I was listening to a team report out a few days ago, and the team leader mentioned “MSA.” The plant manager asked what MSA is, and the team leader replied, “Measurement System Analysis.” At the same time she was speaking, several other managers chimed in, saying almost in unison, “Gauge R&R.”

Although it is heartening to see our clients become more versed in the language of LeanSigma and gain understanding that measurement systems are crucial to supplying good data, I feel compelled to continue to emphasize that Measurement Systems Analysis is usually much more involved than just Gauge R&R.  Most measurement systems consist of at least four (and oftentimes five) major components:

1. Opportunity to measure. Different processes have different levels of inspection. If you use a sampling plan, is it carried out at the frequency required? If you are doing visual inspections, is the appraiser always available when needed? Is there sufficient time granted to evaluate the product?
2. Ability to detect. Are the appraisers who evaluate the product correctly trained to detect suspect product? Do the surroundings (lighting, location of the appraisers, etc.) create the best atmosphere for detecting defects? (Attribute agreement analysis is required sometimes along with a standard Gauge R&R to truly understand the “system” component of MSA.)
3. Sample preparation. Many items to be measured or evaluated for acceptability to standards must be prepared prior to the evaluation. Is this done in a consistent manner? Or is sample preparation rather than actual measurement causing variation to appear in your data?
4. Defect classification or physical measurement. Do all appraisers evaluate the defective product the same way? If a customer is willing to accept “minor depressions” but not “dents,” is there an objective way for your appraisers to discern between the two? If you are using a gauge, can an appraiser repeat his own results or reproduce the results of another appraiser?
5. Data recording. How does the measurement or assessment of the process or product get into the form that you call data? Is information collected on forms and later entered into a system? Is non-conforming product set aside, to later be counted as defective? Does data get collected as part of your process? If so, is it in a usable format to help make process-related decisions?

Each of these components is subject to some amount of variation, and it all adds up to variation in your data. My teams have found that one of the best ways to understand the measurement system, rather than just jumping straight into the Gauge R&R or attribute agreement analysis, is to observe all the parts of the process and make a business process map that starts with the product being produced and ends with the data being extracted from where it resides. As the map unfolds and all of the decision points are generated, the team now has defined areas to investigate to make sure that all of the elements of the system, not just the measuring piece, are well defined and going to lead to a consistent result.  After all, as we move toward making data-driven decisions, the most important thing we can have is data we can trust.

Jidoka is a Japanese word without a simple English translation. It has two primary meanings. One relates to autonomation, the practice of separating the operator from the machine for higher quality output and more productive work. The second relates to how managers respond to abnormalities and implement countermeasures.

Even though jidoka is one of the pillars of the lean production system, very few managers truly understand the importance of this concept. Even fewer put the principle to work in their operations. This blog post will explore the abnormality management aspect of jidoka at a medical device company and the impact that it had on the culture and the business.

Making quality a priority
Abnormality management strives to minimize the time between when an issue occurs, when root causes are identified, and corrective actions are implemented. At this medical device company, like many organizations, abnormalities would occur in manufacturing and it would take hours and sometimes even days for anyone to respond. Supervisors would call the support groups only to be told that they were busy with other priorities.

Today, that kind of we’ll-get-to-it-when-we-get-to-it response is no longer acceptable. Every manufacturing cell in the company is now equipped with andon lights. When the lights are triggered by operators, someone from the quality department responds within minutes.

Working with the operators, the quality people quickly establish root causes if possible, and implement temporary or permanent countermeasures. They track and discuss these non-conformance issues, and document improvement actions in kaizen newspapers for each cell. Management reviews these regularly during daily muda walkabouts.

Such behavior is one aspect of the lean management system that the jidoka methodology instills. To change the culture of an organization, as this example illustrates, managers must communicate the way they want people to behave, provide the necessary training, and then do everything possible to reinforce that behavior.
As a result of these changes in behavior and the management culture, nonconformance from the assembly line declined by 80 percent. First-pass yield at the end of the line improved by 50 percent, and productivity improved significantly as well.

Such dramatic and impressive results were impossible for anyone at the company to ignore or resist. The rapid response abnormality management approach has since been deployed across the entire site and at other company locations as well.

For another example of how changes in management behavior and expectations can dramatically and rapidly change the culture of an organization, see John Shook’s article in the MIT Sloan Management Review, which describes his experience during the startup of NUMMI.

When lean process improvement activities move beyond production and distribution operations, and into transactional areas, it’s a great time for companies to abandon artificial market segments and set up end-to-end value streams that encompass all aspects of an enterprise.

Organized according to the specific set of values being sought by a group of customers, end-to-end value streams should include product development and commercialization, marketing and sales, fulfillment, and after-market service. When set up this way each value stream is more tuned in to customer needs than a functional or product-oriented sales and fulfillment organization. The company will then be able to develop, commercialize, and deliver new products and services to each customer segment in a short period of time with greatest efficiency.

How many end-to-end value streams should a company have? And how should they be defined?

Many companies have pseudo-value streams based on functional hierarchies, how products are made or artificial market segments. An electronics manufacturing company, for example, may be organized based on technology level. Lower-level technology products may move through a consumer channel, and higher level products will be sold through a commercial channel. Many companies have separate organizations that serve the public sector and the private sector. Such structures don’t provide optimum service levels for customers.

End-to-end value streams can be delineated based on the specific combination of values that customers want. Customers today, especially large corporate customers, don’t just want products. They want fully integrated solutions. These solutions usually require a combination of product types along with configuration, installation and after-market service.   Private firms and public sector organizations may have a very similar set of product and service requirements that can be most efficiently served by one value stream.

To determine how many different values steams an enterprise should have, managers must examine the different sets of values (or integrated solutions) that their customers are looking for. A spreadsheet like the one below can help the management team figure that out.  In the next blog post, we will explore more of the benefits of end-to-end value stream management.

In this age of increasing environmental awareness, green is good, right?

Sure it is. But what if you’re a CEO struggling to shake off a global economic crisis and your shareholders are clamoring for a return?

In these challenging circumstances, going green may appear very unfriendly to business indeed.

That’s because when it comes to environmental compliancy, the Australian government insists on over-regulation. And all those limits, directives and codes of conduct say one thing to a CEO – how much do I have to spend?

Regulations and operating codes might be helpful to auditors, but their presence assumes the audit body knows business better than business does – which is rarely the case.

No, for a true green revolution to occur, government needs to keep promoting sustainability but step back and let business find the solutions.

For decades, we’ve have been competing for sales growth and profitability by responding to consumer demand. Now consumers everywhere are sold on sustainability and we must respond to that, too.

All we need is the freedom to do so.

Innovation is what businesses do best. If we don’t innovate, we die. And that fact is a far better incentive than any kind of heavy-handed stick-wielding by the state.

Prime Minister Kevin Rudd recently issued an impending doom kind of warning about our aging population, calling upon Australians to “work smarter and more efficiently” if we want to retain the standard of living we’re used to.

Predictably, knee-jerk respondents are looking for someone or something to blame for the statistical fact Mr Rudd has brought to light. How did it get to this, the critics decry. It must be the government’s poor budget management and lack of immigration control, or the prime minister’s failure to relax health and safety regulations.

Utter nonsense.

It is the natural desire of Australian citizens to pursue long, healthy lives that has driven increased demand for healthcare services and brought us to this point.

The good news is that as a result of our industries’ marvellous responses, we’ll get to live longer. This sounds like a good deal to me! I relish the thought of medical innovators giving me the opportunity to torment my siblings at age 150!

It’s also true, however, that you don’t get something for nothing. The value of living and the cost of living have to balance out. My father (he’s 79, by the way) has drilled this into my consciousness my whole adult life.

Mr Rudd’s government must look into the future and work to prevent the next generation being tipped into a financial hole from which it cannot emerge. And there seems little doubt that we ordinary folk have a role to play, too, by being innovative in the face of the painful change that is now inevitable.

Suddenly Mr Rudd’s idea of “working smarter” doesn’t seem so bad after all. He’s asking us to do more with less — one of the foundations of lean methodology and a step towards a balanced and sustainable economy.

If that’s too painful a reality, we could always stop valuing our older generations, or even export them. How’s that for progress?