The Data Heads

This morning I opened my weekly update from LinkedIn and saw the following note: Jay Bronec is working on automating QualiFine’s KPIs by integrating our CRM and Web data using GainSeeker.

I fired off an email and asked Jay to fill me in. He called my a few minutes later from his car. In the middle of the conversation I turned on the tape recorder so you could hear Jay explain how he is automating KPIs using GainSeeker SPC Software.

Jay’s company, QualiFine, is the largest independent Minitab training program in the country. He is also an independent regional representative for our GainSeeker Suite. QualiFine is aligned with Hertzler Systems because Jay wants to help his customers reduce the cost and improve the value of the data they have in their organization.

In this podcast Jay describes his “A-Ha” moment when he realized that he is no different than his customers: his current data collection system is unsustainable and unable to help him make good business decisions.

The other thing that you’ll hear is a connection to Mike Webb’s vision of sales process improvement. Mike has a blog called Six Sigma Selling, and in it he draws the parallels between selling and manufacturing processes. For example, if you provide sales people with better raw materials you’ll have a better close rate. If Jay is successful with his KPIs he’ll learn a lot about his ‘raw materials’.

For the last couple weeks we’ve been working on an OEE (Overall Equipment Effectiveness) project for a new client. When I sat down over lunch today with our CTO and Alpha Geek, Byron Shetler, he explained that the biggest issue – as usual – is getting the data. “This company doesn’t have an OPC/PLC network in place yet, so everything we did last week was around manual data entry.

“I set up a couple of GainSeeker templates to collect downtime, scrap, and efficiency, and we’re storing that as either variable or defect data every hour on every machine.” Byron pointed out that once this customer puts his OPC factory network in place we’ll automate the data collection piece.

By the end of the day Friday (after less than a week on site) Byron had a couple of dashboards in place. He couldn’t bring back any screen caps of their dashboard, but it sounds a lot like what you’ll see on the Dashboard page on our website.

GainSeeker Enterprise Dashboard - OEE Example

Byron reported that the customer was pretty happy that we got in and out so quickly. But more important, he’s excited about getting an hourly update on OEE, Quality, Downtime and Efficiency, and being able drill into any of those metrics by machine or operator or downtime reason, or scrap reason.

Byron reported: “This customer is pretty sharp, and he was practically rubbing his hands together in anticipation of getting his hands on that data. Being able to see the big picture and then drill into various components to understand the root cause is a huge opportunity for this company.”

In addition to linking to the OPC network, once it is in place, Byron also sees potential to feed data back from GainSeeker to the customer’s AS400 business system. “Right now the customer has a couple people who sit down and type data from paper records for scrap and production rates back into the primary business sytem.

I’m attending the Aberdeen Manufacturing Executive Summit today and tomorrow. The speakers have been great, but I’m intrigued by the live surveys that they’re running between speakers. This morning they asked two questions back-to-back and the results shocked me.

The first question was “How is the macro-economic picture affecting your budget?” I wasn’t surprised to see that only 9% of the people at the conference were forecasting increased budgets. The rest expected no change (31%), Frozen (14%) or Decrease (34%). (I’m afraid I’m not sure about the difference between No Change and Frozen.)

The second question was the one that jarred me: “How is the macro-economic climate affecting your growth strategy?” The results were a complete flip-flop. (Well the survey is being held on election day.)

Sixty-eight percent planned expansion, while only 6% planned contraction. The balance (26%) are staying the course.

Grow your business with fewer resources.

Do more with less!

What is clear from our experience, and is now supported by research from the Aberdeen Group, is that one of the best ways to do more with less is to empower your people with ready access to accurate, actionable, real-time data.

You can download a free copy of the Aberdeen Report on Event Driven Manufacturing Intelligence, along with our companion white paper on the Role of Real-time Data in Improving Profitability and Customer Satisfaction from the Portfolio section our website.

Real-time data helps you respond to problems faster and reduce material costs and scrap and rework costs, and it frees staff for more productive work.

That’s doing more with less.

Recently a colleague forwarded this email from a friend of his and asked me for my comments:

Please let me know what lean/6sigma book you would recommend. I’ve read a couple over the years but they are a bit dull and won’t fire up our management – is there one that is simple but convincing?

You’d be surprised how hard it is to get their heads out of the sand. Part of the problem is that we are so successful and dominant in our field.

e.g. At a major meeting last week, the exec responsible for customer satisfaction presented data to show that our competitor is the leader in terms of quality and customer satisfaction. He actually said “we don’t want to copy THEM because their margin is lower than ours so their quality is costing them money”. That’s how dumb and simplistic we are.

My response:

The problem you’re facing is way too common, and I don’t think there is any pill you can give your CEO to adjust his attitude. This isn’t what you want to hear, but until your CEO’s hair is on fire, I don’t think there is any book that will make a difference.

If you can find some smoke somewhere above the hairline, and then tie that back to quality and customer satisfaction, you might get somewhere. Sadly there is usually a huge disconnect between the ceo/finance function and quality/performance. Here is an true example:

I’ve been working with a customer (an electronics firm) on a data collection/analysis project. A bright Six Sigma Black Belt proved a direct correlation between the statistically significant variation on a handful of test results and out-of-box failures at the customer’s site. These were units that met specifications on well over a thousand tests, but still failed out of the box. Those OOB failures were threatening the contract: the customer was ready to pull the business.

We put together a proposal using SPC software to capture the signals so engineers would know immediately when they had a unit that was statistically different than the others (even though it still passed all the tests). It was a beautiful solution and everyone was really excited about it.

To sell that proposal to upper management my contact bypassed the (to me) obvious argument that identifing statistically significant variation would isolate defective units, which protects the customer from receiving bad product, thereby saving the contract.

(I can hear all the MBBs in the audience saying I’m not really using statistics right, but they were doing 100% testing here so pardon me.)

Instead my contact framed the proposal around faster product release cycles and the impact that would have on inventory turns. By having real-time data as the units were produced, he argued that they would be able to release production lots from WIP to Inventory 3 or 4 hours earlier. That was an argument that got the finance guy and the CEO excited.

I tell this story because it is an example of how a creative (read politically savvy) middle manager pushed through his agenda for quality process improvement using language that any  CEO understands. No book on SS or TQM or anything else would accomplish the same thing.

So look for smoke above the hairline. Something is keeping your CEO awake at night, and unless it is his girlfriend, you can probably tie it back to quality and customer sat.

Hope that helps, and best wishes.

Regards,

Evan

Even though the CEO and CFO didn’t care, in the first 10 days of the pilot project, GainSeeker real-time SPC software trapped two defects that the test process couldn’t catch. My contact reported: “Three defects in a year is enough to knock us out of ‘Preferred Vendor’ status. Anytime I stop two defects from getting to this customer, I’m a happy man.”