The purpose of conducting management review is for the management team to get together at determined intervals to
discuss how effective its business is. This included looking for “opportunities for improvement and the need for changes” to how the business is run.
To some organizations, holding management reviews is as dreaded and avoided as going to the dentist. Even dentist trips should occur twice a year for cleaning, so I recommend against annual reviews.
So how often should “Management Review” be held?
When should management review “results of audits”?
Why not within 5 working days after the audit is held?
When should management review “customer feedback”?
Why not the same or the same day received or the following day?
Or why not at a weekly management meeting and review applicable items? How often should management review open “action items”?
How often should management review key performance results (aka Quality Objectives)?
Certainly not annually.
You may have picked up on the recurring theme in the examples above. The answer to “How often the activities listed in “5.6, Management Review” (ISO 9001:2008) need to be reviewed?” is, it depends. It depends on how timely and effective you want your appropriate action to be. The ISO 9001:2008 standard does not say that all the activities listed in “5.6, Management Review” have to be reviewed at the same time. As long as all items of 5.6 are covered and records are kept, whatever frequency of management reviews enables the organization to run its business most effective is acceptable.
How often do you review?
The opening of GE’s new GeoSpring Hybrid Electric Water Heater plant in Kentucky isn’t just a great endorsement for American Manufacturing but an affirmation of Lean’s ability to help improve a company’s competitive edge in today’s global marketplace. The events that have taken place at GE and GE’s Appliance Park in Louisville read like a case study straight out of a Lean handbook.
In the 1980s America was in an industrial decline and when the GE facility could no longer compete with production costs in Asia, for reasons such as an increase in wages and a decrease in the selling price of products, GE began moving production to the Asian plants. As expected GE was able to reduce labor cost and save on materials, but over time the cost savings from outsourcing was outweighed by the negative impact on GE’s competitiveness. The following examples are just a few problems GE encountered:
What did GE do to address these problems? They invested millions of dollars in Appliance Park. In addition to the problems brought on by outsourcing, two major events helped initiate the investment. The first was the availability of job-creation incentives from the state and federal governments and the second was a competitive labor costs as a result of the 2009 Competitive Wage Agreement between GE and IUE-CWA Local 761. But according to GE the company had not invested in Appliance Park because the culture “wasn’t right to invest”. How did GE address the culture problem? They embarked on a lean initiative that “maximizes customer value while minimizing waste and identifies employees as the most valuable resource a company has”, said a GE spokesperson.
GE’s upper management is showing their commitment to changing the company’s manufacturing culture by investing not just in the building with a multimillion dollar renovation but in their people. Investment in the people has been done through lean training and employee empowerment. The empowerment has removed barriers that would keep any employee from taking positive action that would lead to better quality and/or performance. According to GE’s Appliance Lean Leaders and employees, the way of thinking and the way things are done at Appliance Park have changed:
Using lean practices and tools, GE has reported cutting cycle time by 50%, eliminated 20% of the parts included in the GeoSpring final assembly, and reduced equipment investment by 30%. GE’s lean journey is demonstrating that Global competitiveness can be accomplished when the right tools are used in the right way.
According to a report by Boston Consulting Group (BCG), labor cost in China have risen dramatically and shipping and fuel costs have skyrocketed, this means China is not as cheap as it used to be and the United States is poised to bring back jobs from China. The report also points out that by 2015, it will only be about 10% cheaper to manufacture in China. If the BCG report is correct then the question for the United States will not be what company’s want the jobs but what companies have the capability (structure and culture) to compete in a global market.
With the freedom that a consumer has, in today’s global market, to go almost anyplace for a product that meets their quality and price requirements companies must be agile enough to meet consumers changing needs. As GE is showing us, the place can be the United States and the way to get it done can be through American Manufacturing.
Furthermore, what does moving a barn (click link for video) have to do with Lean?
TMAC’s emphasis in Lean deployment is the ability to identify and prepare the different roles to fulfill their respective responsibilities to move the organization along the journey to achieve the vision. Tools are integral to the journey but in themselves are insufficient. Working in ‘the white space’ beyond the punctuated activities related to training, events, and projects requires that we develop each role to fulfill their responsibilities.
What are you doing to work in the white space?
Jim Croce, a popular singer and song writer from the late 1960’s and early 70’s, wrote and sang a song titled, Time in a Bottle. A few of the lyrics include:
“If I could make days last forever, if words could make wishes come true……but there never seems to be enough time to do the things you want to do once you find them….”
It occurred to me how applicable this theme is in management and leadership, not just our personal lives. As leaders, we often spend a great deal of time preparing plans of all types –marketing and sales, sales and operations, master production, new product introductions, and improvement initiatives. And although we have the best of intentions to execute the plans, it seems as though ‘there never seems to be enough time to do the things we want to do once we’ve found them’.
In the book, Creating a Lean Culture by David Mann, an Organizational Psychologist, he identifies a 4 step approach to achieving the daily habits critical to building a desired culture. And not surprisingly, it begins with Leadership. Specifically, Leader Standard Work (LSW). The other 3 steps include visual control boards, daily accountability cycles, and discipline.
Leader Standard Work provides the mechanism to think through the ‘grand plans’ and design a set of recurring rituals and routines that each manager must perform. To make it practical, LSW incorporates a Lean theme of smaller batches, more frequently. Instead of lengthy management meetings held monthly, LSW strives to conduct review activities for a few minutes every day or every week. This establishes a cadence that is much better at creating lasting behavioral changes than lengthy, infrequent reviews.
Leader Standard Work isn’t a silver bullet but it provides a practical structure by which managers can plan and execute their daily lives and activities to support the grand plans they’ve spent great effort preparing. LSW has shown to provide the structure and standardization needed to become more systematic in planning, doing, checking, and acting to create learning organizations. Coupled with the Visual Control Boards, Daily Accountability Cycles, and Discipline, the 4 steps outlined in the book create a framework of an effective management system.
What has your company done to incorporate Leader Standard Work? How has it worked for you?
Managing people is always about politics, isn’t it?
It is, if we believe interpersonal relationships are always someone else’s responsibility.
“I’ll ignore it for now; it will stop being a problem soon.”
We tend to think that our involvement requires too much time and uncomfortable discussions with people.
”I’m just too busy to spend my time on little stuff like that.”