17
Steps to Successful Implementation of a QRM Program
SO YOU’RE CONVINCED QRM will work for you. You’ve weighed the arguments for QRM, absorbed the case studies and success stories, and pondered the opportunities in your own marketplace. Having evaluated all this data you feel there is excellent potential for implementing QRM at your company. But how and where do you start? And given the difficulties and potential obstacles that you have read about in this book, how do you maximize the chances of success?
This chapter provides fifteen concrete steps for you to follow to ensure success of implementing QRM at your company. I will attempt to build on lessons I have learned over many years of implementing QRM at dozens of companies. Before I proceed, however, it should be clear in your mind that you cannot reduce lead time as a tactic. It has to be part of a QRM strategy led by top management. Let us understand this further.
Throughout this book you have seen that in order to significantly affect lead times, firms need to change many of their traditional ways of operating. This will necessarily have a major impact on the organization’s structure. Such change has companywide implications and cannot be accomplished without total commitment from top management. It would be naive for senior managers to think that they can order their staff to cut lead times in half, delegate the responsibility, and expect that it will eventually happen.
This is why upper management must lead the company on the QRM journey. However, despite all the knowledge from experiences with prior implementations, there is no one sure-fire way for success—each organization must learn its own best way of achieving QRM. This is because each company and its management have a unique dynamic. So, even while upper management realizes they must lead the company down the QRM path, it will not be obvious exactly how to do so. True, a number of principles can be stated (and indeed, these form the basis for this book), and these principles can help greatly in promoting success, but in the end each company must endure a certain amount of learning based on its own unique nature. In order to support this learning process and yet leverage off all the knowledge we already have about QRM, I have designed a generic implementation process for QRM efforts.
Other novel approaches to manufacturing strategy also advocate some similar implementation steps, but my approach is unique in a few ways. One, it doesn’t involve just putting together a team for a project, but rather, it has stages that progress through several different teams, from a steering committee, to a planning team, to an implementation team. Two, although each implementation step is summarized below, it is based on a large number of details given in previous chapters, which the teams should use for their initial training and as a reference for their detailed work. Thus, the whole QRM approach to implementation is based on a set of documented and argued principles, as opposed to a number of loosely stated philosophies.
FIFTEEN SPECIFIC STEPS TO IMPLEMENTING QRM
These specific steps will not only assist you in planning and implementing a QRM program at your organization, but will also provide a roadmap to successful implementation, while at the same time allowing for the learning that must occur in each individual organization.
Step One: Get Top Management Commitment
To be successful in implementing QRM you will have to change many operating norms of the company, including the way you use financial measures and other metrics such as efficiency, existing reward systems, traditional reporting structures, and functional boundaries. Such changes will not occur without the backing of top management. Failing to get this commitment up front will only mean that the project will stall later and may even be perceived as a failure, thereby undermining the chances of ever getting another shot at implementing QRM.
If getting total commitment from top management seems too daunting-because management is too deeply rooted in cost-based methods, for example-then let me share a little secret with you. This secret has helped me to achieve successes even in very traditional organizations. It is this: Getting upper management’s commitment is not to be seen as scaling a high wall in one attempt; rather, it should be seen as climbing a series of small steps over time.
The reason for this is that in most cases, you don’t know up front exactly what norms need to be changed first for a QRM project to succeed. Each company is a little different from the others, and some are very different. For similar reasons, top management often doesn’t truly understand the extent and implications of what it is committing to when it gives the green light to a QRM effort. So you must begin your effort by getting an initial commitment from upper management, and then, as the effort progresses, return to it time and time again. It is best that this not be seen as coming back with a change in direction or a modification to the rules of engagement. Instead, each visit back with upper management should be seen as seeking additional definition and refinement of the original commitment.
It is not unusual for a typical session with a senior manager to go as follows.
Scene: The executive vice president of a company has received a request from a QRM implementation team to change a long-standing company policy. He is currently in a meeting with one of the representatives of this team.
Executive VP: “Did I really commit to that when I gave you the go ahead?”
QRM Implementer: “Not specifically, but you did give us an overall direction and goals when we began this project, and committed to supporting that. And in order to proceed in that direction, we will have to change this existing rule at our company.”
Executive VP: “Are you sure we can’t make some simple modifications or exceptions to this policy?”
QRM Implementer: “Unfortunately not. We have spent a good deal of time debating this in our team. Here are the reasons why the policy as a whole must be scrapped…” [she continues with detailed reasons, and then concludes] “… thus, if you still believe in pursuing the goals you laid out for us, the policy will have to go.”
Note that there will typically be many such meetings between the QRM implementers and representatives of upper management.
There are only two sure-fire ways to get the steadfast commitment of senior managers. The first involves education: Have them attend seminars, workshops, or conferences, and have them read about QRM. The second involves their peers at other companies. Have your top managers call and speak with executives at other companies that have been down this path, or better still, have them visit those companies and talk to managers and employees there.1
Step Two: Steering Committee and Champion
After getting the initial and general commitment from top management, put together a steering committee for the QRM effort. This should include at least one senior manager who is willing to be a champion of this effort.
This committee will not run the project or even manage it. The main function of the committee and the champion is to identify an initial area for a potential QRM project and then to be available to clear obstacles in the path of studying this area further. Also, the committee or champion can be useful in strengthening top management’s commitment to the project by helping out in situations like the scenario I described with the vice president and the need to eliminate the company policy.
Step Three: Pick a Potential Product and Set Rough Goals
The steering committee should home in on a product whose lead time is too long. (Throughout the following discussion, I will use the term product in the broad sense of Chapter 11. Remember that this usually will be not one actual product, but a family of related deliverables serving a given market segment.) Committee members should present several candidate products to the whole committee for consideration.
At this point it is worth reviewing the principles in Chapter 5 (if the product involves the shop floor) or Chapter 11 (if the product involves the office). In particular, some of the key points to be observed in picking a product are: Aim for a lead time reduction large enough so that it can’t be obtained by tweaking the current system. If the desired lead time reduction is achieved, it should “make a splash” in terms of its effect on company performance or sales. The resulting project should have a reasonable chance of success (in other words, don’t start your QRM implementation by choosing a project with an almost impossible goal). The project scope should not be too broad, so that the implementation team isn’t spread too thin. And the scope should be such that there is a good chance that ownership can be had of all the processes required for the particular product chosen.
The above principles, as well as the supporting details in Chapters 5 and 11, have evolved from successes in getting many companies to adopt QRM. The basis of this success has been to start small and then build on the initial success with additional projects. In this respect, the QRM approach differs in a fundamental way from approaches such as reengineering (or BPR), which have often attempted to reorganize whole divisions or companies in one fell swoop, in many cases with disastrous results.
Step Four: Put Together the Planning Team
Based on its initial impression of the processes covered by the chosen product, the steering committee should put together a cross-functional team of people called the planning team. This team should have a representative from each functional area that has a substantial impact on the delivery of the given product. The role of this team is to study the QRM opportunity in detail and come up with specific implementation recommendations to management. The people on this team are not necessarily going to be the ones that end up in the cell (if one is recommended); however, there may be some that do. I’ll discuss this issue later.
In creating the planning team, the steering committee should attempt to use, as much as possible, the QRM principle of seeking volunteers. If not enough people volunteer, both employees and managers should use the approaches outlined in the previous chapter to drum up more interest in participation.
Ideally, the planning team should be collocated and devoted to the study full time for a short period such as one or two months. However, many organizations may not be able to afford giving up an individual from each of several departments for this length of time. The alternative is to have regular times for the team to get together—e.g, every Tuesday and Thursday, from 8 A.M. to noon-and a space that is permanently allotted to the team, where they can meet, keep team records, have computer resources, and the like. It is extremely important to set regular and frequent meeting times, rather than having to put people’s calendars together to schedule each meeting. Instituting regular meeting times will clarify the time commitment needed from all team members to their managers and also maintain a sense of urgency for the project. Note that, in order to put this team together and get people’s time and the space, the steering committee needs to have sufficient authority over the rest of the company.
Step Five: Invest in Team Building
Even though the planning team does not have a long life, it is useful to engage in some team-building exercises along the lines detailed in the previous chapter. The only point to keep in mind is that these exercises can be less extensive than they would be for a team that may end up working together for several years. Still, the planning team needs to gel, in order to be able to work together and brainstorm effectively, so some investment in this step is important.
Step Six: Get Rough Measures of Current System Performance
The first significant task for the planning team, after it has completed the team-building exercises, is to get ballpark measures of current lead time performance for the given product. I’ve noted in several places that companies do not have good data on their actual lead times. In order for the team to set its goals and have an idea of what it takes to accomplish these goals, they should conduct some preliminary data gathering on current lead times. However, this step should not occupy too much time; more accurate and detailed data gathering comes at a later step.
Step Seven: Refine Scope and Set More Precise Goals
After the team has a better idea of the current lead time performance, it can establish more precisely the goals for the project and what processes or activities should be included (the scope). In setting the goals, note the points made above and in Chapter 16. At this point the team should also run the refined scope and goals past the steering committee and get its blessing on the project, or further refine the scope and goals based on feedback from the committee.
Step Eight: Conduct Detailed Data Gathering and Analysis
Now that the team has agreed upon the scope and goals, they are truly ready to sink their teeth into the problem of reducing lead time. At this stage, the team should use the methodologies detailed in this book. For example, if the project involves office lead time, then the team may wish to gather data using tagging and process mapping exercises. If it concerns a fabrication operation, then data on product volumes, routings, setup, and process times might be called for. Chapters 5 and 12 discuss in depth the types of data needed and the analysis methods that serve the team in this effort.
Step Nine: Brainstorm Solutions
In this step you apply the full power of QRM methodologies. The team begins to rethink the way jobs are done with the aim of minimizing lead time. In particular, a critical part of the brainstorming is for the team to home in on a focused target market subsegment (FTMS). Choosing the FTMS is important because all the details of the subsequent solution, as well as its impact, are dependent on this choice. After picking the FTMS, you should apply all the remaining principles discussed in preceding chapters. Also, team members should review Chapter 13 to help them come up with additional ideas to reduce lead time.
In addition to generating potential solutions, the team should attempt to quantify their impact. Various analysis tools such as rapid modeling can help with both quantifying the lead time impact of decisions, as well as eliminating inferior solutions.2 It is advisable for the team to generate not just one, but multiple solutions, with the quantitative and qualitative impact determined for each.
Step Ten: Present Recommendations
The planning team should next hold a formal presentation for the steering committee and upper management, to share its analysis and insights and to present its recommendations for implementation along with anticipated results. Data gathered during the team’s work can help in this stage by showing management the extent of non-value-added time in the system and other forms of waste (see the Ingersoll case study in Chapter 12 for detailed examples of such analyses and how they helped). Also, the radical solutions proposed by the team, along with estimates of the dramatic lead time reduction potential, can help to open management’s eyes to the need for change.
Step Eleven: Create the Implementation Team
Assuming management approves one of the solutions recommended by the planning team, the next step is to create the team that implements the solution. Since the QRM solution involves some type of cellular team, the implementation team will consist mainly of the people who will be in the cell. However, it may have some additional people allocated to it for an initial period, such as support people or specialists on a given topic, to help the team get off the ground. Ideally, there should be some overlap between the planning team and the implementation team. For example, if you make a few of the planning team members part of the implementation team, either as cell members or as part of the transitory support staff, it will help to maintain continuity of thinking from the planning stage to the implementation stage. You should keep this point in mind when choosing your planning team so you can choose some members who have a good chance of ending up on the implementation team.
At this stage you may ask, if we wanted overlap between these teams, why did we create two of them in the first place? Why not create just one team from the start? In fact, this is one of the key differences between my approach and those in other texts on related manufacturing strategies. The reason for two teams is that the implementation team will almost certainly differ significantly in size and skill base relative to the planning team. The planning team needs to have a sufficient knowledge base to understand all the processes involved, study QRM principles in detail, conduct appropriate analysis, brainstorm solutions, and make recommendations to management. The implementation team needs to have the skills to do the tasks needed in the actual cell. Consider a lead time reduction project for order processing, which results in the recommendation for a Q-ROC. The planning team could well involve 10 people from a host of departments. The implementation team might consist of just 5 people, 3 who will work in the Q-ROC, and 2 others to support and train them during a transition period.
In creating the implementation team, remember to use the QRM principle of asking for volunteers, along with other related principles laid down in the previous chapter. (It is to be hoped that some of the members of the planning team are so enthused with the ideas they have created that they will volunteer, and thus help accomplish the preceding goal.) Also, the implementation team must be collocated into a space created for it, and its members must be full-time. On these two issues there can be no compromises.
Step Twelve: Team-Building and Training for the Implementation Team
This step is more critical than for the planning team. Most members of the implementation team may end up working together for several years, so it is essential to put effort into making them a cohesive team. Not only is it necessary to go through team-building exercises, but now it is important to study all the different categories of training listed in the previous chapter and to create a mechanism and plan for the team members to obtain training in those areas.
Step Thirteen: Implement the Recommendations
This is the step you have been waiting for, where the rubber finally hits the road and you start to see some results. All preceding steps have involved theory, planning, training, but now you get real action. Perhaps you have to move or purchase machines to create a manufacturing cell. Or a new office setting is created for a Q-ROC. Whatever the detailed idea, whole new ways of delivering the product are put in place.
Of course this stage is not without difficulties. Unanticipated problems will occur and the team will need to resolve them. This is where the foundation of good team training, both in team dynamics and in problem-solving skills, shows its worth. In addition, organizational or political barriers may surface, and the team, along with the help of the champion or steering committee, will have to tackle these as well.
Be sure to put in place mechanisms, such as those in Chapter 16, to track lead time accurately, so that the team can measure the progress toward its goal, as well as have data for problem-solving and improvement.
Step Fourteen: Progress Review, Presentation, and Recognition
If you did your homework properly in choosing the FTMS, and if the team makes substantial progress toward its goals, then you should get the “splash” that you targeted. Once you have achieved some initial successes, it is time to do a formal review of the team’s progress. The team should have a meeting, anywhere from two hours to a day, to assess where it is with respect to its goals and what still needs to be done. In addition, they should brainstorm over what they did well, what were the key contributors to success, what mistakes were made, and what they might have done differently if they were to do it all over again.
The team should document the results of this session and turn them into a presentation. They should deliver this presentation to several audiences, including upper management, but also all other managers and supervisors, and employees in both the office and the shop floor. Senior management should use at least one such occasion to recognize the team; it is not necessary that there be a monetary reward, but public recognition, presentation of plaques or certificates, or even just handshakes with the company president go a long way toward making the team feel good. These presentations and the recognition awarded to the team help stimulate people to volunteer for the next team-which brings us to the last step.
Step Fifteen: Repeat the Process with Additional QRM Projects
After you have obtained concrete results from the first effort, and hopefully the splash too, management should leverage off these results to initiate additional QRM projects. Now the company may be able to engage in several projects, or ones with a broader scope or greater difficulty, because the lessons obtained from the first project should provide insight and help the company be more effective in these additional projects.
In doing the next round of projects you should follow the same set of steps. The company should not become blase about the need for team-building, training, or project reviews. Each project will have its own needs and its own lessons, and it is worth sticking to the full process.
Again, the best advocates for continued change to the QRM way are both the planning and implementation members from completed projects. You should ask them to speak to people throughout the company to help stimulate even more projects. The managing director of a British company that makes tooling found, after publicizing the results of their first cell, “We were constantly asked by shop floor employees, ‘when are you going to start on the next cells, because we want to be included’.”3
Eventually, as more and more QRM implementations come on-line, you will see the company transition into the new type of organization described in Chapter 16.
QRM: MANAGEMENT HEADACHE OR OPPORTUNITY?
Despite all the literature on lead time reduction and related manufacturing strategies, companies still struggle with how to successfully implement QRM. Implementation calls for substantial change, and management may well feel the changes are too onerous, and that it cannot put the time into following through with the QRM program.
But this precise point allows us to look at QRM another way: If it was easy to accomplish, why wouldn’t all the companies in your industry have done it already? Taking this point further, it is clear that implementing speed is not passe—there is still a substantial competitive opportunity for companies embarking on QRM implementation. If these companies can overcome the obstacles and successfully adopt a QRM strategy, they will not only create a profitable enterprise, but also construct a significant barrier to competition. The very fact that implementing QRM is difficult means it will take the competition a considerable amount of effort and time to catch up, if it can at all.
The QRM journey awaits those companies wanting to begin the twenty-first century with whole new ways of operating, novel organizational structures, hitherto unforeseen levels of performance combined with job satisfaction, and a vision of democracy that flows through our society and into the workplace. What is there to prevent you and your company from embarking on this exciting journey?