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论老子

道,领导也。领导必需要不断呼唤,教导下属以及以身作则。下属的过和错皆因领导懒惰。

 
 
 

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Chapter 12: Misused of Pareto Analysis  

2012-06-24 12:21:40|  分类: Buffer Mentality |  标签: |举报 |字号 订阅

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I continued with the fourth misused of statistics. That is the Pareto analysis. I said, “John, this is an even more controversial and debatable argument. I am afraid you may not agree with me at all. Anyway, I have to share with you simply because I think if it is not applied correctly it is another dangerous form of misused of statistics.”

John encouraged me, “Go ahead, Eric. I am open to your opinion. Please feel free to speak your mind” 

I explained, “Among the fraternity of the engineers who work in a manufacturing factory environment, the pressure to solve problems quickly is over-bearing. Moreover, the short development lead time for new products does not provide the design engineers with sufficient time to design robust products that are of a high level of manufacturability and thus, are produced with minimum defects or quality problems.

When engineers faced with a whole array of different problems, the first thing in their mind is to determine which problems are most critical and urgent and must be solved now. The rest of the problems that could be delayed shall be postponed. There is one magic wand that is often used but very few people had thought of its negative effect. That is the Pareto Analysis[1].

The quality engineering director often calls for problem-solving meetings with this focus mindset. He will say, ‘We do a Pareto Analysis and identify the top 3 most frequently occurring problems. Let’s form project teams to focus on eliminating them.’

Everyone in the manufacturing world knows precisely why and when to use the Pareto Analysis – an 80-20 rule. It says, for example, 20% of the defects contribute to 80% of the scrap losses and the remaining 80% of the defects contribute to only 20% of the scrap losses. Therefore, one should focus on the top 20% of the problems. Once this top 20% of the problems is resolved, 80% of the losses would be eliminated.

Why should we put in the effort working on the remaining 80% of the defects of which you can derive only 20% of the reduction in scrap losses? The workload is simply too much and yet the return is quite marginal. This is the logic behind their thinking.

 

Figure 12-1: An example how Pareto Analysis is used


      Using the Pareto Analysis is like wielding a big knife. With one vertical downward chop, a neat decision is made to decide which of the top few quality issues are to be worked on immediately and the bulk of the other quality issues can therefore, be ignored momentarily.”  

John asked earnestly, “Is there a weakness about the use of Pareto Analysis in this way?”

I continued, “A company like Seagate (the word biggest manufacturer of hard disks used in computers and servers) employs a few hundred engineers. In their weekly quality review (or SPC[2]) meeting, they decide which are the top few quality issues to be worked on and immediately assign these few issues to a few engineers. These engineers then formed work teams to expedite on the problem resolution for these few quality issues. Yes, it is a very focus approach.

But what do you do with the rest of the hundreds of engineers? Without any assignment, what are they supposed to work on? The answer is, ‘Nobody knows.’

The hind side of the Pareto Analysis is, it effectively gives these engineers a reason not to work on the remaining 80% of the quality issues. This is simply because all these other issues are not in the radar screen of the quality engineering director. A lame excuse it may be. But this is really buffer mentality. It is simply a case of out of sight, out of mind.

Is that what you want out of the pool of engineers? Where a few of them were assigned to work very hard but the majority of them can laze off with nothing more than routine work.

Of course, the engineers love the Pareto Analysis. It gives them a reason not to work on the remaining 80% of the quality issues. But it means quite a totally different thing to the chief executive officer. He sees the Pareto Analysis as a wonderfully comfortable and cozy piece of cushion that enables the majority of his engineers to rest on their laurels, idling away. How can he tolerate the cream of his employees wasting away their time? They are his most precious resources.

Likewise, if you were to scrutinize how many Design of Experiments (abbreviation, DOE) projects that can be meaningfully carried in a month, you will notice frequently the engineers often give an excuse not to proceed with their experimental studies. The excuse most often is, ‘The production folks could not allocate a time slot for me to run experiments.’

Again, can the CEO tolerate this lame excuse? Of course not! He would want every one of his engineers to work on at least one quality issue continuously, time after time. Suffice it to say, his engineers must be able to work on nine out of ten quality issues using their best knowledge and leave the tenth quality issue to DOE, or for that matter, to the 6-sigma experts.

Where do the nine out of ten quality issues come from?

Of course, they are from the pool of the 80% of the problems that fall outside the Pareto Analysis. But the funny thing is, every one of the engineers prefers to see which problems are in the top 20% and conveniently ignore the rest of the 80% of the problems. That is the most amazing part how the Pareto Analysis had formed a cozy buffer mentality among the managers and engineers.

Summing up, the engineers will not be that kind to tell their CEO that they are going to work on all problems alike. That would means they have to slog very much harder everyday.

However, the CEO knows buffer mentality is a difficult nut to crack. It has been masterfully applied by every businessmen and employees alike.”

John interrupted and asked, “How do you remove this buffer mentality, or misused of the Pareto analysis, particularly?”

I explained, “It is perfectly alright for the quality engineering director or for that matter, any senior management team member to drive the top few quality issues. But they should not stop at that.

His focus action to drive quality improvements shall be cascaded down to all levels of the management. Meaning, his subordinates must identify the next top 3 issues to work on immediately. This message must be made very clear to all the employees.

Perhaps, right down to the lowest level, each operator (if he is fully motivated) will pick the top three problems occurring in his work area to work on immediately and ignores the rest of the lesser issues.

A decision on the Pareto Analysis at this lowest level is perfectly acceptable. After all, the operators are expected to revisit the remaining issues and work on them later.”

“I fully agree with you, Eric. The Pareto Analysis must be performed by every one in the organization from the top management right down to the lowest level of the organization.”

I summarized my discussion, “My point of view is, the use of the Pareto analysis to focus on key issues to be work on immediately should not stop at anywhere high up in the management level. It simply encourages buffer mentality to set in the organization. It must be drive down to the shop floor employees.” 



[1] Pareto Analysis was a theory founded by an economist, Vilfredo Pareto in the 19th century. It says the majority of the effects come from a few root causes. 80% of the problem comes from 20% of the root causes.

[2] SPC stands for Statistical Process Control. In this meeting, the SPC charts are the key items tabled for discuss to identify quality issues.

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