Jan 14, 2013

Does the recent management survey tell us about lean practices or not?


I've received some feedback on Lean works and now we have proof that I wrote about a report released by the U.S. Census bureau regarding a survey about management practices and their relationship to profitability, productivity, and so on.

One person felt the report and data were thin. That's something to consider. (Read the Census Bureau press release, with links to questions and the research report.) Do you agree?

Another pointed out that the report was not talking about lean except for one reference. True. I was the one who interpreted the results as being data about lean, so let's not blame the researchers for that.

My reason for using the word "lean" was that the questions are, in my view, similar indicators of questions we would use for sensing the use of lean practices in a company. I think that those related to KPIs are revealing, although those about bonuses and career advancement, not so much. What's a good name for the practices? Structured management?

In truth, 16 questions can't be said to cover every practice we'd call lean -- Shingo, Baldrige, and other lean assessment tools are many pages long. But imagine how many people would have completed the survey if it had been extensive.

These are the questions, and the multiple choice answers included in the survey. Each question is answered for 2005 and for 2010, allowing change to be measured.

1. What happened when a problem in a production process arose?
Answers: Fixed, no further action; Fixed, took action so it would not happen again; Fixed, took action so it would not happen again, and had continuous improvement process to anticipate problems like these; No action.

2. How many key performance indicators (KPIs) were monitored? 
Answers: 1-2, 3-9, 10 or more, no key performance indicators.

3. How frequently were KPIs reviewed by managers?
Answers: (Mark all that apply) Yearly, Quarterly, Monthly, Weekly, Hourly or more frequently, Never.

4. How frequently were KPIs reviewed by non-managers? 
Answers: (Mark all that apply) Yearly, Quarterly, Monthly, Weekly, Hourly or more frequently, Never.

5. Where were production display boards showing output and other KPIs?
Answers: All display boards located in one place, display boards located in multiple places, No display boards.

6. What were the time frames of production targets? Examples of production targets include production, quality, efficiency, waste, on-time delivery.
Answers: Main focus on short-term (less than one year), Main focus was on long-term (more than one year), Combination of short-term and long-term, No production targets.

7. How easy or difficult was it to achieve these targets?
Answers: Possible to achieve without much effort, Possible to achieve with some effort, Possible to achieve with normal amount of effort, Possible to achieve with more than normal amount of effort, Only possible to achieve with extraordinary effort.

8. Who was aware of targets? 
Answers: Only senior managers; Most managers and some productions workers, Most managers and most production workers, All managers and most production workers.

9. What were non-managers’ performance bonuses based on? (check all that apply) 
Answers: Their own performance as measured by KPI targets, Their team or shift performance, The plant’s performance, The company's performance, No performance bonuses.

10. When targets were met, what percent of non-managers received performance bonuses? 
Answers: 0%, 1-33%, 34-66%, 67-99%, 100%, Targets not met.

11. What were managers’ bonuses based on? (check all that apply) 
Answers: Their own performance as measured by KPI targets, Their team or shift performance, The plant’s performance, The company's performance, No performance bonuses.

12. When targets were met, what percent of managers received performance bonuses?
Answers: 0%, 1-33%, 34-66%, 67-99%, 100%, Targets not met.

13. What was the primary way non-managers were promoted? (check all that apply) 
Answers: Solely on performance and ability, Partly on performance and ability and partly on other factors, Mainly on other factors than performance and ability, Non-managers are usually not promoted.

14. What was the primary way managers were promoted? 
Answers: Solely on performance and ability, Partly on performance and ability and partly on other factors, Mainly on other factors than performance and ability, Managers are usually not promoted.

15. When was an under-performing non-manager reassigned or dismissed?
Answers: Within 6 months of identifying non-performance; After 6 months of identifying non-performance; Rarely or never.

16. When was an under-performing manager reassigned or dismissed?
Answers: Within 6 months of identifying non-performance; After 6 months of identifying non-performance; Rarely or never.

These questions were followed by others asking about the organization: where company headquarters were located, where certain decisions are made (HQ or plant) hiring and pay increases, where new product introductions take place, product pricing, advertising. Level of purchasing authority at the plant, how many employees report to the plant manager, who prioritized production workers tasks, availability and use of data for decision making, how managers learn about management practices.

Then there were some about background characteristics: seniority and years of employment of person completing the survey, number of managers and employees at the establishment, % of managers and non-managers with bachelors degree, % of employees belonging to a union.


Is some data better than no data?
My overstatement about proof that lean works aside (I did get a lot of hits on the page), I think the survey gives us something to work with when discussing the benefits of lean -- or whatever you want to call it.

1 comment:

Lester said...

Karen,

I agree with you that the findings do point to a link in management techniques that correspond to what we look for in Lean. This is explicitly mentioned in the report The management practices covered three main sections: monitoring, targets and incentives, based on Bloom and Van Reenen (2007), which itself was based in part on the principles continuous monitoring, evaluation and improvement from Lean manufacturing (e.g. Womack, Jones and Roos, 1990).


Keep up the good work on your blog.

Best,

Les

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