process everywhere

In the last post, I exposed the mounting challenge related to our abilities to draw valuable conclusions from the swell of data that will be available to us in the near future.  In order to benefit from this influx of information, companies will need to adopt a scientific approach to understand and create actions from this information.

Fortunately, the sort of scientific and numbers driven approach has been evolving for the past century.  It started with Fredrick Taylor studying the movements of workers in a factory and has evolved into process improvement philosophies like Total Quality Management, Six Sigma and Lean thinking.  Over that time period they have moved from assembly lines, to service business like delivery, restaurants, and medical practices, and now are starting to take shape in white collar environments including banks and insurance companies.

Applying these concepts to web companies and consumer product behavior are the next step in this evolution.  Because the disciplines are heavily focused to operations inside the company, many people assume they are not good for evaluating what is happening outside the walls of the organization.  In fact, this assertion couldn’t be further from the truth.

In lean thinking, everything starts with the customer.  Our business need is to provide the exact item required at the highest quality at the lowest cost in the shortest lead time.

Getting the Right Things Done, Pascal Dennis

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What follows is a brilliantly animated video that demonstrates the technological opportunities and challenges that lie in the very near future.  As computing power continues up the curve of Moore’s Law and chips get smaller, faster, and cheaper, technology will be embedded into more and more of the products we buy.

As the video suggests, the information captured on these items will not simply be isolated to the devices themselves, but rather they will be communicable to the environment around them using wireless technology.

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In the wake of the pedal recall and the controversy that has surrounded it, Toyota is being called out for its failure to adhere to the management philosophies that it helped pioneer over the past half century.  When this kind of failure occurs it is justifiable for both insiders and outsiders to question or reevaluate the system and environment that led to its creation.  Reevaluation is a wise process that leads to learning and getting continuously better.  It is, however, unwise to have a knee jerk reaction and come to the conclusion that the entire management philosophy is now debunked as some are doing.

My take is that nothing is wrong with the philosophy; rather, the management of Toyota has strayed over the past years. An example of this can be found in the following excerpt.  Six years ago, when accidents started occurring Toyota thought the root cause was due to either the floor mats or a more serious malfunction of the gas pedal itself.

By month’s end, Mr. Yon updated his NHTSA case file with a memo. Itsaid NHTSA had decided to limit the probe to incidents involving briefbursts of acceleration, and would exclude so-called “long duration”incidents in which cars allegedly continued racing down the road aftera driver hit the brakes.

The reason: Investigators decided it would be more effective toisolate any possible defect by zeroing in on shorter incidents, aTransportation Department official said. The shorter incidents lookedmore like “pure cases of engine surging due to a possible defect,” theofficial said. Longer incidents were excluded because they showed moresigns of driver error such as mistaking the accelerator for the brake.

Of the 37 incidents, 27 were categorized as long-duration and not investigated. On July 22, 2004, the probe was closed because NHTSA hadfound no pattern of safety problems.

Secretive Culture Led Toyota Astray, WSJ Feb 8th

The father of the Toyota Production System and Lean Manufacturing, W. Edwards Deming, would ask one question to retort the thinking behind the decisions in this passage. By what method? Deming believed it was foolish for managers to draw any conclusion or formulate any kind of plan without the data to back it up.  Conjectures and forward thinking are an integral function of leadership and building a successful organization.  But rather than following conjecture blindly, management must instead use experiments to test out assumptions and draw conclusions from the resulting data.  In this case Toyota should have done more analysis before reaching their optimistic conclusion.  This whole fiasco could have been dealt with six years ago and lives would have been saved.