July 2014 – This blog is 6 months old

I started this blog on January 5th, 2014 to broaden my audience from the French-reading to the whole world by publishing English-only posts.

On June 30th, 181 days later, 109 posts are online, nearly one every two days, a way to measure my willingness and pleasure to share.

Besides posting in English on this blog, I keep posting in French on my website, tweeting, writing possible future books and make a living as consultant, writing business proposals, reports and some position papers and post for the company’s blog.

The audience increases steadily accumulating 9311 views so far. Some weeks ago the visitors by web search outnumbered the visitors lured by my tweets. Nothing to brag about, visitors may reach 100 a day, but not everyday yet.

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I hope you reading these lines have read other posts here and found some interest. You may comment, suggest, correct my English or whatever you’d like to share hereunder.

You may even follow me on twitter or subscribe to follow me on WordPress.

Thank you for passing-by!


 

Pareto: chop off the head or trim the tail?

A Pareto chart is an ordered histogram where the few categories with highest occurrences are on the left side (the head), and the many categories with few occurrences are on the right side (the tail). A Pareto chart is used to discriminate the vital few from trivial many, especially if the distribution complies to the Pareto law stating 20% of all the causes accumulate 80% of all effects.

It is commonly accepted that efforts to solve problems should focus on the Pareto chart’s head as the leverage is most important: solving 20% of the causes eliminates 80% of the effects.

The 20/80 law is important for rational decision-making, optimizing the Return On Investment of problem solving investment vs. problems solved, or put slightly differently: the ROI of cost of problem solving vs. savings related to problems solved.

All books will tell the same: chop off the head

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Yet things are not that simple. While the above is important for management, executives and bosses, personnel struggling with daily problems see the things differently.

In the tail of a Pareto chart of problems are all the smaller difficulties, annoyances and broken items or processes that are nevertheless itching the executant every day, sometimes every minute. Unfortunately for those victims, the matter is not seen serious/costly/risky enough to draw attention of the brass, all focused on Pareto’s chart head.

Team leaders or foremen don’t dare going against the 20/80 rule and distract time or means to fix minor problems. These minor problems remain in the chart’s tail as minor problems, as solved major issues will be replaced by new majors problem. Minor problems remain in the chart’s tail even they get unbearable by those affected.

No wonder if, in order to get attention, those problems are exaggerated, sometimes extended. The “help yourself solutions” range from giving up to ask for repair and improvement (and keep suffering in silence) to actively sabotage and worsen a situation so that management must act.

  • A worn out tool won’t be replaced before it is totally broken? Just break it.
  • Maintenance will not show up until total breakdown? Give the trouble some help to stop the machine.
  • The circuit breaker breaks constantly? Put some tape or stick a match so the lever cannot move, replace fuses with stronger ones or a nail.
  • Random stoppages need to inhibit safety devices to fix the problem and start again? Let the safety devices constantly out.

Lack of attention to so-called minor problems is not only denying respect to people, but can lead to deviant behaviors with potentially high risks for safety, quality or machine/equipment life.

The irony of this kind of situation is that the so-called minor problems are usually easy, quick and inexpensive to fix/solve, while the major issues require more time, efforts and money to get fixed.

Dual approach

For many years now I teach and advise to approach problem solving with pragmatism, focusing on the big issues as 20/80 law tells but in the same time solve as many minor, Pareto chart’s tail problems as possible.

I call this the dual approach or pincer movement if you will.

The main reason is that personnel need evidences that continuous improvement program, lean transformation or whatsoever is going on yields benefits they can assess. This means the improvements have to be quick and solve their daily itching problems.

If this is not done and results in focusing only on major problems show up after several weeks or months, personnel will have lost confidence long before first results show. Conversely, if the simpler problems are fixed swiftly, people will see concrete and fast improvement with some benefits for them. They’ll be much more interested in participating and supporting the program.

Therefore, Pareto chop off the head AND trim the tail!

Feel free to comment or share your own experiences.

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Beyond disengaged: actively disengaged

Disengaged employees are passionless and unmotivated about their job. They are at the lowest level for both own satisfaction and contribution to the organization’s goal / performance.

>Lisez cet article en français

There is another category known as “actively disengaged” that goes beyond the disengaged. Those employee are unhappy and unproductive at work and have negative mindset. What make them “active” is their inclination to spread negativity to coworkers.

In a French TedTalk, Isaac Getz describes actively disengaged as “people so unhappy that they come to work to demonstrate their unhappiness by taking up on engaged employees, just as a fox eating daily a chicken”. Conversely Isaac Gets describes engaged employees as chicken paid to lay white eggs but from their own initiative lay golden eggs.

The trouble with “actively disengaged” is their toxic mindset. Actively disengaged employees are often vocal or actively showing their negative attitude toward their work and their employer. They often speak about leaving and are more absent. They incline to undermine management’s authority and sabotage projects.

In the above video, Isaac Gets describes actively disengaged employees as those, in a boat, rowing purposely in the opposite direction, while simply disengaged pretend rowing but just lift the oars and splash a bit.

If actively disengaged employees cannot be recycled into engaged ones, the best solution is to get rid of them. This could help both the organization and themselves, as actively disengaged people are also often unhappy with their private lives. A new start may solve this problem as well.

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Bottleneck explained with water pipes

Among the analogies used to explain the concept of bottleneck resource, core of the Theory of Constraints in operations and manufacturing, the pipes of a hydraulic system is a classic one.

>lisez cet article en français

Here is a hydraulic system made of a succession of pipes of different diameters.

The throughput of this hydraulic system is limited by the section with the thinnest diameter, which chokes the water flow.

If the water flow must increase, increasing the diameter of pipe before or after the bottleneck section is of no interest, the flow is still limited by the thinnest section. The only way to increase the flow is to work to increase the throughput at the bottleneck.

This rule applies for any system with a bottleneck, the system overall throughput is limited by the bottleneck’s throughput.


Will 3D printing revitalize strategic analysis?

It seems to me that in the last decades strategic analysis focused mainly on monitoring new entrants from low-cost countries, struggling with competitors and entering emerging countries’ markets.

Compared to Michael Porter’s model of five forces, the above takes care about two at best; Threat of new entrants and intensity of competitive rivalry.

Reminder of the five forces:

  • Threat of new entrants
  • Threat of substitute products or services
  • Bargaining power of customers (buyers)
  • Intensity of competitive rivalry
  • Bargaining power of suppliers

With the rise of additive manufacturing techniques, 3D printing being a flagship for them all, competitors in some businesses may have to reconsider the basics and the neglected forces.

Threat of substitute products or services

Among the neglected forces, the threat of substitute products or services comes to mind quickly. What have been manufactured in traditional way with several machining and assembly steps could be produced in one step with additive techniques, for cheaper* and in many cases faster.

*Cheaper remains questionable if considered in high volume. What seems obvious is the cost of manufacturing replacement parts in additive manufacturing vs traditional manufacturing. In the first case, parts can be printed in units when needed while in traditional manufacturing, parts would be produced in minimal batches, regardless the real demand. If the other parts of the batch aren’t sold, they’ll be total waste thus no saving with economies of scale.

The new techniques have to be mastered but do not seem so difficult to master to be barriers to entry. If they would, it would be irony to see a long established competitor locked out of his own business because he didn’t prepare for the substitute. A case not totally unlikely to happen.

The new techniques are/soon will be available to anyone, which means capital investment or access to these technologies are no barriers to entry either.

This brings us to next threats: threat of new (unexpected) entrants, bargaining power of suppliers and buyers.

Threat of new (unexpected) entrants

With the new techniques made easy and affordable (still taking 3D printing as example), literally anybody can establish him/herself as competitor. This could be former buyers, customers, enabled to manufacture themselves what they had to buy before. Many of them may not create a business, but as they are many, if a majority prints products or parts themselves instead of buying them, it can be enough to kill an established business.

Former buyers like distributors may be more serious potential new competitor as they may consider creating value from raw material instead of storing and distributing goods. Manufacturing with additive techniques will require few capital while distribution requires huge capital sitting in warehouse, carries over costs and all the risks.

These new competitors would no more (not only) provide a service by selling off-the-shelf, but manufacture-on-demand and possibly modify, improve or adapt the products.

Bargaining power of customers (buyers)

Former customers, now new competitors, like distributors could enforce their bargaining power as they will not be competitors for the whole product panel thus keep being customers, which in turn could enforce bargaining power of suppliers.

Bargaining power of suppliers

The first suppliers of substitute products will certainly have some bargaining power, yet their position will most likely be quickly challenged, revealed “blue oceans” being attractive to competition and barriers to entry not really existing.

Additive manufacturing will very probably disrupt many businesses, yet I do not believe everything can be provided cheaper and better (what ever better means) with 3D printers and the like. Mundane items of daily use, produced in very large batches may still continue to be manufactured the way they are.
In many cases, consumers will continue to trust genuine parts and original maker’s products. Therefore, in some trades and businesses where the choice will exist, traditional makers may regain some bargaining power when it comes to compare quality, safety, trust, reputation, esteem value, etc.

Will 3D printing revitalize strategic analysis?

Finally will 3D printing revitalize strategic analysis? I do think so. Threats will multiply as well as opportunities and new options in manufacturing require to broaden the scope of analysis.


Related posts on this blog:

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Michael Porter’s five forces (video)

In several past posts related to additive manufacturing / 3D printing I mentioned Michael Porter’s five forces model, its real name being The Five Competitive Forces That Shape Strategy.
In this post, I pay credit to Mr Porter and let himself explain what the five forces are.


You may also like a brief video on this subject provided by Harvard Business Review: The Five Competitive Forces That Shape Strategy


How lean can help shaping the future – Value Stream Design

When thinking about planning or shaping the future, most people believe it requires very complicated means, software or science. The reality is deceivingly simple as it takes pens, paper and analytical skills.

Therefore when it comes to answer the question “How lean can help shaping the future”, the simplest and most common way is when people involved in a workgroup of transformation program design a future, improved situation through Value Stream Design (VSD).

From actual to future (improved) state

Depiction and analysis of the actual state of a Value Stream uses Value Stream Mapping (VSM). This mapping uses symbols or pictograms to describe processes, physical and information flows. The actual process, depicted with all its flaws, dysfunctions and improvement potentials is analyzed in search for a better, improved process.

Thus, once the map of actual state is drawn and improvements found, the sketch of the future improved state is done with a similar map, called Value Stream Design (VSD).

VSM and VSD don’t need much high-tech, a roll of brown paper and pens are enough.

The way to bridge the gap between VSM and VSD or to transform the actual state into the future improved one is the action plan.

Sometimes it requires a somewhat more conceptual step in between, like a Goal Tree or a Hoshin Kanri to identify and plan breakthroughs, before listing all necessary underlying actions in an action plan.

Nevertheless, the simplest and most common way for Lean to help shaping the future remains the Value Stream Design (VSD). It is not because it is relatively simple that it is not powerful or interesting.

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>More about How Lean can help shaping the future


Lean in the digital age: free apps

Lean-educated people will consider value as something a customer is ready to pay for because the product or service has some value from his/her point of view.
Lean-educated people will consider to use just-needed resources and avoid unnecessary storage.
But what about free or almost free apps for smartphones and tablets?
Do the Lean principles apply on the digital side?

Value vs price

Apps come for free or for little money. Not a big deal if a free app is not keeping its promises (most do though, I believe), it’s easy to get rid of it and it didn’t cost a thing. Users may be pickier about apps to purchase, but for less a currency unit a piece, who really cares?

Regardless of their price, many apps are real values. I manage my virtual train tickets and journeys via a well-designed and totally free app provided by the French national railway. I use the equivalent for optimizing my rides on subway, bus, tramway and suburb trains in Paris. Another great free app.

I read newspapers excerpts, listen to podcasts, watch educational videos, all provided for free, in some cases with a minor nuisance of advertising, the counterpart for apps being “free”.

As many smartphone / tablet owners, I have dozens of them.

The perceived value / cost ratio is almost infinite. Something impossible in the material world. So great value “nobody” pays for exists. Time to reflect on the Lean-definition of value..!

Just needed resources

Most of the time not-so-useful and never used-again apps will remain on smartphones and tablets, as long as storage space is not a problem. And it takes lots of apps before they turn into a problem of storage space.

Many Lean principles-aware people I know are real collectors of apps. Useful ones and most doubtful ones. The ones they use constantly and those fancy they once installed, tried, forgot and never deleted.

In strict Lean terms this would be waste. But is it?

Waste of what? A few high-definition pictures taken with the smartphone or tablet occupy more memory space than all apps.
Clutter on the screen? No problem, icons can be rearranged and ordered at will. When it’s difficult to retrieve a seldom used app, just type a search.
Battery life? Yes some apps may shorten it, but those energy drainers can be shut off: GPS location, Wi-fi and Bluetooth, etc.

Act of faith

Consider a Lean-educated promoter trying to convert a digital native to apply Lean principles on his favorite geek tools, I bet he/she would have trouble to demonstrate the rationale behind it.

Keeping Lean principles alive with a smartphone or a tablet, if no in the digital age at large, looks to me as an act of faith.


Related: Minimum Viable Product or just crap?

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Can 5S survive big data?

5S are meant to be the foundations of operational excellence as no efficient work is imaginable in a messy, dirty and unsuitable-for-quality environment. This is long proven in the “physical world” and until recently transposable into the virtual world of digital information.

In short, 5S is a framework for sorting, organizing, tidying, set housekeeping and behavioral rules and standards and improving operations. This “school of discipline” and its simple techniques yields fine result in business as well as in private life.

Yet with the rise of big data, this theorem may need revision and it may happen that laws governing physical efficiency are no longer true on the digital side.

This is an outline of more to come on the subject

From scarcity to abundance

From the very limited capacities to the sheer endless ones nowadays, data storage is no more a problem, not for storage itself nor for costs that decrease continually. It was once mandatory to manage the scarcity by getting rid of obsolete or non-essential data and files. This is no more necessary, may be just a nice-to-have option!
From necessary discipline to unavoidable chaos

In early times, limited data processing and storage capacities made data management and housekeeping discipline mandatory. With actual features and apps to retrieve old data and manage different versions of documents, the chore is pushed onto IT tools, freeing users from the necessity of order and tidiness.
Worse, the ever-growing flood of new data makes it impossible to spend time managing the flow. The chaos is unavoidable, but don’t worry, technology takes care.

Numerous, messy data is the new ore

Big data is about… big data, meaning very large sets of data of different nature. Data don’t even have to be complete or consistent, technology now knows how to cope with messy data!

More and more companies are making big money exploiting big data, that’s why data are called new ore.

As lean-educated people understood to think in terms of just necessary resources, big data is all the contrary, the more the better. And because more future value is in yet unknown use of data, those will be created, collected and stored with greed and no intention to discard a bit (!). This ore is endlessly usable and recyclable.

Those companies that haven’t started to collect their ore or started too late or unable to collect it have no other choice than buy it from those who have. Just as it happened with raw material in the physical world.

5S won’t get over the gap

It is interesting to discuss if proven merits of 5S will survive big data. Furthermore, younger generations, so-called digital natives, do they capture the interest of 5S? When I see the most offices in which the younger people work, I can make my opinion.

I assume that in short-term, 5S will only apply to the physical world, while other rules will prevail on the digital side.

Watch for updates

This is an outline of more to come on the subject. Follow me on twitter or on this blog to keep posted for updates. An e-mail or tweet to encourage me would be welcome.

Remember, I am a Frenchman, non-native English speaker. If you have suggestions to improve my writing, do not hesitate to contact me!

Chris HOHMANN

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