Eliminating Silos Across Functional Lines

Nick RuhmannContinuous Improvement LeaderBD – Diabetes Care

Today’s PresenterNick Ruhmann• 12 Years previously working in a Tier I

Automotive Supplier• 10 of those years in Lean / Six Sigma

roles• Last Position was Business Excellence

Manager (Engineering, Quality, Lean, + 6 Sigma)

• Joined Becton Dickinson (BD) in January 2010

What is Silo Management?A result of natural tendency to organizeA stepping stone of sorts between entrepreneurial and value stream or matrix organizationTypically resources are organized by function and managed by function

Human Resources

Accounting

Engineering

Operations Quality

Continuous

Improvement

Symptoms of Silo ManagementGood unit efficiency, but poor overall efficiencyLack of alignment across organizationStandards don’t exist, or differ across silosProblems aren’t readily visible Slow / no response to problemsRepeatedly solving the same problems

Effects of Silo ManagementLack of constancy of purposeEmphasis on short-term profitsEvaluation by performance, merit rating, or annual review of performanceMobility of managementRunning a company on visible figures alone

W. Edwards Deming – Seven Deadly Diseases

Silos : Then and Now

1950 TODAYFewer silosLess deepLess complex

Many more silosMuch deeperMuch more complex

Source: The High-Velocity Edge, by Steven J. Spear (McGraw-Hill: New York 2010)

Alignmentin 1950InformalCollegial

Alignment

Today?

Previous Attempts at CuresDivisional structure

Each division within a divisional structure contains all the necessary resources and functions within itMight result in new silos

Matrix structureThe matrix structure groups employees by both function and productAllows team members to share information more readily across task boundariesCan result in conflicts of loyalty

Note: Getting ERP to work in matrix structure won’t cure underlying causes

Actual Causes...Complex system’s rarely fail due to one single failure mode or occurrence Complex systems fail when the wrong combination of filaments are broken at the wrong time

BUT HOW DO THEY SUCCEED?

How Do Complex Systems Succeed?In nature complex systems achieve order & stability through application of simple rulesE.g. birds successfully migrate year after year by following a few simple rules:

Try to go the same direction as all the other birdsTry to stay in the middle of the flockTry not to hit anything…

Can man-made systems achieve stability in this way?

Source: The High-Velocity Edge, by Steven J. Spear (McGraw-Hill: New York 2010)

How Do Complex Systems Succeed?

We have to know when a filament is broken and immediately fix it – just like the spider!

Causes...Failure Mode 1:

Copy “tools” only without making work self-diagnostic

Causes:We look only with our eyes...so we only see what is visible

"I think that people here expect miracles. American management thinks that they can just copy from Japan—but they don't know what to copy!“

- W. Edwards Demming

Causes...Failure Mode 2:

Workaround problems even when they are recognized

Causes:Scientific Problem Solving isn’t taughtProblems aren’t seen as opportunitiesFocus on Short Term Goals

This weekThis MonthThis QuarterThis Fiscal Year

Causes...Failure Mode 3:

Don’t share systemically what has been learned locally

Causes:No predefined method of sharingNo way of knowing when sharing has not occurredRunning an organization with functional “Silos”

Causes...Failure Mode 4:

Don’t develop the capabilities of others to design work, improve work, and institutionalize new knowledge

Causes:Problem Solving is thought of as a specialist role, rather than a core capability of every worker to be developedProblem Solving and the ability to develop problem solving in others is not a key requirement of managers everywhereIgnoring the importance of mentor / student ratio’s on the plant floor.

CountermeasuresStop measuring your organization’s departments by short term goals

focus on customer satisfaction, profits will come

Move away from functional silo’s of disciplinary “experts”

move towards organization built around products

Give every employee a capable mentor

expect that every employee continue learning

Countermeasures (what to teach)

How to Design Work to see problemsMake All work highly specified as to content, sequence, timing, and outcome

Insist on swarming problemsProblems must be immediately addressed, both to contain their effects from propagating, and to trigger problem solving

Countermeasures (what to teach)

Problem Solving Using the Scientific Method

Any improvement must be made in accordance with the scientific method, under guidance of a teacher, at the lowest possible level within the organization

Leaders Must be TeachersThe most senior management level has to own the capability development process – it must cascade downhill

Capability 1 : Design work to see problems

The FOUR Levels of Process Design

Defining objectives/outputs for the systemCreating pathways by assigning responsibilitiesConnecting adjacent nodes on the pathwayDesigning individual work activities

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Capability 2 : Swarming problems when they occur

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And where they occur

Problem Solving is Mostly Simple...

Both Demming and Ishikawa agreed that basic problem solving will solve up to 95% of all problems typical in manufacturing. The problem is one of data collection and rigorous execution of a structured methodology.

Basic PDCA* Problem SolvingPlan

• Definition & AnalysisDo

• Try Counter-measureCheck

• Confirm result

Act• Standardize or revise

Key Points:

•Constantly repeat the cycle as a problem solving tool & management routine

•Was the Toyota starting point for quality improvement in the 1960’s.

*Originally known as the Shewart Cycle, developed by Walter Shewart in his 1939 book titled “Statistical Methods From the Viewpoint of Quality Improvement” and later popularized by Edward Demming.

Scientific Method in each...

PDCA• Plan• Do• Check• Act

8D Steps• Use Team Approach• Describe the

Problem• Containment• Root Causes• Verify Corrective

Actions• Implement

Permanent Corrective Actions

• Prevent Recurrence• Congratulate Your

Team

Six Sigma• define • Measure• Analyze• Improve• Control

Pathwise• Problem• Investigate• Compare• Clues• Cause

7 Classic QC ToolsThe 7 Classic QC Tools are essential in gathering data and analyzing problems, they also make relevant information visible.

Check Sheet

C&E Diagra

mGraphs Pareto

ChartControl Chart

Histogram

Scatter Diagra

m

Capability 3 : Sharing knowledge where it is created

Capability 3 : Sharing knowledge where it is created

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Capability 4 : Leaders train, coach, assist, & teach

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Capability 4 : Leaders train, coach, assist, & teach

Are all your employees afforded a close mentor / teacher?

What Can You Do?Understand the nature of Silo ManagementDevelop a shared language of improvement & disseminate it across the value streamImplement the Four Rules in your zone of controlImprove how we keep score

Questions?