Our approach to implementations is to put the customer through a series of experiences intended to teach them the knowledge they need and then lead them in applying that knowledge to their specific environment. This is normally a five-step process: 1. Assessment. A good "Jonah"2 had better know the answer to the question prior to asking it. During the assessment phase, I want to get a feel for what the issues are and what a solution might look like. I also want to have an idea of system definition and who needs to be involved.

2. Education. The purpose of this phase is to transfer appropriate knowledge to the client that they will need to improve. We use hands-on games and lectures laced with examples to help the customer learn in an environment that is not their own (helps avoid the "this will not work here syndrome").

3. Design. In this phase, we get the client team to use their newfound knowledge to design a new system (complete with new policies) to improve their performance. Such a system might involve writing detailed procedures for a DBR system tailored for their environment.

4. Planning. In this phase, specific goals and tasks are defined and obstacles that would stand in the way of completion are identified. Action plans are developed to overcome obstacles. This work is similar to building a prerequisite tree (PRT).

5. Execution. This is where folks go out and execute the plan and progress is monitored.

It has been my experience that by the time we get through this process, most of the resistance to change has been overcome and the client has ownership of the solution.

However, in this case we had some additional reservations. As mentioned before, Norris had a history of adversarial relations between management and the union and there was an awful lot of distrust. There was also distrust between Norris and AOT. We decided that our normal approach would not work because information flows through relationships and those relationships were clogged with numerous erroneous negative assumptions. So, while the physical constraint was heat treat, the real constraint that made it a complex system was mindsets/relationships within and across plants. We needed somehow to add learning experiences that would suffice to break through the distrust issue.

What We Did to Implement the Change

Relationships, purpose (includes processes that achieve purpose), and information flow form culture, and the existing culture at Norris needed a change.

We considered the most important part of this particular implementation to be the selection, nurturing, and guiding of the implementation team. We also figured we had one shot to get it right.

To get a cross-functional team of those directly involved in forging, we figuratively went to the forges and walked outward, touching those we met. We met: Operators Mechanics Production foremen Maintenance foremen Process improvement engineers Schedulers With a list of possibilities of team members, we sat down with upper management and human resources and selected a Norris implementation team of 15 people. Things we considered were: Formal and informal leaders Union representation Folks from each shift People with positive attitudes Once the team was selected, education began. Process and technical education included a typical 2-day synchronous flow workshop and a 1-day hands-on workshop on Lean. The knowledge we hoped to transfer included: The concept of constraints The issue of protective capacity The relationship among capacity, dependency, variability, and inventory The strategic location of a constraint Ideas and tools (such as setup reduction) to gain "cheap and free" capacity TOC measures, such as Throughput, Inventory, and Operating Expense Other appropriate operations measures.

The leadership/relationship education and experience included: Individual assessments of behavior, values, and skills relative to projects, systems, and people A one-on-one session with an executive coach to review the assessments A 2-day communications workshop The knowledge we hoped to transfer in this 2-day workshop was: Each individual of the team to better understand themselves and how their style affected others. This knowledge gives the individual the choice to adapt their behavior in order to improve information flow (remember that culture thing).

Get to know their fellow workers/managers better to begin to build relationships based on respect and trust.

The team was now ready to head for Canada.

"Oh Canada"

Can you imagine the logistics of taking a team of workers to Canada, many of whom had never left Oklahoma? Just getting passports in a timely manner was an ordeal. I would like to pause here for a second and have us ponder the support given this project by Dover management. Some executives may have rationalized that they could have gotten the same results without the expense of sending the team to Canada. Dover executives had the wisdom to realize that this was a significant event that would send a powerful message to both companies.

AOT did a wonderful job of hosting the visit. In addition to plant tours and briefings, the joint Canadian and U.S. team had lots of food and entertainment together. The Norris team observed and participated in forging setups and other operations events. The visit accomplished: 1. A deeper appreciation by the Norris team for AOT accomplishments with respect to operational excellence.

2. Clarity about the learning gap between facilities, which is a tangible opportunity for Norris.

3. An extensive list of team-generated ideas for both Norris and AOT.

4. Multiple new relationships among counterparts at the facilities.

Results after Six Months

Once the team returned to Norris, they implemented several of the concepts and tools learned. A summary of the important results follows: Increased focus on heat treat as the strategic constraint for both companies.

Norris increased profits by 6 percent despite taking 2 of the 6 furnaces out of service for repair.

AOT profits increased more than 6 percent and both of these improvements were achieved in spite of increased steel prices that were not passed on.

Forging at Norris increased flexibility by reducing setup times from an average of half a shift to 30 minutes (12.5 percent of the original setup time).

Reduced rework from a 50 percent rework rate to a 10 percent rework rate in several product lines (thus gaining additional constraint capacity for free).

AOT now shares formulations with Norris to improve efficiency.

More overall collaboration between the two companies.

As the implementation progressed, other changes were made to put the two companies more in alignment. One of the major changes was putting the CEO of AOT over both companies. Another was a change in the culture (mindsets/relationships) within and across plants.

Have You Really Defined the System?

Introduction.

GKN Automotive is a company that produces half-shafts for front-wheel-drive cars. Their customers included Ford, General Motors, Toyota, Honda, and most other major automobile companies. Their president and CEO, Tom Stone, felt that he could improve performance by embracing the principles of TOC.

What is a half-shaft? If you climb up under your front-wheel-drive vehicle, you will note two small shafts that connect the transmission to each wheel. At the end of each shaft is a forged piece of metal that looks like a tulip-in fact that is what GKN folks call it. The end that attaches to the transmission is the "inboard end" and the one that attaches to the wheel is the "outboard end."

There were four plants in the system. One plant produced the forged "tulips," one plant machined the tulips and inners for the inboard side, another plant did the same for the out-board side, and both of these plants shipped to the assembly plant which assembled product for approximately 22 different car models.

All four plants were structured as separate cost centers and the entity of concern (or system) was the physical plant. During the assessment phase, it was clear to us that this structure made no sense. Looking at the GKN system from the perspective of four independent plants measured by cost actually made GKN more complex. What we learned is that all of the machining equipment was designated for a particular car model and that the auto manufacturer controlled "their" machines. It became apparent based on the outside control of scheduling of the plants and the dependent nature of the parts and processes across plants that considering each physical plant as the system was erroneous. Each plant had to deal with parts from all 22 car models and each plant's management was focused on "local optimization" of their own plant. (See Fig. 37-2.) If the system is not defined properly, then identifying a constraint or doing a Thinking Processes (TP) analysis is meaningless. In addition, it should always be our goal to look at a complex system in a manner that makes it less complex.

What Do We Need To Change?

GKN had been working on the wrong system-the physical plant location and treating them as independent cost centers. The individual plants saw themselves as having their own customers, all of which had different requirements and tendencies with respect to lead time, quality, and other issues.

What Do We Change To?

What did make sense was to segment GKN by specific models/markets. Now team members from the forging, inboard, outboard, and assembly facilities all worked to satisfy a specific customer and model. The focus became the customer (from the beginning of the process to the end) with fluid communications through the organization. This new view of the organization focused on value to the customer. Value lanes by customer was a system that made sense. We design a value lane by starting at the customer and working back toward the receiving dock and stopping at a natural point of divergence (see Fig. 37-3). Each value lane had its own assembly, inboard machining, outboard machining, and its own special forged tulips. Operators assigned to these machines were full time and they considered themselves more a part of their value lane than a particular plant location.

FIGURE 37-2 GKN "plant perspective."

FIGURE 37-3"Value lane" perspective-12 to 14 value lanes covering 22 models.

How Do We Cause the Change?

In the case of GKN, the concept of value lanes replacing the physical plants as the "system" was sold to the President and CEO; therefore, there was no debate as to whether we were going to try to go in that direction. I chose those words carefully-there was no debate that we were going to try. Whether it was going to work was going to be totally dependent on the buy-in of those involved.

By changing to value lanes, we essentially began to change the functional organizational structure. In a major complex system, this change is not uncommon. The new organization consisted of 12 to 14 value lanes that covered all 22 models and each lane included workers in all four plants. The lanes were responsible for ensuring customer satisfaction for their customer-Ford Taurus, Toyota Camry, etc. Telephone, e-mails, and buffer data were modes of communication. Many hourly employees were now involved directly on what was to be produced and how things were managed. Each value lane monitored their shipping buffer and controlled release of raw materials to the processing equipment. In the transition from a functional organization structure to a DBR flow structure, plant managers and other supervisors needed to let go of control and trust their workers more.

Results

GKN experienced all of the normal TOC success: Net profit nearly doubled (increased by 85 percent).

Inventory decreased by 22 percent.

Return on net assets increased by 40 percent.

Value added per employee (rough estimate of T/OE) increased by 30 percent.

Their executives explained their new operating method as bringing "calm to a chaotic environment."

Where is the Constraint in Disciple Making?

Introduction.

The United Methodist Church (UMC) is the second largest Protestant denomination in the world. Its founder, John Wesley, is credited by many as helping England avoid a revolution similar to the French Revolution. John Wesley preached to the poor and was all about Christians being in action to do good. He had enough of an impact that the hope he gave people through God staved off a violent uprising of the masses.

The UMC has been in decline for over five decades and they are losing about 1000 members per week. This number would be worse if it were not for the fact they are growing overseas, especially in Africa.

In the early 1990s, I was invited to do a one-day TOC seminar in Nashville, Tennessee for their General Board of Discipleship, which is one of the church's most influential agencies. Ezra Earl Jones was the General Secretary in charge of the Board and his position was on a level with a Bishop. Ezra Earl was considered an innovator in the church and attempted to use many tools that were used successfully by industry in order to turn around the plight of the UMC.

The 1-day workshop contained the TOC basics of measures and the 5FS. This session went well and Ezra Earl and his publisher of the Upper Room devotional subsequently attended an open audience Jonah Class I conducted at Clemson University. After years of working with the UMC, I now have grown to appreciate what a commitment Ezra Earl made by spending two weeks away from his job.

After the Jonah 2-week workshop, Ezra Earl said that his next goal would be to introduce the TOC concepts to several Bishops and other leaders in the church. The opportunity presented itself in January 1996 when I spent four days at a retreat with several Bishops and other leaders at "The Grove" near Ashville, NC, which is the mountain retreat owned by the Billy Graham organization. There were several speakers for the retreat, Dr. Margaret Wheatley, author of Leadership and the New Science, spoke one day, Peter Block, famous author and consultant, spoke one day, I spoke one day and then I facilitated the last day where we tried to pull the three days of knowledge transfer together. It was a great session; it motivated some of the leaders to consider more study and analysis.

One thing you are going to learn in this example is that some complex systems take years and perhaps decades to begin to shift their thinking and behavior. One key lesson is not to give up. Many times an outside disrupter does not control when a shift in thinking occurs. The best we can do for the complex system is to be persistent and ready.

After this program, Ezra Earl said that his next goal would be to get a team of Bishops and other church leaders to dedicate time to do a complete analysis of the UMC and to develop a solution. He accomplished his goal and Chesapeake facilitated the workshop. Lisa Scheinkopf, who worked for Chesapeake at the time, and I would conduct the sessions. We met 12 days over several months with sessions in Atlanta, Chicago, and Nashville. While in Chicago, we stayed at a Catholic convent. Lisa, who is Jewish, said that she was way outside her comfort zone sleeping under a cross. As you might imagine, we had a lot of laughs.