As part of my day job I am often asked to help a team, project or department find a way to improve the value they deliver. When dealing with knowledge work having a single, prescriptive path is rarely effective because even the most mundane product support work includes discovery and innovation. Once we have discovered a path it is important to step back and generalize the approach so that teams can use the process in a variety of scenarios. I have found that developing a generalized approach is rarely as straight forward as changing the personal pronouns in the process to refer to another group. Regardless of this hard won realization, I still read posts and hear about people that are considering adopting best practices or procedures from other groups without tailoring. Adopting a process, procedure or even a tool using an untailored, out of the box approach is rarely a good idea in knowledge work. Alex and his team continue to search for a generalized approach that can be used to transform the entire division
Chapter 37. Alex and his team continue their daily meetings do discover the answer to the question “What are the techniques needed for management?” In Chapter 36 the team had settled on a generalized five step process which was:
- Find the bottleneck,
- Exploit the bottleneck,
- Subordinate every other step to the bottleneck,
- Elevate the bottleneck, then
- Repeat if the bottleneck has been broken.
Ralph (computer guy) voices a concern that they really had not done step three. After some discussion the team finds that the by constraining how work and material enter the process they really had subordinated all of the steps in the process to the bottlenecks. Remember that the work and material entering the process had been constrained so the bottlenecks were 100% utilized (no more, no less). During the discussion, Stacey (materials) recognized that the earlier red/yellow card approach the team had used to control the flow of work into the bottlenecks was still in place and was the cause of the problems she had been observing (Chapter 36). In order to deal with the problems caused by earlier red/yellow card approach and to keep everyone busy, Stacey admitted to have been releasing extra work into the process therefore building excess inventory of finished goods. The back of the envelope calculations showed that the plant now had 20% extra capacity therefore they needed more orders to keep the plant at maximum capacity. Alex decides go see Johnny Jons (sales manager) to see if they can prime the sales pump.
These observations led the team to the understanding that every time they recycled through the process they should have re-questioned and revalidated EVERY change they had previously made. The inertia of thinking something will work because it has in the past or because it has for someone else is often not your friend in process improvement!
Chapter 38. Jons, Alex, Lou (plant controller), Ralph and one of Jons more innovative salesmen meet at headquarters to discuss where they can come up with 10 million dollars of additional orders. During the discussion it comes to light that Jons has a potential deal that he about to reject because the prices are well below standard margins. Alex points out that since the plant has excess capacity the real cost to produce the product is far lower than Jons is assuming (labor and overhead are already sunk costs). The plant could take the order and make a huge profit. Alex and his team convince Jons to take the order if the potential client will commit to a one year deal. They further sweeten the deal by committing to a quick deliveries (something other companies can’t emulate) in order to avoid starting a price war. Jons agrees to accept the order as the potential client is well outside of the company’s standard area of distribution therefore will not impact the margins they getting on other orders. On the way back to the plant Alex, Lout and Ralph reflect that they had just seen the same type of inertia that the team discovered the previous day in their process improvement approach and that Alex’s new role in changing the whole division will need to address even more organizational inertia.
Later Alex and Julie (wife) reflect that the key to the management practices Alex is searching for lie in the application of the scientific method. Instead of collecting a lot of data and making inferences, the approach Johan had taken begins with a single observation, develops a hypothesis, leverages if-then relationships and then tests those relationships. Alex searches popular scientific books for inspiration to his management questions. When they discuss the topic again, Julie, who has continued to read the Socratic Dialogs, points out that they follow the same if-then pattern that Alex has described as Johan’s approach.
Re-Read Saturday Notes:
- I anticipate that the re-read of The Goal will conclude in two weeks with part 18. Our next book will be The Mythical Man-Month (I am buying a new copy today so if you do not have a copy . . . get a copy today and please use this Man-Month).
- Remember that the summary of previous entries in the re-read of The Goal have been shifted to a new page (here).
- Also, if you don’t have a copy of the book, buy one. If you use the link below it will support the Software Process and Measurement blog and podcast. Dead Tree Version or Kindle Version