DOING IT RIGHT IS CHEAPER

I decided to scan my immediate environment here in Victoria Island (V.I), Lagos for any lessons worth learning on efficient service delivery and its impact.

The local council after prolonged abandonment of a road stretch on about 2KM somewhere in V.I finally decided to construct drainage and lay asphalt in a move to repair the stretch. From the initial work done, it seemed they had done a proper assessment and found the root cause to the incessant degradation of the road over the years -usually soon after major rehabilitations. After one year of man hours, capital, and scarce resources, the job was declared completed. Unfortunately the unexpected happened, right in November a defiant rain poured; asphalt washed away, drainage collapsed, manholes got filled up and the entire stretch was not motor-able. Typically, the contract was re-awarded as usual to a expatriate constructions firm that spent another year to do a very thorough job. Drainage reconstructed and covered up appropriately, road tiles well laid, inter-drainage connector and underground reinforcement properly fixed.

Picture from http://www.omaxeindia.in/page.php?page=Road%20Construction

What that has happened in the spate of two and a half year which was used to construct 2 KM stretch is nothing short of:

1. Millions of dollars wasted from tax payers funds on the entire first project

2. 2 and a half years inconvenience to road users (customers)
3. Lost revenue on other projects that could not be serviced due to the engagement of reources of the first project.

The real cost of this avoidable mess is hardly quantifiable.

I guess doing it right the firt time (part of te seven habits of highly effective people) is actually about 60% cheaper than not.

Thanks for reading ( pls leave a comment)

Your friend.

Titus

ERROR-FREE PROCESSING IDEAS

           

Hello Folks,

Talking about day-to-day transactions, I have noticed over the years how business leaders take process improvement initiatives like SS and Lean with a pinch of salt. Often times, transactional processes are designed without proper understanding of the end point. Scores of millions is lost yearly on avoidable wastes that are either embedded or generated by the business. This time around I'd like to focus on designing process for an error-free transaction processing.

I have itemized a number of ideas for anyone interested in implementing some ideas on error-free processing.

Picture from www.improsys.in

IDEA 1 - Think of AUTOMATING repetitive activities using light computer apps like MS Access or off-shelf apps - nothing hypertek.

IDEA 2 - ELIMINATE HUMAN INTERVENTION where possible (very similar to idea 1)

IDEA 3 - For repetitive transactional processes, insert CONTROL steps that will limit errors like maker, checker approval

IDEA 4 - Where automation is not feasible, consider OPTIMIZING CONTROL steps that will eliminate error from processes like job rotation, shifts periods, job deliniation.

IDEA 5 - Where possible PREVENT processors from making errors using system capacities. This is called POKA-YOKE (Error Proofing). e.g. Design your Customer Information Systems to take only appropriate figures on texts and not both - thereby eliminating mistakes of putting erronous texts in date field.

IDEA 6 - Design your CONTROL to be BEFORE the PROCESS or at worst part of the process and not after the process (post moterm). This helps processors to own the audit/control thereby developing the subconiousness to do things right

IDEA 7 - SET achievable STANDARD for acceptable error rate using benchmark analysis and train processors on it.

IDEA 8 - MEASURE error rate of your processes using the six sigma methodology (or any better method if you know one)

IDEA 9 - REWARD error free processing. Put your money where your mouth is.

IDEA 10. This is the most important one - OBTAIN MANAGEMENT COMMITMENT. and stakeholders buy-in.

CREATING AN EFFECTIVE QUALITY CIRCLE

Putting together a cross functional team to solve the problems created in the course of business is a very powerful tool that is often underplayed by business owners. Asides saving an organization the cost of engaging consultants to solve their problems, it also creates an avenue to nurture the learning opportunities in an organization.

Quality Circle (QC) was established in the early 60's in Japan. It is made up of volunteers that are trained to identify work related problems, analyze them and resolve. These individuals are drawn from different departments (though preferably doing similar work) within the organization thereby giving the team a powerful pool of experienced team as an organizational resource. Members can also come from related departments so that they can contribute more from their understanding of the problem.

A good example is having a team of volunteers made up of technicians from the Engineering department, Product Developers, IT analysts, Sales men, Accountants, Controllers and Business Analysts come together as a group that meets like once a week to resolve work related problems like a recurring error made in processing a customer order. The different options brought to bear from the varied expertise will also serve as a very effective tool to manage the problems.

There is no size limitation but it must not be large. The principles followed in establishing a QC are as below:

Ideas in setting up a QC

• Draw members from cross functional groups (preferably people doing similar work)
• Schedule meetings for once a week or once in two weeks at most
• Ensure membership is voluntary
• Make the meetings compulsory
• The QC members should be trained by an expert on the conduct of a QC and problem solving skills
• There should be a pool of problems to be resolved by the QC
• There should be a steering committee for the QC to report to 

In a QC meeting, the following occur:

• Identification of a problem to discuss
• Getting deeper information about the problem from the process owner so that members can understand
• Brainstorming and analyzing the problems using tools like Ishikawa Diagram, Affinity diagram and other brainstorming tools
• Agreeing and making recommendations for implementation
• Sending the recommendation to the relevant approving authority.

The benefits of a QC

• It is a very effective means of solving organization's problems
• It may be more cost effective than outsourcing
• It facilitates organizational learning from understanding the cause of problems and resolving them by staff or the organization.
• It aids the personal development of QC members
• It promotes team work
• It promotes satisfaction of volunteers
• It facilitates continuous improvement

Just to mention a few.

Sample list of pool of problems for a QC

• Reduction of material wastage in a process
• Reduction of processing time (TAT)
• Improvement in customer satisfaction
• Reduction in lead time of a project delivery date
• Resolution of a repetitive audit non conformance
• Resolution of a recurring problem in the production process
• Resolution of a recurring customer complaints

You don't have to wait to have big organization to establish one, you should start today to enjoy the potency of this powerful tool. I will be your collaborator in making this happen for your organization - mail me at titus@profficio.com 

HOW DO YOU HANDLE MISTAKES OF YOUR STAFF?

Above popular business management strategies like Six Sigma and Lean, the way mistakes is handled is an organization has been identified as one of the critical success factors of the organization. When staffs make mistakes, the way it is handled by the immediate boss, management of the organization and policies put in place will largely determines how creative the organization will grow to become.

In a theory advanced by Sutton R in 2001 (In Weird Rules for Creativity), mistakes can be handled in a number of distinct ways. Each of these dimensions has its resultant effect. The choice of an organization would depend on what culture/type of business environment it chooses to create.
The usual practices you will find in most organizations are:

(1) The rewarding of successes
(2) The punishment of failure

This traditional practice usually inhibits creativity.

Here are Sutton's considerations/alternatives which will encourage creativity and innovation.

(1) Reward Success
(2) Reward Failure
(3) Punish In-action.

If your organization desires Creativity and Innovation, it will be nice to pay attention to reviewing your MISTAKE HANDLING POLICY.

It may be the respite you & your organization have been longing for.

What do you think? How can this facilitate innovation/creativity in your organization mates?

R.I.P ELIYAHU GOLDRAT (1947-2011)

The father of the Theory of Constraints (TOC) passed away on June 12 at 67 years of age.

Eliyahu was the popular author of The Goal amongst many other books. TOC grew to become one of the important hinges of Lean principles.

In The Goal he practically narrated how he had to surmount an almost hopeless operational position of his factory when he was posted to turn around a factory in his home town where he spent his childhood. He was an ace performer where he was and the company felt he would rise to the occasion and revive the ailing factory. His discoveries, leanings, success and thought patterns are clearly narrated in a rare style in THE GOAL.

May his soul rest in peace.

If you have not read THE GOAL, please try and do so before the end of the year. You will not regret doing so - you'd be shocked that you rarely have come across his style of explaining concepts. Let me know your opinion when you do.

BEYOND COST REDUCTION

I came across this short piece by Steve Martin and I feel sharing it at this time of the year may just get some of us started. These points align very much to my year plan. I hope they do for you too; somehow.

These difficult economic times have caused many companies to layoff millions of employees, cut back strategic expenditures and do many other things that are probably not in the long-term best interest of their companies.

I have identified Five Generations of Corporate Intellectual Growth:
1. Work (work harder and faster)
2. Sell (increase revenues to support expenses)
3. Cut (reduce and manage expenses)
4. Buy (apply technology, merge & acquire)
5. Think (use strategic innovation - exceed the norm)

Even good companies have regressed into the "Cut" mode with short-term strategies that they felt were the best move to get through the recession. Only time will tell whether or not these were good moves. History tends to say that those companies that "Cut" as their primary strategy will not do as well as those companies that applied thinking strategies to not only

THE 8TH WASTE: UNDER UTILIZATION OF PEOPLE

Recently I did a post of 7 waste of Lean (Check Thread) in an attempt to jump start some Quality Improvement Program in your organization.

The 8th waste which is not originally included in the traditional 7 WASTES OF TPS by Taichi Ohno is equally an interesting one.

The 8th Waste is UNDER UTILIZATION OF PEOPLE: When employees potentials are not leveraged on by the organization, the opportunity cost becomes a direct waste to the bottom line. Other sample of this waste are as follows:

(1) Persons put on the wrong job
(2) Giving position without the requisite authority
(3) Not dealing with perpetual under performance.

e.t.c.

I am sure you can relate with one of those.
Do identify this waste in your business and make necessary corrections.