Dock to Marketing
The normal direction of this process goes from Marketing to the shipping dock. However, the process I am about to discuss started at the shipping dock and worked its way upstream all the way from the final shipping dock to the Marketing Department. This sequence took place one department at a time on about one to two week centers. This experience was the forerunner to the creation of the TTZ document. The TTZ is my attempt to illustrate the multiple connections between the interrelated departments in this organization. Subsequently, I have applied the TTZ to a great many for-profit and not-for-profit organizations to explain why improvement initiatives succeed and then why they subsequently falter and fail and then how to restart them for greater success. This whole case is an excellent illustration of what happens when you “Pull More Value” as discussed in the Chiropractic School of Lean Implementation.
I had a client that was in the cleaning equipment manufacturing business. They made equipment for cleaning such things as airplanes (big ones), military tanks, chicken processing chain belts, cars in car washes, and a wide variety of other industrial cleaning applications. Essentially, they had three major product lines that enabled them to recycle and reuse cleaning-process water.
- Pressure washers were the first major product line. They would spray hot or cold water to impact whatever needed to be cleaned along with surfactants, soaps and whatever other chemicals were needed in the cleaning process.
- The next product line included equipment to collect the water that had been sprayed, along with the dirt, oils or whatever was entrained in that water.
- The last major product line included filtration equipment to remove the impurities collected in the water, so they could use the water again to keep cleaning without having to continually use more fresh water.
For example, they installed a water recycle operation in Utah that reduced the amount of fresh water needed to wash a car from 43 gallons to 7 gallons.
Following the first three or four visits with this client, occasional damage to equipment at the shipping dock came up in our conversation. I asked them to tell me about their process for delivering things to the shipping dock for final delivery. They indicated that items were scheduled in master scheduling, and then were released all at once. For example, if a client wanted something from each of the three major products categories, there would be three to six separate serial numbers as well as separately processed work orders that would all be released at the same time, and eventually wend their way to the shipping dock. This resulted in the fast things, such as the pressure washer, arriving 6 to 10 days before the long lead-time things such as filtration equipment or water collection equipment.
The different arrival times meant that the quicker products had to be fork-lifted into the building at night for security and back out of the building to make space for production every day. Therefore they had a greater chance for being dinged or damaged, which was in fact happening. Another result of this practice was chronic emergency rework of finished product which also just bogged things down.
I saw that they needed to change from a “push” scheduling to a “pull” scheduling system, so I asked them what it would take to schedule their releases of product serial numbers so that they would all arrive at the dock on the day before the scheduled shipping date. Over the course of the next two months, they changed their information systems and their ordering systems so that this could be accomplished. The biggest change was to switch from an “all computer scheduling system” which was run and maintained by and visible only to the Production Manager, to a couple of large whiteboards at the back of the production office. The whiteboards were arranged in a spreadsheet fashion with the columns being the 31 days in a month, and the rows being specific final assembly resources. There was also a small space to the right of this spreadsheet designated for orders shipping beyond 31 days. “Today” was indicated by a 1/2″ wide ribbon, which was hung from the top of the whiteboard and had a weight at the bottom. The ribbon was simply moved along from day-to-day.
The idea was that you could SEE the status of each serial number progressing through production. In addition, each of the production departments could see when a given serial number needed to commence in order to be ready for the promised ship date. This allowed commencing long-lead items sufficiently before the short-lead items so they would all arrive at the same time in the testing department and then in shipping by the promised shipping date. This is a straightforward application of visual scheduling.
In addition, everyone could see where the buffers were for the very first time. A scheduling goal for this organization was to schedule the large orders with some buffer in between them so that small orders, for example a small pressure washer or a small filtration unit, could be built very quickly for a customer that needed it very quickly. Also (as we will get to in a while) information flows into this production system were very intermittent. The production manager had actually designed much of the equipment, several years earlier, and therefore was familiar with how they were built and frequently had to redesign the equipment for a specific order and then reorder parts, on-the-fly, because things changed… often without adequate documentation! (Keep reading for the systemic reasons why the documentation was inadequate.)
As the information regarding what orders were “next” was published in the production office so that not only the production manager could see it, but the fabrication shop manager, the assembly manager, the testing manager, and the sales force and manager could see what was coming up, all of those managers and crews began working in synchronization to the visually published schedule at the back of the production office… for the very first time in the company’s history. The Production Manager was no longer the source of “start now” information to every single entity in the production system, which he had hitherto been… since the company was started with three employees!
RESULT: In the course of one month the company increased its throughput by about 30%!!!! The production manager had been eliminated as the “constraint”; much to the joy of everyone involved… especially the production manager!
Note that according to the Theory of Constraints, throughput increases ONLY in response to improving the performance of the actual systemic constraint… in this case the production manager’s scheduling and communication tools. Also note that sometimes the systemic constraint is the information management tools with which people have to work. Obviously, the rest of the organization had untapped capacity which was limited only by everyone’s expectations regarding “this is just how we do business.”
Over the course of the next few weeks, as we tried to get Physical Transformation to increase its speed, we discovered that Physical Transformation was going really fast and then stopping… and then going really fast and then stopping… and then going really fast and then stopping…. Or more accurately, Physical Transformation was going really fast on “Item A” then setting it aside and picking up “Item B” and then going really fast on that item and then setting it aside to pick up “Item C” and then going really fast on that item and then suddenly setting it aside and picking up “Item A” again! It seems that “Item A” finally had the information necessary to rush it through! Then they would have to go back to “Item C” because they didn’t have the information for “Item B” yet. Nevertheless, they were going faster… just in a disjointed fashion. This began to be frustrating to everyone! Very quickly more “stuff” was lying around and becoming damaged which, of course, required more emergency rework.
More importantly, at the higher production rates, the information system that provided physical transformation with its production triggers, as well as production information and production materials had never had to go this fast… because the production manager’s information system had heretofore been the systemic constraint… not the larger, companywide, information system!
Next we sought the root causes regarding why the information was not “flowing.” We did this in an effort to enable complete orders to “Flow” out the door. As specified in the chiropractic school of Lean implementation, we started closest to the Customer: the Dock.
- The Dock crew said that it was Testing…
- Testing said that it was Assembly…
- Assembly said that it was both the Parts Department and the Fabrication Department (which makes sense because Assembly gets their information and parts from these two sources).
- Fabrication said they couldn’t get information from the Engineering Department.
- The Parts Department said they couldn’t get information from the Bill of the Materials Department.
- The Bill of Materials Department and the Engineering Department didn’t really speak to each other very well because the Bill of Materials Department was an input to final billing and finance and had been historically disjointed from the Engineering Department. Go figure.
Each of these assertions, along with its details, took about a week. Notice that from each managers point of view, the scope of “the problem” lived mostly in plus or minus 1 department from them! Their downstream Department whined and pushed too much and their upstream Department (or departments) couldn’t properly supply them. This had also been going on for many years. The Fortified Department-Centric View of the Organzation was very much alive and well!
When we “arrived” in Engineering, I thought that “The Buck” had finally stopped where it was going to land!
Much to my surprise, about two weeks later, as we were asking the head of the Engineering Department where the information was, he said that it took him 20 minutes make a change in the computer regarding any changes or updates that came back from the production departments. A piece of equipment might have 4 or 5 changes from the assembly floor that were never documented because it was so laborious in Engineering!
What we discovered is that the Marketing Department and the Engineering Department had developed and were locally optimizing independent computer systems that did not talk to each other to name product components! The Engineering Department was using a Linux system with eight-character filenames, and the Marketing Department was using Windows-based systems with long filenames! Therefore, the Engineering Department workers had to translate the part numbers between these two systems, and it was taking an awful long time to do minuscule, simple changes.
Miraculously, after the Engineering Department established the eight-character filenames as the company standard, engineering changes started being made in three or four minutes apiece… or at least the myriad simple ones began to be made in three or four minutes apiece. I was very surprised that some of the roots of the damaged equipment on the dock were the results of several broken systems that originated in Marketing.
This process culminated about 10 weeks after the production schedule was published on the back wall of the production office.
During my next couple of visits, I worked on understanding how the original documents for an order were created once the order was actually confirmed. I learned that this company had over 3000 full-blown… “Fully supported”… Bill of Material “Versions”! And what is more, everyone was perfectly okay with this! It was “just the way we do business.”
Apparently, Strategic Marketing had never defined what pieces of equipment would be built and what options would be supported for each piece of equipment. This was the Root Cause why orders were not flowing out the door!
The absence of the basic marketing decisions regarding such issues as “Why to offer what to whom for how much” and what options to offer with each product had never been addressed much less promulgated throughout the organization. Everyone was just doing their best to “Git-‘er-Dun” to meet promised delivery dates. Training took years of On-The-Job experience because there was not agreement on Basic Strategic Marketing Decisions. (Please see the TTZ Overview and related articles.) p>
The answer to “What options go with this product?” literally depended on which department head you asked… across the whole product line! Lack of answers to these basic decisions caused more waste and unnecessary emergencies than can be addressed in this article. Suffice it to say it was high stress and not very rewarding either financially or emotionally.
The engineering and production processes would go like this: the salesman would sell whatever combination of options on “close” equipment necessary to “get the order”… he somehow would get the order through Engineering (typically as a copy of a “close” piece of equipment with “minor changes”, which of course would produce yet another “fully-supported ‘Version'”)… the Bill of Material would be produced independently of Engineering to support purchasing and final billing (because engineering was chronically too busy to look at any “this time only” product). Then, the engineering documents, such as they existed, would be broadcast out to the Production Departments and Purchasing, and the product would wend its way through production as best as it could with lots and lots of questions back to Engineering. After the product was purchased, fabricated, kitted, assembled, and tested by “craftsman” (with privately held “cheat sheets.”), the information packet would be returned to engineering… where it would be “continually be selected” for update in the continual push of “current product support.” In short, changes were never documented back to their related “Versions.” Hence the necessity for downstream “cheat sheets”! This had been going on for 20 years as “Just the way we do business”! As the operation grew, the Engineering Department just could not keep up and was buried beyond belief.
This situation was not entirely the fault of Engineering… it was actually the responsibility of Strategic Marketing. Since Strategic Marketing had never defined which equipment was to be supported and which options were supported on each piece of equipment, the salesman would routinely sell an option that was available on one piece of equipment as an existing option on a lesser scale piece of equipment to “get the sale.” Whether the organization made any money or not did not matter! (Yes, my client did rectify this particular situation with later improvements, but first they had to be able to see it! Perhaps I will post that process as a separate story!)
Please… study the TTZ Overview and related articles much more closely. Uncorrected omissions on the 1st Tier subtly and surely foul up everything following!