Lean Training

COMPETITIVE KNOWLEDGE NEWSLETTER

Let's get to it,

The quality and speed by which we manage information integrity provides a significant influence on our manufacturing environment. What information is critical? Drawings, blueprints, specifications, product definition, configuration 
management, work instructions, bills-of-material, purchase orders, work orders, shop order control, inventory records, lead times, system parameters, accounts payable, accounts receivable, sales orders, order entry---need I go on? Only through the execution of aggressive information integrity and continuous improvement programs will manufacturing environments be free of shop floor chaos and the end-of-the-month crunch.

Our lead article is entitled "Infotegrity." It presents a case for information integrity and how important it is in a company's pursuit of world-class manufacturing. Be sure to share it with all your manufacturing people---it can raise their day-to-day performance to the next higher level. 

How many times have you heard, "If only they'd use their common sense?" Well, if you're interested in a guideline to applying common sense, check out the article on "How to think simply and with common sense."

Job commitment is a key personal asset in a person's pursuit of career advancement. How important it is is the subject of our third article, "Commit Fully to Your Job." If career advancement is an important objective in your 
personal success plan, don't miss this article.

During my weekend research, I ran across an interesting book, "The Dance of Change" that identified 10 "limiting processes" that can keep a corporation change effort from taking root and sprouting to its full potential. If you're 
experiencing difficulties implementing change within your company, this article could help you identify the problem. 

Start your New Year educational program by attending our next seminar on "Kaizen Based Manufacturing." It is scheduled for January 17-18, 2001 at the Harborsite Hyatt Conference Center in Boston, MA. If you can't get away, 
you can still purchase our e-learning tutorial, "Kaizen Based Manufacturing." If you order prior to year-end, we'll honor the $395 introductory price. To check it out, go to our Website at: www.BBasicsLLC.com and click on "KBLM Tutorial"

We suggest that you both print and archive this newsletter for current and future reference. Feel free to make copies and share with colleagues.

This newsletter has reached your desk because we share a common objective -- to help key manufacturing people avoid "burnout" while achieving their full performance potential.

Enjoy,

Bill Gaw, President
Business Basics, LLC
BBasicsLLC.com
760.930.1973 

Competitive Knowledge Newsletter - December 2000

Featured in This Month's Edition of CKN

I.    Infotegrity
II.   How to Think Simply and With Common Sense
III.  Commit Fully to Your Job
IV. The Challenges of Change
V. Business Anecdotes and Famous Quotations

Lean Training for winners. 

I. Infotegrity
   By Bill Gaw

Manufacturing objectives cannot be achieved when inaccurate, untimely and uncontrolled data and/or documentation drive day-to-day production and manufacturing control systems. If your company is typical, you'll find that converting the monthly financial forecast into reality still requires overtime, costly expediting, expensive "on-the-run" product changes and even a little "smoke and mirrors." With all the available sophisticated computerized systems, why is this so?

The answer lies in what's missing and has nothing to do with the quality of the system designs. Like Vince Lombardi, who focused his team on the mastering of football basics - we need to focus our teams on the mastering of business basics. There are Eight-Basics of Kaizen Based Manufacturing, but when it comes to improving systems performance, "Information Integrity" 
is the most important. We call it KBM Basic #001, "Infotegrity"---the ability to communicate data and documentation completely, accurately and in a timely 
manner. Like blocking and tackling in football, it's not glamorous and few want to do it - but without tenacious and flawless continuous improvement and execution, manufacturing performance can never be optimized. 

Infotegrity is crucial to computerized master scheduling and MRP computations. Excessive MRP rescheduling of released orders is costly and disruptive and is usually driven by poor input data. To improve the quality of MRP "rescheduling" messages, one materials manager focused on improving the integrity of MRP inputs. She reduced the frequency of their MRP "regeneration" and implemented a mandatory weekly review/purge/reset of 
all purchase and production "open" order status. The results were amazing; reschedule messages were reduced by 85% and her planner/buyers gained time to do additional proactive parameter maintenance. Because of increased scheduling stability, there was a significant improvement in both supplier and factory on-time deliveries. 

A good example of the importance of Infotegrity is the "eye-opening" result of the cumulative effect of data inputs in a computerized order release and scheduling system such as MRP. There are at least ten data input files that 
drive such systems with data accuracy indexes varying between 90% and 100%. Statistically, their cumulative effect (the product of their values) could yield a devastating order release accuracy of 68.2%. That translates into a 
cumulative 31.8% error rate in the order release and scheduling process, (see relevant slide on the reverse side of bulletin). In spite of this huge constraint, American ingenuity and energy still gets the job done - but at what cost?

Although many business gurus have identified data accuracy as important in the implementation of computerized systems, their message has been lost in the mania of systems sophistication. To remain competitive in the future, 
manufacturers must improve the results gained from their business systems investments - to do this, the fine-tuning of Infotegrity is a "must do." How does a company accomplish this task? Here are a few challenges:

• Simplify databases - making it easy and routine to keepdata correct and up to date
• "Bulletproof" system parameter maintenance - helping to eliminate mistakes
• Streamline and discipline the product documentation process - doing it right the first time
• Real time auditing and corrective actions - keeping information current and correct
• Employ the right tools - bar coding, back-flushing, EDI and the Internet
• Establish the right mindset - the quality of decision-making 
  is dependent on Infotegrity

Competition is getting tougher and tougher as each year passes. If we don't want our competitors to close in on our markets, we need to continuously improve product/service quality, increase productivity, lower costs and increase speed of new product introductions. To maintain ones competitive edge into the future, management's focus must be shifted from systems sophistication to systems Infotegrity. In short, its time to put the "horse before the cart." Information Integrity is no panacea, however, we're convinced that a company with simple, unsophisticated systems and 
a high level of Infotegrity will outperform a company that has sophisticated systems and low Infotegrity. What about those companies that have both? We buy their stock!

Lean Training for winners. 

II. How to Think Simply and With Common Sense
    By Jack Trout with Steve Rivkin

To think simply and with common sense, start by following three guidelines:

1. Get your ego out of the situation. Good judgment is based on reality. The more you screen things through your ego, the farther you get from reality.
2. Avoid wishful thinking. We all want things to go a certain way, but in many cases we can't control the outcome. Good common sense tends to be in tune with the way things are really going.
3. Get better at listening. By definition, common sense is based on what others think: It's thinking that is common to many people. If you don't pay attention to others, you shut yourself off from common sense. 

Lean Training for winners. 

III. Commit Fully to Your Job
     By Price Pritchett

Expect your employer to expect more from you. The reason? The marketplace is demanding far more these days from the organization itself.

Clients and customers want much better quality than before. They expect topnotch service, too, or they'll take their business to your competitors. Speed is also essential, because people have gotten used to instant everything. Frankly, the only way your organization can even hope to compete is to employ high performance people.

In times past, the common solution to problems was only to hire more employees. Spend more money. But companies can't afford that approach any more. Instead of simply throwing more people at problems, organizations now throw fewer. They have to do more---faster and better--- with less. This calls for highly committed people.

There's no room now for employees who mainly put in their time, going through the motions but giving only halfhearted effort. The people who seemed to keep their jobs merely because they could "fog the mirror" are goners.

In today's world, career success belongs to the committed. To those who work from the heart…who invest themselves passionately in their jobs…and who recommit quickly when change reshapes their work. 

If you find you can't commit rapidly when the company changes, you probably should quit. Get out of there. Don't waste your energy resisting change, and don't kill precious time sitting on the fence. Either buy in, or be on your way, because that's best for both you and your employer.

Lean Training for winners. 

IV. The Challenges of Change

Peter Senge and associates in the book, "The Dance of Change" identifies 10 "limiting processes," that can keep a corporate change effort from taking root and sprouting to its full potential.

1. "We don't have enough time!" People involved in change initiatives need enough flexibility and control over their own time and priorities. 
2. "We have no help!" People initiating a change need coherent coaching, guidance, and support.
3. "This stuff isn't relevant!" People need to understand clearly why the change is essential to the achievement of business goals.
4. "They're not walking the talk!" The behavior of management must be in sync with the new values.

The next three challenges arise when a team makes some progress and then must sustain a change:

5. "This stuff is a waste of time!" Fear and anxiety naturally escalate within the team if trust is low among team members.
6. "This stuff isn't working!" When the company's traditional ways of measuring success conflict with the team's achievements, the progress will be hard to see.
7. "We have the right way!" When the "true believers" on the team confront the "nonbelievers" outside the group, arrogance and misunderstandings occur.

The last set of challenges involve redesigning and rethinking.

8. "Who's in charge of this stuff?" Conflict erupts as the team struggles for greater autonomy and the managers refuse to give up control, fearing chaos.
9. "We keep reinventing the wheel!" When the new knowledge fails to cross-organizational boundaries, teams are unable to build upon each other's success.
10. "What are we here for?" The pilot group's success leads them to question the value of the company's current strategy and purpose.

For any executive leader, local line leader, network leader (and, yes, even a "heroic CEO") who is interested in making a profound change at his or her company, the first step is to learn. And the way to start learning is by reading the sections of The Dance of Change that are most relevant to you and to your company. In this way, you can plant the seeds that will grow into a learning organization.

Lean Training for winners. 

VI. Business Anecdotes and Famous Quotes 

Make sure you know who your employees are---and what they do.

Russell Baker, while the New York Times correspondent on Capitol Hill in early 1961, was emerging from the Senate when he was collared by Vice President Lyndon Johnson. Johnson exclaimed, "You. I've been looking for you," and pulled him into his office. Johnson embarked on a monologue concerning Baker's insider position and importance within the Kennedy administration. While talking, he scribbled on a piece of paper and buzzed for his secretary. She took the paper, left the room, soon reappeared, and returned the paper to him. Johnson, still talking, glanced at the paper, crumpled it, and threw it away. Later Baker learned what Johnson had written: "Who is this I'm talking to?"

- - - Adapted from The Ultimate Reference Book: The Wit's Thesaurus

"Faster, in almost every case, is better. From decision making to deal making to communication to product introduction, speed, more often than not, ends up being the competitive differentiator."

- - - Jack Welch, Past CEO, General Electric

The obvious answer.

"The question, 'who ought to be boss?' is like asking 'Who ought to be the tenor in the quartet?' Obviously, the man who can sing tenor." 

- - - Henry Ford

Business Is an Adventure.

"I like business because it is competitive, because it rewards deeds rather than words. I like business because it compels earnestness and does not permit me to neglect today's task while thinking about tomorrow. I like 
business because it undertakes to please, not reform; because it is honestly selfish, thereby avoiding hypocrisy and sentimentality. I like business because it promptly penalizes mistakes, shiftlessness and inefficiency, while 
rewarding well those who give it the best they have in them. Lastly, I like business because each day is a fresh adventure." 

- - - R. H. Cabell

Lean Training for winners.