The wonder of dabbawallas

Denis (http://mysenko.com), an old University friend of mine, who happens to be living in Mumbai at the moment starting his own company Esperanza Consulting pointed me to quite an interesting entrepreneurship - Dabbawallas.

A dabbawala (one who carries the box), is a person in the Indian city of Mumbai whose job is to carry and deliver freshly made food from home in lunch boxes to office workers.

There are 5000 dabbawallas (uneducated and in most cases even illiterate) in Mumbai and they manage to deliver 200 000 lunches a day in an unbelievably effective and reliable way: there is only one mistake in every 6,000,000 deliveries.

Add to the facts that this structure is existent for over 120 years and neither uses technology nor has its infrastructure and you will understand why I called it a wonder. Shouldn't we all have a better look at the way they work and try to learn from these people?

Having done a very quick research I can now highlight a couple of basic and most important points:

• "Error is horror"- every single dabbawalla knows that there is nothing worse than a mistake
• Customer in the first place: nothing can stop the process. Even bad weather, transport delays or storms are not an acceptable excuse for late delivery. Amazing, but when Prince Charles expressed a desire to see the operations, the dabbawallas requested him to schedule the meeting such that it did not interfere with their mid-day delivery timings.
• "Complexity opposes Compliance". Dabbawallas use very simple and effective colour coding to mark destinations (remember: most of employees are illiterate). No technology traps, infrastructures and budgets. 
• Do not deviate from your core competency. Dabbawallas are aware that any set of additional services would require building completely new Supply Chain and, most importantly, will cannibalize existing market.
• Flat organization: dabbawallas virtually have no boss due to they are all shareholders themselves. Besides, they are always in power of making instant decision.
• Keep people united: there is a strong network between dabbawallas. Not only they work in small groups, but also meet altogether every month to sort out any differences and issues.
• Human capital is the one and only Dabbawallas' business asset. Most of the people work there for over 30 years. They know their work, their customers, their peers.
• Be humble ;)

Pretty Lean, eh?

You can find a lot more information on http://www.mydabbawala.com/ 

You can even plan your own "Day with Dabbawalla" and see the whole organization from inside. If you accept all the rules, of course.

Non Value Activities again: how much do you spend on listening to the VoiceMail instructions per year?

I'll ask you to make a very quick test in order to understand what Non Value Activities are.

Grab your mobile and call your voicemail. Now count how many seconds did you spend listening to this ugly automatic voice "You have reached you voicemail. If you want to listen to your messages...."Gosh, what else would I call for?

Personally I have to check my voicemail at least 3 times per day and on average listen to 40 seconds of dumb instructions every time... Simple calculations: over 12 hours a year. Imagine that! I spend 12 hours a year listening to a set of totally superfluous directives.

Does it make any sense?

Non Value Activities outrage

The more I read on Lean Thinking and TPS, the more outrageous I become about how stupidly our time is spent on things, which nobody benefits from.

I had to go to some bureaucracy office today in order to obtain a couple of papers.

The whole procedure required me to call in advance and set an appointment (great idea: no waiting!). An office manager from my company was kind enough to arrange that and later sent an e-mail with a confirmation code, which I had to provide at the entrance. Well, not bad, unique identification for attendees.

I came to this bureaucracy office 5 minutes in advance and handed the printed appointment code to the reception girl. She REJECTED to accept it.

"Your surname, please". "At what time do you have your appointment?". "What reason?"

She typed it into the system, checked that the information I said was correct and handed me a queue number.

I have only one question: WHY? Isn't typing the unique ID quicker?  Why do you assign it, if the officer doesn't give a damn about using it?

I entered a huge room with around 20 service windows there. All the sofas were placed in a corner of this hall right by the window #20, while all other space was free and the entrance was in the room's other side - by window #1.

While sitting there I noticed that a particular window would serve a person on a particular need. Why not place sofas along the whole space and let people know which window (or set of windows he is expected to go to). Otherwise you make people go forth and back - just as it happened with me.

My window was #2. (And good thing I had to wait only 10 minutes!)

The lady over there was very pleasant and knew her business perfectly. She checked my papers, smiled and went to make a copy of my passport. She went all the way to the window #20, where the copy-machine was. And by the way all the other officers were doing the same exact thing with EVERY attendee.

Why? Did anybody think of installing 2 or 3 copiers? Or at least about installing the only one by the window #5?

The lady came back in 5 minutes, smiled once again, handed me some paper and asked to pay 40 Euros by the cashier.

Right, the cashier's window was 20a. Right by the #20.

Well, why didn't she asked me to do this before making the copy? We would not have to wait for each other all the time.

Or even better: why not accept my money right there?

Damn, all these movements around the room are such a clear example of NVAs!

Cashier took the form I got from the officer and my 4o euros. Here is what followed next:

1) She typed some numbers (amount and operation code, I assume) on the keyboard 

2) Checked money with the false banknotes detector

3) Signed the paper

4) Stamped the paper

5) Put the paper in some kind of a printer, which printed another stamp on the paper

6) Handed me the paper along with payment check

You decide, which of these activities provide any value the client. The payment operation took me 9 minutes. Can you imagine spending 9 minutes on just payment at McDonald's, for example?

Well, enough with all this bureaucracy nonsense!!!

 

The Globalization era is over? Part 2

http://whatmatters.mckinseydigital.com/the_debate_zone/will-globalization-be-derailed-by-the-world-financial-crisis

Back to my globalization question I discovered an amazing discussion today! Definitely worth reading through.

The breakdown has created a political impasse. State rescues of entire banking systems are a necessary and inevitable response to the financial meltdown, but the consequence will be to try to limit banking to national units. Italian taxpayers will not want to see their money used to bail out remote eastern European debtors. The same political logic applies for fiscal stimulus packages, where voters will not want to see foreign producers in effect subsidized.

When I was speaking about the end of globalization I was considering only corporate movements towards shorter Supply Chain, turnaround into insourcing instead of outsourcing (after all those talks about rising labour costs in China). I totally missed the political importance and impact of strong international ties.... Well, though that all seems true, I am reminded of another discussion topic I had a couple of days ago at the round table hold by Cranfield School of Management together with TiasNimbas University: in order to get out of this crunch coordinated measures with a very strong leadership should ba taken on a GLOBAL scale. That is why G-20 hold a meeting in London. That is why governments are trying their best to solve the problem altogether. Shouldn't it on the other hand strengthen our the politcial and financial ties?

Forget all the bankers, traders and politicians! I mean, they are not everything in the world. Companies are still looking for new outsourcing destinations (Mexico and Northen Africa are newest hot spots), though that is something I mostly disagree with. Many consultancy companies still bet on the international talents pool model. Internet continues to connect processes, people and objects all over the planet.

Indeed, the ability of any government to shield its economy and society from outside influences and dangers has steadily eroded in the past two decades. That’s because the current wave of globalization has unprecedented characteristics. As Internet access penetrates the most remote corners of the globe, it is touching more people in more places more cheaply than ever before. It allows Vietnamese artisans to peddle their handicrafts in Europe and South African teenagers to share music files with peers in Scotland and religious leaders to preach to believers across oceans. 

Another interesting idea I grabbed from the discussion is "virtual globalization". Indeed, with all available communication and media tools, who want to spend thousands flying forth and back? 

Will labour outsourcing be replaced by business processes outsourcing? Good option?

New hit on the market?

Will India be the next China?

Your ideas?

RFID and Lean: how technology can help you fight muda

Several days ago I was reading quite an old whitepaper on how UPS is relying on RFID during their Six Sigma initiatives.

That is something I have already been actively thinking about. Many companies in today's world on one hand struggle from lack of data (a crucial input for Measure phase of 6Sigma DMAIC cycle). On the other hand (and I have already been writing about this) some companies are overloaded with information they never use.

What is the possible reasoning?

I personally see the main problem in misalignment of Business and IT Department goals. Some projects are being implemented by technologists (that's when we end up with too much data nobody cares about), while others are performed by pure strategists, who in many cases do not believe in high-tech solution and try to keep costs as low as possible.

"Fostering business and IT strategies coupling" is kind of a personal mission statement I created for myself one year ago. The more I work, read, experience and learn, the stronger my focus on fulfilling this statement becomes.

As an IT specialist striving to become a business professional I find it quite appealing to look on management techniques as an engineer and on new innovative technologies as a business strategist.

I guess it should be surprise for no-one that I would like to start on coupling two topics which are in the center of my professional attention at the moment: RFID (Radio Frequency Identification) vs. LSS (Lean Six Sigma)

How to couple Six Sigma and RFID should be more or less clear to all of you, who have a rough idea about those technologies:

Because RFID offers the potential to collect and store data without human intervention, the technology can provide a relatively low-cost solution when spread over a large number of units. When compared to the costs of data entry or manual scanning of barcodes, RFID may be a better, more economical solution for many firms. In the absence of a process measurement system, RFID may provide visibility and process insights that can identify issues early in their lifecycle, and supplement the “M” component of the Six Sigma process.

What one should do during RFID implementations in this case is to do planning and designing based not only on short term gains, but also considering great strategy impact and a huge number of possible use cases a new infrastructure may bring forward. That might be quite a difficult task, when you are struggling to build a great-looking business case and present perfect ROI calculations. Stop for a moment: if your company is actively using Six Sigma approach, ask yourself "How can I make new system as flexible as possible, so that I can add new functionalities, new data collection points, new items to be tracked and traced; understand what are potential scope extensions for the Future". Shortly, that comes to our old great friend "flexibility" again. Please do not design your systems sealed. Allow them to evolve and become more informative in the Future.

Simple example: if you are tracking products inside your facility and are locating equipment in diverse locations, dock doors and chokepoints; ask yourself what else may I want to track in the Future? What kind of data my Black Belts may need? Forklifts and trucks? Returnables? Operators' motions? Once you build a good tracking application, you will be able to add new object types with extremely low cost by purchasing new tags only. When making "Go - Not go" decision think globally about all possible opportunities.  Choose data collection points as effectively as possible, so that greatest amount of measurements can be performed there.

Speaking about Lean, I found that the best way to reflex on the topic is to connect possible RFID use cases to 7 MUDA wastes:

Transportation

• Minimize errors (it's hard to imagine how often and how many items are being shipped to a wrong customer, wrong country or even wrong continent) 
  
• RFID may also help in fast and flexible delivery route planning: you always know what's in your truck, who are the clients, where they are located (add GPS on top!)
  

Inventory

• Real-time visibility of the whole Supply Chain (from materials warehouse to products on-shelf visibility)
  
• e-Kanban implementations to for timely and intelligent Just-in-Time replenishment
  
• RTLS implementations to solve "loosing items" problem (big issue in RTI management)
  

Motion

• Errors prevention: e.g., let the items (pallets, dollies, crates, etc.) talk with a forklift and warn when unnecessary motions are done
  
• RTLS again: do not let people wander around looking for objects
  

Waiting

• RTLS again? Eliminate time spent on waiting by your clients (they are not happy about it) or transportation units (you pay them for this), while somebody is looking for items
  
• Synchronize your production considering states of other cells, inventories and assembly lines. Knowing exactly what you already have and what you need is the key to switch machines from producing item A to item B on time and therefore minimize waiting.
  

Overproduction

• Full Supply Chain visibility
  
• Timely and precise warehouse management through inventory control
  
• Better planning based on real-time point of sale information
  

Overprocessing 

• Elimination of excessive maintenance procedures (it's easy to determine exactly when maintenance should be done for every particular item, tool)
  
• In Healthcare, for example, retesting can be eliminated by providing fast reliable access to patient's treatment history
  

Defect

• Use of Auto-ID combined with Visual Controls to minimize errors of using wrong tool, assembling wrong part, doing operation in a wrong place or wrong time
  
• In Cool Chains use of Active RFID can greatly assist in products scrap due to expiry, through usage of 3rd generation RFID tags combined with temperature sensors
  
• In Healthcare Active RFID combined with different sensors can guarantee defects prevention by warning about external conditions changes
  

These are thoughts which popped up without any brainstorming in a couple of minutes.

Do you have anything else to add?

The Globalization era is over?

Several years ago I could not stop getting more and more amazed about how global world is getting.

I was constantly surrounded by people from all over the world, my friends and colleagues were flying forth back (I used to have 3-4 flights monthly myself), everybody seemed to know everybody, the same brands were being sold in any city I would arrive. Sometimes coming to a new city I would not notice any change: the same mix of products, languages, people, companies.

Although the virtual globalization continues to expand through networking, videoconferencing, Internet of things, "linked data" and so on, the physical world gets more and more local in the times of downturn.

Right, companies are trying to implement shorter supply chains, switch from outsourcing to insourcing (e.g., Lego moving their factories back to Denmark, Renault - back to France), companies are getting more conscious about travel budgets: they are exploring local talents instead of bringing overseas consultants, etc, etc.

What do you think? Is this Localization vs. Globalization temporary due to current economical situation? Or that is something companies will have to stick to for a longer period?

Technology will help creating Smart Supply Chains

The Smarter Supply Chain of the Future

I have come across this quite interesting IBM Global study today. And, boy, that's just the time! There has been so much already said about an urgent need to make Supply Chains responsive in these tough times we all are experiencing now, but not enough on how to proceed.

I found the article quite informative, interesting though probably exaggerating the role of technology a bit (that's right, you hear this from an IT graduate and Technology Consultant). The study focuses on using ability of Supply Chains to get Smart thanks to RFID, all kind of sensor and actuators. Exactly my piece of cake. That's why I decided to make a little reflection on a couple of interesting points I found.

The main topic of the study, to my belief, is bringing best practices from Top Supply Chains and prove their viability. Although, Lean is never mentioned in the document, many of the ideas seem quite familiar to me. And one of the brightest is, of course, need to react fast. 

Gotcha! Smart Supply Chains do not need to predict. They need to respond. Isn't that lean? Isn't than Just-In-Time? Why does everybody spend so much time learning to predict (and later suffer from inequality of demand and supply), while they can learn to be responsive?

You have all instruments for that: networks, sensors, collaborative work technologies!

Why do companies have to cut costs and regret their overestimated budgets? Well, right, they did not care much about being flexible before. Flexibility is their antidote for cost volatility.

Speaking about collaborative technologies. Enterprise 2.0 has given us tools and techniques to share the knowledge quickly and efficiently. And in my life I have seen a good number of implemented Knowledge portals, CRM, Warehouse management systems, etc. Guess what? Most of them are used internally. Executives do not believe in (or probably too afraid of) revealing information to 3rd parties. My thought: survivals will be the ones who understand that real competition in 21st century is going to happen between Supply Chains, not individual companies. Time to bring all participants together.

More than half of all supply chain executives have implemented practices

aimed at improving visibility, such as continuous replenishment and inventory

management with customers. But less than 20 percent are pursuing

these practices extensively.

And here we come to the visibility discussions. Amazingly, how much data is  being captured, stored but never used:

Visibility – Flooded with more information than ever, supply chain executives

still struggle to “see” and act on the right information.

Once I had to work on a proposal for a a new IT system. We did a good job, estimated the number of hours employees will save in waste-operations (search, movement, transportation), translated them into money and presented to the client. But at the final presentation we had to add a killer: you should hire someone to work with the application, analyse the data we are gathering and make sense of it. Not surprising, hiring that guy would cost way more than an operator looking for items in the field. (In fact the project would never work for another reason: it was not improving any Critical-To-Customer characteristic, nobody in fact cared about the time).

To be short: we should be cautious what we are trying to measure and have a clear visibility what opportunities this knowledge can bring. There's no sense storing another Gigabyte of irrelevant data on your servers.

An interesting point IBM brings to light is Internet of Things. The research promises us that Future Supply Chains are going to create global networks not only with customers and suppliers, but between items as well, give them "brains" and decision making capabilities (several weeks ago I was at a presentation of 3rd generation Active RFID technology - smart items are already reality today!). 

I had a discussion on this topic with one of my University mates. He was quite amazed by these possibilities: "Look, that's opposite from ERP monsters enterprises have created. No more huge things, which try to take control over your company. Decisions are made locally, quickly and more reliably". Is that? Wow, wow, wow. I don't think so. Aren't we creating a new distributed and therefore less maintainable monster?

Dashboards on devices perhaps not yet invented will display the realtime

status of plans, commitments, sources of supply, pipeline inventories and

consumer requirements.

That's an interesting one. Whatever decision smart items are doing humans should be aware of that. This awareness will give them ability to understand decisions and re-think them appropriately. Imagine a forklift driver locating a pallet in a wrong place. Should he receive "RELOCATE ME" message, he might probably think "Those damn things are often malfunctioning". It will be quite different if the message says "Apples are stored in this area. Take me to Oranges section!". Don't use your people as tools, give them ability to be in charge.

To end this post, I believe everything goes to quite an old good Triple-A concept: to be successful Supply Chains have to be agile, aligned and adaptive.

My concern is that RFID, sensors, actuators, GPS are extremely powerful in strengthening one of those: Agility (ability to response quickly to short-term challenges, changing situations, circumstances). And that's what I am mostly working on during last year. But the effect of these technologies to Alignment and Adaptiveness is quite questionable at least for me (not in sense that it should be eliminated, but meaning it should be much more carefully designed and limited).

Do you agree?

P.S. I guess, I am going to write a post on purely RFID and its ability to influence 7 wastes (famous Tim Wood). Stay tuned!