Wednesday, April 29, 2009

What is an abnormality?

http://www.gembapantarei.com/2007/05/standards_abnormality_and_the.html

Standards, Abnormality and the Ideal

By Jon Miller - May 3, 2007 7:25 PM

The topic of warusa kagen led to some interesting further thought. The following statements are all true:

1. When work is performed in the absence of a standard, this is an abnormality
2. When standards exist but are not being followed, this is an abnormality
3. When standards exist and are being followed, this is an abnormality

Most would agree with the first two statements, but not the third.

The first statement is true because standards exist a priori for a given process. The management simply have not recognized them or made them visible. There is a correct or appropriate amount of inventory to keep the process in the current condition running on time, for example. So the fact that this standard is not established is an abnormality.

The second statement is true because when a standard is established, we are saying "this is the normal method", so not following it is by definition an abnormality.

Let's take the example of inventory:
inv1.png

The third statement is true because even if a standard is being followed, this is merely adherence to a standard, the standard is flawed when compared against what is desirable.

The Toyota notion that standards are temporary things and not absolutes is at work here. There is always higher goal, referred to as "the ideal". Kaizen challenges people to go to gemba to directly observe the current condition, understand the warusa kagen, imagine the ideal condition and improve towards it.

So this understanding gives us the following diagram:
inv2.png

So a more user-friendly way of expressing this may be to say that there is abnormality versus the standard and abnormality versus the ideal. For the sake of simplicity let's say there are standards, abnormality and the ideal.

You may ask "Once you achieve zero inventory, aren't you done?" It might appear that you have achieved "the ideal" process with respect to inventory. However, even this condition is abnormal. When you question deeply why inventory is a waste, it comes down to inventory turns and cash flow. So now if zero inventory is abnormal, what is the target condition? Less than zero inventory must be negative inventory.

Is the notion of negative inventory ridiculous? Not really. It is not uncommon these days for large OEMs such as Toyota, Dell or Boeing to get their money upfront from their customers, buy components from suppliers on net 30 or net 60 terms. This means that in real cash terms they have something called negative inventory turns. Less than zero inventory.

Could we extend the idea from zero inventory to negative inventory to other areas? How about from zero defects to negative defects? Or zero accidents? How about negative accidents? A workplace that actually heals the sick and makes healthy people healthier, because it is closer to the ideal process. Now that's something that makes doing kaizen for the rest of our lives worthwhile.

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