In the search for answers to the question of inconsistent performance of people and organizations, we can also go back to Deming: “The most important things cannot be measured.” This quote couldn’t be more appropriate than in this discussion. The system of Profound Knowledge has four parts, all of which revolve around people and the potential for variation:
•Appreciation of a system: understanding the overall processes involving suppliers, producers and customers (or recipients) of goods and services
•Knowledge of variation: the range and causes of variation in quality, and use of statistical sampling in measurements
•Theory of knowledge: the concepts explaining knowledge and the limits of what can be known
•Knowledge of psychology: concepts of human nature
Whatever your culture, you will get the results (people variation) the system delivers (good or bad) and not necessarily what is desired or expected. People variation, just as in process variation, requires data and root cause analysis to discover solutions and increase process conformity. If you want to address people variation, “There is no substitute for knowledge” (W. Edwards Deming), and you have to go look for the truth. At a minimum, there must be an effective Performance Management Plan (PMP) that serves to align activities against business vision and strategy. James Womack and Daniel Jones report in “Lean Thinking” several reasons why people perform best when they feel good about what they are doing:
•There are clear objectives
•Concentration is so intense that there is no attention left over
•There is clear and immediate feedback on progress toward the objective
•There is a sense of challenge where skills are adequate, but just adequate, to cope with the task at hand
Here are four tips for reducing variability in your operations:
1) Standardize materials and sourcing. That was the first lesson I documented as a quality manager in the steel industry. Our vice president of purchasing was convinced that he could chase low prices to get profitability. However, those low prices brought us non-conforming material, huge in-process rejections and suspicion about the status of material that passed inspection (not to mention short or late deliveries—or heroics to expedite replacement material, which increased costs).
Failure to standardize sourcing exposes your processes to the full range of global variation. Lock in on a supplier and reduce your variation, risk and costs.
2) Standardize work to reduce in-process variation. I was once involved in an investigation for an automotive supplier who blamed the steel for “poor machinability.” It was a truckload, round-the-clock, running-on-multiple-machines business.
The fact that our steel ran above rate on five of the machines was conveniently ignored by the customer. He was fixated on the four machines that were running below plan.
An examination of the control charts, tool replacement records and drill grinds on the four underperforming machines (compared with the five machines that were achieving plan) showed major differences. The variations cost the customer a production shortfall on four machines times three shifts. It wasn’t the steel.
3) Standardize gaging. This is actually a subset of “Standardize work.” Let’s go back to that chucker job. If there are multiple ways to gage the part on the bench—say, an assortment of mikes and calipers—the decision over which gaging method to use could cost the operator a second or two for each part. That means fewer parts per shift, thus increasing the cost per part.
4) Do not be seduced by “low cost” or “magic solutions.” Remember: consistency is the goal. How does throwing more variation into your operations improve consistency?
Alternative materials, tools or methods should be proved by testing before being adopted in the shop. Failure to control the self-inflicted variability of “new,” “cheaper” or “magic” improvements has increased shops’ costs far more than the routine normal variability of an existing source.
Careful experiments can be an important way to discover better processes. But, reckless adoption of unproven inputs will assure increased variation, increased costs and missed deliveries.
“Variation” is a synonym for risk, increased cost, missed deliveries and loss of customer confidence. Variation can require you or your customer to increase order quantities and order frequencies, only to dramatically cause those orders to be cancelled.
How do you intelligently manage risk? By intelligently reducing variation.
