A new lean tactic

“Learning from Variation” is the latest in our lean tactics series. The theory of variation leads people to make better decisions; it is important to know whether something is predictable or unpredictable – it changes how you act; it is important to know when things are the same and when they are different – and that is not as obvious as it sounds. These tactics give you the essentials for using the theory of variation in your decision making.

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AXA help desk wins chief executives prize

ICL’s AXA help desk has been using Vanguard’s methods to transform the way they design and manage their work. The result has been improved service and reduced costs and, not surprisingly, this work has caught the attention of the chief executive. The team has been awarded the chief executive’s Gold Award – something rarely presented. Steve Parry will be presenting this work at the next Vanguard conference (details will be sent in future newsletters).

More on call centres…

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Bad advice on call centres

Consultants can only give advice according to their view of the world. Given that most call centre consultants subscribe to the mass production view, it follows that their advice is fundamentally flawed. See two examples in newly up-loaded articles at https://www.vanguard-method.com/v1_lib.php?current=945

While you are there, compare the advice given with the observations in the other new article: “A call centre worker speaks”.

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A Visitor from Japan

I saved this to last, as it is a long article for the newsletter – if the business of ISO 9000 interests you, you might want to copy this and read it at your leisure.

Two years ago, I received the following letter from Japan:

Dear Mr Seddon,

I read ISO 9000 News in August 1998 and learned about your book. I am reading your book and am in accord with your way of management thinking.

I have been an industrial consultant for about thirty years. During this time I have done much improvement work (Kaizen) at client’s factories and have written many books.

Then ISO 9000 came. As in the UK, redundant government officers and surplus industry quality managers became assessors and consultants for ISO 9000 registration. Generally they have not been familiar with JIT, VE, Taguchi method and so on, which are concerned with true quality theory as you mentioned. Thus the similar problems you talk about in your book have occurred in Japan.

So I had to participate in the ISO 9000 movement to prevent installation of bad systems for my clients. In 1996, I was certified as a lead auditor and since then I have written several books and many articles on ISO 9000 introduction.

But generally Japanese organisations are losing their world class systems by introducing the ISO 9000 management system.

Sincerely yours

Takaji Nishizawa

I guess we can say that finally ISO 9000 is doing some good – it is undermining the opposition! Takaji Nishizawa told me that the Japanese assumed the problems they were having were unique to them. When he read my book he was surprised to learn that all was not well in the UK, so he decided to visit to see what he could learn.

Takaji Nishizawa visited the UK in April 2000. He had asked us to arrange visits with small to medium size organisations in the manufacturing sector. The six organisations visited comprised two automotive suppliers, both of which were registered to QS 9000, a metal box manufacturer, a label maker, a paint maker and a specialist supplier of measurement equipment.

Takaji Nishizawa was concerned to learn how these organisations had interpreted ISO 9000 in practice. Between visits we discussed the organisations’ general approach to management and whether or not they were improving performance. In short, those that were improving were doing so in spite of the Standard – they had avoided letting the Standard impede their operations. That is the best that can be said for ISO 9000 registration. It can impede operational performance and implementation should be managed closely to ensure it does not.

Four themes emerged from these visits:

Bureaucracy versus simplicity

The best example of a quality manual was the label maker (it has to be said – a Vanguard client). They had integrated the quality manual and management procedures. Each part of the manual began with a high-level flow of the end-to-end process. Each subsequent procedure followed the hierarchical format of purpose, measures and method – where the measures in use related to the purpose of the process and method was a flow diagram of the process. Similarly, the metal box manufacturer organisation had integrated the quality manual and management procedures, reducing the documentation to a minimum. The specialist supplier of measurement equipment was working towards a simpler and combined quality manual, but at the time of our visit, the quality manual was some 350 pages long.

By contrast, the two automotive suppliers that were registered to QS 9000 had enormous volumes of paperwork and the associated bureaucracy (form filling etc) extended to the work areas. To take one example of the bureaucracy: Consistent with the requirements of the Standard, the automotive suppliers had corrective action procedures. In one, Takaji Nishizawa asked: “How many non-conformances have been reported?” The answer was 5 by customers and 2 internally over the last year. Takaji Nishizawa knew immediately this was not a good system. Given the volume of goods being manufactured there were too few problems. It is not unusual to find bureaucracy stifling intent – to declare a non-conformance is to risk trouble. It ought to be a source of learning. But for that to be the case, the way people behave has to change (see below).

The paint maker, which was registered to ISO 9001, also had an enormous number of quality manuals, written to satisfy the assessor’s requirements for each business unit to have it’s own manuals. Interestingly, the work flow in the paint maker was very simple, they mixed and canned paints. The working areas were not clean, there was abundant inventory, some of which was clearly old and, most important of all, the organisation appeared not to be learning. The bulk of non-conformances reported were for colour matching. The data appeared to be stable over time (although they were not used to establish capability – what the system was predictably achieving), in other words this system can be expected to have such problems unless something is changed. Aside from the scope for improving the measurement and control of raw materials, Takaji Nishizawa saw a further probable cause of failure. He asked if this organisation specified the method of application – how the paint should be used by the customer. The answer was no.

Use and mis-use of quality tools

Takaji Nishizawa was concerned that some of these organisations had employed quality tools but without understanding them, hence the tools were of no value. For example in two cases they had “tried” Kanban in conditions for which it was not appropriate. In the first, the line was not a flow; hence Kanban would not improve anything. In the second, the line was making to stock, so the benefits of Kanban would not be realised.

The approach to error-cause-removal in the automotive manufacturers was bureaucratic and unlikely to lead to learning. In keeping with the requirements of the Standard, non-conformances were identified by declared means (for example SPC alert and corrective action reporting). The non-conformances were then reported and subject to later analysis. Takaji Nishizawa was concerned that this approach would lead to loss of knowledge. To use his expression “The truth has gone”. He maintains that the right way to learn is to attend the non-conformance when and where it happens – this is why the operatives on the Toyota line can and do stop the line. If a non-conformance is studied at source, no data is lost – the data tell the truth, they will not be turned into a representation of the truth. Then a hypothesis can be formed and tested. In that way, learning occurs.

In a further example of incorrect use of tools, one organisation employed “visual control” – displays at the work-stations describing what “good work” looked like. However, these displays were complex and had, as he observed “much small writing” – they were unlikely to be useable by the operatives, who, in any event, kept their heads down throughout the period of observation. It was, he observed, as thought they were there for the sake of being there, not for the purpose of helping the operatives do better work. Takaji Nishizawa made the following observation: “These managers are confusing two types of information. Information that is common and should be known by all is to be used for training and should not be needed as visual control. Information that is specific (to a customer’s job) is needed for visual control and should be available to the operator. When managers fail to make this distinction confusion arises”. To make everything available, as was the case here, runs the risk of employees feeling they are being taught to suck eggs – a sure cause of demoralisation.

Design control versus process control

Takaji Nishizawa made a profound observation on the implicit theory of the Standard. He noted that the Standard treats design control and process control as separate clauses. In fact, it does not raise the subject of process design at all, leaving process management to be thought of in procedural terms. To quote Takaji Nishizawa: “Quality is made in the process. You cannot, or should not, separate product design from process design as the Standard does. Process design builds quality in and waste out as has been shown in the Toyota production system and in using Taguchi’s methods. The Standard focuses managers on the control of product or service design and, separately, takes a “procedures” approach to processes – there is insufficient attention to process methods – how quality will be made.” Takaji Nishizawa used the following simple diagram to illustrate his point:

Design and process should be thought of as integrated

The revised standard (ISO 9000: 2000) will also says little or nothing about process design or the need to couple product or service design with process design – a major failing.

Leadership

Of the six organisations we visited, three showed evidence of genuine and sustainable improvements in their operations. However, as we shall see, this had little to do with ISO 9000 and everything to do with their leaders. All three leaders had undergone personal learning experiences. One had travelled with a Japanese sensei (expert) while the expert went around the organisation’s sites in America. One had taken a trip to Japan to study with a sensei. The third was already down the road of systems thinking and was very concerned to take a systems approach to ISO 9000 registration and hence avoid the usual bureaucracy and sub-optimisation associated with the more usual application.

But the impact of the leaders went beyond this. Two described their experiences with quality managers and ISO 9000 assessors. To quote one: “In every meeting with the assessor, I argued for what was right for my business and I would not be influenced to do things that did not help. I also fired three quality managers for spending too much time working with quality documentation from their offices and not on the shop floor, where quality is made. This behaviour made them more susceptible to being influenced by the assessors. In my experience the assessors are not up to the job. They don’t get paid enough, so the general standard is low. They generally lack knowledge – they focus on the Standard and are afraid to look at processes. Many have old-fashioned ideas; they have little understanding of how to manage a business. For that reason I kept all of our improvement work outside of the documented quality system, because I did not want the assessor interfering with something he would not understand.”

The other did likewise. He kept the quality manual deliberately vague. He said: “I don’t want it to be precise, that would give the assessor more things to pick on. If the specifics are there the assessors will focus on them. We were concerned to ensure that ISO 9000 would only be looked at from the point of view of how it might add value to the business, nothing else mattered. We integrated our management procedures within the quality manual, which is only ten pages long, and kept them to a minimum. For example, we have no self-generated work instructions, the work instructions are the customers’ drawings; our people use their brains and decide in each case how best to make them.”

In summary, Takaji Nishizawa sought to learn whether the same problems were occurring in both Japan and the UK and how people were dealing with such problems. He found that same problems were occurring and he was particularly concerned about the problems caused by the poor quality of auditors. The solution was for managers to take responsibility and lead rather than follow their auditors. For managers to lead in a productive way, it would help them significantly to know about the principles and practice of managing flow – the secret behind the Toyota production system. This is a prerequisite to the appropriate use of tools.

But of course ISO 9000 says nothing about any of that… why on earth do we call it a quality standard?

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This is an excerpt from my forthcoming book – “The Case Against ISO 9000” – second edition. In this revision I maintain my attack on the Standard, criticising the new version, ISO 9000: 2000 and proposing a better standard based on systems thinking. The second edition of “The Case Against ISO 9000” will be published in October / November 2000. If you are registered to receive this e-newsletter, you will be told the date of publication