Question 3:

Q: I’d be interested in your thoughts on the current trend emerging from the Agile community on Kanban, or push versus pull systems? The latter deals with variability by not defining end dates and controlling queues and WIP limits (over-simplifying I know.)

Critical chain, as far as I can see, assumes that schedules are a good thing to manage. Pull systems tell you to manage the workflow (aka TPS).

Stuart’s A: Agile and Kanban are techniques applied to operations environments. The basis of Kanban, as you say, is that it manages flow and inventory by using buffers in a pull system. It allows operators to see defects and stops overproduction. Agile is typically used to manage variety and works best (as I understand it) in T-shaped plants where variety can be added at the end. For example in a car plant where lots of Land Rovers were being built the extras could be added at the end.

The problems occur when you try to apply the same techniques to a service system. What’s different is that that customer is involved at the point of transaction and decides what matters to them there and then. Hence the system has to have the ability to absorb the demand at the front of the system. Think of member packs in marketing communications. Though each pack starts as a white shell, the customer decides at the front of the system what they want in their pack. If the variety is added too late in the system then all that happens is waste is introduced as a result of going back and forward between the client.

In terms of Kanban it can be thought of like this: it’s helpful in processing and production environments to make sure that you understand where the capacity is constrained in the system i.e. who is most likely to be overloaded. The capacity constrained resource must be kept busy, must never do re-work and must get work clean. So because Kanban works in conjunction with a physical or time buffer a good place to start is to make sure that the capacity constrained resource is given clean work and never runs out of work as a result of poor flow. That said, in my opinion in most service organisations there is no real capacity constraint, the degree of waste (unclean info, functional design, rework, behaviour caused by targets and incentives) is such that if the system was changed you’d probably see 50%-60% capacity improvement.

The key in service organisation is to focus on flow.

In projects, Agile doesn’t apply because the network determines where the variety is added, there is no choice. However Kanban is used in critical chain. At the end of the network a time buffer is applied to provide an early warning of late running projects. Also the convergence point (the point at which all work comes together) is usually the constraint hence the resource around that point is managed to make sure that no time is lost here. In that way it’s not the schedule that’s being managed but the consumption of the buffer.

Ode to the work

I once had a manager with fabulous patter
But he got no respect because the work didn’t matter
He knew everyone’s names, and boy could he flatter
But he made no difference because the work didn’t matter

He suggested we have targets, standards and incentives
But we started to cheat and be lazy, no longer inventive
And when our attitude faltered and brains became numb
We got called to his office for another one to one

So he got into some fads, BPR and prince two
He even bought software that put the work into queues
But the new new thing made not one bit of change
Except that the staff started to get ill and feel a bit strange

His last gasp attempt was some offsite group hugging
So we all got involved and though no-one came last, one team was struggling
But come Monday morning when we got back to work
Nothing had changed and upstream and downstream we still shouted, burke!

In the end he gave up and left in a very fast motion
Cos head office thought he was brilliant and gave him a promotion
But then our luck changed and we got a new leader
And after years of command and control we really did need her

So she soon got to work studying demand, capability and flow
It looked like she’d been there for years she was so in the know
Things soon started to improve it was a quick as a flash
She used systems thinking, why don’t you give it a bash!

This blog is dedicated to my wife, Denise, who is without doubt the best leader I have ever met. Ask any of the teams she has led over the years and they will testify to this fact. Denise managed her teams on a very simple set of principles

• On the first day she would call a team meeting and ask the team who they were trying to serve and what assumptions they held about how best to run the team (Thinking)
• She then asked them to list all the things that got in the way of them doing their job, and then list all the things that they needed, but didn’t have, to do their job. (Understand and improve the system)
• Finally having studied and designed the system she would work on job design (method).

So here is the idea:

Sit down with your team and ask them to list ten things that get in the way of them doing their job. Score each of the ten items on a scale of 1-7 (1: doesn’t get in the way much-7: If this happens one more time I will scream).

Then do a second list, this time all the things that they need, but don’t have, to do their job. This time score each of the ten items 1: This would be nice to have-7: I really needed this twelve months ago.

Rank each list and then get to work removing and improving; because one day a former member of staff might write a poem about you, and wouldn’t you rather have inspired than just hired and fired.

As ever, I would love to hear your comments on this blog. Click here now and share your thoughts .

Although this may be my personal blog, I regularly consult with members of my team to ensure it continues to be stimulating and thought provoking.

Last week I was discussing a project with Azmi, part of our Scottish team, when he described a fabulous experience he received when he visited the world famous Gleneagles Hotel.

I thought it showed a superb insight into how the Gleneagles Hotel ensure they give their guests the world class service they are famous for and asked Azmi to write this week’s blog.

Valuing Variation At Gleneagles Hotel

My friends and I were lucky enough to spend the weekend at a 5-star hotel recently and we all agreed that what set this hotel apart from the ones that claim to deliver a five star service, but fail, was that this one recognises the value of coping with variation in their guests’ demands. In fact, it positively ENCOURAGES variation (in the form of requests) from its guests, so much so that guests are made to feel they’re getting a very personalised service and that nothing is too much to ask for.

But it’s no use promising to meet customer demands if you don’t have work systems that are designed to cope with the variation in those demands. In this case they appear to have done that. Here are some examples:

Providing what matters: a ’standard’ menu was offered but we were informed by the waiter that if we’d like something that wasn’t on the menu, they’d make it for us. One of my friends asked for a pasta dish that wasn’t on the menu and it was provided without any fuss.

Empower the staff : staff didn’t have to ‘check’ with, or get ‘authorisation’ from, managers before a decision was made to deliver what we requested. This was put to the test when my friend asked for salsa sauce with his omelette at breakfast (honestly, he did!). The waiter said they didn’t have any in stock but he would get the chef to make some up!

Put experts at the front end: the room telephone had buttons that put us straight through to the function we wanted to speak to (no explaining to reception what we wanted then passed on to someone else and have to explain it all again) and the people answering the phone dealt with our requests one-stop (in fact our experience was 100% one-stop interactions during the whole stay)

Ok these examples may seem trivial and I don’t suppose the hotel management are consciously using a Systems Thinking approach, but they show that the hotel management do understand one of the fundamentals about dealing with customers i.e. customers don’t all want the same service. They may all want a 5-star standard of service but they certainly don’t want a standardised service.

Many service organisations don’t appreciate the value of variation. In fact they see variation in customer demand as a bad thing. Even many ‘lean’ experts focus on trying to reduce variation and standardising service levels (if you don’t believe me, look at what six sigma is all about).

Standardisation cuts costs and helps deliver outstanding service. Or so they believe. They don’t understand that outstanding service comes from designing the work to cope with variation in demand.

This difference between standard of service and standardisation of service doesn’t just apply to customers of 5-star hotels, it applies to every service organisation.

As usual let me know what you think?

Stuart