The Real Lessons Of Dr. Deming’s Red Bead Factory

@MarkGraban@MikeStoecklein

June 27, 2016

Why Are We Here?

“To learn… and to have fun!”

Key Management Questions

• How are we performing?– Are we getting better or worse?

• What action should we take?

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Or Not Take Action

“Management must understand the theory of variation: If you don’t understand variation and how it comes from the system itself, you can only react to every figure.

The result is you often overcompensate, when it would have been better to just leave things alone.”

W. Edwards Deming

History of the Game in One Slide• Created at HP as a gift for Dr. Deming in 1982

by William (Bill) Boller• Deming used the “Red Bead Experiment” or

“Red Bead Game” in his seminars

Creating Beads

WillingWorker ofthe Day

Lesson: Standardized Work Alone Doesn’t Work

Account Name:  

White Bead Corporation     CREATION DATE: 2/14/02

Process Location: Chicago IL     CURRENT REVISION LEVEL: 3.1

Operator Process Type: Producing White Beads     PREVIOUS REVISION DATE: 9/15/15

 

  JOB GUIDANCE SHEET  

PROCESS TYPE QUALITY/SAFETY

ORDER OF PROCESS

JOB STEP

DESCRIPTION OFJOB CONTENT

Analysis Information (Process Type & Estimated

Time)

DESCRIPTION OF KEY QUALITY ("Q") AND

SAFETY("S") POINTS

CODE ESTIMATE WHAT WHY

1 1 Ensure paddle holes are empty of all beads I 2    

1 2 Grasp the paddle by the handle. TL 2 Ensure holes are oriented upwards.

Necessary for proper capture of produced beads

1 3 Slide the paddle down into the beads until paddle is covered with beads. LD 4    

1 4 Pick up paddle to 4 inches above the bead level. VA 5    

1 5 Tilt paddle at a 47 degree angle to release excess beads. VA 5 Must be at precisely 47 degree angle. Best utilizes gravity.

1 6 Withdraw paddle from container UL 3 Make sure one bead is in each hole. Production quota

2 7 Walk to Quality Control WK 5 Be careful to not spill bead any beads.  

2 8 Present to Quality Control for count of beads produced. I 10    

3 9 Walk back to Production area. WK 5    

4 10 Empty paddle back into bead container. RW 3    

Lesson: Goals Alone Don’t Work

Lesson: Incentives Alone Don’t Work

Lesson: Clever Programs Don’t Always Work

Lesson: Slogans & Posters Don’t Work

Dr. Deming’s Lessons

https://blog.deming.org/2014/03/lessons-from-the-red-bead-experiment-with-dr-deming/

“Workers will try to do a good job even when they know they cannot. Doing your best doesn’t matter, unless you know what to do, why you are doing it, and how to do it.” (Dobbins)

Lesson: Firing the “Below Average” Workers Doesn’t Work

SPC Chart – A Stable System

Deming Said…

“The worker is not the problem. The system is the problem. If you want to improve performance, you must work on the system.”

Deming Said…

“Management should be working with the supplier to reduce the number of red beads. Reduce lot-by-lot variation. That is how to get better numbers.”

Deming Said…

“94% of the problems in business are systems driven and only 6% are people driven.”

Workplace Red Beads

• What are “red beads” in our workplaces?

http

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BBC Online Simulation

• “…in the calculator, every patient in every hospital has exactly the same chance of dying and every surgeon is equally good.

• This is to show what chance alone can do, even when the odds are the same all round.”

BBC Online Simulation• The calculator shows 100 hospitals each

performing 100 operations• The probability that a patient dies is initially fixed

at five in 100• The government, meanwhile, says death rates 60% worse

than the norm are unacceptable (in red)• So any hospital which has eight deaths or more out of 100

ops - when the expected average is only five - is in trouble.• We've assigned one hospital to you, with a box around it -

it could come out green or red.

Simulation Round 1 Results

Simulation Round 2 Results

Simulation Round 3 Results

Blaming the System

• 10. Eliminate slogans, exhortations, and targets for the workforce asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce. – Deming’s “14 Points for the Transformation of

Management”

“Disappointing Results”

An SPC Chart ViewO

ct-1

2

Nov-

12

Dec-

12

Jan-

13

Feb-

13

Mar

-13

Apr-

13

May

-13

Jun-

13

Jul-1

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Aug-

13

Sep-

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-13

Nov-

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Dec-

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Jan-

14

Feb-

14

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475 ED Arrival to Admission

Min

utes

CMS Top Decile = 175 minutes

CMS Median = 277 then to 269 minutes

The Wrong Questions

• “Why was performance disappointing yesterday?”

• “Why were we worse than our goal yesterday?”

– Don’t ask for a “special cause” explanation when you have common cause variation

An SPC Chart ViewO

ct-1

2

Nov-

12

Dec-

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Jan-

13

Feb-

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Mar

-13

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-13

Jun-

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Jul-1

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Aug-

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-13

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14

Feb-

14

0

25

50

75

100

125

150

175

200

225

250

275

300

325

350

375

400

425

450

475 ED Arrival to Admission

Min

utes

CMS Top Decile = 175 minutes

CMS Median = 277 then to 269 minutes

?

What was different this day?

Reacting to Special Causes

• Can we identify what was different in that time period?– There’s a small chance there was no difference

• Can we:– Prevent reoccurrence? (bad outlier)– Make that a permanent change? (good outlier)

Two Kinds of Mistakes

1. To react to an outcome as if it came from a special cause when actually it came from common causes of variation.

2. To treat an outcome as if it came from common causes of variation, when it actually came from a special cause

Mark’s Most Favorite Book Ever

http://www.spcpress.com/Amazon: http://bit.ly/wheeler-book

Donald J. Wheeler, PhD

Red / Green Charts

http://www.leanblog.org/RYG

Red / Green Charts with SPC

http://www.leanblog.org/RYG

Red / Green / Yellow

http://www.leanblog.org/RYG

Common Cause (Random)Variation

Special Cause (Assignable)

Variation

What you are dealing with:C

hoic

es fo

r act

ion:

Cha

nge

the

syst

emto

try

to Im

prov

e fu

ture

resu

lts

Rea

ct to

, inv

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ate

sear

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r roo

t cau

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rem

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Correct action

Correct actionDisappointment(make matters worse)

“Tampering”

Disappointment(make matters worse)

90% 10%90

%10

%

81% 9%

9% <1%

Making Matters Worse - Consequences

W. E. Deming, The New Economics, p. 36

“Somehow the theory for transformation has been applied mostly on the shop floor. Everyone knows about the statistical control of quality. This is important, but theshop floor is only a small part of the total. The most important application of theprinciples of statistical control of quality, by which I mean knowledge about commoncauses and special causes, is in the management of people.”

Deming Said…

“The most important application of the principles of statistical control of quality, by which I mean knowledge about common causes and special causes, is in the management of people.”

The New Economics, 2nd Ed., 1993, p. 37 and Chapter 6.

Three Possible Worlds

Individual

System

World 1

IndividualSystem

World 2

System Individual

World 3Heero Hacquebord, OQPF, 1996

The red bead demonstration

The better you understand how to react to variation when you have figures,the better you will be at reacting appropriately when you don’t have figures.

Understanding and reacting to behaviors.variation

systems psychology

Theory ofKnowledge

Deming’s “system of profoundknowledge”

Systems drive (affect) behaviors.

RulesEducation Training Roads

Weather

Light

Law Enforcement Other drivers

“backseat drivers”

Cell phone

Is it the individual? Or the system?

Is it the individual? Or the system?

Is it the individual? Or the system?

This just in ….

http://bit.ly/performanceisrandom

“If the good people are always good and the badpeople are always bad, we can explain 100% of yourscores because next year’s score will be identical tothis year’s score. If it’s random, which would be kindof astonishing, then it would be zero. There’d be norelationship between how people on average performthis year and how they perform next year. The goodpeople could be good, the bad people could be goodor bad.

People in human resources guess 80%. The correctanswer is 27%, so it’s way closer to zero than it is to100%”.

NOT Understanding Variation Leads To…

• Pressuring people to get better results by working harder within the same system

• Wasting time looking for explanations of a perceived trend when nothing has changed

• Taking the wrong sorts of actions in response to variation

• Not focusing on systemic improvements

Quick Recap

• Don’t blame individuals for performance variation that’s actually due to the system

• Don’t ask for “special cause” explanations when the chart shows “common cause” variation

Q&A and Contact Info

@MarkGrabanmark@markgraban.com

www.LeanBlog.orgwww.MarkGraban.com

@MikeStoeckleinmike.stoecklein@

instituteforexcellence.org