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Michael Balle

Michael Ballé: Don’t reorganize! Learn to pull instead

By Michael Balle, co-author of The Gold Mine and The Lean Manager - Last updated: Sunday, June 24, 2012 - Save & Share - Leave a comment

Full disclosure : I wrote a book on re-engineering almost 20 years ago and I wish there was a recall procedure for published books :). As the book was put on the shelves I had reached the conclusion from evidence that a re-engineering project would stop the company working for about two years as every one tried to figure out their role and play musical chairs and the new “re-engineered” organization would work brilliantly for high-running products but very poorly for every thing else, which typically would be disastrous for market share.

At the time I was writing it, I was pondering the fundamental problem of why do silos exist – I actually included some of this discussion at the end of the book. I was struck by Jim and Dan’s point that functional silos are necessary for developing expert knowledge on technical topics – and yes, I’ve found since that purely process oriented organizations lose out tremendously on this front: DON’T DO IT!

The second point is, obviously, concentration or resource and resource management – the people making investments needs to know what they’re buying. If they buy the wrong kind of stuff because they are solving the wrong problem, fix that instead, but don’t try to attack functional investment logic – all you’ll get is a political mess.

So how does one both keep a functional silo organization as well as grow a stronger business process orientation. The lean answer is pull system.

I’m currently working in a large German factory which produces high-variety industrial products with processes integrated from final assembly to casting (foundry! Imagine that!). The plant is run by the MRP so it looks like a 747 having crashed in a hangar – there are machines, parts and people all over the place without any process logic.

The first very difficult job the guys are facing is the product process matrix to create actual value streams by putting together baskets of products that move through the same equipment. Considering the number of steps of the process and the variety of the products this is a mammoth task, but they’re on to it (thank God it’s a German plant, a French plant would have given up a long time ago).

The interesting thing is that they’d previously attempted to do what you seem to have in mind – they’d set up “Value Stream Managers” who didn’t have a standard job and ended up being just another layer of organizational confusion. By working at establishing pull even in very difficult  conditions, they’ve now realized that each value stream requires a Master Scheduler more than a transverse manager: someone who imposes production control and logistics dictatorship, but lets the resources owners be resource owners.

On the other hand each department head (the silo managers) have now started dojos and kaizen programs to hone their people’s technical skills and learn to solve problems across department boundaries. From experience elsewhere, pulling is key to standardized workbecause takt time determines the amount of work and the cycle per station, which is the prerequisite for standardized work. The brilliancy of pull is that frontline manager’s role change from the boss who gives tasks to do to people (the pull system now does that: follow the cards) to the guy who has to keep working conditions up so that tasks can be achieved in time: hence standardized work.

Now, this is not an easy endeavor and the overall plant manager shows both resilience and courage, but the impact is interesting as, even though they fumble, their operational indicators are improving and they’ve all started working together as opposed to working against each other. Progressively, quality claims by customers are taken into account daily on the shop floor and internal customer-supplier relationships are clarifying: the organization is being transformed – without the pain and sheer waste of re-engineering the company. My answer, here, for what it’s worth, is DON’T REORGANIZE, learn how to use a pull system, from product-process matrix to shop stocks to kanban cards!

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