Averages And How Deceptive a Word That Is!

Recently I attended our local Mayor’s Breakfast where the Mayor gave an update on the Town Council’s plan for the upcoming years.  During that discussion, the Mayor brought up some statistics about the area.  Namely, she brought up the average household income.

Now, the area where I live is quite diverse in households.  We are located just north of a very large metropolitan area and thus many of the communities in our town are bedroom communities.  We also have a very large rural aspect, with farms of varying livestock and crops.  Lastly, we also have many homes that belong to the rich and wealthy.  In fact, I have been told our town is the location of one of the most expensive houses in Canada.

To get back to the average household income:  according to our Mayor, this is about $113 000.  That sounds pretty good and she used that number to discuss the type of industry, education and retail requirements of the town.  Now, from a stats perspective, I’d like to show you four different charts.  Each chart represents 100 data points, with an average of approximately $100 000.

Chart 1: Average is $100K and the distribution in tight – everyone is very close to $100K.

Chart 2: Average is $100K and the distribution is looser - have some people with no income and some with a household income closer to $300K

 Chart 3: Average is again approximately $100K but we have more people with an income of less than $100K but they are being offset by those with incomes greater than $300K

 

Chart 4: Okay, average is closer to $125K but here you can see that over 75 of the 100 data points have an income less than $100K and nobody has an income between $100K and $350K.  Yet those who have an income greater than $350K offset those lower incomes dramatically.

Now which one of these scenarios more accurately represent my local area?  I would imagine somewhat of a blend between Chart 2 and Chart 3.

Populations statistics is not the only place this kind of variation in data all with the same average can occur.  This also occurs with machine performance – you may on average be able to fill 250ml in your carton but how many are underweights and how many are overweights?  Are you filling well above the 250ml to make sure your underweights fit within government regulations?  How much profit are you losing to make sure you range of weights doesn’t go below T1 or T2?

Stop the Creep – or at least contain it!

All projects change – may be not quite a truism but close enough!  Life happens and it WILL have an effect on your project.

Upfront planning can help develop contingency planning and well as conducting an FMEA (Failure Modes Effects Analysis) to anticipate some events (i.e. Customs officers holding up equipment at the border).  Mother Nature though has been known to be unpredictable, delaying shipments, changing costs and even damaging equipment.  Imagine those companies in flooded Queensland, Australia who have literally seen their plants go down the river!

Once a project has been initiated, a huge challenge for any project team is sticking to the original scope.  While the previous examples have been more of an emergency, once the projects begins, many more people become involved and start wanting things added or changed.  These changes to the project are termed “scope creep”.

During the planning phase, a stakeholder analysis can help identify those people who may want to see a slightly different outcome or who will place a higher priority on different aspects of the project.  This again allows the team to develop a contingency strategy.  Even more important at this time is to develop a scope change strategy.

A scope change strategy can be broken into 3 parts:

1. Approvals – who needs to agree to the change in order for it to go ahead
2. Criteria – what conditions have to be met to accept the change (ie safety, cost, quality)
3. Impact – analysis of the impact it will have on the 3 success criteria; cost, performance and timeline

Communicating the strategy to team members and stakeholders will help reduce tension and ensure a fair process is being used, making things overall go smoothly.

No One Wants a Lemon

Running a capital project without spending the time to do upfront planning is like going to a random car lot and choosing the first red car you see – chances are you may end up with a lemon on your hands!

It is generally accepted that success of a capital project is defined as:

1. Project stays within budget
2. Projects finishes within schedule
3. Final, installed, commissioned project meets performance objectives

These criteria have a tight interrelationship and when one goes out of balance, the others generally follow.  For example, the timeline is shortened, so costs likely will go up due to overtime and expediting costs, shortcuts may have to be made and inferior equipment chosen.

Upfront planning is one of the most critical pieces to improving the capital process and increasing the number of successful projects; more projects that come in on time, on budget and do what they are supposed to do.  If you look at your company’s capital project performance, how long was spent in the planning phase?  Can you relate this to the number of successful projects, how many actually closed versus the ones that were cancelled?  

Each project is different with a different level of complexity so measuring time may not necessarily be the best measure of upfront planning.  The better measure is evaluating the outputs of the planning stage.  Where project expectations and goals clear, understood, agreed upon by all and achievable?  In other words, were they SMART (Specific, Measureable, Achievable, Realistic, Timebound)?

Just like buying a car, if you don’t know what you want when you start shopping, you may just end up with a lemon and no one wants a lemon car!

Not invented here syndrome

Recently I holidayed in Bermuda and did what many typical tourists do - had an accident on a motorized scooter!  Fortunately Bermuda has a great health care system and the people at Pompano Beach Club take great care of their guests!

Coming back home though, I was less than impressed.  You see, I had an x-ray of my separated AC joint (collarbone and shoulder) at the hospital in Bermuda, then I had a series of others by my GP.  I was then sent to an orthopaedic surgeon (based at a local hospital) and told to bring my x-rays.  Did the ortho ever look at the x-rays (that I had to pay for to be put on a disc)?  No, they insisted on having new x-rays done by the hospital.

I was less than impressed for many reasons.  First, to do the x-ray properly I actually have to have a weight hanging from the injured arm - PAIN!  Second, having the 3rd set of x-rays (which showed nothing different from the first 2 sets) meant my appointment took an extra hour.  Third, an extra set of x-rays means waste and unnecessary expense for the hospital itself- technicians time, x-ray equipment, attendant to take me there, line up for other people who actually needed an original x-ray.

This smells to me of the not-invented here syndrome.  How often is someone else's work not accepted simply because they don't work for your company or your department?  Or in the case of larger companies, because it is not invented in that plant/office/country?  Sometime this is blamed on potential for viruses (in the case of files being transferred) or on differences in programming language used.  Often, it is simply political and egotistical.


Do you have spreadsheets in your department that has data that needs to be regenerated by each different person who uses it?  Do you insist on building your own equipment because you don't want to buy an off-the-shelf product?  Is cost really driving your decision to make it in house?

Consider the hidden costs: time, quality, long term maintenance, lack of flexibility, lack of a knowledge base.

I'm not suggesting you get someone else to do your work, but consider how reinventing the wheel fits in with your company's longer term outlook and direction.

Waste not want not! Your profit is in your waste!

The food industry has a unique position when it comes to reduce, reuse and recycle.  The industry focuses around the organic and deals with animate material.  When I first started in food, it was at a canning company in Australia.  As a student who had previously worked in the plastics industry, it amazed me how so much product could be eeked out of fruit.  AND, even more so, that any unused or wasted food, could go right back into the food chain.

The Shepparton Preserving Company (SPC, now SPC-Ardmona), used the parts of the apples and pears that did not go into the cans, as the basis for juice.  Through enzymes and separation technology, they were able to get an incredible product.  The peel, seeds, etc that weren't used, went to pig feed.

Last week, PepsiCo UK announced that it plans to make potato chip bags from ... potatoes!  How is that for redirecting a waste stream! (see foodproductiondaily.com news article)  The question will be does the customer find it more acceptable than the SunChip compostable bag.

Have you looked to see how your waste streams can be reduced, reused or recycled?  And I don't just mean plastic and metal!

Why vs What If

When children are growing up, they go through a stage when they believe adults have all the answers - unlike when they are a teen and believe parents know nothing!  For many children the favourite question is "why?"  Two of my children though were "What if..." children.

"Why?" is a fantastic question to get to the root cause of a problem.  It is also a great tool to understand how a process or machine works.  When it is answered by one word, "because", then it can also lead to the perfect place to start improvements.

"What if" is also an excellent tool for problem solving, but it excels when it comes time to implement solutions.  Success in implementation is often dependant on the ability to mistake-proof or contingency plan.  This is the ability to consider "what if" situations and determine the impact if the imagined scenario occurs and what the impact could be and what needs to be done to minimize the negative impact.

The "what if" scenarios my kids created often ended up with me saying either "we'd all be in big trouble" (aliens blowing up the Earth) or "we'd all be really happy" (instead of shooting bullets, all guns shot bubble gum).  Some "what ifs" are highly improbably but they are worth some discussion because they free up a team to think more creatively but realistically about what can happen.

Are you a "why" or a "what if" person?  Does your team have members of both camps?  What would you do if there were no restrictions on your business and why aren't you already trying to be like that?

Manufacturing, Process Optimization and Product Lifecycle Management

This week I took advantage of some free webinars being offered about the food industry.  I was really intrigued by the Product Lifecycle Management for the Food Industry given by Greg Nutter of Lascom Solutions, through the Prepared Foods webinars.

Why was I intrigued?  Well, some complaints you hear in manufacturing facilities are; you can never find the information you need (ie Sales won't give it to you) or that the other business departments don't understand.  Or you may discover that the same product is made a different way at another facility.  Or people are using different standards somewhere else!  Or, that no one kept track of the way the process was set up when R&D or Sales did a last minute trial run.

Imagine being able to have all this information available easily and set up so that changes in spot initiate notices wherever else it may have an impact.  Imagine being able to get your product to market faster because information is centralized.  Wouldn't it be great to be able to see why things are being done the way they are? To be able to identify ways to improve and cut costs.

Check out the presentation on Product Lifecycle Management.   The concept would fill many people's wishlists.

As this will only be archived for a limited time, send me an email if you would like a copy of the podcast: gemma@edgeofcontrol.ca

Don't Touch That Dial - Part 2

Last time I discussed accurate data and how that impacts our reacting to our process outputs. This week we will look at interpreting the story those outputs tell us. Without the right story and context, manufacturing optimization will not occur effectively.


A lot of the time the data comes to us in numbers. Some people can read numbers very well presented in tabular form. Me, I prefer a picture. The best way to see that picture is in a graph. On the Y-axis, we typically put the outputs of our process – kgs produced, hrs uptime, % efficiency etc. On the X-axis is our inputs with time being the most common. If you are trying to decide whether to do an input or time, ask yourself, which changes? If you always have a setting constant, then you don’t want it on your X-axis. Time can be days, hours, minutes, shifts or even batches or lots.

Charts can tell you a lot but only if you have done them correctly. We will focus at this time on run charts, spec charts and control charts. Below are 3 graphs with the identical production information – but each tells a different story.


Figure 1 is a run chart. The shift production rates are plotted against the day and shift. That’s it. Is it good or bad? Who knows. The production rate varies from shift to shift and it looks like some were worse than others but who knows if it was bad?

 Figure 1: Run Chart

Figure 2: Spec Chart

The next chart has the production goal laid over top. We will call this a spec chart because often it is not the production goals but the specification limits the customer wants. Now we have some context and can see that some of the production was great, well over the goal but some was bad, well below. But can we expect our process to perform more consistently, with less variation?

Figure 3: Control Chart

Figure 3 removes the production goal and puts what the mean (average) production rate is for the whole time period. It also introduces an Upper Control Limit (UCL) and a Lower Control Limit (LCL). According to those limits, there is so much variation in the process that the probability of having a day with an unplanned production of 0 KLiters is as likely as a day with 150 KLiters of production. Therefore, we should look at our process, not for one-off things to change (ie train Operator B to do CIP properly) but for improvements that go across all shifts, all the time.

Figure 4: Control Chart for Fine Tuned Process (with Production Goal)

Say we managed to fine tune the process and we ended up with Figure 4. Wow, lot less variation but, without any special events occurring, we would never make the production goal. One shift though something happened (special event – ie power outage) and the production really fell off. Another shift though, production was phenomenal, exceeding the control limits AND the Production Goal. Again, this is a special event, so we SHOULD be able to find out what happened differently and see how we can adjust the process to be like that all the time.

Context is critical when looking at data. And that context has to reflect the process itself and its capabilites and not just the goals of the business. The goals will put emphasis, pressure and criticality on the process, but if it cannot fundamentally perform that way, you have to do a complete rethink on what you want.

To put it another way; If you put a bowl of cookies on an 8 ft wall and tell your 6yr old to jump and grab one, they will try again and again and will get closer and closer to it but will never reach it. That is, until they get a ladder, get a taller friend or start throwing things to knock the bowl off. Does your data tell you it is time to get a ladder?

Don’t Touch That Dial – Part I

Many of us have the luxury of processes with data.  We can see how fast a line is running, find out production rates, weights of a product or counts of final inventory.  We can take this data and manipulate them into different forms to tell us different stories.  We can then be proactive or reactive in our response.

Our favourite way to respond is often to turn that dial.  There is little more satisfying than to make a change and see it instantly in the process.  But did that change make things worse?  Did it just mask the true problem?  Was there a downstream effect not anticipated?

Knowing when to touch that dial and, more importantly, when NOT to touch it, can be the difference between stellar performance and a truckload of rejected material.

Let’s consider several factors that decide whether or not to adjust the process.  First is the data integrity (accuracy, timeliness and relevance) and second is interpreting the story the data is telling.

This blog will consider the data integrity and the next blog will go into the story telling.

Is Your Data Accurate?

When considering accuracy, there is an instrument factor, a human factor and an environmental factor.  They can be considered separately or collectively.  Interpreting the story though is going to depend on the ability to trust in the accuracy of the combinations.

From an instrument perspective, calibration frequency and performance should be regular and complete.  The complication here is when the only time you doubt the reading is when it tells you something you don’t like.  Why do you retest only if the product is out of limits?

The human factor pertains to standardizations.  Does everyone read and record the instrument the same way?  If the measurement is of the reaction to an input (ie. rejecting or accepting a product), has everyone followed the same standards?  For example, if a label is missing, does the person add the missing label back and consider it 100% accepted?  Or do they add it but track an error?  If they reject the product, do they only reject the one item or do they reject the whole box it was in?  While it is good to have people automatically correct the problem, that lack of data could mask the real issue while also creating an increase in manual labour involved in the process.

The effects of the environment can be subtle in their impact on taking measurements.  Raw pork is often graded on a colour scale as to whether or not it is pale or dark (National Pork Producers Council Color Standards, http://www.porkstore.pork.org/producer/default.aspx?p=viewitem&item=NPB-04036&subno=&showpage=4&subcat=8).  If the lights are changed from fluorescent to incandescent or moved closer or further away from the sample, the evaluation of the meat can change significantly.

Is Your Data Timely?

Not everyone operates continuous flow processes.  In fact, very few processes could be considered true continuous flow, especially in the food industry when a sanitation step needs to be included.  The opposite of continuous flow is batch flow.  When it comes down to timeliness of information, getting the results only after the batch is complete is often too late.  In fact, sometimes those results don’t come until the product has actually reached the customer.

Sometimes getting the final release of a product has to be a while after the batch is over.  Chocolate bloom can take several days to literally surface.  Quarantining the product though can be costly while waiting for that release.  While an issue of quality requires an immediate action, turning that dial may not be the right one.

Yields are often calculated after the fact, which again, in a batch scenario, is too late to react by turning a dial.  Your next batch, especially with variable raw material such as meat, milk, vegetables, may require completely different settings due to other reasons.

Relevance

That timeliness works hand in hand with relevance of data.  HACCP can dramatically help in identifying which points of the process are critical from a food safety perspective but they may not be indicative of processing optimization control parameters.  When considering what to watch from an optimization process, you have to consider what parameters can be changed and how easily it can be done.  Are they truly control parameters or just indicators?

As a final comment on understanding the relevance of a measurement, I am reminded of a time when I worked with an extrusion process.  The “control” point was considered to be the exit temperature.  A key control of that exit temperature was the upstream temperatures in the extruder.  So much focus was spent on ensuring the exit temperature was steady that several weeks went by before it was realized that every time it moved so much as 0.5 deg C, the operators were changing the upstream process to get it back in line.  The upstream ended up operating under dramatically different conditions, as evidenced both downstream in property changes to the product and in the extruder itself when it was opened and broken screw elements discovered.  Does maintaining your control point mask other issues?

Part two: Interpreting the story behind the data!  - stay tuned!

Terms of Reference - G20

During June 2010, Toronto Ontario was the scene of the most recent G20 Summit.  Unfortunately, as per standard these days, it saw protests that turned violent.  As too is common, an inquiry has been called into the police actions.

What does this have to do with optimization, projects, manufacturing etc?  Well, I was interested to hear them say on CBC that a person has been appointed who's sole role is to define the terms of reference of the inquiry.  For those of us in the project management world, this is another term for project scope.

Defining these terms of reference is crucial for the inquiry.  It will determine the type of questioning, how far along the chain of command, who will be questioned and how far back into the planning of the Summit they will go.  What is truly interesting is that time will be allocated to develop these terms, considering all the stakeholders involved and the long term impact it could have on Summits all over the world.

How often do we in manufacturing ever take the time to truly develop the scope of projects?  Have we ever faced the wrath of a poorly defined scope?  How often have we seen the scope change significantly in the middle of a project?

Most projects will not have the global attention this inquiry could have, nor would they have the political intrigue, nor the breadth of stakeholders.  Therefore, one would say that a project does not need to dedicate the month or two to developing a scope as this one does.  But, each project needs to have some time spent on developing a good scope.  Next time you work on a scope, think of the impact of a poor scope and spend the time to make sure yours is narrow yet broad, defined but loose enough to bend as more information comes in.  Good luck!

3 Signs of a Perfect Process

One of my favourite business writers is Patrick Lencioni. Recently I reread his book “3 Signs of a Miserable Job”. Once again I was struck by its simplicity and how the philosophy of job satisfaction can be applied to many aspects of life as well as business.


In his book, his theory is that a great job boils down to 3 elements; measurement that is almost instantaneous feedback, not delayed by weeks or months, understanding of an employee’s relevance to the business, their boss and the people they interact with, and people they work with having a genuine interest in them as a person. He puts in the negative though: the three signs of a miserable job are irrelevance, anonymity and immeasurement (his word, not mine!).

Machines are not people but processes are organic! So if you apply the same basic idea, you should be able to get the “perfect process” or 3 signs of a miserable process.

Sign 1: Relevance
o all steps of the process are understood (process map)
o interactions between this process and other process are understood
o people in process understand why they make the product they do, and how it helps the customer and the business

Sign 2: Measurement
o the value each step brings is understood and measured
o process variables that are controllable are measured and reported
o that day’s or that shift’s or that hour’s performance is measured
o corrective action can be associated with the measurement

Sign 3: Identity
o all steps of the process are understood
o interactions between steps and impact of each step is understood at all steps of the process
o cross-functional people interactions occur (ie production meetings)
o the people who are part of the process are known by their names and not just their functions

Identity and measurement are probably the hardest of these to implement. Many organizations have high turnovers so keeping track of who is in what role is often difficult. Measurement is difficult because most systems are set up to only track performance either at the end of the process or on a weekly or monthly basis.

Actually, all three are difficult to implement. Do you know how your processes really work? Do you know the impact you have on the overall business?

Launch of Update Web Site!

Hey, just wanted to let people know that the edgeofcontrol.ca website has been updated!  We'd love to get your comments on what you think of the design.

Our awesome web designer, Banja Solutions took our ideas and ran with it!  Thanks Candace.

Sometimes you need to reinvent the wheel (Lego Hello World video)

I noticed this video today in a newsletter I get from a manufacturing magazine.  This is a case of someone reinventing the printer, but using many different components than what we would normally expect to see.

http://www.youtube.com/watch?v=zX09WnGU6ZY

Lego brings out the fun side of all of us but it can bring out amazing creativity and innovation.  The best part about seeing someone make a printer out of Lego is that it makes us think what else can be made of Lego.   Once we can think of it being made with Lego, then we need to think about what can be made with things other than Lego.

Just like in this printer, with its electronic components, sometimes we have to use specific materials.  But do you need to use polypropylene for your packaging?  Do you have to have all the piping in the plant be hardpiped?  Can some of them go to soft tubing like they now do in houses?


Take the time to brainstorm, ask yourself "what if" and most importantly "why not?".  Do you know your process well enough to see the contraints and if they can be removed?

Reinvent the wheel, but this time try to make it out of something other than wood, rubber and steel!

Simple Every Day Poka-Yoke

Changing lanes while in the car this weekend, I was reminded of some of the poka-yokes that around everyday.
While driving, it is impossible to see if your indicator light comes on when you actually turn it on (kind of like trying to see if you really are sunburned on the back of your neck!).  So, how do we know if it actually is on?  Well, we have two ways, though neither are totally foolproof.  The first is the little light that comes on somewhere on the dashboard, and the second, is that annoying noise "ticker, ticker, ticker" - or however you so translate it!  Most of the time they work to let us know if everyone else can see which way we want to go.  Sometimes they fail, but this is not often so we can get away with such a simple device.

The purpose of a poka-yoke is to prevent someone from making a mistake!  Like most things in the Lean world, it is based on Japanese terminology.  Some people call it mistake-proofing.

Another fairly common poka-yoke is in your kitchen fridge.  In this case, beside preventing a mistake, it also reduces the amount of work we need to do!  What am I talking about?  Why that light that comes on as we open the door!  The mistake in this case would be the light being left on when the fridge door was closed, wasting electricity.  By putting it on a switch that is activated when the pressure on it is relieved, the light turns on when the door is opened and turns off when closed.  This also means that we don't need to flip a switch each time we open the door!

What is your favourite poka-yoke?  Put a comment here or go to our Facebook Page and add it there!  For a link to our Facebook Page, look to the right of the blog!

thanks!

Dairy Crest, JUGIT™ and overdesign

Dairy Crest in the UK has just announced the relaunch of their redesigned JUGIT™.

As a Canadian in a marketplace that has used milk bags for many years, this seems like a bit of overdesign to me.

At our house we place the bag in either a plastic or ceramic jug, grab a pair of scissors and snip the corner off one end, then pour. When the bag is empty, we take it out and throw it away, recycle it or clean it and reuse it for sandwiches. Every so often we clean the jug itself, but not everytime because the inside only gets wet really when there is a factory-created leak. Nothing ever touches the milk itself.





This JUGIT™, on the otherhand, has a lot of pieces. And the spout needs to be washed whenever a bag is emptied and a new one put in. Is all this design necessary?

When designing something, you have to consider what the needs of the client or customer are and how they fit into the bigger picture - cost, safety, ease of function and overall satisfaction. Sometimes you have to fight the "Not Invented Here" syndrome where someone does not want to do it a certain way simply because that is the way someone else did it!

3 questions about the British consumer and British marketplace come to my mind when I see this JUGIT™ design:
1. Are people worried about milk taking on odours of other foods in the fridge?
2. Aseptically packaged milk (more prevalent in UK than Canada), has a longer shelf life while waiting to be opened. Is the consumer looking for a way to extend the shelf-life after the bag is opened?
3. Are people concerned with lack of space in the fridge and therefore want to be able to put product on top of the jug when it is on the shelf at home?

I love using a bag vs using a jug. Glass bottles are cool but with kids comes the worry of breakage.

I know I haven't touched much on overdesign. It is very easy to get carried away when designing a new product or simply a remedy to an existing problem. Just remember, Keep It Simple, Sweetie! Don't ignore a solution that is right in front of you because someone else came up with it. But, hardest of all, let go. Don't stick with an idea when something new comes along, just because the old idea is what is you are familiar with. Maybe this new design IS better!
(Sainsbury is selling this new JUGIT™.)

Launch of Facebook page

Hi
I recently launched the Facebook page for my company and I would encourage you to take a look at it.

I will be updating it with manufacturing related items about the food industry, some points about project management and information about any of our upcoming lunch and learns, workshops and speaking events.

Thanks
Gemma

forming, storming, norming, performing and...adjourning

During the 16 years I have been optimizing, troubleshooting and developing process, I learnt about the phases a team can go through. I saw it in action as well as in theory.

It actually is quite interesting to see how teams can follow the 4 well known steps - forming, storming, norming and performing. Until recently though, I had never known about the 5th phase - adjourning.

For those of you not familiar with Bruce Tuckman's model, when a team first gets together, people are feeling each other out, trying to figure out what is acceptable and what the team is about. This is known as "forming". It can also be known as the polite phase.

Then the gloves are taken off and along comes the rocky stage or "storming". By this time the team is starting to challenge each other, push the boundaries and start pushing their own perspectives. Sounds scary and even like something you don't want, but it is actually great for getting things out in the open, getting the creative juices flowing and pushing the team. The trick though is getting the team through this phase and out the other side.

The other side is the "norming" phase. Now that the team has worked out some of the issues, there is an understanding of how to work together and the productivity levels start to increase, moral starts to improve and synergies form. Since this is often drawn as a plateau (forming), followed by a downslope (storming) and then a gentle upslope (norming), you can imagine there may be some sliding backward into the valley of storming! But, the recovery can (or should) be a lot quicker.

Eventually (and can be quite fast), the team moves into "performing". Now that the environment has been set and people are working together, conflict is seen as productive, collaborative and respectful. The synergies of the team are creating very powerful results.

And that was all I had been taught. Now I have learned there is another phase; "adjourning" or "mourning". Actually it makes a lot of sense. This assumes that a team is only together for a specific purpose and that purpose has been fulfilled. Now the team needs to get closure and be ready to move on. It is about celebrating success and recognizing growth.

In this day and age where there is so much fluidity in roles and projects though, this should be considered on an individual level as well as the team. Sometimes a person is moved onto a new challenge before the team has completed the old challenge. This can end up with someone feeling in limbo as their work was never quite done. A simple meeting between the team leader and the individual reflecting on contributions can ease this.

On the other hand, new peple can join a team. This can actually put the group all the way to the norming stage depending on the amount of distruption the knew person can bring. Knowing these dynamics, while stressful going through them, can be helpful because you know what comes next and now you can work towards getting to the performing stage!

Value vs Cost

How do you value your product? Is it a fixed value or a variable value?

This IS a different question that saying how do you cost your product. It also gets at the question of what comes first, the chicken (cost) or the egg (value)?

Value is a more ephemeral than cost and can be broken down into 2 types of value - the value it brings to the business and the value it gives the customer. Cost is a measure of the transformations that occur to the product on its way from conception to eventual destruction (though this is often shortened to the cost up to when the customer takes possession of it).

If the cost exceeds the value, then a business needs to consider continuing production. If the value exceeds the cost, then the business should be making a profit. Tying these two together is the price.

Back to the chicken and the egg and price. And this is where sales, marketing and manufacturing can be at loggerheads. Does the price reflect the cost (chicken) or the value (egg) and which is the constraint? Therefore, which does a company work on when the cost exceeds the value? Smart answer is both (cost and value), the easy answer is cost and the tricky answer is value. Manufacturing is told to reduce cost, sales and marketing are told to increase perception of value. Both sides of the organization though need to look at what value they are adding and how to transform that into an actual value for the customer and not just a perceived value.

Fundamental to all approaches to make value more than the cost is that proper understanding of the values and costs of the transformation process. Value Stream Mapping (VSM) and Value Stream Analysis (VSA) attempt to capture the value and highlight areas of cost. It is more than just showing all the steps, from order placement to order fulfillment, it is about highlighting time, effort and waste streams.

It can highlight areas were low value steps can either be eliminated or modified to become high value. Sometimes this is by speeding up the process, smaller lot sized, exchanging a raw material for another or by finding a different use for the waste (think whey, was a waste now a premium item in health food stores!)

Value is variable, though price may not. Cost is merely a reflection of the value someone else places on for their own product or service. What would your process look like if you focused on increasing value throughout your processes and merely used cost to measure that success?

SMED - Single Minute Exchnage of Dies

Well, it has been awhile but a lot of things can happen in a short time!

Which is precisely what we decided to talk about when Eva and I finally met up again! In this case though, she wanted a lot of things to happen in a short time - as in let's reduce the time it takes to do changeovers from one line-up to another.

What she was taking about is called SMED or, single minute exchange of dies. It goes like this. The carton packaging equipment (cartoner) is going to go from packaging a 250 ml milk carton to packaging a 500 ml chocolate milk carton. In order to do so, there are many things that have to happen, starting with line flushes, labeller changes, carton changes etc. The goal of SMED is to reduce the time it takes to make all these changes, thereby decreasing waste, increasing flexibility and increasing profits.

Using SMED is basically a 4 step process:

Step 1 - determine all the steps associated with the changeover, including all prep work and all clean up work and outline them in the order they currently occur.

Step 2 - assign each step as being internal (can only be done when equipment is down, or in time between product runs) or external (can be done offline, before or after the change and not during)

Step 3 - change the order of the steps so that all the external steps occur first (or last) and the internal steps occur second.

Step 4 - reduce the time it takes to do either certain steps or to do all steps.

Simple right! That's what Eva thought and for the most part it was. It just required us getting people to look at their work differently. Some steps did take a little imagination though and some change management but at the end of the day the changeover time dropped 50%, bumping up production quite significantly!

RASCI and You

During projects and in day-to-day activities, work sometimes doesn't get completed as expected because no one thought it was their job to do it. Or, worse, it was done twice or even three times. And the worst, the task was done but it failed because it wasn't sustained or was just the wrong thing to do. Generally the last two happen because the proper communication didn't occur. In fact, all three of these happen because people don't know what their role is and what other people's roles are in getting a task accomplished.

One of the tools available in clarifying tasks is RASCI. This stands for Responsible, Accountable, Subject matter expert, Communicate/Consult and Inform. Though it is used most frequently on projects, the concept is a great one to consider when running any meeting that generates action items.

Consider a project. A meeting is held and the team decides that Task A needs to be performed. No one on the team has the skills to complete the task. Someone on the team needs to make sure the task is done though. He or she is the person who finds the available resources, ensures the task is completed on time and in budget and as required, and lets the necessary people know if it can't be done. She or he is A - Accountable for the task.

The person that gets assigned the task of doing the work (aka a doer) is R - Responsible for the task. Sometimes this can overlap with the person who is also Accountable.

There are times when the Accountable or Responsible person does not know enough about how to accomplish the task or needs more specific information on the peculiarities of the task. Then they would call upon a Subject matter expert - S. Again, these roles can overlap with the Responsible and Accountable person.

What is the difference between Communicate (C) and Inform (I)? Essentially two things. Communicate (C) would occur with someone or someones that you need to have a 2-way interaction with (i.e. Quality needs to let production know they will be taking extra samples and could Production help out), whereas Inform (I) is someone who needs high level details and needs to know the impact. Also the C person would generally be informed before, during and after the task. The I person may know before and will know after but rarely during. I.e. CFIA (Canadian Food Inspection Agency) is informed a test is occurring and when it was complete and the product from the trial was quarantined and the results came back negative for spoilage.

One piece of advice; Never assign accountability to someone not present in the meeting or at the decision-making time. Accountability may be transferred later on, but someone present at the decision needs to take accountability to see that the communication occurred and that the accountability was transferred correctly.