The Pendulum Effect

I had a good conversation today about the role of senior management to balance the sometimes conflicting needs of different departments while optimizing the overall business - and the pitfalls of allowing the "pendulum" to swing back and forth between which metrics (and therefore, which departments) are "optimized" at any particular time.

For example, a production department would prefer to have large production runs to minimize changeovers and maximize overall output even though this may create more raw material and finished goods inventory. Production planning would prefer more frequent small production runs to minimize inventory and provide flexibility to meet urgent customer demands even though it might reduce production utilization. Sales and customer service would like a ton of inventory to maintain the highest customer service levels and promise any customer any product at any time. Of course this assumes that the departments are primarily focused on different metrics, e.g., overall production output, inventory turns, and customer service.

Senior management is focused on overall growth and profitability - for both the short term and the long term. If a senior management team is not careful, they can drive undesirable behaviors based on the metrics that departments think are most important.

For example, if senior management only asks about overall production output for 6 months and then goes wild about growing inventory they will create a "pendulum effect" where the organization swings from trying to optimize for one goal and then the other. What's the answer? Senior management must engage all departments in the primary overall objective of the company, help everybody understand the interdependencies, and consistently use a set of metrics to measure and manage progress that minimizes large swings in direction and helps the organization build momentum in one direction.

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Quality & Production: Too many cooks ...

Or too many inspections in this case. It's human nature. If two people are told to count the pages in a book and record the results - it's natural that if one does it before the other one, then the 2nd person might rely on the results of the 1st person.

During a review of common and frequent problems on our production lines, I believe that we have too many checks and double-checks and overlapping responsibilities between the Quality department and the Production department.

It's too easy for the production line supervisor to rely on the Quality inspector and visa-versa. It's not a true separate independent check.

Production needs to take responsibility and make sure the production line supervisors are not relying on the quality inspector to "catch" any problems. The current in-process quality inspection should actually be reduced and moved to the end of the production line.

In a recent book, The Tipping Point: How Little Things Can Make a Big Difference, the author refers to this problem as the "broken windows theory" and sites studies where crimes witnessed by multiple observers are reported less often than crimes witnessed by one observer. With multiple observers, everybody thinks someone else will report the crime. Another recent story centered around the number of editors involved in a book publication at a major publishing house. Over the years, the organization kept adding more editors to the review process only to discover after several years that they had 11 editor reviews and errors were not reduced. Everybody thought everybody else would catch the errors.

More people is not the solution. The right person doing the job right the first time is the answer. They need to have responsibility and not rely on downstream checks and double-checks.

Get the extra cooks out of the kitchen.

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