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Process and Operations / What is your excuse for not doing Root Cause Analysis?
« Last post by admin on November 04, 2015, 12:12:11 pm »
Most people know what is good for them. We know it is better to eat vegetables than cookies and chips. We know it is healthier to exercise than watch TV. How come the cookies and chips are flying off shelves while the veggies whither? How come the average person spends 20-some hours in front of the TV while we struggle to get one single hour of exercise in a week? The answer is that we don't do what is best for us. We more often do what we feel like and what is easy.

The same logic applies to plants and mills. For example, I know all of you who read this blog agrees that we should fix the root causes of problems rather than the symptoms. I also know that most of us don't fix the root causes of problems. We keep repairing breakdowns and patching problems with temporary solutions, year in and year out. How come? There are a million excuses, but none of those make any sense if we look at what is best for a company over a few years time. Let's look at the most common excuses.

There is no time for people to do root cause problem elimination.
This is a bit more complex than it may seem at first glance. Most companies are caught in a Catch-22 situation where there are so many breakdowns and no extra people to do root cause. In this situation, it is unlikely that root cause is the answer to the plant's problem! Why? Because people have no time to do root cause, they are too busy fixing problems, and there are usually so many obvious improvements to be done without doing a root cause analysis. Common examples are to improve alignment, basic lubrication, implement inspection rounds, implement basic planning and scheduling, etc.

Adding more people to solve the situation will, in many cases, just increase cost since people are used ineffectively due to poor planning and scheduling.

Most frontline people will recognize the problem. Unfortunately, top management often doesn't understand the problem, or it understands the problem but is pressured to perform a quick fix to the situation. Either way, the outcome is often to demand cost-cutting very quickly, which means cutting people (contractor first, then the in-house staff), which over the long term just amplifies the problems of being reactive.

The solution is, as mentioned above, usually to implement some basic reliability practices, which in turn will cut cost.

We have tried it, but root cause is too complicated and doesn't work as a practical tool.
It is common to see complicated and cumbersome root cause analysis methods that are supplied by advisors to industry. There are many documentation tools in RCA that can are very complicated. Also, consider that the more complicated the methods are, the more advising time is needed from consultants.

I am an advisor myself, so I can see how some people play that game. However, if you have had a bad experience with RCA, give it another try with a straight commonsense approach. I like to think our company has a very good methodology, but there are others that do a very good job as well.

People are not doing the analysis right.
Root cause analysis is not primarily about how problems are documented and what charts you use. It is about basic critical and creative thinking. The thinking concepts are easy, but they are hard for most of us to follow. It takes practice to become a good root cause analyst and critical thinker. Remember that most people form opinions based on very little information (poor critical thinking). If you ask random people how they, for example, researched what car to buy, decided who to hire or promote, what party to vote for, what to think about coal fuel vs. wind mills, or even what research was done to select their faith, you will understand that most people have spent their whole lives making decisions primarily on an emotional basis. Evaluating problems in you plant works the same way. We tend to rush our thinking and make decisions on an emotional basis rather than logical ones.

For example, if a pump is not pumping the required flow, then we decide to change the pump without further information. If a motor is running hot, let's change it out! If a bearing breaks down, it is a mechanical problem. These decisions are almost always taken without RCA and very often without any information at all about the actual problem.

My recommendation is to have patience with your peers and work on helping them to focus on facts and logic. The thinking patterns for most of us are deeply engrained. It requires practice and a good thinking methodology to break out of the patterns we are used to. And yes, it probably applies to you as well. I know it applies to me, even though I teach and perform root cause.

What do you think? Post your comments!!
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Process and Operations / Measuring Customer Engagement
« Last post by admin on November 04, 2015, 12:10:52 pm »
Measuring customer engagement

Customer engagement- loosely defined as measuring how much you customers adore you-grows as an indicator of success. Just how is it being measured?

Customer engagement is one of those seemingly squishy marketing concepts grown out of the social internet phenomena and Web 2.0, which has surprising precision and heft once you spend some time with it. In webland, the client who is engaged interacts with your site often and buys what you have to sell there; he or she may be opinionated and free to offer personal views, blog on the industry you serve, or otherwise spend quality personal time thinking about your company. In this sense, engagement is measured by metrics like click-through rate, duration of visit, and percentage of repeat visits.

In broader terms, the engaged customer is a pleased customer. (Although definitions differ on this, the engaged customer, according to Gallup, has an emotional attachment to the brand and generally incorporates it into his or her self concept.) He or she becomes a regular-and possibly an advocate.

Net promoter score examined
A loud and proud metric in this broader field of engagement analysis is the Net Promoter Score, which was developed by Fred Reichheld, founder of Bain's Loyalty Practice and the NPS Loyalty Forum, a community of practitioners.

Reichheld, who spoke at the recent Forrester Financial Services Forum in New York, offered a simple explanation of the score. "What we found was that the Golden Rule applied to business," he said. "‘Treat people the way you want to be treated' is not only an ethical way to operate, it can yield a payoff."

Customers who perceive that value in the product was enhanced by fair treatment and good service buy more. When a bank combines NPS information on loyalty with information on customer profitability and other segment data, according to Reichheld, the bank can glean insight about what's working and what isn't, supporting necessary strategic shifts. The score also lets a bank leverage its customer service and retail delivery spend to boost profits.

Important to banks
Having engaged and loyal customers is important to banks, which face a tough economy and, according to Forrester Research, have received the lowest Customer Advocacy Rankings in the five years that the firm began looking at it. "The subprime mortgage crisis and a sagging stock market has consumers feeling less confident about their financial position," says Bill Doyle, vice-president and principal analyst at Forrester Research. Banks that continue with status quo operations and a product focus will remain on shaky ground.

But, as bankers realize, even when the grass was greener and accounts had more green, many consumers were said to view retail banks as typically interchangeable and serving up of commodity fare. Leaders in the field-Wells Fargo and Wachovia come to mind-have gradually reworked operations to better enable awareness of the customer's perspective, in part, admittedly to make their cross-sales campaigns work. Yet, both have pushed to improve service issues via better channel integration, and generally, more consistent customer experiences across the channels.

In short, these and other leaders have tried to "be all they can be" for consumers, but loyalty isn't easy to come by. And perhaps this is why there is more attention being paid to measuring non-financial feedback from customers: those who manage to get it right-the process and the loyalty-will have something.

"Measuring factors like loyalty, customer engagement, and customer satisfaction is becoming a popular idea," says John McHugh, a New York-based managing partner, Financial Services CRM practice with Accenture. "You're beginning to see more dashboards being developed to, in effect, link customer service insights to other measures," he says. Banks, he explains have long known that happy customers are important to success, but only now is the industry in the first wave of formalizing how this intuitive truth translates into harder measures of success.

The space is still emerging, with multi-application "enterprise marketing vendors" such as Aprimo, Oracle, and Unica offering applications within their suites, and niche players such as CustomerSat, MountainView, Calif., People Metrics in Philadelphia, and Satmetrix, Foster City, Calif., offering score development. IBM, in recent years, has been working with a concept similar to NPS it calls a Customer Advocacy Framework, which helps bank customers refine behavior-based segments and steer strategy based on customer feedback. Gallup Consulting, with its HumanSigma methodology, is also seeking to render systematic the ways in which companies measure both employee performance and customer response to a given strategy.

Survey says...
Accenture recently released research based on work it did with Satmetrix, which bills itself as "the Net Promoter Company." The two companies did an internet-based query of 3,500 customers representing 16 banks. Accenture looked at loyalty and value creation measures such as: 1. a willingness to continue doing business with the bank; 2. likelihood of recommending bank; 3. likelihood of choosing to do business again with the bank, as well as 4. plan to purchase additional services; and 5. overall bank satisfaction.

Out of these, Accenture found that net promoter most strongly correlated with loyalty. And yet, among the group surveyed, only half indicated that they would recommend their institution to others.

Accenture isn't recommending that banks make indiscriminate improvements. "Of the highest performing banks on customer satisfaction scores, one quarter of that group indicated that what they spent on sales, service, and product delivery didn't resonate with their customers," McHugh explains. Said differently, of the total amount spent to make customers happy, 25% missed the mark and didn't result in organic growth.

Accenture's research suggests some customers aren't worth investing in, either because they are unlikely to leave, will leave anyway, or are not aligned with a target segment. The consultancy advises banks to align brand messages, experiences, and capabilities to meet certain segment objectives and use measures like NPS to make adjustments to the program.

As to how to use scores, McHugh advises that bank marketing teams pick a few metrics, stick with them over time, and supplement them with focus group research and other forms of frank discussions with clients. That's because scoring systems can be "gamed," as was openly acknowledged among advocates of NPS.

"If you are coaching your customers to give a certain score by, for example, ‘guilting' them into it, the way I saw an employee doing at one car rental agency, what you wind up with is meaningless," Reichheld said good naturedly.

There has to be integrity in the process.
Sunny Banerjea, global solutions executive, IBM Banking Industry, based in Plano, Tex., says that top tier banks have been measuring general satisfaction for as long as a decade. He indicated when he worked at a money center bank years ago, it was common to outsource customer satisfaction scores. "What's different now is a linking of satisfaction to other key metrics within the institution," he says.

In addition, banks are trying to build internal expertise and really understand how loyalty, profitability, and cross selling ratios interrelate.
Using customer opinion as a guide
One NPS advocate is Walter Bettinger II, president and CEO, Charles Schwab & Co. who also spoke at the Forrester Conference in New York. He admitted that Chuck Schwab's shareholder position gave senior management the leverage it needed to put a significant portion of revenue at risk by eliminating the "bad profits" that come from sources like nuisance fees or from the practice of attracting short-term only customers from giveaways and a seasonal campaign. It let management realign incentives and reward a different sort of behavior, one that embraced the customer. "We realized that we were sending the wrong message to loyal, existing customers by making special offers to the new ones," said Bettinger.

Among the investment firm's well-heeled customers, surprising feedback surfaced. "We had wealthy clients ask us about fees that they didn't have to pay, but saw that they were bothered by what we charged less wealthy clients," says Bettinger. "That's when it became clear that we were being judged not only on our interactions with a given customer but our interactions with all customers."

Bettinger explained that the firm began the gradual process of recalibrating product pricing and retail deliver about two years ago. It has relied on analysis and net promoter score to help guide its adjustments. "With strong top-down commitment, you can institutionalize practices that put you and the customer on the same side," says Bettinger." You can do well by doing good."

While a quick scan of marketing related blogs shows that not all the pros are equally enamored with the net promoter score (perhaps its fairer to say that several have pointed out that it is, after all, just one measure of several), the method definitely has a following. Reichheld himself mentioned the criticism. "I've read that NPS is too simple," he said. "I've read NPS doesn't paint an accurate enough picture of who the brand advocates or detractors are," he said. "While vigorous measurement is required and root cause analysis needs to occur as part of the exercise, the information you get from a net promoter score is a good proxy into how that revenue is being generated," he explained. BJ
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Strategy and Analytics / Why some companies are better at Innovation?
« Last post by admin on November 04, 2015, 12:09:39 pm »
IDEO's Paul Bennett on why some companies are better than others at 'The I-Word'. We see it all the time: businesses looking to innovate face a battle between The Big and The Small. Those that win are able to reconcile the wants of The Big – the organisation – and the needs of The Small: their customers.

Well here’s a newsflash: Small is The New Big, and companies in the know are listening to and bringing their customers into the process of creating ‘stuff’: new products, services, businesses or even organisational changes. The companies (both large and small) that are winning these daily battles have developed their own approach to innovation. Each is unique and interesting in its own way.

Take Dell for example: its IdeaStorm is a great example of letting the consumer contribute to the lifecycle of the design and creation of new products and services. The BBC developed a creative network to support the innovation process – a team of 50 trained BBC staff, some dedicated to the network but most of whom are operational managers. El Bulli, deemed the best restaurant in the world, closes for six months of the year to allow for culinary research and development at the laboratory kitchen, which is built for no-holds-barred creativity. The one thing that each of these organisations has in common is their understanding of the I-word. Here are some lessons I’ve learned from being in the Innovation Trenches with clients like these:

It’s about DOING. Innovation is not a noun, it’s a verb. It’s not about flow charts, clever Venn diagrams, hypothesizing and numerous rounds of discussion in the conference room. Innovation is about doing stuff. It’s about looking (with your own eyes) for gaps, needs, holes and business opportunities – and then creating, designing and making real solutions to them.

Innovation is about PEOPLE. Actual people. Not the ones in focus group suites who answer questions about you and your products. It’s the ones whose homes you go into, the ones that you listen to, the ones that you quietly watch preparing their breakfast and going about their day that generate ideas for you and your team. These are the people that you should ask for feedback, and these are the people you should credit for helping you get there when you do.

FAILURE is important too. You are going to get it wrong a whole lot before you get it right. These days we live in a ‘beta’ culture, where nothing is absolute any more; where the next, improved version is waiting for our feedback before it gets improved and iterated upon. The same is true of innovation. Spending years (and a fortune) perfecting it probably means that someone else will beat you to it. Prototype it fast and cheaply, put it out there and ask for feedback. When you get it, add it to the mix, iterate again and keep on going until it works. 85% is the new 100% when it comes to perfection.

COLLABORATION is key. It’s about everyone chipping in and doing their bit, building things together and all getting the credit for the whole. Mashing together skill-sets and interests makes for a more interesting team dynamic, and for a better end result. From my experience, the grumpy guy in R&D is usually grumpy because no one ever asks him to play.

In the end, innovation simply comes down to BRAVERY. You’re either going to leap into the void or you’re not. There are no guarantees, no sure-wins and no secret Celestine Prophecy ways to add up the numbers to create a sure-win formula. You just have to be brave. Try it.

Paul Bennett is Chief Creative Officer and European Managing Director of IDEO, which works with companies to identify opportunities for growth; to design and build new offerings; and to instil the cultural capabilities needed to innovate.
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Strategy and Analytics / How Pixar fosters collective creativity?
« Last post by admin on November 04, 2015, 12:09:09 pm »
How Pixar Fosters Collective Creativity

Behind Pixar's string of hit movies, says the studio's president, is a peer-driven process for solving problems.

by Ed Catmull

♦ Listen to Ed Catmull discuss managing creativity.

A few years ago, I had lunch with the head of a major motion picture studio, who declared that his central problem was not finding good people-it was finding good ideas. Since then, when giving talks, I've asked audiences whether they agree with him. Almost always there's a 50/50 split, which has astounded me because I couldn't disagree more with the studio executive. His belief is rooted in a misguided view of creativity that exaggerates the importance of the initial idea in creating an original product. And it reflects a profound misunderstanding of how to manage the large risks inherent in producing breakthroughs.

When it comes to producing breakthroughs, both technological and artistic, Pixar's track record is unique. In the early 1990s, we were known as the leading technological pioneer in the field of computer animation. Our years of R&D culminated in the release of Toy Story in 1995, the world's first computer-animated feature film. In the following 13 years, we have released eight other films (A Bug's Life; Toy Story 2; Monsters, Inc.; Finding Nemo; The Incredibles; Cars; Ratatouille; and WALL·E), which also have been blockbusters. Unlike most other studios, we have never bought scripts or movie ideas from the outside. All of our stories, worlds, and characters were created internally by our community of artists. And in making these films, we have continued to push the technological boundaries of computer animation, securing dozens of patents in the process.

Read more at http://cogsci.uwaterloo.ca/courses/Phil447.2009/pixar.pdf
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Process and Operations / How Big is your Water Footprint?
« Last post by admin on November 04, 2015, 12:08:22 pm »
How Big Is Your Water Footprint?

Calculating how much water is used to make consumer products is a complicated but crucial task.

by Alyson Kenward

If you think your morning cup of coffee only has 12 ounces of water in it, you're sorely mistaken-it has closer to 40 gallons. Conservation scientists say it's time we think about how much water goes into growing, manufacturing, and shipping our food, and about where exactly that water originated.

Concerns over greenhouse gas emissions have vaulted the term "carbon footprint" into the mainstream vernacular. Now, by promoting the concept of a "water footprint" with the goal of including it on product labels, researchers are hoping to draw similar attention to how drastically we're draining our most precious resource. As the water footprint gains popularity, however, researchers are struggling to reach a consensus on how best to measure that footprint so the public understands its full impact.

As currently defined, a product's water footprint is an inventory of the total amount of water that goes into its manufacture. For that cup of coffee, for instance, most of the 40 gallons go into watering coffee plants and cooling the roasters during processing.

"Most people have no idea how much fresh water they're consuming," says Brad Ridoutt, a water conservation specialist from Australia's Commonwealth Scientific and Industrial Research Organisation. According to Ridoutt, food and energy production account for nearly 90 percent of the world's fresh water consumption.

The water footprint is designed to help consumers and businesses understand just how much water is required to make products like a cotton T-shirt or a can of corn. But according to Ridoutt, just counting up the gallons of water isn't enough, because consumers should also know where that water came from. Corn grown in Minnesota, for example, depends on rainwater, which is abundant and not otherwise useful to people. But in Arizona, corn crops depend on scarce reservoir water. The current definition of the water footprint doesn't address these discrepancies.

In a study published in the February issue of the journal Global Environmental Change, Ridoutt proposed a strategy that takes the original location of the water into account in evaluating the environmental impact of its use in product manufacturing.

To illustrate his ideas, Ridoutt chose two common household food items: an 18-ounce jar of Dolmio pasta sauce and a small bag of Peanut M&M's. For the pasta sauce, the volume of water needed to grow the tomatoes, sugar, garlic and onions added up to 52 gallons. For the M&M's, the total volume of water going into all the ingredients was a whopping 300 gallons.

Comparing these conventional water footprint values would lead people to think the bag of M&M's takes a far worse toll on our water resources. But that isn't the complete picture, says Ridoutt.

Because tomato plants are typically grown in hot, dry climates, they are watered using irrigation systems that draw from the same locations as human drinking water. On the other hand, the cocoa and peanuts in the M&M's are grown in more temperate regions, where they don't need irrigation because they pull water directly from the ground. Taking location into account, Ridoutt says, drastically changes how you think about the water going into your food. According to his calculations, the pasta sauce is about ten times more likely than the M&M's to contribute to water scarcity.

Ridoutt is not the only one trying to redefine the water footprint. Conservationists around the world are trying to figure out how to best include environmental impact in water footprints so they can be incorporated into food labels. The International Organization for Standardization now has a project underway to tackle this problem using methods similar to Ridoutt's.

While many researchers support Ridoutt's work, others say we don't yet know enough about the Earth's water cycles to accurately measure environmental impact. Organizations such as the Water Footprint Network and the World Wildlife Fund still believe that simply reporting the total volume of water is currently the best and clearest way to communicate a water footprint.

"The paper Brad has written has quite a high value, but there is a long way to go," says the World Wildlife Fund's Ashok Chapagain, who has been studying water footprint methods for over five years. Without an agreed-upon standard, reporting water footprints simply as volumes is the easiest for consumers and businesses to understand, he says.

Ridoutt, on the other hand, believes his method will be more useful for consumers, and he hopes that when water footprints are applied to food products in the future, they won't be just a sum of all the water going into them. He says, "If you want to communicate something to the public in a simple way, you have to express it in a way that gives the [environmental] impact."

This article is provided by Scienceline, a project of New York University's Science, Health and Environmental Reporting Program.
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Process and Operations / Pet Food Contamination
« Last post by admin on November 04, 2015, 12:07:49 pm »
Pet Food Contamination - Root Cause Analysis

This is an example of how the Cause Mapping process can be applied to a specific incident. In this case the pet food contamination of 2007 is captured as an example of the Cause Mapping method. The three steps to get to root cause analysis are:

1) Define the problem
2) Conduct the analysis
3) Identify the best solutions

Read more at
http://thinkreliability.com/CM-petfoodcontamination.aspx
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Process and Operations / Lean Six Sigma at Heinz - Experiences
« Last post by admin on November 04, 2015, 12:07:22 pm »
H.J. Heinz
Gary Thomas, Director of Continuous Improvement and Operational Risk Management for HJ Heinz, tells Martin Ashcroft how lean and six sigma are being used to step change performance.

"We think we are truly an innovator in the food business," says Gary Thomas, and he's not talking about the 57 varieties, the stay-clean caps or the upside-down bottles.

Thomas joined HJ Heinz four years ago to help deploy a continuous improvement process that focuses on removing waste, improving flow, and changing culture.

It all started more than five years ago when Bob Ostryniec joined Heinz as VP of Supply Chain. From his previous experience at General Electric and Stanley Tools, he gained extensive knowledge of the six sigma and lean manufacturing processes. During Ostryniec's time with Stanley as VP of Manufacturing he worked with Thomas to help turnaround a large facility using these continuous improvement methodologies. Once at Heinz, Ostryniec asked Thomas to join him on this continuous improvement journey.

The program began in Heinz's Consumer Products' frozen foods factories in San Diego, California; Fort Myers, Florida; Massillon, Ohio; Pocatello, Idaho and Ontario, Oregon. "We felt there were huge opportunities there, in terms of waste, labor efficiency and line utilization improvements," says Thomas. "Every dollar we save in waste is equivalent to five dollars worth of sales.

"We started with a lean sigma approach in those five factories," he says. "Putting productivity processes in place allowed us to gain some pretty quick results. From there we started taking over more and more factories, so we have been in some factories as long as three and a half years, and in others, a year to a year and a half."

With 6,000 employees in 24 factories, implementing new processes is a long term task, but, says Thomas, his team has now trained about 1,200 people in the basic principles of lean sigma, with 800 or so already up to at least a green belt level, not just in manufacturing but in the internal supply chain, too, in logistics, warehousing and procurement. "Heinz has always been committed to driving improvements," he says, "but it has never been a formalized process. If you don't put control plans in place, you're fixing the same problem again next year."

When Toyota started developing its unique production system 60 years ago, few could have had any idea of the influence it was destined to have on global industry. In the United States, naturally, automobile manufacturers were the first to notice it, being in the same business. Many tried to copy it, with the occasional success, but most failed because they tried to apply the tools without understanding Toyota's thinking.

What we now know as ‘lean' has at last begun to spread into other sectors, however, with executives in finance, education, healthcare and construction now embarking on their own ‘lean journeys'. It has also gained a toe-hold in the food industry, but why has this taken so long? "Most people think of industrial manufacturing as kind of a slow one piece flow process; you put pieces on, you move it along," says Thomas. "With high speed production in a continuous flow environment there was always a push back on how it would work here."

The response from employees, many of whom have 30-plus years of service, has been outstanding, however. "We have had tremendous response to the tools and processes that we have deployed," says Thomas, "which have given people the opportunity to look at things differently. It has been a breath of fresh air for these factories. When you walked into them two years ago and you walk into them today, it's like night and day. They have absolutely embraced it.

"Every one of our factories is at a different stage," he continues, "and we have a long way to go. We are currently seeing significant productivity improvements every year, but we are trying to make it much more than just a cost-out program. It is about sustainability and culture changing-that is the journey that we are on."

Lean is often described as a journey, but those who understand it properly do not think about getting to the end and putting their feet up. It's called continuous improvement because you have to keep on improving. "We are currently developing a global continuous improvement roadmap that takes the best processes, tools, and systems from all of our factories around the globe and integrates them into one production system," says Thomas. "We truly believe this will give Heinz a global competitive advantage."

He explains that a key focus is on changing behavior at the point of execution. "Most American companies have a status quo approach," he says. "At the end of the day they take a tally of how they did, and they'll talk about what they can do better tomorrow.

"The management operating system employed at Heinz is based on short interval pulsing," he continues, "where we monitor the line every hour or two and provide feedback to the operators about what they are doing well, what they could do better and what they need help with. We then post those numbers so people can see if they are winning or losing."

So is this a technology-based initiative? "It is basically a methodology approach," he says. "We have invested in some technology; we have a system in our factories called Heinz Operational Tracking Systems, better known as HOTS. This system allows the factory employees to get updates on line efficiencies, and downtime opportunities in real time so they can start analyzing the root cause of their failures and provide solutions."

Heinz is using both lean and six sigma, for different purposes. Its approach is to use the appropriate tool for the problem. "Lean helps us get after the low hanging fruit, reduce all waste and optimize flow," explains Thomas. "For example, on a yield improvement project, lean will help us optimize the waste hitting the floor while six sigma would help us optimize the fill heights in the product through our SPC process. If we are over-filling by half a gram of ketchup in every bottle, for instance, what is the statistical sampling we have to take to adjust it so that we are in control, while still maintaining our spec.?"

An improvement program of this magnitude takes huge resources and specialized expertise, so Heinz is not doing it all on its own. External consultants have been used for specific purposes, and Thomas admits to "shamelessly trying to steal their knowledge to instill into our people."

The goal is to get the entire workforce trained at a yellow and green belt level, he explains. This will give everyone at least the basic knowledge of lean and six sigma. A smaller number of experts in each business unit will go on to be black belt certified.

"One thing we have found as Lean Sigma Masters," says Thomas, "is that lean doesn't typically teach people how to think about root cause analysis, but six sigma does, so if we can instill that mindset into somebody and then we introduce them to lean, they are really effective!"

It is definitely working, says Thomas, and the absolute key is commitment at all levels. "It cannot be a choice program," he insists. "It starts with commitment from senior leadership that has to be pushed down through the entire organization. As the program grows we should then see a shift from a senior leadership driven program to an employee owned program. One of the key factors for success has been our factories' engagement. All the credit goes to the factories, they are the ones doing it. We can put anything on a piece of paper and show somebody how to do it but until they do it there are no results. It is a credit to the leadership and employees at our factories, who have a continuous improvement mindset. That's the reason we are winning."
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Process and Operations / The Right recall strategy
« Last post by admin on November 04, 2015, 12:06:56 pm »
The right recall strategy
Source: HBS Working Knowledge

Mattel has been criticized heavily for having to recall not once but twice in as many weeks 20 million toys manufactured in China with lead paint and/or loose, potentially dangerous magnets.

Clearly Mattel did not have sufficiently tight quality control procedures in its supply chain to compensate for the extra risks of outsourcing to relatively new Chinese subcontractors. Clearly there were design flaws in the toys with the magnets that could come loose.

But Mattel deserves praise for now stepping up to its responsibilities as the leading brand in the toy industry.

Mattell CEO Bob Eckert has taken personal charge of the situation. He has apologized publicly and taken immediate steps to tighten quality assurance requirements on Mattel's suppliers. There has been no effort to duck behind blaming suppliers and distributors or, even worse, consumers - as Audi attempted to do in the famous unintended acceleration recall of the late 1980s.

Mattel is effectively getting the word out about the recall. Among other methods, the company is using bold red ads on high-traffic Internet sites such as Yahoo.com to find owners of the affected products and drive them to the Mattel website for more recall information. With this approach, consumers are being empowered to handle the problem themselves rather than clog customer service desks at Mattel's retail outlets, which would strain Mattel's dealer relations and cost the company extra dollars in processing fees.

Mattel's recall website is a model of excellence. All the affected products are depicted and clear instructions are provided on how to return recalled products (including downloadable application forms and shipping mailers), which suggests strong contingency planning.

Where Mattel has fallen short so far is in compensation. Mattel is offering equivalent value coupons good for other Mattel products in exchange for recalled products. Given the inconvenience caused to consumers and the need to motivate them to return the affected products, this offer may not be sufficient.

Ultimately, the success of the recall will be determined by the percentage of affected products that are returned. Anything less than 90 percent within 3 months for a child safety hazard will represent failure.

As long as the two recalls to date are the whole of the problem and not the tip of an iceberg, Mattel's brand reputation should survive. The CEO knows that Mattel's brand trust - built up over 62 years - is at stake, just ahead of the holiday selling season. And with 80 percent of US toys sourced from China, other US toy marketers are under equal scrutiny; if similar problems surface at other companies, Mattel may earn some credit for getting out ahead of the problem
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Process and Operations / Six Sigma Design
« Last post by admin on November 04, 2015, 12:06:31 pm »
Six Sigma DesignGE Healthcare Technologies CEO Joseph M. Hogan talks with CDF chairman Peter Lawrence about setting measurable goals for design and how designers contribute to new medical product ideas

GE is a proponent of Six Sigma, a datadriven process aimed at achieving measurable business results. Do you apply it to design?

Yes. Every employee is trained in Six Sigma. Our Design for Six Sigma (DFSS) process uses tools that develop and analyze data to make sure our design is focused in the right direction. GE Healthcare product development is not a linear process where the engineers make something and "toss it over the wall" to the designers and walk away. We work in cross-functional teams that include design, engineering and manufacturing and often distribution and assembly as well.

How do you get design, engineering and manufacturing in agreement?

We start with the customer. The first part of Six Sigma involves developing a "critical-to-quality list." Our cross-functional teams have to first identify and agree upon the patient or customer needs that absolutely must be met. This investigation drives the introductory documentation for each new product.

How much of your product design is done in-house?

Nearly all. Our Global Design Group is headed by Seth Banks, who manages a worldwide staff of some 35 industrial and interactive designers. They are linked by collaborative software. With our design studios in different cultures and continents, we get a tremendous variety of concepts at the brainstorming level.

Are your designers directly involved in product research?

Very involved. Through user observation research and focus groups, our designers gather information about the medical procedure for the product, ergonomics, patient positioning requirements, the size of the patient, how they get on and off the product, needed accessories -- all the things that will help them corroborate data that the engineering teams are collecting. Their research also looks at how a product might be serviced. For instance, certain parts that may need more service attention must be located appropriately and not require a lot of lifting. A service person working independently should be able to easily access the area that needs the most frequent maintenance.

Does your user observation research include the patient as well as the hospital technician?

We start the observation process in the waiting room because our products are so far-reaching that the enterprise software starts right at the admission desk.

Even that is changing quickly and is now starting in the patient's home.

What is the balance between observation research and focus groups?

Observation research far outweighs our use of focus groups. We identify opportunities to improve productivity, workflow and efficiency by watching how people use current products -- not just ours but our competitors' as well. Once we get all that information, we confirm it by conducting interactive focus groups around a product to ensure that what we saw and what we are attempting to do will add value to the customers. Sometimes you can get very enamored with an idea that customers don't see as a true productivity enhancement. We have had a number of occasions where customers have said, "That's nice. But what about this?" That's terrific feedback.

Are your designers also involved in developing new product ideas?

Yes. For example, when laptop computers came out, our designers thought that medical equipment should provide the same kind of mobility and flexibility.

In 1996, we began developing ideas for portable ultrasound equipment. Our design studios worldwide brainstormed this idea and worked with our technology teams to bring the idea to life. The result was the LOGIQ Book, GE's portable ultrasound scanner introduced three years ago. It has been very successful.

We sell some 20 different kinds of ultrasound products, and our LOGIQ Book portable technology provided an answer to the many different user interfaces that customers have. We were able to keep the same user interface -- same nomenclature, same buttons -- on a $200,000 high-end piece of equipment as on a $40,000 portable unit, so if you can operate one, you can operate the other. That's been a huge selling point, because right now the "half-life" of hospital technicians could be six months. Consistent user interface means hospitals don't have to re-train a person on nine different pieces of equipment.

Why is design still important when your medical products often represent major breakthroughs in technology?

Cutting-edge technology is not enough. Our products are roughly in the same price category as our competitors'. The difference is in the features. Design is what sets our products apart. When a customer pays $2 million for an MRI machine, everything needs to come together seamlessly when a user walks up to it. Design creates the experience that is most directly related to the customer's needs -- the visual aesthetics, the interface between the product and the user, the creation of the right environment. Also, if a hospital buys several products from us, design helps us communicate the fact that the newly acquired product can be easily integrated into the fold. It does that by presenting a unified and consistent look.

Are current design trends considered when designing, say, a cardiovascular imaging system or mammography machine?

We don't look at fads because they don't last long.

We do look at worldwide trends in architecture, fabric design, and consumer and automotive products.

We try to create an environment that is familiar and reassuring to the patient by selecting colors that will put them at ease and materials that feel warm, soft and comfortable.

How much of the design focuses on usability?

Ergonomics drives everything in our product development -- the location of the controls, the product's ability to move in a manner that doesn't necessitate a lot of physical exertion on the part of the technician to position a patient. As a global company, we have to make sure that the product is adaptable enough to accommodate a variety of situations and users, from petite technicians to lanky operators.

What must a design prove before it can be implemented?

It has to meet the original customer "critical-to-quality" criteria identified at the outset. Our designers have to be able to measure and hit the criteria before they finish the design.

Over the past five years, GE Healthcare revenues have grown from $5 billion to $10 billion. Has that changed your approach to design?

We offer many more products, so conveying a consistent image in the marketplace is essential.

Design must take a front-and-center position and bring disparate businesses together. Also, as we acquire different companies, often it's not our own organic technology that we offer. It's extremely important that the newly acquired company be integrated into our brand from a design standpoint so our equipment has an integrated look and feel.

When did you first begin to appreciate design as a business resource?

When I headed marketing at GE Plastics, I developed a broad sense of design, particularly from European colleagues. At the time, the idea of incorporating industrial design into our strategy wasn't prevalent in the U.S. In the plastics business, I saw design used across different applications and industries, and I started to understand how it could lead to out-of-the-box thinking. Designers would come in and look at a problem and not immediately seek a technical solution, but look at what could be done. They looked at new applications, new forms. For example, when baby bottles moved from being made out of glass to plastic, manufacturers remained functionally fixated on thinking that baby bottles had to look like the glass ones.

Suddenly, a designer thought to suggest, "Why don't you make two tubes so babies can put their hands through it." The use of plastic enables that possibility.

The plastics experience opened my eyes to how design ideas could be applied in so many different ways.

Why don't more business leaders see design as offering more than aesthetic appeal?

People are functionally fixated. A chair is a chair. It's not until a creative designer builds something completely different that you say, "That's it! That's the answer! That's the differentiator!" The other day, I saw a design award for a pair of baby nail clippers made from plastic with a magnifying glass at the end. You say to yourself, "Why didn't someone do that 20 years ago?" It's something that simple. When you see a good design, it knocks you off your feet. Unless you've been exposed to innovative design, your view is more utilitarian.

Do GE Healthcare designers frequently incorporate new materials into products?

GE Healthcare has always worked with GE Plastics and with our global research center to seek out new materials -- materials that will provide greater strength-to-weight ratios, materials that will require less finishing so we can use the structural elements as design elements and not need covers where they are not necessary, especially if you have to take them off to service a product.

New materials have always been critical to driving design innovation. Years ago I read an article in Harvard Business Review that described how air-conditioning and super-strength steel eliminated the necessity for low buildings with a modest number of windows. The advent of steel changed architecture.

And air-conditioning allowed architects to put glass all around a building and make open-looking, towering skyscrapers. New materials must always be taken into consideration.

How is design relevant to your corporate goals?

It improves our corporate image. It helps us communicate more effectively with our customers. It helps us sell and break into new markets. It contributes to increased profits. Design, in a broad sense, reflects GE Healthcare by the way that our products appear. It's the means to communicate the quality and technology inside. It's essential for making the product exceptionally functional and intuitive to operate.

How is design changing in the healthcare industry?

Today when we think about designing, say, a new MRI system, we don't just think about designing the product; we think about designing the entire radiology suite. Design in the next ten years will move beyond the product. It will move beyond workflow. It will get into the whole work environment and what that means.

Hospitals in the future will be very different places.

They will have different ways of interacting with the patient. The screening and treatment plan will start on a molecular level and involve minimally invasive procedures.

We have to think about setting the course for how design can affect the whole healthcare experience.
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