The Big Why: Russian Automotive example

I stumbled upon this funny pic. yesterday in Gary P. Cox's blog (he has many more of those). 

A funny story came to my mind, which, I guess, explains the whole Big Why question quite well. Interestingly enough, the story comes from Russian Automotive industry (yeah, formally it exists, although it has been dead for over 20 years now), while everybody is discussing American Big Three bailouts. Well, learning from worst cases works in a lot of cases, doesn't it? 

The story itself was told by a friend of mine who is working as an IT Consultant for a big machinery manufacturer: they produce assemblies for agriculture and construction machines industry mainly. One day the company got a perfect deal for supplying spare parts to a famous brand foreign Automotive company, who had built an assembly line in Russia and was planning to localize a part of production through Russian suppliers.

Well, being quite familiar with local specialities, the client insisted on installation of Quality Control system at the end of the line. They brought in those fancy lasers, which were checking the dimensions of the product in order to reject all defects. The count of "good" and defected items was interfaced to their ERP system for later use in order to update daily assembly line schedules.

Several weeks later the storyteller happened to be passing by the conveyor belt at the point of the Quality Control installation. He was extremely surprised to see a group of people doing strange movements and running constantly forth and back... Well, apparently factory management set a special team, whose only task was to cheat the lasers: the guys had a set of 100% confirming to standard products with which they were constantly replacing items on the conveyor belt and switching them back after the dimensions control.

Of course, wondering why he is getting such low quality product, the customer started sending Quality Control teams to the site... But local "smart" management found solution for this problem as well: a daily batch of final good quality items was always stored in a hidden place along the conveyor. As soon as customer representatives were entering the premises a special operator started replacing items on the belt with this nicely prepared inventory... The Automotive company representatives had to scratch their heads and agree with what they saw: 100% confirming products at the end of the line. 

Several months later a decision was made to introduce higher level of inspection: apply RFID tags to all items and therefore not only count but also individually identify what is passing through the dimensions control point.

Apparently, the western management hoped that the Russian manufacturer confronted with such a level of control would have to find new ways of quality improvement. You know what happened? The factory just hired 10 more guys and gave them hot steam pistols to switch RFID tags forth and back, forth and back and continued cheating their high potential purchaser.

What is the lesson in here?

I guess, it's petty clear.

No matter how obvious best practices and philosophies are. No matter what tools and techniques you are bringing in. No matter how many consultants you hire. Your results will always be unsatisfactory unless your management stops searching only short-term benefits and starts taking real responsibility.

Outsourcing vs. Lean

So, I am an LSS newbie. And my "desk book" at the moment is Pyzdek's Six Sigma Handbook

Therefore I am naturally calculating error rate in everything I see around.

Couple of days ago I heard this funny , let's say, "A". The company headquarters in Stockholm found that their British subsidiary processes are a great mess. They decided to roll out new ERP system, which would confirm to all corporate standards.

OK, here how the whole implementation worked:

• Business Analysts from A's Stockholm office prepared a concept of requirements for the new ERP system. 
• An external consultant from company B was hired for overall project and change management as well as functional design in collaboration with A's London office.
• Upon the completion of the functional design it was handed to IT consultancy company C located in London. Its analysts and consultants prepared detailed software specification. 
• Detailed specification was transferred to C's development office in Bangalore, where it was developed.

Well, back to my Six Sigma book: first thing I could remember is RTY. 

It's almost obvious that at every step of transformation there will be misreading, misunderstandings, errors, etc. Add language and cultural difference and opsss... No wonder, in this particular project deliverables were so little of what the senior management from Stockholm expected. 

Well, is there anybody who would still call Outsourcing Lean?

Aren't we making the development process too complicated, while trying to slash the costs?

Hello World!

Well, those of you who come from IT background are definitely aware what "Hello World!" is - first attempt to do something new. And that is exactly what this post is meant to be!

I am not sure there will be any visitors or readers around here and whether my reflections are of any particular interest.. But why not give it a try?

I've been blogging for years already for my friends (250 readers on my Livejournal blog) telling about my trips, studies, languages and lifetime experiences. 

Well, now time has come when I need a space to write down my ideas and thoughts about professional, not personal life. At least I need a personal "piggy box" to collect my discoveries, reflections and, of course, mistakes... At most, I want to have a place to share, discuss and learn.

Nevertheless, If you ended up here in one or another way, let me introduce myself.

My name  is Vladimir.

I am native Russian, who grew up Central Asia, studied in Russia, Czech Republic, Italy and ended up working in the Netherlands, serving clients Europe-wide.

Strictly speaking, I am an IT guy, who happened to have formal education in Professional Communication and General Management subjects as well. (You can always find more on my LinkedIn profile or personal website)

Though creation of this blog is a direct result of my professional involvement in technology driven Supply Chain and Operational Management improvements and high fresh interest in Lean Thinking, Six Sigma and TPS...

Therefore, coupling of IT vs.  Lean will probably be the main topic of  this blog. But, again, who knows, where it will bring me? :)