DAILY MANAGEMENT

CONTENTS - 1. What is Daily management ? 2. Breakthrough and Daily manage ment 3. Daily management resour ces 4. Symptoms of poor Daily management 5. Functions of manage ment 6. Linkage between policy & daily management 7. Daily management model 8. Importance of role clarity 9. Managi ng & checking points in daily management 10. Control diagram & process abnor mality report 11. Flowchart & Implementation steps for daily management 12. Auditing for daily manage ment 13. Some critical concept s for effective daily management 14. Concl usion

Daily management is considered as one the most important practices under TQM. Though concept ually daily manage ment sound s very simple. However , for effective implementation it requires good amount of understanding and organization wide commitment & involvement.

1. What is Daily management? By definition, Daily Management is the system that provides the ability to manage departments, functions, and processes, wherein processes are: Defined, Standardized, Controlled and Improved by the process owners themselves. Looking at the history, Daily manage ment is a concept / method that has been researched and established around 1960 to 1985 in Japan. The purpose of Daily management (day-to-day control) is to carry out work as per standardization as well as to find out incompletion in the standardization and to carry out addition or revision necessar y for it through systematic problem solving and identifying improvement oppor tunities. The main object in Daily management is ‘ABNORMALIT Y’. In Daily management it is necessar y to find out a condition that is drastically different compared to normal condition. Carry out accurate cause investigation and prevent recurrence. Daily management is a structure for systematically performing normal duties that cannot be covered in Policy manage ment & it aims at getting each role fulfilled by each department accurately.

2. Breakthrough and Daily management - Breakthrough improvement is only part what you need to do to keep a business thriving. Businesses assume that if they are working on continuous breakthrough problem-solving, they will see improvements as modeled in the following graph, with the process output some arbitrary measure, where higher is better.

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Assumed results with breakthrough

Fig. 2.1

So the improved process is supposed to reflect a change from 10 to 30 directly to the bottom line. But in the absence of good daily management , processes are not stable through time, they degrade without systemic monitoring and improvement, as shown in the following graph:

Actual results with breakthrough only

Fig. 2.2

Where the expected improvement from 10 to 30 is actually experienced as an improvement from 10 to 15, the rest having been lost in process degradation.

Or, in other words, you need your breakthrough projects just to stay about where you are. This is one reason why cost savings from breakthrough projects are not always reflected to the bottom line.

If, on the other hand, you have a good daily management system, your local resources are constantly looking for ways to make their process better. These are not a few big-ticket breakthrough items, but rather many small, local, continuous improvement activities. In this case, improvement happens in the process on an ongoing basis in addition to the occasional breakthroughs, as in the following graph:

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Results of Continuous Improvement Activities and Breakthrough Improvements

Fig. 2.3

Here we have ongoing local continuous improvement activities in addition to breakthroughs, resulting in an improvement of 10 to 45, 20 being due to the breakthroughs, and 15 due to local improvement activities.

3. Daily management resources - Frequently when people learn the concept of "continuous improvement" they say something like, "Well, sure it sounds good, but where am I going to get the resources to do this?" The answer is that you already have the resources. It is a symptom of project-by-project thinking to believe that you need a few highly trained individuals to make improvements. Continuous improvement is best handled by local people running and managing a process. A system needs to be set up so that these people know what to do and how to do it. That system is Daily Management .

While breakthrough activities utilize advanced problem solving tools and strategies with a few highly trained individuals to make big improvements, Daily Management is how you use the other 95-98% of your organization to achieve ongoing continuous improvement. Or, in Matsushita's words, how you utilize, “...every ounce of intelligence”. Good Daily Management is the found ation upon which breakthrough improvements and company viability is built.

4. Symptoms of poor Daily management - It is very important for an organization to be able to identify if their daily manage ment is sound or weak. Here are some warning signs that a company's daily management is not working which are equally applicable for a manufacturing & non-manufact uring scenario:

Ø Quali ty problems and incidents increase when vacation or other relief workers are employed Ø Process performance (quality and output) is noticeably and quantitatively different from shift to

shift Ø Planned process changes/product changes do not go smoothly Ø Different operators run the same equipment differently Ø The same work rules, methods, and conditions have existed for a long time and things are not

getting better Ø Process performance deteriorates with the age of equipment

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Ø Problems in key performance areas (e.g., quali ty, delivery, productivity) have been solved numerous times only to return after a short absence

Ø Different departments (and individuals within departments) have or appear to have different goals and objectives associat ed with their outputs

Ø Equipment failures and outages create havoc for the organization because dealing with them is almost always reactionary

Ø Processes are run to the best of the operator's ability and adjustments and corrections are made based on judgment (as opposed to data)

Ø When “seasoned ” employees change jobs or retire, problems spring up in the area they left Ø Process performance modification and control is not documented. Many problems of quality,

traceabili ty, and account ability are traced to between shift transfer or handoff Ø Expedited orders slow down (even get lost) between shifts and/or between departments Ø When someone important is due to visit, you have to take special time (and sometimes much

effort) to clean things up

5. Functions of management - Management functions can be broadly classified into 3 main areas viz:

a. Maintenance - To maintain levels already achieved b. Improvement - To improve levels more than that of achieved c. Breakthrough - Innovation of improvement

Improvement

Fire-fighting

Top mgmt.

Middle mgmt.

Supervisors

Workers

Breakthrough

Improvement

Maintenance

Fig. 5.1

Daily management relates to our ability to maintain what we have. Without maintenance, everyone engages in firefighting (solving yesterday’s problems). Good maintenance prevents deterioration - frees up time for improvement. Improvement is sustainable only when it can be maintained.

6. Linkage between policy and daily management – Policy manage ment deals with setting policy direction for the organization through which key breakthrough improvement projects are identified. Typically, policy manage ment items will follow P-D-C-A cycle. This, over time, triggers standardization of many activities & processes. Daily manage ment deals with running & managing these standardized processes on a routine basis. Daily manage ment typically follows the S-D-C-A cycle. As evident from the below fig. 6.1, Through S-D-C-A, priority problems are handled through breakthrough projects whereas minor problems are tackled through daily management improvement themes.

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Policy Management Daily Management

Concerned with Breakthroughs, quantum improvements, business level issues

Maintenance, control

Task Set priority directions Achieve work purpose, efficiently

Management cycle Rotating PDCA systematically C-A cycle and corrective action, often SDCA

Change Create change Prevent change

Level Higher level managem ent involvement Operating level involvement, mainly

Standards Activities that help create new standards Use rules, regulations, procedures, standards

Communication Aligning all members to the priorities of the organization.

Concerned with process or sub-process level priorities

Fig. 6.2

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Data-based communication

Daily Control Daily work

improvement

Define and Standardize

Establish Ownership

7. Daily management model –

Daily Work: The "roof" of the house that is supported by all the other elements. Daily Work is the day to day activity which is the primary purpose of the area.

Establish Ownership: The "foundation" of the

house, upon which all the other elements rest. "Ownership" is achieved by establishing the roles and responsibilities for the area and empowering the workers to perform the Daily Work.

Define and Standardize: The first room you enter.

This is defining the area's processes and developing and implementing common operational practices.

Daily Control: The monitoring, control, and reaction

activities of important processes to maintain performance levels and prevent backsliding.

Daily Work Improvement: The system that

takes system input, prioritizes opportunities, and deploys and monitors local resources.

Data-based Communication: The ongoing

communication of information to provide system feedback, focus, and alignment within and between areas.

Daily work

Fig. 7.1

8. Importance of role clarity – As evident from fig. 7.1, the foundation of the daily management house, i.e. ‘establish ownership’ is achieved by establishing role clarity. This is consid ered to be fundamental and 1st step towards effective daily management . In order to enable effective daily management , organization should define for key persons, their – Authority; Responsi bility and Accountability. Authority is the delegated right to take decisions. Responsi bility is for execution or implementation. Both of these are usually given in job description. Whereas account ability is the results we are committed to produce. Typically are addressed as individuals Key Resul t Area’s (KRA’s). Account ability should always be quantitative. The relationship between account ability, responsi bility and authority varies between levels – account ability rises with rise in level. Account abilities must be shared to create the “weft” in the organization whereas; responsi bility for “doing” must be completely distinct between people.

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9. Managing and checking point – Managing point : Numerical indicators of success or failure of one’s responsibility Checki ng point : Indicator of soundness of one’s business process to achieve Managing Point

Managi ng points are also sometimes referred as result quantifiers and checking points as process quantifiers. Managing points are identified from area’s of account ability. Managing and checki ng points share a cause & effect relationship as evident from fig. 9.1.

Checking

Managing point

Checking Output/ Result

Process

Fig. 9.1

Usuall y in an organization which follows hierarchical structure, checking points of boss or superior becomes managing point for subordinate and is cascaded similarly to the lowest level in the organization, starting from the highest level.

Fig. 9.2

Examp le: Fig. 9.3

Rules for managing points: Ø Must measure fulfillment of purpose of business. Ø Should focus on vital few i.e. 5 to 7. Ø Are general ly shared with different departments. Ø Are selected from the results of our work e.g. PQCDSM. Ø Should always be measurable. Ø Should be ones which are measurable frequently & based on reality to give appropriate and

timely feedback for corrections.

Rules for checking points: Ø Checki ng points are selected from the business process flow of one’s responsibi lity area. Ø Checki ng points need not always be measurable i.e. information, attention point can also be

the Checking Points. Ø While Managing Points are shared by different departments, their checking Points are specific

to their responsibili ty areas. Ø Checki ng Points can be shared at different levels within a department. Ø Checki ng Points should be measured more frequently than Managing Points to give an early

indication for course correction.

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10. Control diagram and Process abnormality report – It is well understood that the main object in Daily manage ment is ‘ABNOR MALITY’. In Daily manage ment it is necessar y to find out a condition that is drastically different compared to normal condition. Carry out accurat e cause investigation and prevent recurrence. Control diagram is mainly used as a detection tool for identification of abnormal condition. And, Process abnormality report facilitates systematic problem solving.

a. Control diagram (also known as control charts or shewart charts):

Control diagram/ chart is not only useful in process analysis, but it is also very useful in detection of abnormality in a process and enforcement of proper control of process. Various types of control diagram can be applied based on control item (Xbar-R, Xbar-s, X-MR, p, np, c, u etc).

In case of any control diagram, necessar y standardization is carried out and the condition of controlled process is the prerequisite.

Control diagram is a tool to detect occurrence of abnor mality logically, but it does not clarify the cause of abnormality. For cause identification, event log corresponding to control diagram is useful.

Fig. 10.1

b. Process abnormality report:

The purpose of creating process abnormality report is as given below: • Record and transfer occurred abnormality properly • Distinguish between completed and uncompleted measures • Record contents of measures, opinion of enforcement department regarding the steps • Record contents of reoccurrence prevention measures and its result • Record measures requested to other departments and sections • It should be the basic document for more fundamental analysis, counter measures

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Sample process abnormality report:

Phenomena Product Name

………. Process Name

Component Recept ion

Control Items Recept ion N.G. Ratio

Delivery N.G. ratio of August was 0.2% and Control Limit exceeded 0.15%

Occurrence Time

X yr Aug

Found By: Inspection Section: Yamamoto

Cause Investigation

As xx dimensions N.G. was found largely in the component A3815 suppli ed by new suppli er OO company, the equipment was refor med for cost down in OO company, but quality confirmation was neglected

1

When X yr Sep 15th

Who Purchase Section: Sato

2

When

Who

Emergency Measures

Instruct OO company for equipment reform. Till then get the component s sorted before receiving shipment.

When X yr Sep 20th

Who Purchase Section: Sato

Re-Occurrence Prevention Measure

If equipment with importance level above B is to be changed , then prior notice has to be given. The supplier is required to establish quality confirmation system in case of Process Change and to confirm enforcement conditions by inspection

When X yr Oct 15th

Who Product Maintenance Section: Tanaka

Effect Confirmation

Delivery N.G. ratio of the component A3815 became 0.0% Delivery N.G. ratio was at stabilized condition with 0.08%

When X yr Nov

Who Inspection Section: Yamamoto

Fig. 10.2

11. Implementation steps and process flow in daily management – Procedure of Daily management & its steps are as below:

• Step 1 – Identify role or function of each department towards other departments.

• Step 2 – Identify each process required for each job. Along with detailed distribution of the

process it is better to define all inputs, outputs, contents of activities for process, suppliers, customers, responsi bilities etc. After measuring possible uniformity about contents of activities in a process, provide standards, manuals etc.

• Step 3 – It determines ‘control items’ for judging, whether the process is stabilized by

measuring & monitoring or whether work is fulfilled as expected. Control items list may be utilized for same.

• Step 4 – The purpose of Daily manageme nt is to detect abnormality in a process &

eliminate its cause. So it is very necessar y to define what ‘Normal’ is in a form in which

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objective judgment is possible. Value to be drawn from control items is determined in ‘Control standards’, when process is stable. It consists of 2 items mainly – Target and upper / lower limits.

• Step 5 – It is necessar y to pursue the cause of detected abnormality. In this case it is

necessar y to find out what is normal & what is abnor mal for the process. Find out when an abnor mality occurs & that information should be used effectively. Following are some types of abnormalities:

a. Single occurrence – Occurs once & doesn’t continue for long. b. Intermittent – Once occurred, continues & presents abnormality. c. Tendency – Degree of abnormality increases along with the course of time. d. Cyclic – Occurs for a moment with certain rules & cycle.

• Step 6 – It is natural that emergency measures are required for minimizing the influence of

abnormality, but for preventing the recurrence of abnor mality, it is necessar y to take steps against the process.

• Step 7 – When steps against a process are taken, confirm its results and revise

correspondi ng standards. At the same time, reconsid er control standards & revise it when required.

Flowchart for establishing daily management:

Clarify job objectives & job

description

P Establish job evaluation criteria &

L targets for same A (Managing points)

N

Define Job Flow in relation to others & establish Job standards like SOP, check-

sheets, etc. (Checking Points)

DO Implement standards

A

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Level Description

1 The work is left entirely up to the workers and nothing is done about checking the results.

2 Managers have insufficient grasp of what is actually happening in the workplace, and no work record are kept. Standards exist but are never revised, and the work is simply performed in accordance with traditional practices & rules.

3 Every job has clear control items & measures, and corrective actions for preventing the recurrence of problems are taken, based on warning systems for notifying abnormalities.

4 The main control items & actual results achieved in each work place are recorded promptly, and visual controls are thoroughly implemented. Changes are reliably controlled.

5 Authority is appropriately delegated, and autonomous management is practiced by workplace groups. Workplace leaders spend very little time sorting out present problems and are able to devote large amounts of time to future oriented work.

Ref. ‘TQM promotion guidebook’ by Hitoshi Kume

K

A Take actions to

C prevent recurrence T

A

C H

Are results as E

per target in C managing

points?

Continue to control process using

Job Standards A Review Performance on checking C points as per defined frequency T

Update Job standards/Managing Points/Checking Points based on A

customer feedback/ internal problems C T

Fig. 11.1

12. Auditing for daily management – It focuses on whether activities of each department are enforced as per plan, whether they confor m to requirements, whether it is in progress and used effectively or not. While auditing Daily management,

look for: Adequacy, Implementation and Effectiveness

Use trained auditors Can combine with regular planning of QMS audits

Devel op and use checklists

Audit findings and actions planned to be reviewed by senior leadership team

Checklist example (daily management):

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13. Some critical concepts of effective daily management –

Ø The key is continuous improvement and sound manage ment of the department/ level Ø The intent is not to create a bureaucracy an piles of paperwork Ø Daily management is not a checklist of things to do, it is a system to manage an area Ø Minimize the structure and formality as much as possible Ø Use a proper balance between system development & improvement efforts Ø If the efforts are not perceived by the area manage ment & personnel as valuable, they

should not be continued

Once it is up and running, Daily Management might look like this: Every shift there might be a "stand-up" meeting of process owners, where process performance for the ending shift is reviewed. Those process measures which indicate stability (control in statistical terms) cannot be addressed on a daily basis, regardless of if they are capable of what the business requires, and so they are not discussed . Those processes which exhibit unpredictable behavior are identified and reaction plans are activated to deal with the issue tactically. In addition, the stand-up meeting may be used to communicate activities in the area.

Once a week, representatives of the process owners (including the workers) meet for an hour to review the longer-term trends of the process performance, identify new potential projects, prioritize and deploy potential project activities, and review current project progress. It is in this forum where issues that are "in control" but not capable of what the business wants are identified and attacked . Additionally, the team will identify and support local projects that align with the company-wide Policy Deployment activities.

14. Conclusion – Daily Management is essential to all organizations, and all organizations do it. However , many organizations do not do it well. There is a proven model for managing your processes with local resour ces in a team environment, where the team defines, standardizes, controls, and continuousl y improves the process without constant upper-level direction. In the absence of a good Daily Management system, processes degrade through time, do not involve or empower their process owners, and result in poor output quality.

In an effort to correct for this degradation, many companies mistakenly implement advanced problem solving activities (such as Six Sigma) rather than address the lack of quality in the execution of the basics. The efforts of these organizations to achieve improvements resemble trying to win an auto race in a car with four flat tires by putting in a brand new racing engine. Sure, you might make gains, but not nearly the gains they would have made had their personnel been working on improving process quality in addition to problems. It is necessar y to integrate the two systems of advanced problem solving and Daily manage ment, which results in both systems working better than either alone.