The Goal: A Process of Ongoing Improvement (34 page)

"And what happened to you today?’’ I ask Julie, after I’ve told her the day’s events in detail.
"I spent some time in the library. Do you know that Socrates didn’t write anything? Socrates’ dialogues actually were written by his pupil, Plato. The librarian here is a very pleasant woman, I like her a lot. Anyhow, she recommended some of the dialogues and I’ve started to read them.’’
I can’t hold my surprise, "You read philosophy! What for, isn’t it boring?’’
She grins at me, "You were talking about the Socratic method as a method to persuade other people. I wouldn’t touch philosophy with a ten foot pole, but to learn a method to persuade my stubborn husband and kids—for that I’m willing to sweat.’’
"So you started to read philosophy,’’ I’m still trying to digest it.
"You make it sound like a punishment,’’ she laughs. "Alex, did you ever read the dialogues of Socrates?’’
"No.’’
"They’re not too bad. They’re actually written like stories. They’re quite interesting.’’
"How many have you read so far?’’ I ask.
"I’m still slaving on the first one,
Protagoras
.’’
"It’ll be interesting to hear your opinion tomorrow.’’ I say skeptically. "If it’s still positive, maybe I’ll read it, too.’’
"Yeah, when pigs fly,’’ she says. Before I can answer, she stands up, "Let’s hit the sack.’’
I yawn and join her.

We’re getting started a little late since Stacey and Bob have to deal with some problematic orders. I wonder what’s really happening; are we drifting back into trouble? Is Stacey’s warning about her Capacity Constraint Resources starting to materialize? She was concerned about any increase in sales and, for sure, sales are slowly but constantly on the rise. I dismiss these thoughts; it’s just the natural friction that should be expected when your material manager moves her responsibilities to her replacement. I decided not to interfere; if it evolves into something serious they won’t hesitate to tell me.

This is not going to be easy. We all are action-oriented and searching for basic procedures is almost against our nature, no matter how much Bob tells me that he’s been transformed.

So when, at last, they all take seats I remind them about the issue on the table. If we want the same movement that we’ve succeeded in starting here to happen in the entire division, we have to clarify for ourselves what we actually have done—in a generic sense. Repeating the specific actions won’t work. Not only are the plants very different from each other; how can one fight local efficiencies in sales, or cut batches in product design?

Stacey is the only one who has something to offer and her idea is simple. If Jonah forced us to start by asking, ‘what is the goal of the company’, Stacey suggests that we start by asking, ‘what is our goal’—not as individuals, but as managers.

We don’t like it. It’s too theoretical. Bob yawns, looks bored. Lou responds to my unspoken request and volunteers to play the game.

With a smile he says, "This is trivial. If the goal of our company is ‘to make more money now as well as in the future,’ then our job is to try and move our division to achieve that goal.’’

"Can you do it?’’ Stacey asks. "If the goal includes the word ‘more’, can we achieve the goal?’’
"I see what you mean,’’ Lou responds, still smiling. "No, of course we can’t achieve a goal that is open-ended. What we’ll have to do is to try and move the division toward that goal. And you are right, Stacey, it’s not a one-shot effort, we have to constantly strive toward it. Let me rephrase my initial answer.’’ And in his punctuating voice, emphasizing each word, he concludes, "A good job will be to start our division on a process of on-going improvement.’’
Turning to me, Stacey says, "You asked for an idea of how to tackle the subject? I think that we should proceed from here.’’ "How?’’ Donovan echoes the question that everybody is thinking.
"I don’t know,’’ is Stacey’s answer. When she sees Bob’s expression she says defensively, "I didn’t claim to have a breakthrough, just an idea.’’
"Thank you Stacey,’’ I say, and turning to the rest I point to the white board that nobody has bothered to erase yet. "We must admit that it is a different angle from the one we had so far.’’ We are stuck. Donovan’s question is certainly in place. So I try to gain some momentum by cleaning the board and writing in big letters "A process of on-going improvement.’’
It doesn’t help much. We sit in silence for a while staring at the board.
"Comments?’’ I ask at last. And, as expected, it’s Bob who voices everybody’s feeling.
"I’m sick and tired of these big words. Everywhere I go, I hear the same thing.’’ He stands up, goes to the board, and mimicking a first grade teacher he intones "A process ...of... on-going... improvement.’’
Sitting back down he adds, "Even if I wanted to forget it I can’t. Hilton Smyth’s memos are all spotted with this phrase. By the way Alex, these memos keep on coming, and more often than before. In the name of savings, at least saving paper, can’t you do something to stop it?’’
"In due time. But let’s keep at it. If nothing comes out of these discussions, then the only useful thing that I will be able to do as the division manager will be to stop some memos. Come on Bob, spit out your frustrations.’’
It doesn’t take much to encourage Bob to voice his true opinion. "Every plant in our company, has already launched at least four or five of those pain-in-the-neck improvement projects. If you ask me, they lead only to indigestion problems. You go down there, to the floor, and mention a new improvement project and you’ll see the response. People have already developed allergies to the phrase.’’
"So, what are you suggesting should be done?’’ I pour some more fuel on his flames.
"To do what we have done here,’’ he roars back. "We, here, have not done any of these. We have not launched even one formal improvement project. But look at what we have achieved. No talks, no big words, but if you ask me, what we’ve achieved here is the real thing.’’
"You’re right,’’ I try to calm the volcano that I have awakened. "But Bob, if we want to do the same in the entire division we must pinpoint what exactly the difference is between what we have done and what everyone else has tried to do.’’
"We haven’t launched so many improvement projects,’’ he says.
"That is not accurate,’’ Stacey responds. "We have taken many initiatives: in shop floor procedures, in measurements, in quality, in local processes, not to mention the changes that we have made in the way we release material to production.’’ Raising her hand to stop Bob from interrupting, she concludes: "True, we didn’t call them improvement projects, but I don’t believe the crucial difference is that we didn’t bother to title them.’’
"So why do you think we have succeeded where so many have failed?’’ I ask her.
"Simple,’’ Bob jumps in. "They talked, we did.’’
"Who is playing with words now,’’ I shut him off.
"I think that the key,’’ Stacey says in a thoughtful tone, "is in the different way we interpreted the word ‘improvement’.’’
"What do you mean?’’ I ask her.
"She is absolutely right!’’ Lou beams. "It’s all a matter of measurements.’’
"For an accountant,’’ Bob speaks to the room, "Everything is a matter of measurements.’’
Lou stands up and starts to pace the room. I rarely see him so excited.
We wait.
At last he turns to the board and writes:
THROUGHPUT INVENTORY OPERATING EXPENSE

Then he turns back to us and says, "Everywhere, improvement was interpreted as almost synonymous to cost savings. People are concentrating on reducing operating expenses as if it’s the most important measurement.’’

"Not even that,’’ Bob interrupts. "We were busy reducing costs that didn’t have any impact on reducing operating expenses.’’

"Correct,’’ Lou continues. "But the important thing is that we, in our plant, have switched to regard throughput as the most important measurement. Improvement for us is not so much to reduce costs but to increase throughput.’’

"You are right,’’ Stacey agrees. "The entire bottleneck concept is not geared to decrease operating expense, it’s focused on increasing throughput.’’

"What you are telling us,’’ I say slowly, trying to digest it, "is that we have switched the scale of importance.’’
"That’s precisely what it is,’’ Lou says. "In the past, cost was the most important, throughput was second, and inventory was a remote third.’’ Smiling at me he adds, "To the extent that we regarded it as assets. Our new scale is different. Throughput is most important, then inventory—due to its impact on throughput and only then, at the tail, comes operating expenses. And our numbers certainly confirm it,’’ Lou provides the evidence. "Throughput and inventory had changed by several tens of percent while operating expenses went down by less than two percent.’’
"This is a very important lesson,’’ I say. "What you claim is that we have moved from the ‘cost world’ into the ‘throughput world’.’’
After a minute of silence I continue, "You know what, it really highlights another problem. Changing the measurements’ scale of importance, moving from one world into another, is without a doubt a culture change. Let’s face it, that is exactly what we had to go through, a culture change. But how are we going to take the division through such a change?’’

I go to pour myself another cup of coffee. Bob joins me. "You know, Alex, something is still missing. I have the feeling that the entire approach we took was different.’’

"In what way?’’ I ask.
"I don’t know. But one thing I can tell you, we haven’t declared any improvement project, they grow from the need. Somehow it was always obvious what the next step should be.’’
"I guess so.’’
We spend good time. We bring up the actions we took and verify that each one actually has been guided by our new scale. Bob is very quiet until he jumps to his feet.
"I nailed the bastard!’’ he shouts, "I have it!’’
He goes to the board, grabs a marker and put a heavy circle around the word ‘improvement.’ "Process of on-going improvement,’’ he booms. "Lou and his fixation on measurements forced us to concentrate on the last word. Don’t you realize that the real sneaky SOB is the first one?’’ and he draws several circles around the word ‘process.’
"If Lou has a fixation about measurements,’’ I say somewhat irritated, "then you certainly have a fixation about processes. Let’s hope your fixation will turn up to be as useful as his.’’
"Sure thing, boss. I knew that the way we handled it was different. That it wasn’t just a matter of scales.’’
He returned to his seat still beaming.
"Do you care to elaborate?’’ Stacey inquires in a soft voice.
"You haven’t got it?’’ Bob is surprised.
"Neither did we.’’ We all looked perplexed.
He looks around and when he realizes that we are serious he asks, "What is a process? We all know. It’s a sequence of steps to be followed. Correct?’’
"Yes...’’
"So, will anybody tell me what the process is that we should follow? What is the process mentioned in our ‘process of on-going improvement’? Do you think that launching several improvement projects is a process? We haven’t done that, we have followed a process. That’s what we have done.’’
"He’s right,’’ says Ralph in his quiet voice.
I stand up and shake Bob’s hand. Everybody is smiling at him.
Then Lou asks, "What process have we followed?’’
Bob doesn’t hurry to answer. At last he says, "I don’t know, but we definitely followed a process.’’
To save embarrassment I hurriedly say, "Let’s find it. If we followed it, it shouldn’t be too difficult to find. Let’s think, what is the first thing we did?’’
Before anybody has a chance to answer Ralph says, "You know, these two things are connected.’’
"What things?’’
"In the ‘cost world’ as Alex called it, we are concerned primarily with cost. Cost is drained everywhere, everything cost us money. We had viewed our complex organization as if it were composed out of many links and each link is important to control.’’
"Will you please get to the point?’’ Bob asks impatiently.
"Let him talk,’’ Stacey is no less impatient.
Ralph ignores them both and calmly continues, "It’s like measuring a chain according to its weight. Every link is important. Of course, if the links are very different from each other then we use the principle of the twenty-eighty rule. Twenty percent of the variables are responsible for eighty percent of the result. The mere fact that we all know the Pareto principle shows us to what extent Lou is right, the extent to which we all were in the cost world.’’
Stacey puts her hand on Bob’s to prevent him from interfering.
"We recognize that the scale has to be changed,’’ Ralph continues. "We choose throughput as the most important measurement. Where do we achieve throughput? At each link? No. Only at the end of all operations. You see, Bob, deciding that throughput is number one is like changing from considering weight to considering strength.’’
"I don’t see a thing,’’ is Bob’s response.
Ralph doesn’t let go, "What determines the strength of a chain?’’ he asks Bob.
"The weakest link, wise guy.’’
"So if you want to improve the strength of the chain, what must your first step be?’’
"To find the weakest link. To identify the bottleneck!’’ Bob pats him on the back. "That’s it! What a guy!’’ And he pats him again.
Ralph looks a little bent, but he is glowing. As a matter of fact, we all are.
After that it was easy. Relatively easy. It wasn’t too long before the process was written clearly on the board:
STEP 1. Identify the system’s bottlenecks.
(After all it wasn’t too difficult to identify the oven and the NCX10 as the bottlenecks of the plant.) STEP 2. Decide how to exploit the bottlenecks.
(That was fun. Realizing that those machines should not take a lunch break, etc.)
STEP 3. Subordinate everything else to the above decision. (Making sure that everything marches to the tune of the constraints. The red and green tags.)
STEP 4. Elevate the system’s bottlenecks.
(Bringing back the old Zmegma, switching back to old, less "effective’’ routings. . . .)
STEP 5. If, in a previous step, a bottleneck has been broken go back to step 1.

I look at the board. It’s so simple. Plain common sense. I’m wondering, and not for the first time, how come we didn’t see it before, when Stacey speaks up.

"Bob is right, we certainly followed this process, and we cycled through it more than once—even the nature of the bottlenecks we had to deal with changed.’’

"What do you mean by the ‘nature of the bottlenecks?’’’ I ask.
"I mean a major change,’’ she says. "You know, something serious like the bottleneck changing from being a machine to being something totally different, like insufficient market demand. Each time that we’ve gone through this five-step cycle the nature of the bottleneck has changed. First the bottlenecks were the oven and the NCX10, then it was the material release system —remember the last time when Jonah was here?—then it was the market, and I’m afraid that very soon it’ll be back in production.’’
"You’re right,’’ I say. And then, "It’s a little odd to call the market or the system of material release a bottleneck. Why don’t we change the word, to...’’
"Constraint?’’ Stacey suggests.
We correct it on the board. Then we just sit there admiring our work.
"What am I going to do to continue the momentum?’’ I ask Julie.
"Never satisfied, huh?’’ and then she adds passionately, "Alex, why do you drive yourself so hard? Aren’t the five steps that you developed enough of an achievement for one day?’’