52 weeks of tools: Week 1 is CSM

For many companies, December and January are the time of year when budgets need to be approved for the coming year. Fundamental to any processing facility is the capital project budget. The Munleytown plant of Curds and Whey was no different.

As the only fluid plant though, they did not have to compete against anyone else for dollars. They did have to have their project list approved by corporate though and their projects were not to exceed $6 Million. Unfortunately, their current list totalled $10 Million. Somehow the list needed to be whittled down – not an easy task!

Knowing the debate that would occur, Eva Dunro, plant manager, called Edge of Control to facilitate the meeting.

When prioritizing, there are several tools that can be used but for this particular case, we settled on a Characteristic Selection Matrix (CSM). In a CSM the projects are rated individually against the same criteria and the projects with the highest overall score make it onto the final list. Sounds simple but getting everyone to agree on the criteria and the importance of it as well as how each project scores involves a lot of discussion and debate.

Eva and her team decided to evaluate the projects based on the value add the project was bringing to the business. In very general terms, the value of a project can be lumped into 3 categories:
1. Customer Value Added = customer is willing to pay for benefit the project will bring
2. Business Value Added = need to do this to keep operations running, generally from a regulatory perspective (Health and Safety, environmental, fiscal, etc)
3. Customer Non-value Added = no immediate requirement by customer/market but could set up for long term, nice to do
Once the main groupings of criteria/characteristics were determined, the management team then worked on creating sub-criteria and weighting those criteria on a scale of 1-9.




With the evaluation criteria in place, each project was rated individually against the criteria on how well it would fill that value-added need. To make the differences more distinctive, a rating of 1, 3 or 9 was used. Then the weighting of the criteria was multiplied by the rating of the project and a tally was determined.



Once all projects were tallied up, several were immediately removed from the list due to their low-ranking score. Three projects generated a lot of discussion as team members felt that intuitively it was the right thing to do but the projects did not score high on a totally logical criteria basis. Somehow room in the criteria had to be created to capture this important factor. First the team though had to see if there was any way the gut feel could be described and therefore evaluated. Otherwise, criteria called “instinct” or something similar gets added and weighted and ranked the same as everything else.

Finally, Eva Dunro and her team whittled down the list to 12 projects, with a cost estimate of $6.5 Million. Eva left the meeting feeling confident that she could approach corporate and get the extra $0.5 million approved, especially when corporate saw the objective manner in which the list was generated.

Curds and Whey Incorporated

This weekend I had the opportunity to watch Julie and Julia and have decided to take some inspiration from it. While writing this blog I have often been confused on the purpose of it and have felt like I am talking to a void.

So I have given myself the challenge of demonstrating a different tool for continuous improvement each and every week for the next year - so 52 tools! To help me in this endeavour, I will be using a fictional company and people to set a realistic scene for using the tools.

The company is called "Curds and Whey Incorporated" and Eva Dunro is the plant manager for the plant in Munleytown, a fluids division plant. They have been set the challenge of being the top performer in 2010 in the division while also setting up a new aseptic process for a new-to-them product.

Any ideas for tools and scenarios will be most certainly appreciated. Or feedback on how the tool was used!

To start things off next week, we will discuss the use of Characteristic Selection Matrix (CSM) in helping with the budget!

Keeping it short

Hey there!

Last week I had the pleasure of introducing myself and engineering to 3 classes of Gr. 5 students. For the rest of the school year I am going to be working with them on their science curriculum, doing experiments and generally giving an engineers view on how what they learn is being applied all around them.

Let me say that I got a lesson in being organized and focused on the key points. I knew basically what I wanted to say but as soon as I got in the class, most of that went out the window! Once you give the kids a chance to ask questions, they can lead in you in so many different directions! After the first class, which I didn't do too bad for time, I thought I was prepared for the next! NOPE! During the second class I blew my time budget and by the third group, I was at the school for about an hour longer than I had planned!

Since the first part of the curriculum I would be helping with is about structures and forces acting on them, I knew we would be talking a lot about bridges. I decided to tie this in with the Iron Ring that engineers in Canada wear BUT I just wanted to give them an idea of what was to come. No, Gr. 5's want the info NOW. Plus, they are proud of their parents and want to tell you all about what the parents do! And the students want to show off what they know!

All in all, it was a lot of fun and I had a good time. I did learn though that I really need to think about what my key lessons are that I want to share, the amount of time that I have to share it in and how the audience best receives it. Then I need to reduce it by half because the kids will have too many questions! It is kind of like when you pack for a trip!

Lastly, I gained a new admiration for teachers especially in how they can politely, without putting children down, stop the questions and move on to the next topic.

I am so looking forward to building bridges, solar ovens, and doing lots of other fun with the kids! There is nothing like spending time with a class to get back to what is really important in life and refresh your own desire to learn more!

How numbers can make you make mistakes

When I've moved into new jobs, positions or projects, one of the first things I'll do is look to see what data there is about the process and what people are doing with it. Time and again it amazes me what huge amounts of data there is - or the complete lack of it. Having lots of data is not always good because the majority of it is completely useless and the rest is never looked at.
People have an obsession with numbers and apply a lot of significance to them (IE baseball stats) without thinking through what the numbers are truly telling us. The three biggest sins when measuring and analyzing numbers would be: a) they don't measure anything controllable, b) the measure at the wrong frequency (too often or not often enough) and c) they measure the wrong step of the process.
Measuring too often or not often enough can be quite a significant factor but focus on only that particular point of the process. The two other sins have a tremendous impact on the total process and on the business itself if the measurements are used to make significant business decisions. Again, those two sins are measuring the wrong step in the process and measuring uncontrollable factors.
Imagine a company making widgets. The company has been doing well and they know this because they look at their sales numbers on a monthly basis. One month, the sales drop. Second month, they drop as well and phone calls by Sales to customers aren't being returned. The owner is furious and fires the Sales Manager.
The new Sales Manager comes in but sales continue to fall. She gets smart though and starts looking for other measures. Hmm, complaints about the number of defective parts being received has escalated in the past 6 months. Speaking to the plant manager, who in only measured on number of cases leaving the plant, reveals that an old machine was put back on the line about 7 months ago so that demand for product could be met.
Together, they look at the old machine and start to measure the number of defective parts making it into the cases. Turns out, there is an 80% defective rate on a machine that produces 1/3 of all production. Over 26% of the product shipped from the plant to customers is defective.
The Sales Manager does not have any control over the quality of the product, which is getting customers upset and causing them not to purchase product. Yet, she is being measured on it via sales numbers. The Plant Manager is being measured on how much product is going out the door, not on how good that product is - measuring the wrong point in the process and after the fact.

Another way to look at is the dieter. They want to be healthier and figure if they measure their weight everyday, they'll know how healthy they are. Between the error inherent in the scale and the natural daily variation in weight, they won't get the true story. Plus, as they exercise more and make better nutrional choices, the fat will decrease and the heavier, more dense muscle will increase, potentially causing an increase in actual weight. BUT, the person is actually healthier and if they measured the type of food they were eating, how long they can now run for and how long they can hold the plank position, they would know that they are healthier! Especially as the jeans wouldn't be so tight! A much better, truer measure!