Archive for May, 2010

Silk Sari, DT & Social Sustainability

May 25, 2010

Marco Polo and his team created the famous silk route that started from Europe and ran through India and then went right up to China. The famous Chinese silk was discovered and introduced to the world and trade flourished.

Soon silk cultivation also began in India and the Indians creatively used silk materials for designing their dresses. And one of the best examples of such Design Thinking is the creation of a woman's dress known as the sari. It is 5 meters long unstitched piece of cloth that a woman wraps around her body.  It might be wrapped around in slightly different ways. The dress is complete by itself. But how does it qualify as a fine example of Design Thinking. Here are some reasons:

1. One size fits all and is self containing. (there is no such dress in the world that fits any woman)
2. Fits all types of body, sizes and ages and any woman looks elegant in that dress (a paradox & a great user experience)
3. Any woman who care to dress up in a silk sari looks beautiful (fulfills aesthetic requirement and user experience)
4. Infinite variation of designs and motifs can be made on this material — colors, weaving, painting, jewels, gold, silver etc (great scope for endless improvisation and design innovation)
5. A dress that has almost unlimited shelf life — can last up to 40 to 50 years & still look good (sustainable and not oriented at consumerism)
6. Made from silk worms (material is a renewable resource)
7. Needs very little washing and maintenance. And usually washed with the sap of a seed (no detergent used, eco-friendly, little or no use of water)
8. Can be worn indoors or outdoors (multiple uses).

And it is also a good example of Social Sustainability. Why?

1. Many workers need to work together to co-create this wealth
2. Involves the communities of silk growers, weavers, artists, designers, jewelers, stone polishers, shop keepers — all traditional trades.
3. Wealth sharing within the community and beyond
4. Sustainable work for generations of workforce based on traditional and artistic skills.
5. No global warming — no carbon footprints during manufacturing — made in hand looms
6. No ecological damage — does not rely on non-renewable resources or damages forests, plants, water or animals
7. Needs low capital to produce
8. Can sell from around $ 4 to $ 100,000 (more than a Ferrari)
9. Market sustainable and never vanishing
10. Catering from a basic need to vanity

The sari shown in the photograph is unique. It is the costliest of the lot — around $ 100, 000. There are a number of innovations here, which are:

1. Depicts one of the eleven famous paintings of 20th century painter Raja Ravi Verma's series on 'Lady Musicians' — Clever synthesis
2. The painting displays women belonging to diverse cultural backgrounds – – appeal for 'unity in diversity'.
3. The women in the painting on the sari are intricately hand woven and beautified with gold, silver, diamond, platinum, ruby, emerald, yellow sapphire, sapphire, cat's ey, topaz, pearls and corals.
4. The whole is more beautiful than any part of it. The whole (including the beautiful woman who drapes this silk) brings out the deeper meaning & beauty — difficult to tell who is more beautiful — the woman or the sari — both would be my answer. 

 

Advertisements

Collective Consciousness to Social Sustainability

May 23, 2010

Many many years back when I visited the UK for the first time as a much  younger person and as a student I stayed there long enough to soak up the culture of the place.

Most things I saw or experienced amazed me a lot. This was  because everything seemed so different from what I saw and experienced in India till that time. My young mind was like a dry sponge absorbing  all I could and busily reflecting on anything that came my way. For example, I saw that cars in Manchester or London did not have dents or scratches on their bodies whereas any car in Kolkata or Mumbai had a significant number of these ugly dents and scratches all over their bodies (not any longer though). There were  certainly lot of cars plying the streets. The streets were old and not so wide but clean. The environment had a ring of safety and confidence around it.

When my wife lost her passport we did get it back from the local police station within a few hours after losing it. I wasn't unduly worried about the safety of my one and half year old child. The very sight of the local beat constables (always in pairs — a man and a woman) smartly walking past was reassuring.

Why was it? I realized that the difference lay in the collective consciousness of the people and the learning that went along with it.

When and wherever there is collective learning in the society things become much easier, smoother and safer. At the back of your mind you are always assured that no one would intentionally bang your car from behind or none would clip your side view mirrors or scrap the sides while overtaking recklessly or throw your passport into the waste bin or parents need not worry much about their young child getting kidnapped.

Social sustainability, i.e the way we earn and live by sharing resources can't happen till collective consciousness develops. For it to develop, knowledge can't be in closed cans it has to be widely distributed and appreciated.

In the UK things are small & large – a living paradox. Small shops, small offices, small companies, small dedicated groups, small lecture rooms, small but well maintained houses and pubs but large parks and large playgrounds and reasonably large town halls, local Olympic size swimming pools, large libraries, large farms and large National Health Scheme.

It has a mix of many other things — capitalism and socialism; democracy and lordships, ethnic British and not so ethnic British. People discuss ideas and events and less of people unless something is praiseworthy or horribly wrong about them.

And people go through an education system that relies less on memory and multiple choice questions but encourages free exchange of thoughts, modern and contextual ideas, debates,experimentation and appreciation of talents.

Most have work and get a reasonable pay just enough to maintain an uniformly decent standard of living accepted by the society.And most small firms have a sense of cooperation between them. The society adapted themselves with time.Most are satisfied with what they do for a living and the way they live life. 

Perhaps these are some of the underlying reasons that made the UK least affected of all European nations in the recent recession that toppled many economies.

I believe that high collective consciousness and sharing knowledge are the starting points of social sustainability — leaving similar resources for the next seven generations to succeed and do better.

Do you believe in that?   

Improving Profitability through Nature Inspired Design Thinking

May 20, 2010
At times business problems are really 'wicked'. So wicked that it can determine that extra vital edge for a company to be more competitive and more profitable. I shall tell this interesting story about the dramatic application of Design Thinking to solve such 'wicked' business problems that affected the bottom line of the company. But there is a small twist in this tale. The twist is that the designed solutions were inspired by Nature/Natural Principles.

The ContextThe Pain

The story is about a reputed Steel Plant in India that produces pig castings for the foundry market. It produces pig castings of around 9 to 10 Kgs weight. The foundries find such castings very convenient. Why? Because if the weight of the total casting is to be around 100 Kgs then all they have to do is to pick up 10 such pigs and melt them to produce the product. However the quality of their final products is highly dependent on the quality of the pigs

In this story both the supplier and the customers were facing problems, which are of course interdependent. However, understanding the process involved to produce the pig castings would help us to form a better idea of the problems faced by the company. Iron ore is first melted into liquid metal in a mini blast furnace. A typical charge takes around 45 minutes. The liquid metal is then poured into a ladle. The ladle is then tilted to pour the liquid metal into a continuous casting machine, which keeps rotating endlessly like a conveyor. The liquid metal from the ladle is poured into a number of molds having the right volume to produce the right weight of the individual pig castings. The molds travel a substantial distance. By the time they come to the end of the line the pig castings are sufficiently cooled and solidified and as the continuous casting machine turns at the end the 'bricks' or the pigs fall off onto waiting trucks and dumpers. The bricks are then transported to the storage site in the plant from where these are sorted for quality and shipped to customers by trucks. 

Problem 1: Loss of metal

The company recorded that the yield of the process was only 92%. This meant that 8% of the liquid metal that came off the mini blast furnace was wasted somewhere in the process (specially through spillages/overflows taking place in the continuous casting machine). The international benchmark of  97% yield was held by a steel company in Brazil. And it was estimated that this loss of 8% meant a minimum loss of 6% in profits. So it was natural for the company to think of boosting their yield to at least 97% if not better. None believed that it can be any better than 97% since none in the world could achieve anything better than 97% for the last 20 years. However, the company struggled to achieve the magic 97% by various ways and means for four years in a row without any success. The yield remained rigidly pegged at 92%. The loss continued in face of rising input costs. The company was desperate to break the 92% barrier to keep their heads above water.

Problem 2: Wide variation in weight

Ideally the weight of the 'pig bricks' should be within 9 to 11Kgs. This would enable the foundry men to achieve the required weight of the final casting just by picking the required number of bricks (since these would be in multiples of 10 kg, approximately). But the problem was that the weight varied between 7 to 14 Kgs. It meant that the customer lost money and the reputed company lost both its brand image and money. If things continue in this manner the company can no longer demand the premium price on their products. The product quality would be just the same as any other start up.

Problem 3: Quality problems

Added to this was the quality problems. The quality of the bricks affected the final output quality of the castings the foundries produced. There were six different types of quality problems (one of these was fondly named the 'elephant foot') and the bad bricks had to be sorted out and rejected at the company's storage yard before the good quality bricks were shipped out as per orders. Such bad quality bricks were called 'poor pigs' and the % of such poor pigs ran as high as 35% of the total pigs that were produced. Such high rejection of the final product  automatically lead to further erosion of company's profits.

Problem 4: Availability of the Continuous Pig Casting Machine

This continuous pig casting machine was the heart of the process. The availability of the machine determined the productivity of the process. On an average the availability of this machine stood at 95% which meant that the company lost 5% of its productive time.

So, what might be the impact of all these four problems on the productivity capacity of the company. We now have an elegant way to measure this. This measure is popularly known as Overall Plant Effectiveness (OPE), which provides a holistic way of gauging the capability and competence of a manufacturing unit.  In this case it could be calculated as: OPE = Yield (%) x Quality accepted (%) x Availability (%). When we substitute the figures in this formula we get the following: OPE = 0.92 x 0.65 x 0.95 = 0.5681 or in terms of % it is 56.81% (remember that the yield was 92%, Accepted quality was 65% and Availability was 95%).

The figure of 56.81% or 57% (rounded off) is significant. It gives us an idea of the overall health of the company. It tells us that the company is able to utilize only around 57% of it available productive capacity to make money. The balance of 43% is simply wasted. This is significant indeed. In other words 43% of the investment goes down the drain despite the investments.

The company was trying very hard to attack the four major problems independently but failed on all fronts.

This gave me a vital clue. To me it meant that in some way all the four problems were tied together and related to each other. So the solution has to be holistic in nature and not in parts as have been attempted so far. That meant a few solutions must work to eliminate or reduce the effect of all the problems.

When faced with such a situation we would start looking for ideas. And ideas come from keen observation of the ongoing phenomenon that goes on right under the nose of the Design Thinker. There is of course a small trick a Design Thinker usually does. Most observations are converted into some sort of visual image to convey the concept. These images then kick off imagination and the deep inquires into the problems and examined with critical discrimination. This is what I observed along with the visual images that came up and the associated natural or physical principles:

A)
Observation: Heavy sparks where the molten metal flowed into the continuously moving casting machine (Refer photo taken). 
Image: A man trying to jump into a moving bus or a train and slipping off (the two speeds don't match)
Phenomenon: Relative velocity

B)
Observation: Looking at the rather long continuous casting machine I observed liquid metal overflowing over the edges of the molds. 
Image: Flowing river
Phenomenon: with all rivers there is a particular ratio of the width of the river to the depth of the river. This is true for any river in the world. So a rapid river would have less depth and width. (refer the pictures I took of river Beas in northern India). When the river flows fast the width is narrow and when it slows down in the plains the width increases. I call this the W/d effect. This has to remain more or less same for any river flow, which is typically around 4. A river floods or silts to adjust this ratio. With more water both the W and the d increase to maintain the ratio resulting into floods. With less water the silting occurs to decrease the depth so that the ratio of W/d still remains constant. This was my grand inspiration from Nature. 

So, now I had two immediate solutions to be implemented, which were the following:

a) Adjust the speed of the machine to the flow of the metal from the ladle. This did not take much time. All I had to do was to train the operator to adjust the speed of the ladle pouring and the speed of the machine in such a manner so that there were no visible sparks at the point of pouring. The training worked.

b) Redesign the molds in such a way that the ratio of the Width/depth of the molds was exactly 4 to prevent overflow.

Did this work?

It not only worked but it worked like magic. What were the figures after implementation?

Yield: From the rigidly held 92% it went up to 99.97%. They get it in every shift for the last 6 years. Never missed it. Remember 97% was the mental barrier across the world. It now stands as the new International Benchmark across the world — yet to be broken by any similar steel company.

Quality: From 35% rejection level it went down to a mere 7% rejection level.

Availability: From 95% to 100%.

And the interesting thing is that all these figures went up simultaneously without any extra effort or tweaking. The holistic solution worked dramatically for the company. The new Overall Plant Effectiveness (OPE) was –> OPE = 0.9997 x 0.93 x 1 = 0.93 (approx), which translates into 93%. A steep jump from a mere 57% to 93% — a step jump of 36%.

So, with these figures the company not only set the new international benchmark (unchallenged till date) but also improved their yield to an unprecedented level of perfection (sustainable) and most importantly gained back the confidence of their customers and boosted their bottom line by over 10% that resulted in the net increase in profits by over 6% (audited).

Hence with Holistic Design Thinking:

a) we may solve multiple 'wicked' problems at the same time which could not be solved otherwise
b) the health of a company can be improved immediately with the minimum delay and minimum investment
c) people and companies need not lose heart when faced with problems however 'wicked' these might appear to be.
d) Nature provides the right inspiration at the right time provided our observation and visual imagery are both strong. 

This is what the company's Managing Director wrote in their house magazine:

"We broke new grounds in achieving high yield levels…. One thing which remains hidden is the manner in which the opportunities for improvement were addressed. Keen observation followed by out-of-the box thinking to arrive at creative solutions led to dramatic improvements … making positive changes irreversible and long lasting."
H.K. Jha, M.D. T.M in their in house journal — Metalogue, Vol 4, Number 2, Feb 2005

 

How to Turnaround a Business through Design Thinking?

May 6, 2010

In my last blog I illustrated the 4th principle of Design Thinking (Observe the whole and not the parts) through a technical problem. In this post I am going to illustrate the same principle but through a case study from the business world, which I personally dealt with. However, the other principles of Design Thinking would be implicitly demonstrated too through this story.

 

Whether a company would live long or die prematurely would depend greatly on the ability of the managers to solve business problems – not through help of models but by using the principles of Design Thinking.

 

Why is that?  Unlike mathematics problems, business problems are such where everybody wants an answer but is not clear as to what the answer might be or how to reach the solution.  

 

For example, if someone asks us to find out the square root of 31. 5 we know for sure that by applying a given method or model we would find out the desired solution quickly. This is what most of us try doing when we are confronted with business problems. We desperately search for a method to find the answer. But unfortunately, this style of finding a solution to a business problem simply does not work.

 

Then what can managers do?

 

Most business managers try solving their business problems thru gut feelings, experience, common sense or plain logic or they try applying solutions that have worked earlier. They may also try applying solutions or methods they have only heard from others or read in some book or journal. They try to implement some system to bring about some order into the chaos that already exists.

 

Alternatively, they continue to do what they have been doing with perhaps additional emphasis on ‘harder work’, ‘better work’ or ‘smarter work’ or ‘closer and more stringent supervision’ or thru coaxing, manipulating, reward or punishment. But by its very nature, business problems are always tricky and are not so amiable to such treatments. As a result business problems remain unresolved and companies fail to gain dramatic  improvement in performance  – essential to realize their well thought out competitive strategies.

 

Even tried and tested techniques like brainstorming, field force analysis, failure mode effect criticality analysis have limited value in solving business problems. These may generally fix something that is broken or improve it marginally. Using such methods is a way of simply trying to solve the problem by specifically trying to look at some issues or parts of their system.

 

But dramatic improvements never happen. Why is it so?

 

This is because we sometimes misunderstand the term business problem solving. We may think that we have solved a problem only to find that it is either a partial solution or we have landed up with a bigger problem or we have created many new problems. In short, we did not get the benefits that we initially thought we would.

 

The objective of business problem solving therefore is to solve a problem permanently, gain dramatically without creating any adverse side effects and help people do their job better. Apparently it is a tall order. But it need not be so as the story would demonstrate.

 

The trick is to observe the system in totality and find out the present imperfections within the system, which interact to create the problem. Once such imperfections are found we then creatively find ways and means to eliminate such imperfections for good to restore or bring about the needed balance in the system and boost business results by leaps and bounds. This method of solving business problems comes under the broad umbrella of Design Thinking. Specifically, I call it the ‘Theory of Imperfections’.

The application of Design Thinking principles is varied. It can not only be used to solve tricky business problems but also be used to transform organizations under any business conditions, improve any individual processes for performance, quality improvement, product development, knowledge development, etc.

2

The Story or the Case Study

 

0th Principle of Design Thinking – The Context

 

A company ABC (name withheld for confidentiality) operates in India to produce plastic molded parts. The monthly turnover of the company is say X units (in money terms). The company is 12 years old. The technology has been imported from Germany. The market is stable. But there has been a slow build up of order backlog and the backlog at the present rate of production would take around 11 months of sustained production to complete execution of the orders.

 

This generates a business problem. The marketing department is unable or unwilling to book any more orders since they would not be able to keep delivery commitments and the company would incur late delivery charges. At the same time since orders can’t be executed in time the company suffers from severe cash flow problems.  60% of the raw material is either imported or has to be purchased against advance payment. Moreover, raw materials make up for 60% of the product cost. Machine availability varied between 80 to 90%. Management has not been able to pay dividends to its shareholders for the last 4 years. At present, it does not have much liquidity to buy any additional machine. The banks have refused to lend money. If this state continues the board has even contemplated to close down the factory and sell off the company or its assets. The 63-year-old Chairman of the board is a very experienced and knowledgeable hands-on technocrat in the country with a MBA degree from the best business school in India.

 

1st Principle of Design Thinking — What are the Assumptions? Challenge them!

 

a)       If the production process can be speeded up the orders can be executed in time and that would improve the cash flow of the company.

b)       The management is unable to increase the price of the product owing to competitive pressures.

c)       The labour union does not have any incentives for higher production.  The union is not pro-management but might not offer too much resistance to improve productivity if proper incentives are paid.

d)       If the management fails to step up production then the loss and subsequent closure of the factory is imminent.

 

2nd Principle of Design Thinking – The Constraints

 

a)       No liquidity

b)       No money to buy new technology

c)       Bankers refuse loans

d)       Machine availability is low

e)       Competitive Pressures are high

f)         Talented fresh blood refused to join the company.

 

How the company wanted to solve the problem?

 

Management thought a lot on traditional lines and decided to initiate many actions to improve the situation. The actions along with the results are listed below.

 

a)  Introduce productivity tools to eliminate manual operations. This was carried out in a systematic manner. However the turnover of X units of money per month remained the same. Delivery backlog remained at the previous level of 11 months.

 

b)  Get higher productivity die for faster processing. The die was designed, manufactured and fitted. The speed of processing improved by 20 to 30%. However, no significant improvement in productivity took place. Monthly turnover remained at around X units with estimated backlog at 11 months.

 

c)  Get an industrial engineering study done – time and motion study. This was done No improvement in productivity or reduction in backlog showed up.

 

d) Offer financial incentives to the workers for higher productivity. This was instituted with no visible improvement in productivity or order backlog.

 

e)  Introduce system approach — TPM – the Japanese way. It was thought that this takes time to implement to get appreciable results (minimum 3 years). Hence the idea was dropped.

 

f)  Buy additional machinery. This was not done for want of funds.

 

g) Reduce manpower Could be done marginally since the company was already operating with the bare minimum manpower. No improvement seen or felt.

 

h) Reduce cost. Some improvements could be done on raw material. The effect was marginal and not lasting since price of raw material went up offsetting the advantage.

3

So we see that traditional thinking did not help the company achieve its business objectives and improve its bottom or the top line. More than two years of valuable time were wasted experimenting with proven ideas.

 

I hope that the Paradoxes (3rd Principle of Design Thinking) clearly stand out for everyone to see. 

 

Now let us see what happens when we apply the 4th Principle of Design Thinking – Observe the System as a whole & not in parts — to this tricky problem.

 

But how does one see the whole in Operation Management. There are many ways but one of the easy ways is to see the 3 fundamental things, which are the following:

 

a) The flow of materials – how the materials move from one place to another – how smooth it is.

b) The flow of information – what type of information flows across the organization and how, what is the speed of the movement, how many routes does it take, what is the quality of information, etc…

c) The flow of energy and signals – How much energy is added at different work stations, what is the transformation at each station, how much is wasted and how is it wasted, etc…

 

Basically, I looked at the different types of ‘flows’ and their interactions that were taking place all over the organisation to keep the operation alive and productive. 

 

On doing this, I quickly discovered that the ‘imperfections’ lay in the information and material flow.

 

As for the information flow a strange thing was happening. All bits of information in the plant were sort of looping around a *centre* repeatedly before these achieved their intended purpose. This was causing delay at every stage of the internal decision making process and with time, these delays were stacking up one upon other to form ever increasing delay loops all across the operation. This was getting reflected in the productivity, poor availability of the machines and order backlog.

 

The material flow problem looked something like this. Large quantities of materials were stacked across different work stations. This was because they wanted to process as many orders as possible in parallel mode. That is simultaneously process two or more orders. Common wisdom would say that it would speed up the production process – just like modern computers do – parallel processing. But instead of speeding up the process it was delaying the process since every time a new order has to be processed the machines are to be set differently, different dies were to be used. And all these operations, seemingly small, were cumulatively consuming a large amount of time. 

 

5th Principle of Design Thinking – Making intelligent choices

 

To fulfill this Principle is relatively easy once we successfully negotiate the 4th Principle.  The choices that lay before me were clear. I now had to redesign the system to eliminate the system imperfections as much as possible. Accordingly, the information flow was redesigned and the production scheduling was also redesigned. It was redesigned in such a manner that it was easy to do (6th Principle of Design Thinking — Algorithm) and day to day decision making at different stages of the operation would be extremely easy (7th Principle of Design Thinking – binary code).

 

Results of the application of Design thinking to solve this tricky problem:

 

1. Monthly turnover increased from X units (of money) to 2X units in just one month.

2. By the end of the seventh month from implementation the turnover increased to 3X units per month

3. The order backlog of 11 months was wiped off within the first 4 months of the change.

4. Cash flow problem vanished.

5. The company made a profit for the first time in the last 4 years and could pay dividends.

6. The company could lessen the manpower and still work more effectively.

7. The sales people picked up their bags again and started connecting customers with the new found confidence for fresh order.

 

How did this all happen?

 

The only miracle that was needed was to look inwards and understand the System as a whole as opposed to seeing the problems in parts and blaming this or that. And that is done by successfully applying the 8 basic principles of Design Thinking.

 

But this is not the end of the story. The system would again change with time and a new set of problems would appear. When that happens we would again have to look at the system with fresh eyes and not assiduously stick to something that worked well for us. The *brilliant* solutions of today would be outdated tomorrow.

 

Acknowledgement

I gratefully acknowledge with thanks the permission given by Mr. Madan Mohanka, Chairman, Tega Industries Limited to publish the story of one of his subsidiary plants where the Principles of Design Thinking were applied to solve the tricky problem to turnaround the organisation. You may reach him, if you like, at

madan.mohanka@tegaindustries.com