BOP PMI Branch Meeting: 18 October 2012
Venue: Gen-i Offices, Mount Maunganui

1.        Feedback from the BOP PMI Branch Chairperson: Lars Thiel-            Lardon

Lars attended the PMI Conference held in Wellington on 24^thtill the 26^thSeptember 2012.With a beaming smile, he described the event as entertaining, interesting, a great party, covering a broad spectrum of topics and he mentioned that he learnt a lot.  The event also provided a fantastic opportunity for networking.  The 2013 event will be held in Auckland and Lars encouraged everyone, if possible, to attend.

2.        Upcoming event: End of year social function. 

A relaxed social event for members and partners with finger food and drinks.  Further details to be provided in due time.

Date: 30th November
Time: 7pm
Venue: Masonic Lodge, Hairini, Tauranga

3.        Guest speaker:  Murray Clode, Gen-i,  Tauranga

Murray Clode is a Lean Management consultant and General Manager for Gen-I, Tauranga.  He hails from Invercargill and has extensive experience in Project Management.  In his spare time he enjoys art, tramping and mountain biking.  He is also a board member of the Tauranga Chamber of Commerce.

Project Management  in a Lean World

Note by C. Dawson: The following is a summary of the talk as presented by Murray as well as extracts from the book  The Toyota Way (J.K. Liker, 2004).  It is not a word for word account of the material as presented by Murray but rather contains the essence of what was discussed.

 Lean is a term the authors of the book "The Machine That Changed the World" (Womack, Jones, Roos, 1991) used to describe the methods used by Toyota to improve the productivity of their business:  "Shortening lead time by eliminating waste in each step of a process leads to best quality and lower cost while improving safety and morale"  pg 25, The Toyota Way (J.K. Liker, 2004).

Toyota Motor Corporation was founded in the 1930's and at first made poor quality vehicles using primitive techniques.  The leaders of Toyota visited the US in the 1930's, specifically Ford and General Motors, to learn from the already successful companies.  Mass production using huge equipment was the key to their success.  Toyota trialled the technology but Toyota still struggled to be a viable entity.  Demand was low and in comparison with Ford's 9000 units per month, Toyota produced only 900 units.  After WWII, the Toyota company became instrumental in rebuilding post-war Japan and with assistance from the US, the company was resurrected.  The leaders once again visited the US and the Ford plants.  Their dilemma was how to become as productive as Ford within a post-war, cash strapped Japan.

The following statistics were taken from the same book (The Toyota Way):

• Toyota  showed a net profit of 8.3 times that of its competitors (1983)


• Stock prices continued to increase by 24% while competitors fell (2003)


• The company has made a profit every year for the last 25 years (pre - 2004)


• Toyota has the fastest product development in the world (as of 2004) taking less that 12 months to design while competitors take 2 to 3 years.

Looking at the above statistics, one may ask "How did a small company in a small country manage to become a giant in the automobile industry? " 

The solution was to develop a philosophy of business with principles and tools that transformed the mass production process into a flexible, low waste process, delivering a quality product in a short time with maximum profit.

What was evident in the 1950 visits to the US, was that nothing much had changed in 20 years.  Ford still used great big machines to produce large volumes of product that were then stored in massive warehouses until such time as orders were placed and the parts assembled.  In essence, much of the company's finances were held in stagnant stock.   In addition to over production, there was an uneven flow of processes, defective products that went unseen due to storage times and disorganised workplaces.

The then plant manager of Toyota, Taiichi Ohno, was given the onerous task of improving productivity.  With subsequent visits to the US, reading Ford's book Today & Tomorrow, and in collaboration with the Toyota team, the principles of "Lean" or the "Toyota Way" were established.

First Ohno changed the idea of "mass production equalling success" . 

He reduced the volume of "step1" manufacturing and subsequent need to store the product until needed in the "step 2" of the process. The same principle was applied to each successive stage so that there was less front loading and a more even flow of effort and resources. This in turn reduced the waiting time (short lead times) between the processes and thus improved cash flow.  Processes were reviewed, "waste" identified and the processes amended.

In summary, some of the principles of Lean Management are:

1    Eliminate Waste (analysis)

Ask yourself: What value is this process adding to final product / to the client / to us?

There are  7 main waste areas which for ease of remembering, Murray ordered into an acronym WORMPIT.

Waiting - bottlenecks, standing around watching, walking from desk to printers, waiting for  meetings.

Over production - of product or people.  Producing large amount of stock which have not been ordered requires storage until needed.  Storage costs money and is money tied up.  When product is stored, defects are not discovered until later when used and if this is a production defect, any product made until discovery of the defect will be useless. 

Toyota's solution was to develop a "Just in Time" process where minimal product is stored and just enough produced or delivered to meet the demand at that time.

Rework - Defects caused by poor quality control, excessive production and poor inspection.  Not meeting your clients needs or failing to understanding your client's brief will require  redesign and abortive efforts.

Motion - Transport costs, time taken to walk between places, time taken looking for documents or parts or equipment.  Efficient workspaces, ordered grouping of items, locations of plants within the area of demand or network of suppliers.

Process - over design or under design is wasted effort and cost.

Inventory - too much or too little product or raw materials (production).  If you look outside the manufacturing world, your "in tray" could be a different example - what you still have to do can create delays to your own process or to others.

and last but not least:

Training - having the right people do the job with the right skills, engaging with employees to continuously improve the process, tap into employee creativity. Not applying these leads to wasted resources, defects and time delays.

This leads us to the second principle:

2.      People: 
            Develop leaders, teams and employees.  Encourage them to challenge the way things are done, to improve the process. Respect their input, opinion, their need for job satisfaction and dignity.  Respect your network of partners.

3.      Go and See:
              Put into practice what you preach and go see how the processes are actually working, how people are implementing the paperwork.  It is a hand on approach of management.

4.      Fix it when you see it (KEIZEN BLITZ)

5.      Visual Aids:

               Simply having a process does not prevent errors.  For example, four similar looking bottles contain different medication.  Each bottle has similar looking labels but different instructions. Preventing an error relies on a person reading the instruction.  An effective method would be to differentiate the contents by visually differentiating the bottles from one another by colour, size and shape. 

Another visual aid is to produce "Story Boards" where the presentation, reports or problems are contained on a 1 page format.  Identify the key issues, make it concise.  Provide visual instructions, analysis of data.  Also called an "Information Sites".

6.      Reflect (HAINSEI) and
               Continuously improve (transformation) KAIZEN (change for the better).

               Analyse the process and determine what is working, what is not.  What is adding value, how much value is it adding.  Amend the process to improve and apply the changes.

7.      Sustain: 

               Maintain the smooth flow of production on a daily basis and look at long term implications such as maintenance.   A lean organisation needs buy in from all personnel, not just management.  It is a bottom up approach.

Murray concluded his presentation with a reminder that "Problems are an opportunity for learning and improvement".

While writing this article, out of interest, I googled "Toyota Statistics".  Search results highlighted that recently things are not so rosy for Toyota.  In 2011 several vehicles were recalled for faulty components. 

http://www.iveybusinessjournal.com/topics/global-business/continuity-and-change-in-japan%e2%80%99s-automotive-industry

It seems as if the "quality" once so prized by Toyota is having issues however, these have been identified as being caused by defective parts and not the process of assembly, the rapid international expansion that was required as Japan's economy faltered  and also, the change in the workforce structure.

http://www.iveybusinessjournal.com/topics/marketing/the-toyota-recall-missing-the-forest-for-the-trees

However, in comparison with competitors GM, the number of legal cases due to quality issues show that Toyota accounts for only 3.55% of the claims awhile GM accounts for 16.6% even though the production is similar in quantity. 

http://www.normantaylor.com/lemon-law-graph-by-make.html

The same link had this quotation:

Because I am an engineering-quality person by training, one key thing repeats over and over to me.  It costs a lot to make bad products.
-Anonymous

4.        Study Group:

10 students sat the CAPM and PMP exam on the 12th October.  All agreed that it was a long exam and quite demanding.  We wait with baited breath for the results and congratulate all on your commitment over 14 weeks.  The students presented Alex with a gift of appreciation for his leadership in the role of Study Group Co-ordinator.

Two study groups are envisaged for 2013.  Details will be conveyed once known.

_______________________________________________________________________________

The meeting ended with drinks and relaxed mingling.

1.     Linear Communication such email, letters & memos where it is one way, has limited interaction and feedback but is perceived as quick and factual.  It can also be tedious ie long email train

2.     Interactive Communication such as meetings, phone conversations and video conferencing.  This allows for two way involvement but can be marred by “filters” ie people’s perceptions of the other which affects how one receives and sends communication.  Filters such as gender, dress, previous experience, culture and position affect how messages are sent and received.  Being aware of these filters and putting yourself in the other person’s shoes will help to dispel any message distortion that could occur.

2.     Show respect for the other persons’ opinions – never say “your’e wrong

3.     If your’e wrong admit it quickly and emphatically - especially with wives!

4.     Begin in a friendly way

5.     Get the other person saying “yes, yes” immediately

6.     Let the other person do a great deal of talking

7.     Let the other person feel the idea is his or hers

8.     Try honestly to see things from the other person’s point of view

9.     Be sympathetic with the other person’s ideas and desires

10.  Appeal to the nobler motives – their values

11.  Dramatise your ideas – present your ideas or message in a way that is exciting ie using graphs

12.  Throw a challenge – especially good if you are communicating with competitive people

1.     Diffusing negative attitudes

2.     Increasing co-operation

3.     Promoting understanding

4.     Influencing outcomes

Following the inaugural meeting in January to launch the PMI sub-branch in the BoP, we had our first formal meeting on Thursday 22nd March.

BoP PMI had another great turnout in terms of numbers, who came along to hear guest speaker Clayton Delmarter, Manager - Major Projects at Trustpower.   Clayton shared his experiences of the value that formal project management techniques bring, in the delivery of large infrastructure projects in the renewable energy sector.

Time was also spent assessing what the attendees were looking for from their PMI locally:
-          High on the list was the opportunity to meet on a regular basis and network with other project managers
-          Being able to hear a wide range of guest speakers covering topical aspects of project management and describing real life experiences
-          Participation in study groups.  We now have interest expressed from sufficient PMI registered members to get study groups started (details can be found soon on our website pminz.org.nz).