learnsigma

The £3bn widening of a stretch of the M6 tells you a lot about Government spending priorities. It is 40 times what is being spent on the low-carbon buildings programme aimed at boosting take-up of renewable energies: £3bn spent on railways, solar panels, wind turbines or insulation might have been more sensible. But like so many other wrong signals from ministers - making motoring cheaper while train fares rocket, or chopping and changing the grant system for solar and wind power - it makes a mockery of their boasts about climate change action. In fact, our use of renewables is still only 4.6% of all energy use, and the pace of increase slowed last year. Germany, by contrast, has reached 13% of energy used and has 200 times as much solar capacity as Britain - encouraged by an attractive feed-in tariff scheme setting a guaranteed price for any electricity generated and exported to the grid.

Next time you hear the Government claim it leads the world on climate change, do as the Germans do: laugh.

What you can do

Join Energy 21 : Energy 21 is the hub of a national network of grassroots renewable energy groups. These groups work to make a difference at a local level to reduce our reliance on fossil fuels and to promote a more sustainable future for everyone. A future with clean renewable energy driving progress

And watch this:

photo credit: Alex Osterwalder

Almost every organization can be broken down into three basic levels. The highest level is the business level — the umbrella level that encompasses everything related to the company. The next level is the operations level, while the lowest level is the process level.

The success of Six Sigma is defined as the extent to which it transforms each level of an organization to improve that organization’s overall quality and profitability. The fluidity of the methodology allows it to work up and down the different levels of the organization. In this post I’ll be focusing on the business level:

Business Level: The business-level application of Six Sigma focuses on making significant improvements to the informational and economic systems used to steer your business, such as customer feedback or supplier quality. It requires a three- to five-year commitment from executive leadership to consistently do the following:

• Recognize the true states of your business. Do you really know the states (or conditions) of your business — for example, how well your company is doing in customer service (see box below)? You cannot improve what you do not measure; identifying the various states of your business help you properly focus on what must be improved.
• Define what plans must be in place to realize improvement of each state. Creatively consider how to achieve a higher level of performance and relate those things to customer satisfaction.
• Measure the business systems that support the plans. Know what you need to measure and how to properly measure it, and get executive commitment to pursue the correct measurements.
• Analyze the gaps in system performance and benchmarks. Diagnose capability measures and assess performance gaps, through analyzing benchmarks and uncovering the “secrets” of how businesses operate at higher sigma levels.
• Improve system elements to achieve performance goals. Define your measuring system, collect the necessary data, analyze that data and prioritize your efforts
  for improvement.
• Control system-level characteristics that are critical to value. Monitor those efforts and their elements over a period of time, conducting regular “audits” of performance and controlling these critical-to-value characteristics.
• Standardize the systems that prove to be best-in class. Compare the optimal performance of your business systems with similar examples elsewhere. When appropriate, apply these findings to other business units, capitalizing on the potential savings of your system level analysis and control.
• Integrate best-in-class systems into the strategic planning framework. Roll the improvements out to all pertinent business units, folding these improvements into critical business strategies and tying the initiative to compensation as an incentive for full cooperation.

In the next couple of posts I’ll be looking at the remaining levels in the organisation and how Six Sigma can be applied there.

Britain’s economy is built on blah, blah, blah.

1. The Germans export motor vehicles trailers and semi-trailers, electrical machinery, chemicals and chemicals products
2. The French specialise in machinery and transport equipment, agricultural products, including wine
3. The Italians send electric goods (especially home appliances), food, fashion and clothing.

And the Brits?

While we do plastics, aerospace products and electrical and electronic equipment, we’re also the world’s second largest exporter of services, including banking, insurance, stockbroking, consultancy and computer programming. In other words, “knowledge workers”.

But it’s devastating our trade figures.

Last year the UK’s deficit from the trade in goods amounted to £60bn, around 5% of GDP, and the services we sold abroad only reduced it to 4%. The Government’s confidence in knowledge workers is totally divorced from reality.

While ministers talk about braining up to face the future, the country’s fastest growing profession is hairdressing.

Come on, is this really our future?

From Wikipedia:

The Toyota Production System (TPS) is the philosophy which organizes manufacturing and logistics at Toyota, including the interaction with suppliers and customers. The TPS is a major part of the more generic Lean manufacturing. It was largely created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno; they drew heavily on the work of W. Edwards Deming and the writings of Henry Ford.

But how much do you really know about the Toyota Production System?

Take this quiz and add your results below … no cheating!

Black Belts, who shoulder the bulk of the responsibility for Six Sigma project work, must be properly motivated to reach the levels of achievement expected of them. Here are my personal top five things they need some ideas:

1. Compensation. Compensation and reward mechanisms send a message to employees about the worth of the Black Belts to your organization and its Six Sigma endeavors. GE’s Jack Welch ties 40 percent of bonus compensation for managers to the intensity of their efforts and measurable progress toward Six Sigma quality in their operations.
2. Promise of Promotion. GE’s ranks of general managers, directors and vice presidents are full of Six Sigma leaders — Black Belts who proved their worth to the organization and were rewarded accordingly. Here’s a great idea for a Black Belt performance review to facilitate such a process.
3. Recognition. Motivation is highest when success is acknowledged. Verbal and written recognition is inexpensive and simple, whether done privately or in an open and public manner.
4. Permission to Fail. Most Six Sigma-conscious CEOs view mistakes as tools for the personal growth of both the Champion or Black Belt, and the organization, as it works toward Six Sigma status.
5. Become a Change Agent: The role of a Black Belt is typically described as a Change Agent and the two terms are frequently used interchangeably. Why then, if the change agent role is such an important part of the Black Belt identity, do we spend 4 to 6 months training the Black Belt candidates with maybe, just a few hours of training on the process of change?

Two six sigma quotes I highlighted to myself recently. The first was from The Six Sigma Leader: How Top Executives Will Prevail in the 21st Century:

“Studies have repeatedly shown that the high failure rate of many promising leaders is largely due to an over-reliance on a limited set of capabilities. Many times leaders are promoted because of a strong record of achievement, only to derail later because of their inability to adapt. For example, an individual may be good at demanding high performance from his or her followers, or have strong technical ability. However, those strengths are not sufficient when, for example, big-picture thinking or relationship building are also essential to success. To prepare yourself and others for growing challenges, you need the clarity of thought and flexibility to understand your own weaknesses and develop new talents.”

The second was from The Six Sigma Handbook, Revised and Expanded: A Complete Guide for Greenbelts, Blackbelts and Managers at All Levels:

“It would be a mistake to think that Six Sigma is about quality in the traditional sense. Quality, defined traditionally as conformance to internal requirements, has little to do with Six Sigma. Six Sigma is about helping the organization make more money by improving customer value and efficiency. Six Sigma focuses on customer requirements, defect prevention, cycle time reduction, and cost savings. Thus, the benefits from Six Sigma go straight to the bottom line. Unlike mindless cost-cutting programs which also reduce value and quality, Six Sigma identifies and eliminates costs which provide no value to customers, waste cost.”

Clearly then six sigma requires leaders who understand that it is not a traditional quality program, but more importantly these leaders must understand themselves. A great six sigma leader is concerned with achieving results through people, the goodwill and support of others (influence), while a weak six sigma leader is not.

How can 5S contribute to helping the environment? Well …

• Painting the machines and the equipment light colors and cleaning the windows, often done under the Shine pillar, decreases energy needs associated with lighting.
• Painting and cleaning makes it easier for workers to notice spills or leaks quickly, thereby decreasing spill response. This can significantly reduce waste generation from spills and clean-up.
  The removal of obstacles and the marking of main thoroughfares decreases the potential of accidents that could lead to spills and associated hazardous waste generation (e.g., spilled material, absorbent pads and clean up materials).
• Regular cleaning, as part of the Shine pillar, decreases the accumulation of cuttings, shavings, dirt, and other substances that can contaminate production processes and result in defects. Reduction in defects has significant environmental benefits (e.g., avoided materials, wastes, and energy needed to produce the defective output; avoided need to dispose of defective output).
• 5S implementation can significant reduce the square footage needed for operations by organizing and disposing of unused equipment and supplies. Less storage space decreases energy needed to heat and light the space.
• Organizing equipment, parts, and materials so they are easy to find can significantly reduce unneeded consumption. Employees are more likely to finish one batch of chemicals or materials before opening or ordering more, resulting in less chemicals or materials expiring and needing disposal.
• 5S visual cues (e.g., signs, placards, scoreboards, laminated procedures in workstations) can be used to raise employee understanding of proper waste handling and management procedures, as well as workplace hazards and appropriate emergency response procedures. 5S techniques can be used to improve labeling of hazardous materials and wastes. In addition, environmental procedures often are separate from operating procedures, and they are not easily accessible to the workstation. 5S implementation often result is easy to read, laminated procedures located in workstations.
• Integration with 5S visual cues and operating procedures can improve employee environmental management.

Hmm, I wonder if companies who are not happy with Lean results realize that:

The tools themselves, however, are not the point, nor the purpose of Lean. The tools are merely a means to an end, and a clear understanding of the end is crucial to success with Lean. Because many people like “silver bullet” solutions, however, use of the tools is often confused with actually being Lean.Lean Manufacturing is an attitude, a philosophy and an ingrained way to behave and think. For success with Lean, it is crucial to weave the Lean Manufacturing philosophy into the fabric of your company. The tools we think of as “Lean” are the current best thinking on how to overcome specific limitations. When we figure out how to eliminate the limitation, we eliminate the need for the tool. Consider the tools of Lean band aids, not the cure. Simply applying tools will not reap the full benefits that the Lean philosophy can bring.

Well said! In fact

In his book “Good to Great,” Jim Collins talks about the flywheel effect. He says great organizations don’t become that way overnight through radical change. They become that way because continuous small pushes on their flywheels create a breakthrough velocity that sustains growth. At the point where the momentum of change reaches breakthrough velocity, the organization moves forward along its lean journey with little or no support required from a consulting organization.

photo credit: dsevilla

Adopting statistical thinking is critical for businesses, however, what is it?

Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write.

Lord Kelvin (1824 – 1907)

Statistical thinking is based around three concepts:

The first concept is that all work occurs in a system of interconnected processes

The key words here are system and processes.

Here is a tool from six-sigma, called a SIPOC diagram.

iSixSigma SIPOC Diagram

• The outputs of one are the inputs of another
• The customers of one process are the suppliers to the next

Every product or service provided by company is the result of a combination or series of processes, whereby a variety of inputs come together to create one or more outputs. A process is therefore an added value transformation of input to output. It is the interlinking of basic processes which make up the complex systems of production.

The benefits of this are:

• It encourages focus on optimisation of the whole process, not just individual elements. Local optimisation could lead to imbalance or  bottlenecks.
• It forces a customer focus – recognition of unnecessary complexity: which steps add little value (concept of waste in LEAN) - VSM
• It recognises the role of suppliers and the importance of up-stream prevention not down-stream detection (define terms)
• It promotes standardisation around best practice – again a lean concept

A couple of quotes from Deming summarise this concept nicely, he said that:

1/ If you can’t describe what you are doing as a process, you don’t know what you’re doing.

He also said that:

2/ We should work on the process, not the outcome of the processes.

By this he meant that the output from a process is dependent on the process itself and you need data to be able to successfully change the process.

Systems are several processes joined together. A system must have an aim and it must be managed. To manage the system, again, you need data.

However, processes will vary and because of this the output from any system will fluctuate. This leads onto the second concept of statistical thinking:

Each process in a system has variation in it. Like it or not, variation is everywhere:

• Journey time to work
• Quantity of products rejected
• Departure time of your plane

I’m sure you can think of several more examples?

All variation is caused. Variation is a natural phenomenon, it is everywhere, and because of this it can be quite difficult to say precisely what might be the cause of any particular example of variability.

All processes will be subject to variation in performance; no two outputs will ever be exactly the same. The overall variation is caused by variation within the process due to variation in people, materials, methods, equipment and environment. To regulate or improve a process we must understand the cause of variation. This does not mean that we need to measure the variation caused by every possible source; but we do need to know about the possible sources and understand which of them contributes most significantly to the output.

In any process there will be many (individually) small causes of variation which combine to produce a predictable degree of variation which remains reasonably constant over time, provided nothing arbitrarily changes the process (for example; traffic density affecting the journey time to work).

There may also be present significant “assignable” causes of variation. These are not usually a planned part of the process but which cause significant shift in process variation when they occur. Their occurrence can usually be “assigned” to something special occurring (for example, running out of petrol affecting the journey time to work).

All causes of variation therefore fall into two categories; those which are assignable (special cause variation) and those which are common to the system (common cause variation). Knowing this, helps in a very specific way because each requires a different reaction.

Any process may reveal both types of variation from time to time. For example, material quality will vary within a batch or from batch to batch from a single supplier. Hopefully, this will be controlled common cause variation which does not have a significant impact. However, variation in material quality from supplier to supplier may be much more significant and have a more marked effect on product quality. Changing supplier may therefore cause special cause variation. This decreases process reliability and predictability, and is one reason why “Single Source Supply” arrangements have increases in popularity over the last decade.

So, the third concept of statistical thinking is:

Understanding and reducing variation requires an understanding and appropriate use of statistical tools.

For example, statistical process control or run charts.

These help you eliminate special causes or unusual types of variation first then reduce common or expected variation.

They also help you to anticipate variation by designing robust products and processes in the first place.

The more certain we are about the way that people, equipment, methods and materials perform, the more accurately we can plan, manage and operate.

The idea of uncertainty about the performance of people, methods, materials and equipment might be little hard to grasp, it is perhaps better expressed as the predictability of processes.

If we are fairly certain about how a process performs, then we can predict its performance. Every process is subject to variation. No process is absolutely predictable, but the performance of any reasonably reliable process can be predicted within limits, provided nothing interferes arbitrarily with the process.

The first issue then, is the extent of these limits (i.e. the Process variation), because the narrower they are, the more predictable the process is. Reducing process variation increases profit.

Here are some simple equations which summarise what statistical thinking is all about are:

• Greater Process Variation = Greater Uncertainty = More Waste
• Lesser Process Variation = Greater Certainty = Less Waste

Which would you prefer?

Some great links to I’ve spotted:

openlearn is an opportunity for informal study – in your own time access materials in areas familiar or new to you, without the pressure of keeping to a timetable or sitting exams. Instead, assess your own progress by keeping an online learning journal, discussing the topics with other online learners in forums and completing self assessment exercises where you control when the answer is revealed. While openlearn isn’t exactly the same as studying at University, it gives real learning experiences taken from degree courses – and for free! Here’s the link to the Statistics section:

The next two links take you to pdf files which provide an overview of variation and also how the understanding of variation has evolved.

Enjoy!

photo credit: I, Timmy

Invasive plant and animal species have a habit of wreaking havoc on native biodiversity just like big supermarket chains, which share many of the same characteristics. They have few real predators, are exceptionally hardy, and exist on a generalist diet by selling virtually everything. If you want diversity in your world, you have to manage for that outcome.

Weakly regulated markets give free rein to economic invasive species and hence tend towards monopoly. This is the great modern economic irony. Advocates of free markets argue against checks and balances to counter the power of big business, but, in doing so, ultimately destroy the possibility of markets that could meaningfully be called free. In some ways, we are returning to an earlier phase of corporatism. Henry Ford told customers they could have any colour of car, as long as it was black.

The same may eventually be true of shopping in Britain.

What you can do

The inexorable rise of supermarkets, particularly Tesco, is big news but have we taken on board what it really means for our daily lives? In this searing analysis Andrew Simms tackles a subject that none of us can afford to ignore.

Click here to buy Tescopoly: How One Shop Came Out on Top and Why It Matters

The Japanese have very different ways of conducting meetings or gaining consensus on an idea. This is termed Nemawashi and it is an informal process of talking to the people concerned, gathering support and feedback, so before a formal meeting starts, participants have already drawn conclusions regarding information to be presented at the meeting. The original meaning of the word is to smooth around roots before planting.

Whilst we may no be able to emulate this culture, we can use a methodology called Nominal Group Technique (NGT) to gain consensus; this is a structured method for group brainstorming that encourages contributions from everyone.

When should a team use NGT?
When a team needs to create a list of options and rank them, using NGT effectively neutralizes the domination of the loudest person, or the person with the most authority, over the decision-making process. This tool can also help a team achieve consensus about the relative importance of issues. The final result may not be everyone’s first priority, but they can live with it. NGT is a good tool to use when dealing with controversial or emotional issues, or when a group is stuck. It is particularly useful when you need to:

• Reduce the number of issues for easier handling.
• Get input from all team members.
• Rank items in priority order.

The process is outlined as follows:

• State the subject of the brainstorming. Clarify the statement as needed until everyone understands it.
• Each team member silently thinks of and writes down as many ideas as possible in a set period of time (5 to 10 minutes).
• Each member in turn states aloud one idea. Facilitator records it on the flipchart.
• No discussion is allowed, not even questions for clarification.
• Ideas given do not need to be from the team member’s written list. Indeed, as time goes on, many ideas will not be.
• A member may “pass” his or her turn, and may then add an idea on a subsequent turn.
• Continue around the group until all members pass or for an agreed-upon length of time.
• Discuss each idea in turn. Wording may be changed only when the idea’s originator agrees. Ideas may be stricken from the list only by unanimous agreement. Discussion may clarify meaning, explain logic or analysis, raise and answer questions, or state agreement or disagreement.
• Prioritize the ideas using multivoting or list reduction.

Example

A team is struggling with some problems in the workplace. The members identified the following issues:

A. Ineffective organizational structure
B. Poor communications outside the office
C. Lack of training
D. Poor communications within the office
E. Unclear mission and objectives
F. Poor distribution of office mail
G. Lack of feedback on reports to management

The team has some opinionated members who think they know the most important problem. Several team members, however, are not vocalizing their position. You decide to use NGT to prioritize the issues.

Each team member writes the letters A through G on a piece of paper. Then, each member ranks each issue from 1 to 7 (with the most important receiving 7 and the least important receiving 1), using each number only once.

Using NGT, the issues were prioritized as shown below. The issue the team will tackle first is item E, unclear mission and objectives.

Have you had experience in using NGT? Post a comment below ….

Occam’s razor is a principle attributed to the 14th century logician and Franciscan friar; William of Occam. The principle states that “Entities should not be multiplied unnecessarily.” It’s sometimes written as: “when you have two competing theories which make exactly the same predictions, the one that is simpler is the better.”

Lean projects are complex, and everything from a lack of funds, to a lack of staffing, to a lack of time and focus can be blamed for failures. Nevertheless, striving for the simplest possible solutions in a project is one of the drivers of success. Consider this example:

It is one of the largest computing projects on the planet, arguably employing more computers than any other single, fully managed system (we’re not counting distributed computing projects here), some 200 computer science PhDs, and 600 other computer scientists.And it is all hidden behind a deceptively simple, white, Web page that contains a single one-line text box and a button that says Google Search.

The quote above shows that although achieving simplicity is difficult ultimately simplicity leads to a greater chance of success. In fact, lean is all down to that basic adage – KISS (or Keep It Simple, Stupid). It is very easy to be carried away with all the jargon surrounding Lean and Agile, MRP and JIT, kaizen and kaikaku and on the surface, TPS appears simple. It can be explained with the kind of homilies that companies like to laminate on three-by-five cards: Maximize flow, eliminate waste, respect people, etc. But while TPS in concept isn’t complicated, its implementation and coordination require blood, sweat, and tears. In the end, simplicity: the rigorous application of Occam’s Razor in all of our lean activities leads to excellence in what we do!

hot executive

“The nail that sticks up gets hammered down,” is a common refrain in Japanese business. So it is pleasing to report the success of a business leader who breaks the mould. Young, dynamic and clever, Kosaku Shima is not afraid to push aside old conservatives. He disdains corporate politics and promotes people based on merit rather than seniority. He can make mistakes, but he is wildly popular among Japan’s “salarymen” and, in June, he was given the top job at one of the country’s biggest firms. Mr Shima has only one serious shortcoming: he is not a real person, but a manga cartoon character. For many critics of Japan, that says it all. In the real world, few in business say what they think because “it might disrupt the harmony or be seen as immodest”; and most rely on consensus to make decisions. The result is a culture with little risk-taking or initiative, in which decisions are made slowly, if at all.

Kosaku Shima is an inspiration. Japan would be transformed if more learned to emulate him.

Flat Earth: The History of an Infamous Idea by by Christine Garwood

Up until 1492, when Columbus sailed the ocean blue, everyone thought the Earth was flat. Since then, we’ve all known better. In fact, it didn’t happen like that at all, as Christine Garwood demonstrates in Flat Earth: The History of an Infamous Idea. The Ancient Greeks knew that the earth was round: Pythagoras established it back in the 6th century BC, and his view was the orthodoxy among Christian thinkers. Oddly enough, the flat Earth theory only took hold again in the 19th century, revived by one Samuel Birley Rowbotham of Stockport, a radical socialist, quack doctor and nutter who toured Britain arguing that the earth was a stationary disc, that the sun was 400 miles from London, and that humans only age because we ingest too much phosphate and sulphate of lime.

Garwood is at her strongest when she examines the 19th century’s intellectual warfare between science and religion. The second half of Garwood’s book is an discusses various kinds of scientific and religious eccentricity: the hellfire fundamentalist Wilbur Glenn Voliva, for instance, who built the flat-Earthist haven at Zion City in Illinois; and more recent proponents who took on the task of defending their beliefs during the Space Age.

As the scientific view of the world has become ever more powerful and less accessible, such ideas have in fact maintained their appeal: 1 in 5 Americans believe Sun revolves around the Earth!!

Click here to buy - Flat Earth: The History of an Infamous Idea

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