Some years ago I had a very rare privilege of being interviewed by one of the most influential Vice-Presidents of a huge world-known corporation.  It was indeed a privilege, as a person of this statue very rarely gets involved in preliminary contact with a potential employee.  I saw this as a promising sign and had quiet hopes of being employed by this company.  My interview was proceeding smoothly.  The Vice-President seemed to be impressed and very interested.  This was good news to me and I was very comfortable with this topic until the moment when the interviewer asked me the straightforward question “So how did you do it?” This seemingly simple question caught me completely off guard.  I didn’t know what to say!  There was so much I could talk about!  I hesitated, shrugged my arms, and muttered “we just did it, Sir.”  He did not look too impressed and I had this sinking feeling that I just destroyed this one-in-the-lifetime opportunity.  Later, driving home, I was analyzing what had happened.  And I couldn’t forgive myself.  I had this phenomenal opportunity to impress the “big boss” and possibly find for myself what we commonly describe as a “career”.  Oh, but not just any “career”. This was “the Career”.  The one with “the” and capital “C”!   And instead of speaking convincingly about what we had accomplished, and how many crumbs of this glory were traceable to me personally, I just managed to squeeze out “we just did it, Sir.”   What a jerk I was!  

Well, I have analyzed this situation many, many times since then and always come to the same conclusion.  No, I didn’t lie, and it was not an exercise in empty showmanship.  We indeed did it in a way, which seemed to be almost totally effortless.  It really looked like it all happened by itself, without friction, fights, mistakes and frustrations.  But this is a very superficial impression.  It took a long time, with a huge training effort, numerous changes to the company management, writing brand new procedures, and countless, countless mistakes, some of which were costly. It took relentless pursuit of “bettering” whatever we were doing, from our sales practices to service policies, from attention to the customer to attention to the engineering specification details. 

But what a change it has been!  We used to have a big crowd of inspectors watching quality.  This was quite typical to our industry and the number was proportional to the size of the company.  Now there were none.  Operators were authorized to perform self-inspection. Finally they were the ones who always had nearly total control over making the product “right the first time and every time”.  Quality was no longer an attribute to a dirty word.  Finished product quality instead of being “inspected-in” became “designed-in”, “planned-in” or “quality assured” through other means.  Quality Assurance personnel were no longer directly responsible for quality.  Real-world Quality Assurance and “engineering of quality” was their new domain. The quality verification function was reduced to periodic quality audits.

  • Our Engineering Department actually had “on duty” engineers providing on-the-spot services to the assembly lines and to our Suppliers. 
  • Our Service Department “quick-response team” was analyzing and sharing with other departments the warranty data as soon as they became available. 
  • Our Sales Department started inviting representatives of other departments to their fiestas and started to acknowledge the effort of other departments as a contributing factor to their sales figures. 
  • Even the Purchasing Department took interest in issues other than the lowest possible price of the purchased product that used to dominate purchasing decisions. The term “purchase cost” gradually replaced the term “purchase price”, and this in itself was revolutionary. 
  • Delayed deliveries became a point of concern to more than just Material Control management.
  • And our Suppliers started shipping products which were diligently inspected and certified to the agreed standards. 

All of this didn’t happen without frustrations and occasional discomfort. It required management’s vision and commitment, and it was indeed complex, complicated and costly.  But it made our company much, much better and paid back for all efforts big time! 

When a new or modified management system is being defined and implemented the company may take another critical look at their present business practices. Amazingly very few companies see it as an opportunity for improvement.  This lack of interest or just plain “fear of change” is encountered very often. Later these same companies will complain about their practices as “ineffective”, “overburdening”, “bureaucratic”, “wasteful” or “not working for us”. The most convincing proof of properly defined and implemented management system is usually in the terms of business performance.  The companies will have to identify and address their ineffective routines. The consultants will have to re-specialize more towards business consulting and understand business implications of their recommendations. The auditors will have to learn some new tricks.  It will be certainly a totally new ball game!

I am often asked what is this special stuff which others did which that made them so successful.  And my usual answer is simple; “We know as much as they know.  Maybe even more. They have equipment which we have or may have. Their business practices are similar.  They really do nothing special. They just DO IT!” 

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Tatakidai (叩き台), also spelled as Tataki-Dai, means “Beating Board” or “Chopping Block” or “Talking Paper”. Western versions of Tatakidai are often called “A3 Problem-solving Report”, “1-page Summary” or “1-page Report”. A3 is a well-proven method of proposing new ideas at an advanced stage of their research, and an invitation to the collaboration of all involved parties to the formulation of final recommendations. Tatakidai or “A3 Problem-solving Report” provides advanced information and the recommendations/conclusions (appr. 80% ready) to all affected or involved, so that the recipients will have an opportunity to familiarize, criticize and contribute in a meaningful and constructive way before the proposed idea is presented for final approval and action.

The name of this simple yet very effective management technique comes from the preferred A3 metric paper size of the report (Note: A3=2xA4, where A4 is close to “letter” size). A3 has information presented in a structured format which serves the above purpose, where the supporting documents may be allowed as attachments. Some Japanese companies (i.e. Toyota, Nissan) actually developed blank Tatakidai forms, lined and with defined fields which dictate the overall layout and allow only limited flexibility in the design of each Tatakidai document. Generic, basic layout may look as below:

Implementation:
Typical implementation of 1-page Report techniques follows the following steps:
– Provide required training which reviews available options and the gives practical examples of A3
– Define specific needs of the company for 1-page Reports and their practical application
– Design the most suitable form for A3.
– Issue Standard Operating Procedure with defined (“5W+1H”) instructions for the above.
– Perform preliminary and follow-up assessments of “A3” effectiveness, where required. Fine tune.

Benefits:
Optimizes use of time/resources (research outcome is presented to the interested parties when > 80% completed and proposes conclusions/recommendations. Often discussed with key players beforehand to gain maximum support when presented.
–  Provides an opportunity to discuss and influence final recommendations before their ultimate endorsement minimize the risk of potential poor decisions.
– Promotes an environment in which people are encouraged to contribute to the decision-making process, and appreciate and value the differences in opinion.
– May be used for communicating of any information, i.e. Continuous Improvement suggestions, sourcing decisions, corporate directions, strategies, objectives and plans, etc.
– Builds consensus of all affected parties:
        i.   improves work environment and teamwork
        ii.  encourages the overall “buy-in” and required support
        iii. simplifies the decision-making process
        iv. helps to implement the idea quickly and effectively

Summary:
Excellent management tool. Simple yet very effective. May serve any company. Delivering the best results when equipped with well defined conclusion/recommendation based on sound research, common sense and consensus of all affected/interested parties. For presentation visit http://workspace.office.live.com/#mailquexx/ASQ Workspace

This report was presented for BC Chapter for American Society for Quality. You can find this article on page 6-8 in the ASQ Newsletter June 2010: http://www.asq.bc.ca/newsletter/newsletter.pdf

PJ Jakovljevic, a well respected industry analyst posted an article that asks the compelling question, “Not Yet Sold on SaaS ERP for Manufacturing?” PJ investigates why so few manufacturing systems are delivered via the software as a service (SaaS) model.  His article showcases Plex Online and its research & development (R&D) model which has elements of free and open source software (FOSS) where the development of new features are driven by online requests from customers who stimulate the process by involving the user community in all phases of the system development.

The SaaS provider R&D department became a profit center, as customers pay for the majority of R&D which addressed over 10,000 requests for new features and customizations in 2006 alone. To meet customer needs and expectations Plex has formed a Customer Advisory Board (CAB) and maintains Wiki-based help system which gives end-users an opportunity to contribute in a crowdsourcing manner. This article opens an interesting discussion of market dynamics, new trends and solutions.

Posted by: Arc Rajtar | May 13, 2010

Keep It Simple … Advice for Startups

Take some time and watch a video of a David Heinemeier Hansson presentation.

Something special for startups. Inspiring.
http://www.loudthinking.com/presentations

“David Heineimeier Hansson, the creator of Ruby on Rails and partner at 37signals in Chicago, says that planning is guessing, and for a start-up, the focus must be on today and not on tomorrow. He argues that constraints–fiscal, temporal, or otherwise–drive innovation and effective problem-solving. The most important thing, Hansson believes, is to make a dent in the universe with your company.”

http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2351

DEMONSTRATION PROJECT TO STUDY “REAL-WORLD” OPERATING CONDITIONS 

Burlington, Ontario, April 21 2010 – Rapid Electric Vehicles (REV) of Vancouver today delivered its first all-electric light duty SUV for use in a North American commercial fleet.

REV’s advanced modular electric drive system is used to electrify today’s most popular short-haul fleet
chassis found in Ford Escapes and F-150s, transforming them into advanced, highway-capable electric
vehicles.
 
Burlington Hydro Inc. (BHI) is first to own the REV 300 ACX, a retrofit Ford Escape producing zero tailpipe
emissions and complete with smart grid and wireless telemetry capabilities. The ACX features a 160-
kilometre range, a 144-kph top speed, with no compromise to performance or safety.
 
“The REV 300 ACX is not a hybrid nor is it a concept vehicle – it is a fully electric vehicle that will be in daily use in the Burlington Hydro and GridSmartCityTM fleet,” said Jay Giraud, REV’s CEO and president.
 
“This is a first for Canada, made possible by Burlington Hydro’s leadership and REV’s vehicle architecture designed by our electric vehicle veterans who have more than 30 years experience developing proprietary drive systems and electric energy storage technologies.”
 

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The SUV is the focal point of BHI’s Pure Electric Vehicle Demonstration Project, also the first of its kind.  The one-year study will be conducted by the University of Waterloo, with funding from Transport Canada.  It is designed to increase understanding of the operating characteristics of an all-electric fleet vehicle in practical, working applications.  Characteristics to be monitored include recharging patterns and requirements; optimizing the usage and recharging cycle in a real life setting; overall vehicle performance; drive-cycle; battery state-of-health and electricity grid impacts.
 
“Ontario leads the world in the development of the emerging Smart Grid, and Burlington Hydro is committed to be the leading distribution utility in Smart Grid development within the province,” said Gerry Smallegange, president of Burlington Hydro. “This electric fleet vehicle demonstration project with REV and our partners is proof of that leadership pledge.” 
 
The vehicle’s motor and drive system technology was developed specifically for fleet applications by REV, an international private company that offers complete modular drive systems, transforming light- duty Ford trucks into advanced all-electric zero-emission vehicles.
  
The Burlington study will be supervised by Roydon Fraser, Professor of Mechanical Engineering and Michael Fowler, Associate Professor of Chemical Engineering at the University of Waterloo, from February 2010 to February 2011. The findings will be useful to designers and prospective operators of electrified fleet vehicles.
 
REV and Burlington Hydro believe “hub and spoke” fleets, like the one operated by Burlington Hydro, potentially represent the best opportunity for initial widespread vehicle electrification. These fleets typically operate from a central point and deploy vehicles with predictable usage patterns. They are therefore ideal in respect to centralized re-charging infrastructure.
 
“There are thousands of fleets comprised of millions of vehicles across North America alone and they represent a significant proportion of vehicles on our roads, most of which are in daily use,” Mr. Giraud said.  “They include utility, couriers, mail, municipal vehicles and numerous other kinds of fleets. Therefore, using electric vehicles will deliver major, immediate environmental benefits for the fleet market today and other OEM platforms in the future.”
 
  
 
 
  
About Rapid Electric Vehicles
Rapid Electric Vehicles of Vancouver, British Columbia’s mission is to become the leading supplier of grid smart, zero emission electric vehicle drive systems to global fleets and OEMs.
  
About Burlington Hydro
Burlington Hydro Inc. is an energy services based company in the power distribution business. The company serves over 58,500 residential customers, and approximately 5,500 commercial and industrial customers.  It maintains 32 substations and almost 1,300 kilometers of low voltage distribution lines throughout the municipality and employs 95 people.
 
For more information:
 
Patrick Folliott, REV Communications:  416-879-2224    pfolliott@realityclick.com Gwen McGuire, REV Communications: 416-948-6500    gwen@gemcguire.com
Posted by: Arc Rajtar | April 13, 2010

About consulting, thumping pipes and … rats.

Consulting is an interesting and very vibrant industry with revenues measured in hundreds of billions of dollars per year. Consulting business spreads over the thousands of specializations (there’s over 130 specializations in the quality consultant field alone). Each specialization employs an army of professionals, generates considerable revenue, and occasionally, makes-or-breaks corporate backbones.

So how much do they charge for their services?! There is this very old anecdote about consultants, their role and their fees.  According to this story a cooling system in one of the nuclear power plants had developed symptoms which put operations of the atom reactor into alert status. The cooling system of the nuclear system is one of the most critical parts of the reactor with a jungle of very complex pipelines providing water, which cools the reactor core and prevents a Chernobyl-type disaster.  It was the cooling system of this nuclear plant which developed some strange noises.  Something was suspiciously “thumping” in these pipes.  No wonder everybody felt somewhat uneasy about it and emergency procedures were invoked.  An immediate investigation was launched to find and fix the cause of these strange noises. Despite all efforts, local specialists couldn’t find what was causing the noisy phenomena. Pipes were “thumping” more than ever, and the management was becoming more and more concerned with every hour. 

A nervous search for an effective solution was continuing fruitlessly until somebody suggested seeking the advice of the retired foreman who was responsible for the cooling system until his last days of work.  He apparently knew everything about this cooling system as he had supervised his area from the first day the power plant built was commissioned.  A decision was made to engage him as a “consultant”.  When he arrived, he was debriefed about the strange and disturbing noises.  He seemed to know what it was, nodded his head and requested a heavy hammer.  He took a walk along the cooling pipes, stopping from time to time, and listening attentively to the strange noises.  Suddenly he stopped, took a swing with the hammer and smacked one of the pipes. The strange noises stopped immediately.  And they never came back again! 

Everybody was relieved.  The whole problem was a very minor one.  It took less than an hour to fix it and the solution was that simple!  Management thankfully expressed gratitude for the consultant’s help and mentioned casually that the company expected a reasonable invoice for his services.  It didn’t take long and an invoice for $1000 was received.  Now, this was considered way too much for the one-hour engagement and the integrity of the invoice was questioned.  An explanation of the consulting fee structure was requested. 

When it arrived, it said as follows: “Dear Gentlemen, in response to your inquiry regarding the structure of our consulting fees we are pleased to advise that the cost for our services was calculated as follows: for 1 hour of consulting time $25.  For knowing the effective solution to the problem (read: what is it, which pipe to hit, how and where) – $975.  We hope you’ll find the above satisfactory. Truly yours. Etc.”

Consultants who have on record that they succeeded getting a client company to the land promised in their contractual obligations do quite well financially.  When the meter starts running they will charge between $600 and $2500 per day. In major metropolitan areas, where consultancy companies equipped with a number of specialists offer broader support services, the rate will usually rise above $1200 per day, peaking at about $4000 for a specialized service demanding short-supply skills.  An established consultant, with plenty of unsolicited referrals, can comfortably keep the meter running three to four days a week, so the income is attractive. Not as good as open heart or brain surgery, but not as messy either. At those prices, consultants can expect some flak.

Robert D. Gilbreath, himself a consultant with Phillip Crosby Associates, and  a devoted supporter of “theory of constraints” and “business re-engineering” techniques, quotes Voltaire’s “the first divine was the first rogue who met the first fool” when referring to the consulting profession. He also quotes the following scene as typical to the close encounter of third kind with between a corporate executive and a consultant:

“A management consultant, you say. How do you know?”

“He has a wrinkled suit, a briefcase, and is more than 50 miles from his office. On the way here he stole my watch, and then charged $1,000 to tell me the time.”

“A consultant for certain. What the hell, send him in.”

Consultants are plentiful. According to Dr. David Collins of Sandwell College (UK), “there are so many consultants around these days they are being used in research labs in place of rats. First of all, there are more of them. Secondly, there’s no chance of a lab assistant falling in love with one of them, and lastly they’ll do things no self respecting rat would dream of.”

When I started my consulting practice in 1991, my records indicate that there were only four consultants practicing in the ISO 9000-related field in my neighborhood. In 1996 this same list of consultants contained over 140 names. It does not take a rocket scientist to figure out that this spontaneous growth and the quality of offered consulting services were going in two opposite directions.

Good consultants are a scarce commodity. Their advice can be invaluable and, despite impressive consulting fees, this advice is worth every penny. The engaging of a good consultant should follow principles of a sound business decision. And there’s nothing wrong with expecting that consulting services should provide decent Return On Investment (ROI) expressed in client’s money saved or earned thanks to the consultant’s advice.

My thoughts on consulting. I hope you found them entertaining. 

Arc Rajtar

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