High-Performing Contractor Newsletter May 2012 - Issue #104
This e-newsletter is dedicated to supporting High-Performing Contractors and all contractors who are working to become one. Written by Dennis Sowards
This is the 100th issue of this newsletter. The first edition was in Oct. 2003. When I started writing these I had just finished developing a High-performing contractor (HPC) assessment tool for SMACNA. I felt there needed to be more information sharing about what a world-class or high-performing contractor is and does. Since then I have worked with many contractors and have facilitated 15 contractors in doing the HPC assessment. I have yet to find a contractor that meets all of the strict standards of a high-performing contractor in all six categories. Many excel in some of the areas but fall short in others.
In honor of the 100th edition of this newsletter and to help remind everyone of what high-performance contractors are about, I am including some of the past issues best topics. In research the best of past issues I found I could not include it all in one issue so I am doing six issues - one for each of the seven categories of the HPC assessment process. The six performance categories for the high-performing contractor assessment are:
- Strategic Planning
- Customer Focus
- Employee Focused
- Process management
- Keeping Score
This issue is a review of Process Management.
Feb 2004 - Process Improvement & Six Sigma
Someone has said, “Nothing improves unless something changes!” That is true but to bring about improvement, one must do it one process and one project at a time. High-performing contractors will manage their processes by instituting projects to improvement them. Six Sigmais gaining a lot of national attention for its success in improving processes and saving money. Six Sigma is basically the COPIS Plusmethod I have often used for process improvement.
Define the Customer and customer requirements
Identify the Output that we produce to meet the customer requirements. Validate that the output satisfies the customer. Identify where we have had a missed requirement – where the output went wrong.
Map the Processes that produce the outputs. Focus on the critical processes that produce the critical outputs or that produced the error output.
Identify the Inputs (resources) that are used by the processes to produce the outputs. Validate the input requirements to ensue that they meet the process’ requirements.
Identify the Suppliers that provide the inputs. Work with them to make sure they understand the input requirements and can meet the requirements. The suppliers need a feedback so they know if they are doing it right.
Six Sigma is ‘COPISPlus’because it adds measurement to the COPISsteps. We measure first at the output side. We measure the key requirements and to what degree we meet them. We then work backwards through the system to measure as needed to make sure we know when we are doing it right or wrong. When we make improvements, we look at the measures to validate we have an improvement. (Maybe we should call it COMPIS?)
In the end, it takes work to improve processes but the investment is worth it.
April 2009 – The Cost of not doing Built-in Quality
The current buzzword is built-in quality as opposed to quality by rework. Maybe this is more palatable than terms like “Right First Time” and “Zero Defects,” but they mean the same thing. Defects are not unique to construction. Consider this story from Boeing:
“An analysis of defect data for one of our shops revealed 49 percent of all defects and 131 defects per assembly were caused by drill and tool marks, debris, part trimming, missing parts and fastener damage.
“Prevention of these defects has the potential of significantly reducing rework cost. At a rework cost in this shop of $3.58 per defect, this could mean a savings of about $470 per assembly. At a production rate of 2,500 units per year, this would translate to $1.2 million dollars in profit before taxes.
“To put this in better perspective, last year our division spent the equivalent rework hours that in effect gave away a 737 airplane free of charge.”
[Source: Management Impact on Productivity by Deane D, Cruze, IIE Annual Conference 1983]
What is it that we (as contractors) are giving away with not doing the work right the first time? Is it a floor, a HVAC system or even a whole building? Studies and logic prove that doing something right the first time is always less expensive than doing it over a second or third time. The problem, many managers have with this approach, is they see it as only a motivational program. They feel they must persuade, inspire, and encourage the workers to do it right. The truth is - to achieve quality right the first time it takes a system. One must set the standard or expectation, then insert preventions and checks to ensure it happens.
The standard is zero defects – work done right the first time – no errors! If one does not set the standard - no one will reach it. Some argue that zero defects is impossible. Some settle for a lesser target such as 6 Sigma –that means only 3.2 defects per million opportunities. To me that is like saying we do not want too many accidents – just a few.How many accidents (eyes or hands or worse lost) is included in your safety target? Talking about defects or accidents is the same thing, how many do you want to have? Zero is the only acceptable target. Is it impossible? No! It can be done.
If one sets a zero error target and invests much time and energy in exhorting the workers to not make errors, no errors might happen once in a while but not consistently. The secret is knowing that defects are preventable! It may happen by luck once in a while but to consistently have zero defects requires preventions systems.
How do you achieve zero defective welds? Learn the root causes for the defects and implement countermeasures. There are too many case studies that show this works than to refute it. Zero defects can be achieved. Yes, it takes work, I didn’t say it was easy but it can be done. Nothing worthwhile is ever gained by default. The challenge is not if it can happen, but getting managers and workers to think it is possible.
How many defects do you want to deliver to your customers? More importantly – how many defects do your customers want? How many are you giving them now? What is the cost of your defects – are you giving away a whole building?
Feb 2008 – Critical Elements of Effective Process Management
All work is a process and yet process management is one of the weakest areas for most companies. Maybe because we work in processes all the time that we fail to learn how to work effectively on the processes. Here are some critical elements of effective process management:
1. Know your customer’s requirements.All processes are done to meet some need. Be sure to periodically validate the actual needs of the process’ customer. Often we think we are doing what is needed only to discover that the needs have changed but the process hasn’t.
2. Map your process. Identify the steps of the process. Field validate that these are the steps the workers in fact do follow. You cannot achieve consistent results without a consistent process being followed.
3. Know the process key requirements. Every process has some things that must be done right to be successful. This may be accuracy, first time quality, on-time delivery, technical expertise, etc. While quality, cost and schedule tend to be the requirements of all processes there may be other requirements for certain processes. A material delivery process that provides the material to the job in a just-in-time approach has a more critical time requirement than shops that send product to the yard randomly in advance. The process for collecting on invoices is tied to schedule pr timing than to the quality of the invoice.
4. Measure for results and process improvement. Measure how well you are doing to meet the customer’s needs (outcomes) and to meet the process’ key requirements.
Nov 2004 – Go on a Waste Safari
High-performing contractors are always looking to reduce non-value added work. One way to do that is to go on a Waste Safari. Go looking for waste. Go out in the shop, at a job site or even in the office and watch for waste. What does waste look like? It takes the form of material waiting to be fabricated. It is stashes of material or tools not being used. It looks like cut sheets being put on carts to move to the next tool. It looks like people doing treasure hunts, looking for needed material, tools or information. It can look like equipment or crews waiting for sometime to trigger their action. Waste can be inventory. Waste is too many extra parts or extra copies of reports or invoices.
Just watch what happens while people go about doing their job and waste will become obvious. Watch more than a few minutes, maybe an hour or two to really seen what happens. You may even want to draw a spaghetti chart showing how a person or material moves from one point to another to see the total flow. Look for when the lines you draw cross back and forth. Look at the distance traveled before it is used or shipped. This is not about trying to catch some worker being lazy; it is about looking for any non-valued added activity. Customers pay for value added services and products not waste. One study found that the total cost of transportation of materials at a job can be more than ten percent of the net building cost excluding design. When waste is eliminated or reduced a contractor becomes more cost effective and lean.
**************** Learning Opportunities
You may be interested in attending one of these training seminars by Dennis Sowards:
May 9, 2012 – Lean in the Service World- Sponsor – P.I.P.I. & 469 JAC – Phoenix, AZ - contact Cathy Mayeux at firstname.lastname@example.org for details
May 24, 2012- Job Planning That Really Works- Sponsor – P.I.P.I. & 469 JAC – Phoenix, AZ - contact Cathy Mayeux at email@example.com for details.
Sept 27, 2012 – Excellence in Customer Relations- Sponsor – P.I.P.I. & 469 JAC – Phoenix, AZ - contact Cathy Mayeux at firstname.lastname@example.org for details.
Oct 4, 2012 - The Lean Construction Advantage: The Best-Kept Secret – Sponsor CCA/PHCC – Connect 2012, Philadelphia, PA. Details coming at http://www.phccweb.org
Oct. 5, 2012 - Dealing with variation in projects – Learn from the Parade of Trade Simulation- PHCC – Connect 2012, Philadelphia, PA. Details coming at http://www.phccweb.org
Oct 25, 2012 – Leadership Skills for the 21st Century- Sponsor – P.I.P.I. & 469 JAC – Phoenix, AZ - contact Cathy Mayeux at email@example.com for details.
If you are interested in bring one of these workshops to your company or association, please contact Dennis Sowards.
**************** Some of the Best Thought for the day
“Brilliant process management is our strategy. We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes.” Mr. Fujio Cho, President of Toyota.
For more information about the High-Performing Contractor assessment process contact Dennis Sowards at 480-835-1185 or at dennis@YourQSS.com (see www.YourQSS.com)
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