What Kind of Management Does This?

Already Mired in Sales Slump, Gap Closes Two Most Popular Internet Stores

Both Gap.com and OldNavy.com have been closed for the past week, driving frustrated shoppers like Kira Storch of San Francisco to other Web sites to buy clothes.
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Hoping to minimize the customer inconvenience, Gap waited until after most back-to-school shopping had been finished before launching a "soup-to-nuts" overhaul of its major e-commerce sites, said company spokeswoman Kris Marubio. She said the changes were too complex to enable the site to continue running.

What? What? Ok, I don't know what they have to deal with but still this strikes me as crazy. It baffles me that they think it is acceptable to go offline for days to make a change, even a major one.

Deming and the New York Times

Steve Brant, in All The News That's FIT To Print, mentions that the New York Times applied some of Deming's ideas in the past. He also links to several articles that mention those attempts.

One article is from the The New Yorker by Ken Auletta, 1993: Opening Up The Times:

Sulzberger [the Times' publisher] has prescribed the management theories of Dr. W. Edwards Deming, a professor emeritus at New York University and a business philosopher whose theories helped revitalize Japanese industry after the Second World War. Sulzberger and a team of Times managers studied Deming's theories during four days of seminars in Washington in 1990.

Statistical Consulting

In the current issue of AMSTAT News (American Satistical Association) the President's letter is focused on Statistical Consulting and W. Edwards Deming. He makes a good point, echoing those others have been making for quite some time:

More and more, we need to define ourselves, perhaps as an internal consultant, by striking out on our own. That self-defined role is a lot more challenging, risky, and fun, too!

ASA bio of Deming - Curious Cat biography of Deming

The Curious Cat Management Improvement library offers the following articles related to Statistical Consulting:

• Redesigning the Introductory Statistics Course by Ronald D. Snee and Roger Hoerl
• The Next 25 Years in Statistics by William Hill and William Hunter, Feb 1986
  (with contributions by Joseph W. Duncan, A. Blanton Godfrey, Brian L. Joiner, Gary C. McDonald, Charles G. Pfeifer, Donald W. Marquardt, and Ronald D. Snee). A transformation of the American style of management has already begun; in order for it to succeed, statisticians must assume a leadership role.
• Youden Memorial Address - 2000 by Geoff Vining, Oct 2000
  "The basic theme for my talk today is that Jack Youden is an appropriate role model for today�s industrial statisticians. Jack Youden was someone who appreciated the fundamental role statistics can play in industry."

Critical Chain, TOC Email List

Email lists have been going out of style, but they can be a useful way to interact with a shared community (when moderated properly). The Theory of Constraints (TOC) email list (Yahoo group) CriticalChain, is useful for those interested in TOC concepts.

This list is for those who are interested in project management via Critical Chain Scheduling and Buffer Management, as well as the application of other aspects of the Theory of Constraints to project management.

The target audience for this discussion list is broad, consisting of:

Those who are experienced with Critical Chain (either by living with it or by helping others implement it),

Those who are attempting to implement Critical Chain in their project(s),

Those who are curious about Critical Chain and the implications it could have for their project environment

and . . .

Those who have heard about Critical Chain and think that it is either misguided or that there is nothing really new about it, but are willing to discuss it with an open mind. It's this last target group that can add real spice to the discussion. (After all, as Eli Goldratt has said, "The strongest force FOR improvement is resistance to change.")

Another good email list is the Deming Electronic Network list.

Lean Manufacturing at Castcon-Stone

Lean manufacturing transforms operations at Saxonburg company:

Kerckhoff said redoing certain portions of products accounted for about 12 percent of the company's volume of work last year. However, after implementing the new lean manufacturing initiative, the number is now down to about 4 percent, and most of the rework is so minor that the company would not have tracked it in the past.

Lean Manufacturing at Delphi

Streamlined by Derek Smith, Kokomo Tribune.

Each morning for local manufacturing workers begins with a "huddle meeting" in which groups discuss a variety of operations issues.

Guggina said Delphi has been recognized as an industry leader in its application of lean manufacturing.
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In 2004, Plants 7 and 9 of Delphi's Kokomo operations earned the coveted Shingo Prize for Excellence in Manufacturing.

Managing with Control Charts

Ideas from the Tiger's Head by Simon Caulkin, The Observer. This is a remarkably nuanced short article on control charts given that it is a newspaper article (which normally overly simplify such concepts to the point not much of value is left).

This is a critical distinction: if managers mistakenly tamper with a stable process, believing an occurrence is exceptional, they introduce an external cause, which destabilises it. Targets do the same thing.

If a system is stable, as a matter of logic you can only force it to deliver a target beyond its limits by improving it, distorting it or fiddling the numbers.

Previous post relating to the last sentance: Dangers of Forgetting the Proxy Nature of Data

Measures of Success

Measures of Success interview of Alex Knight by Michaela Rebbeck. The interview discusses a model of measurement based on Theory of Constraints ideas.

The fundamental difference with my proposition is the shift in the mental model we have about measures. I believe in replacing the 'stick and carrot' mentality with commitment to a culture where measures are used to help identify key opportunities for improvement and contribute to a 'no-blame' measurement mindset.

In a nutshell, I am suggesting that the purpose of any operational measurement is to measure the execution of our strategy by helping us answer the question ‚'How well are we doing compared to what we were expecting to happen?'

This implies you must know what was expected, a great reminder of Deming's statement that Management is Prediction.

Six Sigma Interview with Alan Harrison

Six Sigma Interview with Alan Harrison, Weir Pumps Ltd:

Everyone has been trained to some degree on what we have termed the Weir Production System, which includes but is not limited to TPS and Six Sigma. We have created a pragmatic pull improvement system (driven by business needs) where we define what is needed, when it is needed, and how to make it happen.

LA Jail Saves Time Processing Crime

After efficiency study, L.A. jail saves time processing crime by Dan Laidman Los Angels Daily News

Last week, Chief William Bratton told the Board of Police Commissioners that Toyota methods have produced dramatic changes in a jail division once beset by delays, inefficient transportation, personnel shortages and troubles with medical treatment.
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But the collaboration between Toyota and the LAPD marks the first time law enforcement has used the principles in running a jail, said Mike Morrison, the dean of the University of Toyota.

The City of Madison Police Department applied Deming's ideas in the 1980's. Quality Improvement and Government: Ten Hard Lessons From the Madison Experience by David C. Couper, Chief of Police, City of Madison, Wisconsin, USA.

Doing More With Less in the Public Sector: A Progress Report from Madison, Wisconsin by William G. Hunter, Jan O'Neill, and Carol Wallen, June 1986.

Failed Practice: Forced Ranking

The ABCs of Rank and Fire Management by Mark Edmondson

Due in part to the influence of GE, employee ranking has become more widely adopted over the past 20 years. According to a 2004 study, currently about 34 percent of firms rank employees.
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Our clients have learned that a performance management system that reinforces a culture of engaged employees can be at tremendous competitive advantage. While at least one-third of your competitors are alienating employees with some sort of dysfunctional ranking practice, you're creating a high-performance culture by leveraging your most valuable asset- the minds and hearts of your people.

Previous Posts on the failures of Performance appraisal Process:

• Performance without Appraisal
• Why Go Through the Painful Performance Process

Going Lean in Health Care

Going Lean in Health Care a report from the Institute for Healthcare improvement based on presentation by James Womack and others. This report is an another excellent resource from IHI, which I have mentioned before is doing great things. This is defineately worth reading.

Lean principles hold the promise of reducing or eliminating wasted time, money, and energy in health care, creating a system that is efficient, effective, and truly responsive to the needs of patients the “customers” at the heart of it all.
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The concept called lean management” or “lean thinking” is most commonly associated with Japanese manufacturing, particularly the Toyota Production System (TPS). Much of the TPS way of thinking is based on the work of quality guru W. Edwards Deming, who taught, among other things, that managers should stop depending on mass inspection to achieve quality and, instead, focus on improving the production process and building quality into the product in the first place.

Virginia Mason Medical Center in Seattle, Washington, has been using lean management principles since 2002. By working to eliminate waste, Virginia Mason created more capacity in existing programs and practices so that planned expansions were scrapped, saving significant capital expenses: $1 million for an additional hyperbaric chamber that was no longer needed; $1 to $3 million for endoscopy suites that no longer needed to be relocated; $6 million for new surgery suites that were no longer necessary.

These types of improvements are needed system wide. As we posted earlier Health Care costs reached a record high percentage of GDP last year (15.3%). This problem continues to grow more than two decades after Deming included the high cost of health care as one of the seven deadly diseases.

Despite a '“no-layoff policy,'” a key tenet of lean management, staffing trends at Virginia Mason show a decrease in 2003 and 2004, after six years of annual increases in the number of full-time equivalents (FTEs). Using lean principles, staff, providers and patients have continuously improved or redesigned processes to eliminate waste, requiring fewer staff members and less rework, and resulting in better quality. Consequently, as employees retire or leave for other reasons, improved productivity allows for them not to be replaced.

Some try to implement lean ideas without properly setting the stage by instituting policy's such as Virginia Mason's no layoff policy. Lean ideas will not work, as they should, without changes to the way the organization makes decisions. Failing to understand this factor is one reason some organizations are frustrated with the results they experience when trying to apply lean thinking.

Collaboration Rules

Collaboration Rules by Philip Evans and Bob Wolf:

We have found that Toyota’s managerial methods resemble, in a number of their fundamentals, the workings of the Linux community; the Toyota Production System (TPS) owes some of its vaunted responsiveness to open-source traits. In fact, Toyota itself is evolving into a hybrid between a conventional hierarchy and a Linux-like self-organizing network.
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Both emphasize granularity: They pay attention to small details, eliminate problems at the source, and trim anything resembling excess, whether it be work, code, or material. Linux members, for example, share an obsession with writing minimal code, compiling each day’s output before proceeding to the next and extirpating programming flaws as they go along. For their part, TPS engineers are relentless in applying short cycles of trial and error, focusing on just one thing at a time, and getting inside and observing actual processes. Both groups carry those principles to apparent extremes.
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Monetary carrots and accountability sticks motivate people to perform narrow, specified tasks. Admiration and applause are far more effective stimulants of above-and-beyond behavior.

What Business Can Learn from Open Source

What Business Can Learn from Open Source by Paul Graham

As usual Paul Graham's new article is a great read.

I think the most important of the new principles business has to learn is that people work a lot harder on stuff they like. Well, that's news to no one. So how can I claim business has to learn it? When I say business doesn't know this, I mean the structure of business doesn't reflect it.
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When I'm writing or hacking I spend as much time just thinking as I do actually typing. Half the time I'm sitting drinking a cup of tea, or walking around the neighborhood. This is a critical phase-- this is where ideas come from-- and yet I'd feel guilty doing this in most offices, with everyone else looking busy.
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How many of us have heard stories of employees going to management and saying, please let us build this thing to make money for you-- and the company saying no? The most famous example is probably Steve Wozniak, who originally wanted to build microcomputers for his then-employer, HP. And they turned him down. On the blunderometer, this episode ranks with IBM accepting a non-exclusive license for DOS.

On the point of the first bit of text above, W. Edwards Deming stressed the importance of Joy in Work. How many buisnesses focus on this. Very few. So often, it is easier to keep doing what has been done in the past.

Six Sigma at Jaguar

Six Sigma at Jaguar interview with David Brunson, Powertrain Quality & Reliability, Jaguar Cars Limited by onesixsigma.com.

Are there particular tools you want to focus on using more in the future?

Yes, it's very important to focus on the tools you are getting the most value from, and try to apply them to as many areas as possible. There are tools that we want to be using more in the future:

• Gage Repeatability and Reproducibility (R&R)


• Modeling using design of experiments (DOE), including design selection & Analysis


• Design FMEA with robustness linkages

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It is very dangerous to think of six sigma as a set of tools, as if a company does not understand their processes properly, then they can not expect six sigma to save them money through the application of tools.

Definition of what is going on at each stage of the process is much more important than the tools being used.

Find more Six Sigma articles from the Curious Cat Management Improvement library.