Daily Management

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. (LWI, 1996)

Outline:

Breakthrough and Daily Management | Symptoms of Poor Daily Management | Daily Management Resources | The Improvement Hierarchy | Daily Management Model | Implementation | What It Looks Like | Conclusion

Breakthrough and Daily Management

Businesses have gotten the word about the benefits of advanced problem solving, recently through the successes of "Six Sigma." However, 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. (from Ouellette, 2001)

Assumed Results with Breakthrough Only

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

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. This leads to the "Red Queen" analogy:

Now here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that! (Lewis Carroll, "Through the Looking Glass")

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:

Results of Continuous Improvement Activities and Breakthrough Improvements

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. (For more discussion about this point, read Daily Management in a Six Sigma Environment.)

Symptoms of Poor Daily Management

Here are some warning signs that a company's daily management is not working:

• Quality problems and incidents increase when vacation or other relief workers are employed
• Process performance (quality and output) is noticeably and quantitatively different from shift to shift
• Planned process changes/product changes do not go smoothly
• Different operators run the same equipment differently
• The same work rules, methods, and conditions have existed for a long time and things are not getting better
• Process performance deteriorates with the age of equipment
• Problems in key performance areas (e.g., quality, delivery, productivity) have been solved numerous times only to return after a short absence
• Different departments (and individuals within departments) have or appear to have different goals and objectives associated with their outputs
• Equipment failures and outages create havoc for the organization because dealing with them is almost always reactionary
• Processes are run to the best of the operator's ability and adjustments and corrections are made based on judgment (as opposed to data)
• When “seasoned” employees change jobs or retire, problems spring up in the area they left
• Process performance modification and control is not documented empirically
• Many problems of quality, traceability, and accountability are traced to between shift transfer or handoff
• Expedited orders slow down (even get lost) between shifts and/or between departments
• When someone important is due to visit, you have to take special time (and sometimes much effort) to clean things up

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.

Business, we know, is now so complex and difficult, the survival of firms so hazardous in an environment increasingly unpredictable, competitive, and fraught with danger, that their continued existence depends on the day-to-day mobilization of every ounce of intelligence. (Konosuke Matsushita)

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." It may not be as "sexy" as breakthrough improvement, but good Daily Management is the foundation upon which breakthrough improvements and company viability is built.

The Improvement Hierarchy

The following hierarchy is instructive in explaining the failure of many continuous improvement efforts in the past. Similar to Maslow's Hierarchy of Needs, the upper elements in the hierarchy rest on a base of what is below.

Too frequently, businesses try to implement a control and continuous improvement effort only to find that it requires constant attention and adjustment, and these efforts will usually fail through time. The reason is that the success of control and continuous improvement is built on the foundation of the elements below them on the diagram.

• Management Self-Discipline - Managers doing what they know they should do
• Management - Employee Trust and Respect - Employees and their managers can trust and respect one another.
  • Difficult to achieve if management lacks self-discipline.
• Housekeeping - The ongoing effort to keep work areas clean, safe, and orderly. (To learn more, visit the Industrial Housekeeping page.)
  • Hard to achieve in the absence of trust and respect.
• Maintenance - Keeping the machines operating at the minimum design level.
  • Made difficult by poor cleanliness, safety, and orderliness in an area.
• Standardization - Minimizes variation in materials, methods, equipment, and strategies, establishes the base from which to launch improvement, and locks in improvements after they are made. (To learn more, visit the Standard Operating Procedures page.)
  • Nearly impossible in the absence of machines running as designed - every day the process is changing.
• Control - Maintaining process output so that it is stable and predictable. (To learn more, visit the Statistical Process Control page and the Process Control Technologies page.)
  • Nearly impossible to achieve or maintain in the absence of the previous components. With no standardization, pretty much by definition you can not have a stable and predictable process.

Daily Management Model

At ROI, we use the following visual representation of Daily Management to guide the implementation, which we call "The House of Daily Management."

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.

Process Quality Management: The systems of Daily Management that bring about definition, control and continuous improvement of the area. By controlling the quality of the process, we increase our chances of being able to control the quality of the product or service dependent upon the process.

Implementation

Daily Management is one of three interlocking and supporting management systems. In addition to Daily Management, a company needs to have Policy Deployment and Cross-functional Management.

To implement Daily Management, we have developed a very effective "Daily Management Implementation Event" that during a very intensive week teaches the local process owners about Daily Management and establishes the infrastructure of the system. The team then continues to work on building the system after the event, with the aid of local or external consulting sources, until the system is complete.

What it Looks Like

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.

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 resources in a team environment, where the team defines, standardizes, controls, and continuously 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. The good news is that advanced problem solving and daily management utilize two different types of personnel in a business. It is necessary to integrate the two systems, which results in both systems working better than either alone.

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