.S. (2001) Towards TQM: integrating Japanese 5-S principles with ISO 9001:2000 requirements. TQM Magazine. Vol 13, No 5. pp.334-340.).

Has your implementation of ISO9001 helped your Lean efforts?

Avoid the curse of the active banana!

I’ve often said before that its important to buy into the philosophy behind six-sigma, TQM, Lean, etc and not just focus on the tools. This focuses the organisation on only one level of the four suggested in The Toyota Way (see the image below). By doing this you’ll avoid the, “curse of the active banana“!!

Details on the “active banana” were reported by The Guardian via the Newcastle Journal:

£7 million were paid to consultants in a “Lean” initiative. Part of this process involved using black tape to let workers know where to place their keyboard and stapler. Workers complained that not only is it an enormous waste of money but incredibly demeaning. A union worker said in certain consulting session in Scotland employees were asked if the banana on their desk was active or inactive – and if it was inactive it had to be removed!

These guys should have read: How To Prevent Lean Implementation Failures

Reason #1: Lack of Top Down Management Support
Reason #2: Lack of Communication
Reason #3: Lack of Middle Management/Supervisor Buy-In
Reason #4: Not Understanding That This Is About Your People
Reason #5: Lack of Customer Focus
Reason #6: Lack of Improvement Measures
Reason #7: Lack of Lean Leadership
Reason #8: People Measures Not Aligned With Lean Goals
Reason #9: Using Kaizen Events As The Sole Improvement Measurement
Reason #10: Bonus Pay Systems Where The Only Measure Is Company Profitability

More here and here.

ISO 9001 review

 

ISO 9001 review is currently being undertaken by ISO/TC176, the umbrella ISO committee for quality management and assurance. The committee draft will be issued in anytime now with drafts for comment published in the second half of 2007 with publication of the revised standard planned for late 2008. The key messages coming out of the process to date are that:

• the current scope and purpose of the standard, the title and the field of application shall remain unchanged from ISO 9001:2000
• given that the current standard was a step change from its predecessor and caused considerable changes to businesses, changes will be limited in this review
• it will remain generic so that it can be applied to all types and sizes of organisation. This one-size-fits-all approach will see the continued growth of sector-specific requirements and schemes
• any changes introduced must provide clear benefits to users
• the quality management principles (as contained in ISO 9000) shall be applied unchanged
• the process model, as shown in ISO 9001:2000 figure 1 below, shall remain unchanged

I’m led to believe that some of the changes are:

• clause 1.2 – clarify the intent of this clause in relation to when exclusions can be made in clause 7 specifically for service organisations
• clause 5 – consider clarification of application of the process approach to top management
• clause 5.4.2 – consider the clarification of quality management system planning in order to meet the quality objectives
• clause 8.2.1 – clarify the requirement for client perception (monitoring versus measurement)
• clause 8.3 – clarify this clause in relation to service organisations
• clause 8.5 – clarify the differences in concepts between corrective action and preventive action

There has been global growth in certification of 18 per cent across 161 countries.

The top five countries for ISO 9001 certification are:

1. China (143,823)
2. Italy (98,028)
3. Japan (53,771)
4. Spain (47,445)
5. UK (45,612)

with India seeing the largest growth of over 12,000 a year.

Innovation + Six Sigma = Disaster?

Six Sigma … innovation … not compatible … blah, blah, blah

As I’ve wrote time and time again on this blog there is no reason why Six Sigma should stifle innovation. Obviously 3M would disagree: [3M Shelves Six Sigma in R&D]

Critics argue that excessive metrics, steps, measurements and Six Sigma’s intense focus on reducing variability water down the discovery process. Under Six Sigma, the free-wheeling nature of brainstorming and the serendipitous side of discovery is stifled.

Experts agree the blanket approach to Six Sigma is generally not a good idea

Which ones? Name a few ….

Okay, then: Michael Tushman, a professor at Harvard Business School, says:

 

These TQM (Total Quality Management) and class of methodologies that are anchored on reducing variability are inversely associated with what we call exploratory innovation. Methodologies help incremental innovation. The more you apply them in R&D, the less effective they are on exploratory innovation

At least Ron Atkinson (not Ron Atkinson the UK football pundit), board chairman of the American Society for Quality, understands how Design for Six Sigma can assist:

I usually find that once (companies) understand it, Six Sigma aligns very well with engineering methodology. Six Sigma makes sure projects relate right back to the strategic plan of the company,” says Atkinson. Is paralysis by analysis a concern? “(Project) champions can counteract that. They make sure you do not sit on the design phase forever. And there’s nothing to say you have to finish one step before you start the next.” He believes pure research does not lend itself to Six Sigma, but is more the stuff of universities and federally funded projects.

I think Ron hits the nail on the head here DFSS is very powerful as it seeks to avoid manufacturing/service process problems by using systems engineering techniques to avoid process problems at the outset (i.e., fire prevention). These techniques include tools and processes to predict, model and simulate the product delivery system (the processes/tools, personnel and organization, training, facilities, and logistics to produce the product/service) as well as the analysis of the developing system life cycle itself to ensure customer satisfaction with the proposed system design solution.

In this way, DFSS is closely related to systems engineering, operations research (solving the Knapsack problem), systems architecting and concurrent engineering. DFSS is largely a design activity requiring specialized tools including: quality function deployment (QFD), axiomatic design, TRIZ, Design for X, design of experiments (DOE), Taguchi methods, tolerance design, Robustification and response surface methodology. While these tools are sometimes used in the classic DMAIC Six Sigma process, they are uniquely used by DFSS to analyze new and unprecedented systems/products.

 

A graphical flowchart of common DFSS tools can be seen at DFSS Roadmap.

 

Check out Johns comments

Annoyed about transactional six-sigma

It’s interesting to see that Six Sigma is being applied more frequently in transactional environments:

Buffalo, NY (WBEN) – Throughout his successful campaign for County Executive, Republican Chris Collins spoke often of Six Sigma as one of the primary tools to get Erie County moving toward a more prosperous future.

Although this clearly upsets a few people:

I don’t like the idea of running government like a business but the six sigma sounds too much like someone out to make a profit whereas government is about providing services to taxpayers of which they pay taxes for.

And

The whole Six Sigma analysis process is time consuming, resource oriented and costly. There are probably thousands of human-driven operational processes resulting from services provided by the county. To improve them all would take several lifetimes.

As Michael Marx says:

Proclaiming the desire to be a Six Sigma county as candidate Collins has done, only implied that he’ll start looking at processes from a business improvement perspective, using Six Sigma tools to do it. No one becomes Six Sigma overnight. GE has hundreds of thousands of human driven processes, and that didn’t keep Jack Welch from his Six Sigma objectives.

To me this is just a case of becoming jaded by political rhetoric?

Transactional Six Sigma to me simply boils down to: All work is a process, all processes have variability and all processes create data that explains variability. Analyse the data to make improvements and sustain these!

Refer to this link for more information:

The leadership cult of the black swan

I’ve recently read two books by Nassim Nicholas Taleb who is an ex-trader. The first: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, looks at how and why we tend to assume the existence of patterns where there is only randomness, and assume skill where there is nothing but luck. The second is The Black Swan: The Impact of the Highly Improbable. The Black Swan: which is a study of how we are regularly taken as fools by the unexpected. The chief characteristics of a Black Swan event (so-called because until Australia was discovered no-one dreamt there was any other variety than white) is that they lie outside the realm of regular expectations and have a huge impact when they hit. If a Black Swan was predictable it wouldn’t be a Black Swan, but the fact that we can see only white swans suggests that the shock – if it comes – could be profound.

A Black Swan event was the resignation of Lord Browne from BP, who demonstrated the pitfalls of the cult of leadership. By raising expectations far beyond the capacity of one human to fulfil, hero leaders often end up destroying themselves and wounding their companies. When leaders become celebrities, their firms’ performance starts to decline. Because of a tendency to believe their own press, they attribute success to their own brilliance, blame failure on others, and vastly overestimate their decision-making prowess.

Hierarchy doesn’t work, and no one put the reason for this better than General Electric’s Jack Welch, himself an iconic manager who pioneered the use of six sigma. Hierarchy, he said, defines an organisation in which people:

“have their face towards the CEO and their ass towards the customer”

So the more charismatic the executive, the worse the effect. Investors should take note – when a business leader makes the front cover of Fortune: sell like crazy.

Download this free pdf for more information on the Black Swan.

Enter the 4th dimension – pull world

Lean manufacturing is great! It’s all about ping-pong, football tables, EBay and elephants. But God help you if you haven’t already implemented it, flateto analysis would show, especially if you live in Canada where the dollar is strong, that if you didn’t put it in place by 1995, don’t even bother , no matter what Nick Dieltsien says.

Of course, all of this is complete tosh (noun: Chiefly British Informal – nonsense; bosh). In fact, we are apparently:

… are moving from a world where demand can be forecast and resources “pushed” to the right place at the right time to a world where we need to flexibly “pull” resources wherever they reside when they are needed.

Read more about this here (From Push to Pull)

So in “pull world”, where more automation is sure to help, even maintenance activities will be lean and not include the following wastes

1. Unproductive work – Efficiently doing work that doesn’t need to be done!
2. Delays in motion – Waiting times, delays waiting for parts, machinery, people, etc.
3. Unnecessary motion – Unneeded travel, trips to tool stores or workshops, looking for items, moving mobile work stations around without good reason.
4. Poor management of inventory – Not able to have the right parts at the right time. A complex area that can cause many of the other areas of waste on this list.
5. Rework – Having to repeat tasks, or do additional tasks, as a result of poor workmanship.
6. Underutilization of people – Using people to the limits of their qualifications, not to the limits of their abilities!
7. Ineffective data management – Collecting data that is of no use, or failure to collect data which is vital.
8. Misapplication of machinery – Incorrect operation or deliberate operational strategies leading to maintenance work being done when it needn’t be.

Hmm, will we end-up in pull world? A kind of fourth dimension? I doubt it; but what do you think?

Global Barriers to Lean Understanding

We all know that lean and six sigma cuts waste and boosts productivity but an essential “tool” which is often overlooked in these projects is effective communication. And no where is it required more if project teams don’t speak English as a first language.

Generally, if we want a successful outcome when you’re crossing international boundaries:

good quality means that the target audience received the message its provider intended it to receive.

This communication issue manifests itself in global sourcing. However, even though: you should obtain parts locally, as close to your plant as possible, to eliminate the waste of transportation firms are increasingly:

• exploiting global efficiencies in production
• identifying alternate supplier sources
• utilizing buffer capacities and
• taking advantage of specific geographical talent pools.

China dominates the global sourcing directions of most firms, particularly for those based in the United States and Europe. However, near-shore sourcing destinations such as South America and Eastern Europe form significant second-tier markets.

Indeed, research has shown that a low-cost country sourcing can have a positive impact on company performance in terms of cost and quality although the time dimension remains to be a challenge.

So, whether or not a local or global supply base makes sense is really up to the company, customer and market sector involved. I believe there should be as a minimum three supply base goals:

1. quality improvement to Six Sigma levels
2. delivery performance measured zero days late, to one day early
3. total cost of ownership improvement.

Also you don’t want improvements to come at the expense of supplier margins. The supply base needs to make reasonable margins in order to remain healthy, commercially viable suppliers. Supply chain management is meant to reduce excess inventory in the supply chain. A supply chain should be demand driven. It is built on the pull approach of customers pulling inventory, not with suppliers pushing inventory. Excess inventory reflects the additional time with the supply chain operation. So the perfect supply chain would be lean with removing wasteful time and inventory regardless of where it is in the world.

What do you think? Can a global supply chain be lean?

Big v Small Lean

The contrast between big company lean and small company lean has been troubling me recently, especially as you consider that in the automotive arena Toyota has the highest levels of recalls. One way to view this is to contrast Boeing, who is purportedly using lean to build its new 787 model and Leading Edge, a 120-employee shop that fabricates hydraulic tubing.

To me, and a lot of my other distinguished colleagues, Boeing uses pseudo-lean. This is summarized by Kevin at Evolving Excellence:

Boeing has outsourced most of the 787′s manufacturing to firms in Japan, China, Italy, South Carolina and elsewhere, while the company itself is concentrating on putting the plane together at its cavernous main facility in Everett, near Seattle.

Yes, that’s something to be proud of. Your core competency becomes snapping six pieces (okay, six very large pieces) together. But then Boeing’s warped understanding of lean, especially the metric of cycle time, comes into play.

Boeing said it will take about seven weeks to assemble the first plane. By the 100th plane, the company expects to lower that to six days and, ultimately, Boeing said a new 787 will roll out of its factory every three days. By comparison, Boeing said it takes an average of 14 weeks for the 777 to move out the factory door because much of the manufacturing is done by the company.

Using that logic I could assemble a Dreamliner in about 10 minutes if everything came complete except for painting the black dot on the tip of the nose.

The Leading Edge approach is summarized as follows:

It’s a philosophy; it’s really a culture that you develop. It’s the idea that says no matter how good you are, you can always be better. And when you have that belief you’re constantly looking for ways to improve, to eliminate waste, to reduce redundancies.

Correct!! These guys understand the power of kaizen and need to move away from tools and to a philosophy of continuous improvement. As Mike says over at Got Boondoggle?

On a lean journey, we should never be satisfied, never become comfortable, and never feel secure in the status quo.

7 steps to 3P heaven

There’s a tool which is used within Lean but doesn’t get the recognition it deserves. It’s 3Ps, which stands for:

• production
• preparation, and
• process.

How does 3P work?
Seven steps to getting 3P to installed in your company are:

1. Define Product or Process Design Objectives/Needs: The team seeks to understand the core customer needs that need to be met. If a product or product prototype is available, the project team breaks it down into component parts and raw materials to assess the function that each plays.
2. Diagraming: A fishbone diagram or other type of illustration is created to demonstrate the flow from raw material to finish product. The project team then analyzes each branch of the diagram (or each illustration) and brainstorms key words (e.g., roll, rotate, form, bend) to describe the change (or “transformation”) made at each branch.
3. Find and Analyze Examples in Nature: The project team then tries to find examples of each process keyword in the natural world. For example, forming can be found in nature when a heavy animal such as an elephant walks on mud, or when water pressure shapes rocks in a river. Similar examples are grouped and examples that best exemplify the process key word researched to better understand how the examples occur in nature. Here, team members place heavy emphasis on how nature works in the example and why. Once the unique qualities of the natural process are dissected, team members then discuss how the natural process can be applied to the given manufacturing process step.
4. Sketch and Evaluate the Process: Sub-teams are formed and each sub-tea member is required to draw different ways to accomplish the process in question. Each of the sketches is evaluated and the best is chosen (along with any good features from the sketches that are not chosen) for a mock-up.
5. Build, Present, and Select Process Prototypes: The team prototypes and then evaluates the chosen process, spending several days (if necessary) working with different variations of the mock-up to ensure it will meet criteria.
6. Hold Design Review: Once a concept has been selected for additional refinement, it is presented to a larger group (including the original product designers) for feedback.
7. Develop Project Implementation plan: If the project is selected to proceed, the team selects a project implementation leader who helps determine the schedule, process, resource requirements, and distribution of responsibilities for completion.

Are there other benefits?
3P also helps you build an entire business case for a new product process before any capital has been invested. And it can help you to accurately predict what your costs and quality will be, long before any production begins. It can purge a great deal of waste from the supply chain and help suppliers protect profit margins while meeting cost-down targets.

Do you use 3P?