Category Archives: Quality

Survival is Not Mandatory

“It is not necessary to change. Survival is not mandatory”

 — Dr. Edwards Deming

I always liked this quote from Dr. Deming.  I thought it really highlighted the importance of change.

The point is that you don’t have to change, but it is key to survival.  Over time everything changes and you must be able to keep up with the changes and adapt or change also.  If you don’t, things will pass you up and eventually you won’t survive.

This rarely happens overnight.  GM is a great example.  For decades, they did not change a single thing about there management, accounting and manufacturing practices.  Finally, after the turn of the century Toyota caught and overtook GM as the #1 car manufacturer.  Profits are higher.  Quality is higher.

Even with the stumble by Toyota a few years ago with the quality issues, they maintained their profitability and continued to change.

There comes a time where every company needs to change its practices in order to survive.  In some cases, it may take years or decades to feel the pressure (GM) and in some cases it may take a few months (tech companies).

Of course, you don’t have to change, because there is nothing to say you have to survive.

Owning a Small Business is Very Educational

crimson_hillIf you are a regular reader of Beyond Lean,  you may know that my wife has her own small business.  It is just her and I.  She runs the business 24/7 and I help where I can on nights and weekends.

Both of us have learned about a wide range of business aspects over the last couple of years from her small business.  My wife has a background in marketing, but has learned a lot about IT and web design, materials, costing, production of a consistent product, using data to determine what the customers like and a lot more.

I have been working quite a bit with display booth setup and teardown (quick changeovers), preparing raw materials for usage and investment decisions.

When owning and running a small business a person can see everything from end-to-end.  How a packaging decision can affect sales?  How does shelf life of a product have an effect on the quality?  How do certain ingredients react when mixing for production?  Do they cause immediate quality issues?  Do they cause quality issues over time?

In our experience, we have seen how lean thinking can be more natural for a small business.  There is more of a concern about inventory and cash on hand, so there are many decisions that go into building to stock or building to order.  Using visual management to make things easier to see when work needs to be done or not.  I have some examples from my wife’s business that I will post at a later date as well as examples I have posted in the past.

I have learned numerous things from working with my wife in her small business that I carry on to my other job as lessons to apply.

Owning a small business is very hard work.  You have to learn about things that don’t necessarily interest you, but if you want to be successful you have to get it done.  In the end, it can be very rewarding and extremely educational.

H&H Color Lab – American Company Growing Through Lean

HHLogoH&H Color Lab began in the basement of Wayne and Shirley Haub’s residence in a suburb of Kansas City, Missouri, in 1970. Wayne and his brother, Ted Haub, owned a portrait studio that had just landed its first high school senior contract. With a background in and love for color printing, Wayne chose to install his own color processing equipment in the basement of his home.

Business increased, and so did the need for additional space and employees. What began with Wayne doing everything from his basement has grown to 165 people and 55,000 square feet of space over 40 years later.

H&H customers are primarily school/portrait/wedding photographers.  The offer a wide range of products from photo prints to books to Leather bound albums and digital products.

In 1999, H&H Color Lab started is Lean journey led by Lee Gabbert.  Lee had been with the company for 5 years at the time and was chosen to learn more about lean and teach others at H&H.  They started by reading “Lean Thinking” by James Womack and Daniel Jones.  H&H also decided to get a sensei to help them learn as they traveled the bumpy road down the lean path.

H&H Color Lab started by setting up work cells, going away from a department mentality. H&H moved to smaller batches, moving cells closer to the monuments (that they couldn’t move), standard work, and lots and lots of 5S.

Muda (waste), lead times, late work and quality all had improved. In fact, the gains from lean had now freed up space that was once occupied by manufacturing departments.  It allowed H&H to take the space and use it as a training facility to help customers from all over the United States. Thus, H&H University was born. Roughly 3,000 square feet of space was now designed and transformed into a learning center, working photographic studio with equipment, mock up photography sales room, photography studio work area, kitchen to host all day training, library sitting room with sample products that H&H produce on the book shelves and restrooms. By providing training for customers (mostly free of charge), you truly can engage in a partnership that can grow.

All of this work allowed H&H Color Lab to make a success transition from the “Age of Film” to the “Digital Age”.  Understanding their customers and providing training and education others companies do not, shows how the most important part of lean, focusing on the customer, helps you innovate, grow and thrive.

Here are results that H&H Color Lab have seen from their lean implementation.

 

1999

2012

% Change

Late Orders

3,076

25

99% reduction

WIP

10,421

1731

83% reduction

Redo

5.3%

1.3%

75% reduction

% Shipped Late

49.3%

5.8%

88% reduction

Time in Plant

7 days

1.1 days

84% reduction

Sales

22% increase

 

Guest Post: The Importance of a Quality Management System

Today’s post comes from Alice Rose.  Alice is a freelance copywriter working for QMS International plc, a business certification company specializing in ISO 9001 http://www.qmsuk.com/iso-9001.php.

As the recession hit many businesses began to think of the best ways to cope and short-term solutions such as cutting staffing levels and reducing marketing costs were some of the most popular. But, as time has progressed and consumers are still being very cautious with their spending, I want to touch on some other ways that you can try and beat the big squeeze.

What is a quality management system?

A Quality Management system is the processes, procedures, organizational structure and resources that come together to ensure that a business provides a consistent and reliable service. It emphasizes different principles within a business such as leadership, continual improvement, staff involvement and different approaches to decision making.

It’s all about the consumer

The first thing to remember is that if you provide a great product or a brilliant service to the consumer then they are going to keep coming back. One way to check that your company is running a high quality business is to put a quality management system into place. Quality management systems often incorporate a ‘customer service’ element to them, ensuring that there are procedures in place so customers can record a complaint which means that issues can be addressed and reduced in the future.

Manufacturing industry

If you are manufacturing a product there are certain steps that you can take to ensure that the final product will arrive with the consumer in a high quality state. This can start at the beginning of the production chain, in the factory for example. Simple tasks such as ensuring your workplace is clean will lead to the creation of a better final product. As the product progresses along the chain if simple manufacturing tasks are conducted in a more streamlined fashion the consumer is more likely to receive a high quality product – which will also lead to less waste on your part, reducing costs.

Service industry

The services industry is not immune to the economic downturn and there are simple changes that your company can take to ensure that the customers are still happy. One of the simplest ways to find out if you are providing a good service is by encouraging customer feedback – if you know where you are falling down it’s easier to pick yourself back up.

Setting an example

It is important that quality management systems are considered as a priority by business management who have the facility and knowledge to implement these systems and who, leading by example, will encourage greater productivity and performance across the board as well as locating new areas of the business for growth.

Asking Why 2 Times

A couple days ago I was reminded of a problem solving aspect I hadn’t personally dealt with in a while.  I guess being engaged in other things, I kind of forget one of the fundamental questions in problem solving.

By now there probably aren’t a lot of people unaware of 5-Whys.  But, what about the 2 Whys?  No this isn’t an attempt to be clever by turning 5-S into 8-S or “8 Minute Abs” in to “7 Minute Abs”.  It comes down to addressing the two fundamental paths of how defectives get to the customer.  “Why Make?” and “Why Ship?”.   In simple terms, “Why Make” is pretty self explanatory in terms of understanding why the defect was produced in the first place.  “Why Ship?” becomes a much more nuanced question about why defects were allowed to be passed along to the customer (internal or external).   It brings along questions about how you build quality at the source or at the least how you detect it and prevent it from being shipped.

I used to get these questions asked all the time by a friend who worked in Quality at Toyota.  I guess back then, much like now, I spent much more time on the “Why Make?” question than on the “Why Ship?” one.   Part of that is that I work in a different industry where product is less likely to be shipped anyway.   The other big part of it is that I just find it much more interesting to chase the kind of problems that follow “Why Make?” questions.   That is kind of unfortunate because looking in to why your systems didn’t prevent, detect, or reject bad stuff sometimes offers some holistic views of the operation that you may not always see.  It was kind of fun to have the reminder to ask “Why Ship?” more often.

Hopefully this can be a little kickstart for those who hadn’t heard that or a reminder for those of you who may have put that on the back burner.

Practical Visual Management

I am always on the lookout for good examples of visual management.  I like visual management solutions that are simple and solve a consistent problem especially around quality.

Here is a picture of one from my wife’s small business:

My wife makes natural, hand-poured soaps.  This is a soap pop.  It is part of the kids line of soaps she has.  They are made to look like popsicles and are a great party favor at birthdays (part of a shameless plug for the business).

She wanted to be consistent with the layer from soap-to-soap and batch-to-batch so she drew lines with a sharpie on the outside of the molds.  The mold is semi-transparent so she can see when to stop when she is pouring the soap.  This creates a uniform look that shows here customers she does care about the quality and their experience.

Visual management is a concept that can be used by anyone trying to make a problem visible no matter the size of the company or problem.  Do you have any simple examples of using visual management to solve a problem?

Misinterpretations of Lean vs. Six Sigma

I had a conversation recently with a very smart and talented consultant.  He is a Lean Six Sigma consultant.  He knows the tools of lean and Six Sigma backwards and forwards.  The consultant also talked ab out the importance of having leadership buy-in from the top all the way to the bottom to be the most successful at both lean and Six Sigma. Overall, he was a very astute about both lean and Six Sigma.

During his presentation, there were two misinterpretations that stuck out to me.  I found them to be quite a difference in thinking.

1. Six Sigma is focused on the customer while lean is focused on elimination of waste.  I find this to be a significant difference in thinking.  Lean’s #1 tenant is to focus on the Customer first and foremost.  By focusing on the customer, an organization can learn what the customer finds of value.  What is not of value can be considered non-value added (waste) or non-value added but necessary (government regulations).  These should be eliminated or at least reduced.

Most people focus on the elimination of waste and miss why eliminating the waste is important.  It is because it is of no value to the customer which is the main focus.  Once the waste is eliminated it frees up resources allowing an organization to grow the business without having to invest in more resources.

Thanks to Mark Graban. This picture was borrowed from the Lean Blog.

2. Six Sigma focuses on making the product right while lean just focuses on making the product.  The consultant mentioned the 7 types of wastes.  One of the 7 types of wastes is directly solely at making the product right.  That is the waste of defects. Not to mention the concept of building in quality (jidoka).

As mentioned above, when a company focuses on the customer first it will recognize quality is very important.  This is why building in quality is one of the two pillars of the Toyota Production System.

After the presentation, the consultant and I had a very good discussion on these points.  I admitted to being raised in the Lean House.  I wasn’t arguing that Six Sigma was wrong or companies can’t benefit from it.  Just that I have a different perspective of lean on the points mentioned above.

Sign of a Problem

This weekend I went by one of our many local McDonald’s restaurants.  It has been newly renovated.  It looks really nice, but there was on thing that caught my eye.  The new drive-thru setup.  The ordering and pay/pickup windows are the same.  The change was in the parking spaces.  After the remodel McDonald’s added two parking spaces with reserved signs for people in the drive-thru.  I wish I was able to get a picture of the spots but my camera phone was not working.

The spaces are there because orders aren’t ready so they ask the customer to pull up and park.  They will bring the food out when it is ready.

So are the spaces a good idea? Or bad idea?

I think the spaces are a good idea if they are tracking how many people have to pull up and wait.  If they use it as a way to highlight a problem.  Cars in the parking spaces = problem.

This is equivalent to something we do in our manufacturing plants.  When there is a problem we divert the work to a penalty area to understand the problem and fix it.  This way it does not interfere with the flow of the work that does not have a problem.  But, we are gathering data and looking at and understanding process problems to resolve.

The other thought is to not have the parking spaces and to have the car sit and block the line until the problem is fixed.  This is a reasonable solution also, but I would use it in one of two circumstances.  1) The time to fix the problem is very short and wouldn’t hold up the line for very long or 2) if the restaurant does not use the parking spaces as a way to highlight the problems and work on fixing the process so zero cars have to pull over.

Even Toyota, when they stop the line only stop a portion of the line and not the entire line.  If it is a big problem, Toyota will still move the car offline to a visible area to work on resolving the process problem that created the situation.

We must understand our process well enough to understand which option for highlighting our problems might be best.

What are other ways to highlight problems?

Restaurant Focused On Customer Value

I came across a great story showing how a restaurant’s thinking is about the customer first leading to repeat customers and more profit.

Here is a link to the story.  I would recommend taking 2 minutes to watch the video of the story.  It is well worth it.

Passing along increased food prices just upsets customers.  I know I have quit going to a few restaurants because the same meal was now $2 more.  Multiple that by a family of four and over time that gets very expensive.

The hidden way a restaurant passes on increased cost is by keeping the price the same but giving the customer smaller portions.  Either way this is an example of Price = Profit Wanted + Cost.

This restaurant (Avenue’s Bistro) is trying not to pass on the increased food prices to its customers.  Instead they are trying to hold their prices steady with a unique strategy.  No.  The restaurant doesn’t buy lower quality food.  Instead, they look for high quality food that is less expensive and can still hit the menu price points their customers come to expect.

The manager talks about giving value to the customers.  Understanding the customers want quality dining experience for a good price.  The customer wants a good meal with generous portions at a reasonable price.  Changing the menu based on what food they can get within their cost range also gives the customer different options of food to try on a regular basis.  They seem to be focusing on the model of Profit = Price – Cost.

The restaurant may not be lean but there seems to be some lean like thinking going on and focusing on the customers is a great practice.

Have you seen any restaurants that seem to be using lean like thinking?

Bath Fitter Has Vertical Integration

The other night while watching TV I saw the commercial below for Bath Fitter.  Bath Fitter is a company that retro-fits new acrylic bathtubs, showers, and surrounds to give an updated look to your bathroom.  Can you pick out the things that caught my attention from a lean perspective?

I can’t speak to the quality of their product because I have never used them, but there two things that caught my attention.  The vertical integration of the supply chain and the lifetime guarantee.  The commercial is only 30 seconds that I checked out their website and it mentions the the vertical integration and lifetime guarantee also.

Bath Fitter has control of the product from raw material to installation.  This control allows them to better guarantee the quality by knowing exactly how it is made, not outsourcing it to someone that could take shortcuts to manufacture the product without Bath Fitter knowing.  Also, they control the measuring, installation, and customer facing representative.  By doing this, Bath Fitter would be able to get accurate and fast feedback about how the product is being used, quality issues, or the ease of installation.

This is very similar to Henry Ford controlling everything from the raw materials (mines for metals and saw mils for wood) to manufacturing to the first dealerships.  The tighter control over the supply chain allowed costs to be reduced AND quality improved.  Not just one or the other.

The lifetime guarantee Bath Fitter promises indicates the confidence in their quality of product and installation.  I know some companies (and Bath Fitters could be one, I don’t know) play games with the lifetime guarantee making it impossible to actually get a claim on the guarantee.  A reason they can make the guarantee and feel good about it is because they controlling the supply chain from start to finish.

What do you think?  Does Bath Fitter have some lean like qualities?

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