Organizational Opportunities from the Frontline Story 15: Challenging Status Quo | Operational Excellence Quick Hits

In today’s session, we’re going to continue on the series of Organizational Opportunities: Stories and Lessons Learned from the Front Lines. Today’s story comes to us from a manufacturing company. They’re a made-to-order environment. They had a lot of pressure dealing with production issues to meet customer demand. And when we started to look at the operation, I asked them where they thought the bottleneck in production was, and they said, “Oh, it was in our layout department,” so how do we go about challenging the status quo when we went out to that department to improve productivity?

So first of all, when we look at process improvement, our belief is that every one process can be improved and improved significantly. Also, in order to improve the organizational performance, we don’t need to improve every process. And to improve organizational performance, you need to understand where to focus. And if we focus, then the first step is to challenge the status quo in that area. So in this case, they go, “Oh, it’s our layout department.” This company did huge forgings. So I said, “Okay, let’s walk out to the layout department, take a look at what’s going on.” So we walk out there, and it’s like I start looking at the different workstations in the layout department and only one of the four are working. I’m like, “Well, what’s your utilization cause I only see one resource out of the four resources working?” They’re like, “Well, what’s utilization?” I said, “Well, utilization is how many hours you have available working, and how many actual parts are you working on during that time?”

They’re like, “Oh, we don’t know.” I said, “Well, why is only one of the four stations working?” and they said, “Well, part of the issue is we send this material out to a lab because we have to take a core sample. The lab takes the core sample, does a test to see if the material’s good. They send it back. And if the material’s good, then we can start processing the material through layout. And so most of these forging you see laying here are waiting for the material test to come back to determine if the material’s good or not.” And so I said to the plant manager, “Well, I only have one question.” He’s like, “What’s your question?” I said, “How many of the tests actually fail?” He’s like, “Oh, less than 1%,” and I’m like, so why are you holding them? He goes, “That’s a good question.”

I go, “Every item has a serial number on it. If it happens to not meet the spec, you can find it downstream and pull it out of the system. But right now, because of this policy, it’s like, ‘oh, we wait for the material to get approved from the lab test before we release it.'” It’s killing their productivity in that department. So we got to challenge that status quo. So we’ll talk about what results we got by just doing that. So first of all, I want to talk about the chain analogy. So if we understand where to focus, if we think about the chain, we can look at the chain and measure it two ways. We can measure its weight, which acts like cost in a company. So if I know the weight of each link, and I want to determine the weight of the chain, I just add them up. So weight acts like cost in a company, and it follows the additive rule.

But if I want to know the strength of the chain, how much capacity there is in the system, that’s determined by the weakest links. If I look at the different capacities of these links, this chain is determined by this link that has a capacity of 950. So in this case, that department of layout was their weakest link because work was piling up there, and they weren’t getting much processed through that department on a daily basis, not even meeting customer demand. And so we need to challenge, why is that happening? So when we challenge the status quo, what we want to do is we want to look at the process and understand why they’re doing it a certain way. And of course, the number one answer you’re going to get is, “That’s the way we’ve always done it.” I’ll probably get that answer 90% of the time.

So now we want to challenge that using the Socratic method. And be careful, if you use the Socratic method to start asking questions, you might uncover a Bigfoot. So Bigfoot is a term that we coined working with another company, and the reason we call it Bigfoot is because everyone’s talking about it, but when I go look for evidence of an actually happening, we actually can’t find evidence that it actually exists. So there’s a lot of history in the company where some special cause event happened that caused some process to deviate. They put some immediate countermeasure in place because of that, and that just became the standard for some reason, and nobody can explain why that is in a place. So what is the Socratic method? So the Socratic method is a way of creating a dialogue between individuals based on asking and answering questions to stimulate critical thinking and to draw out ideas.

And so one rule I have, never tell the person that you’re speaking with that they’re wrong or they don’t know what they’re talking about because what they believe is that they’re correct, but they don’t understand that they might be using a false assumption or have false data that made them come up with that conclusion. So when we apply the Socratic method, prior to your conversation, what you want to do is you want to start to understand if there is a Bigfoot and why it exists. So then clearly define the cause and effective thinking that is necessary to achieve the objective, which is we want to eliminate that Bigfoot and change the mindset. So during the conversation, present the Bigfoot and challenge the person to explain why it exists. And what we really want to do is understand what their current belief is or their false assumptions. Then from your investigation, give a counter-example of why their logic does not hold true, and then ask them if they’ve personally experienced a Bigfoot and let them explain their experience.

And so this case, it’s like, “Oh, we always wait for the lab results to come back.” It’s like, “Okay, so why are you doing that?” “Well, that’s the way we’ve always done it.” “Yeah, but if you look at the risk of that material being bad, and every material has a serial number, okay, what’s the negative that can happen if we just process that material?” “Well, we might have a little bit of loss capacity, like 1% loss capacity, but right now it’s like 75% loss capacity,” so the gain is huge, the risk is small. So then if we challenge the person to start articulating your cause and effect thinking under the new paradigm, it can break away from that Bigfoot and open the door for big opportunities for improvement.

So that’s our session for today. So in this company, what we did is we challenged that. They started processing jobs not having the material samples back and actually opened the flood gates. The increase of productivity was huge, and it ended up creating the largest shipment month ever in the company’s history just by changing that mindset and changing that Bigfoot, that’s like, “Oh, we have to wait for the results to come back to process it.” It’s like, “Nope, we don’t have to do that. Stop doing that, and it opens the door for huge productivity gains.” So that’s our session for today. Again, visit us on our YouTube channel, visit our website, visit me on LinkedIn, where we’re posting information about all types of mindset change necessary to get breakthrough improvement.