This month Paul Borawski (CEO of ASQ) has asked the ASQ Influential Voices to share their thoughts on the Intersection of Quality and Social Responsibility.
An understanding of system thinking allows people to see the relationships of connected elements in a system. As you gain the insight provided by such knowledge, the ignorance of connections seems odd. It is hard to have an appreciation for systems thinking and not appreciate the fundamental interconnection between people, corporations and society.
Respect for people is another management principle that extends to social responsibility. Some companies may see respect for people as only respect for workers but a wiser approach is to view it as respect for all people (as Deming, Toyota, Patagonia and many others do).
Society makes the rules for how we live together. Corporations are allowed because society decided there was a benefit to society to allow them. One can argue the benefit to society is entirely independent of social responsibility. That by ignoring the reason they are allowed to exist will result in that aim being just as affective as if ignore the aim. This isn’t what any quality management flavor I know of would suggest.
In the time of the robber barons in the 19th century those leading corporations tried to make the claim that the business world was amoral (morality didn’t apply in that realm). As a society we rejected that assertion. Society has decided morality and ethics do apply to business leaders. Even if the business leaders themselves show a shocking failure to do so in practice (see the endless line of banking executive failures, etc.). The me first attitude of so many current CEO’s is passed onto those they work closely with. It is no wonder those people, that are suppose to be leading the organization, instead are just bleeding the organization for whatever they can get away with. That result is very likely when you fail to encourage systems thinking and respect for people (inside and outside the company).
There are many reasons for a corporation to be moral and practice social responsibility but the most important is that is it the ethical thing to do. In addition to that it will be effective. When you create a culture that treats the system as it doesn’t matter that is damaging. We currently do a bad job of systems thinking in general. Building an appreciation for systems thinking will provide great benefits.
Failing to address the health care crisis for decades because your next quarterly bonus won’t be increased by any efforts you make on that score has not helped us. The focus on going after easy payoffs from politicians may well help short term profit of corporations. But it leaves the world a worse place. That isn’t an acceptable way to behave. We have some CEO’s that are finally trying to push back against the broken health care system but far far too late. It has been obvious for decades the current USA health care system is a huge social and economic drain on society. But instead of dealing with it companies ignored the problem.
It is the same things as ignoring a broken machine that is costing you money in delayed production, using extra resources, customer complaints about defective products, having to replace defective products. Systems thinking also provides more focus on the long term. It is easy to ignore the health care crisis each quarter. The issue can be coped with for the quarter. When you look at the long term it is obviously a hugely critical, hugely costly area. It is complex and many aspects are outside the sphere of control of a corporation. That doesn’t mean it is outside the sphere of influence. It has been a huge problem and the continued failure of leaders to deal with it for decades has made the problem much more difficult to address – as often happens with problems you let grow instead of dealing with them early on.
When you understand systems thinking you know that the impacts of weak systems cost you – even if the direct costs are not obvious. Some times the direct costs become obvious (such as the massive costs today due to decades of failure with the health care system) but others are less so. What is the cost of the current educational system compared to what it could be? What is the cost of having over 2 million people locked up in prison? There are direct costs that can be calculated, but what about the other costs?
I agree completely with Dr. Deming word on page 51 of the New Economics:
Related: Purpose of an Organization – Samuel Adams Acts Like a Good Neighbor (founder says New Economics is his favorite book, by the way) – Why Pay Taxes or be Honest
Guest post by Evan Durant, author of the Kaizen Notebook blog.
I tend to get a little preachy about the importance of value stream maps, but they really can be useful tools not only to plan an improvement effort but also to monitor your progress going forward. In particular they provide a way to quantify the impact of changes to your process. Here’s a real life example as a case in point.
For a particular value stream a team went to gemba, followed the flow of material and information, collected process cycle times, and counted inventory. When everything was mapped and all the data tallied, here was the current state that they came up with:
| Total Lead Time: | 16.8 days | |
| Process Lead Time: | 2.2 days | |
| Process Time: | 1.9 days | |
| Operator Cycle Time: | 8.2 minutes |
So what does all this mean? First of all the Total Lead Time represents the amount of time that a new piece of raw material would take to enter the value stream, be worked on, wait around with all the rest of the material in process, and then finally make its way to the customer. This number is usually driven higher by large amounts of in-process inventory caused by pushing between operations.
Second, the Process Lead Time is the amount of time it would take to process a single batch through the process, if it didn’t have to wait behind any other batches. Note that even though parts are processed one at a time through all of the manual operations, a certain amount of batching is required to overcome long machine cycle times in automatic operations. Also we do not ship parts to the customer one at a time, but rather in standard package sizes.
Third, we have the Process Time. This is the total amount of value added time, manual and automatic processing, that a part sees in the value stream.
Finally the Operator Cycle Time (also called manual time) is the amount of actual “touch” time required to make a part. The difference between the Process Time and the Operator Cycle Time is the Machine Cycle Time (also called automatic time). This is when a batch of parts is on a machine that does not require any operator intervention during a cycle. (We have a lot of machine cycle time in this value stream.)
Then the team applied the concepts of flow and pull to reduce overproduction and pace the value stream to the rate of customer demand. The results of the future state map were as follows:
| Total Lead Time: | 9 days | |
| Process Lead Time: | 2.2 days | |
| Process Time: | 1.9 days | |
| Operator Cycle Time: | 8.2 minutes |
A pretty decent result: a 46% lead time reduction without making any changes to the actual process or to the batch size. This is the magic of demand-based pull in a value stream.
But here’s where it gets interesting. During implementation the team was considering increasing batch size in order to smooth out some issues with the new kanban system. Rather than speculate as to the impact of such a change (as might have been the case in the past) the team returned to the future state map, changed the batch size, and recomputed the timeline. Here’s what they came up with:
| Total Lead Time: | 9.9 days | |
| Process Lead Time: | 3.1 days | |
| Process Time: | 1.9 days | |
| Operator Cycle Time: | 8.2 minutes |
Now the team could see that making the change would result in almost a day of added lead time. (Pretty cool, huh?) And since the calculation for kanban quantity is basically (Lead Time x Daily Demand), they could figure the exact cost of the extra inventory that would be required. So were the benefits of the change worth the added cost in inventory and lead time? Maybe, but at least we could make an informed decision.
So the point is that value stream mapping shouldn’t be a one-time activity after which the maps are rolled up and archived somewhere never to be looked at again. The real value is in continuing to use them, keeping them updated, and looking for opportunities for continued improvement. It’s a journey. You need a good map.
Previous guest posts include: Where to Start Improvement by Dave Nave – One factor at a time (OFAT) Versus Factorial Designs by Bradley Jones – The Achilles’ Heel of Agile by Jurgen Appelo
The Curious Cat management carnival is published 3 times a month highlighting some recent management blog posts. The posts generally focus on the areas I have focused on in the Curious Cat Management Improvement Guide since 1996.
I added a page on our blog showing the most recent blog post from a large number of management blogs.
