06.17.08

How Lean Thinking Can Strangle Your Firm

Posted in Philosophy &c, In the Kitchen, Rant and Rave at 6:51 pm by steve

An Extended Complaint About Kitchen Aide’s Customer Service

Lean thinking was the business rage of the late eighties. Ideas in lean thinking include reducing redundancy, reducing inventory, and reducing the amount of capital one uses to achieve an end. There is much good to be found in lean thinking; but as is true of every good idea it is essential to bring the idea into practice, to use it to inform decisions, but to stay clear of letting it control your business or your life. Lean thinking is one business tool. No matter what its proponents claim it is not the whole of a business.

Let us construct a hypothetical example of a customer service center for a kitchen counter-top appliance manufacturer. Assume it stocks and ships several hundred SKUs. All of them are replacement parts for things like mixers, blenders, toasters, and so on.

Now, let us assume that the management of this enterprise has the lean thinking religion. That is, they organize all of their business approaches around the lean thinking idea, assuming that what else there is to running the business well will take care of itself. Perhaps they lose sight of the idea that the business purpose of the enterprise is to keep parts flowing to customers. Instead, they see only the operational mandate to minimize costs by keeping a razor-thin inventory. Or rather, to arrange a flow of goods from suppliers to customers in a way that reduces the inventory at the service center to zero.

In fact, the optimal solution in terms of minimizing cost of managing the center is to arrange it so that an order for a part and the part itself arrive at the center on the same day. This would allow one to keep zero inventory. And it would provide prompt service for each customer. It’s the best of all possible worlds.

If the scale of the business is large and the number of SKUs is small, it is likely that the average amount of volume for each SKU is relatively large compared to the random noise in order volume. And one can schedule regular deliveries for most SKU’s - maybe weekly or even daily. If one has been in the business for decades, one can develop high-quality time-series forcasting models for parts orders. One can actually hope to approach the ideal situation in which a part and order arrive on the same day.

If the parts are not of some highly time-sensitive nature, then two or three week delivery times may be assumed to be acceptable. In this case, all one needs to do is to arrange weekly or biweekly deliveries of virtually every SKU that might ship. Inventory then becomes nothing but evidence that one has overestimated the order volume of an SKU. A well-managed SKU, then, is never in stock.

In this model, the optimal solution from a cost standpoint is not to carry stock but to carry a standing backorder quantity on all parts. The game is no longer to minimize inventory, but to manage the backorder list in a way that loses the fewest customers. If one gets incredibly good at the game, one needs not stock any parts. And the customer remains oblivious to the fact.

The model above has a glossy kind of appeal that would give lean-thinking fundies wet dreams. And if all one can see in a business is the goal of minimizing costs, there is no other possible model. But is minimizing cost the only game? A business with no costs is no business at all. A business with no customers has the lowest operational costs of all.

Cost minimization is unconditionally good to the extent that it improves efficiency - delivering the same net results with fewer resources. But cost minimization is unconditionally bad when it kills your business. All the stuff that actually matters lies somewhere in between.

You have to actually connect the operational details with the business goals. One of those goals has to be delivering stuff to the customer. Lean strategies that fail to deliver have ceased cutting fat and started amputating limbs. This is where the model begins to fail.

The model above starts with a hidden assumption. It assumes that parts are ordered one at a time. It is not an unreasonable assumption if one is shipping blender parts to housewives. It might work most of the time in this or some other contexts. If one has business practices that always treat the order of any part in a manner that is consistent with this assumption, one has a viable operation. But what happens if someone orders more than one SKU?

I ran into a very interesting example of this in a recent exchange with Kitchen Aide’s customer service department. Last November my wife placed an order for some parts with them, several different SKUs. In April, when they had still not shipped, she cancelled the order. In May I tried again. I started online filling out a customer request. Nearly two weeks later, after getting no response, I called the company. The first call was shuffled through the auto-answering maze. I waited five minutes. Then there were some rings at the other end. Then dial tone.

On the second or third try, after ten or twenty minutes of waiting I got a real person. Long queues is a sign of lean thinking. It screams “The customer’s waiting time costs us nothing.” Not true, but that’s another argument.

I placed an order for the parts. I was told that everything was in stock except for one part, and it was due the next day. Roughly three weeks passed and I did not receive the order. So I called customer service and spoke to Janet.

This time I was told that “all the parts were on backorder.”

“How could this happen?” I asked. “All the parts, save one, were in stock when I placed the order. And that part was due the next day.”

“The order is configured to ship when all the parts are available,” answered Janet. “Some are coming in this week and some are coming in next week.” In other words, parts that should have been shipped to me were shipped to other customers because of the way my order was configured.

I suddenly understood the game. And I explained it to Janet in a forceful and unpleasant way. “While my order waits for food processor blades, all the blender jars are shipped to other customers until there are none left. When the food processor blades arrive, the blender jars are out of stock. But while we wait for jars, the blades go out of stock again. And we are back to where we started. This process repeats itself forever. Or until one cancels the order.”

Janet assured me that what I was explaining was impossible. And that the parts would be in stock maybe this week. Or maybe by the end of this month. Really, I had no cause for concern.

But I have had graduate courses in statistics and in inventory control. I have a good imagination. I have also worked in industry and I have lived among fundamentalists of all sorts: I know how insane things can get. I understand something about what might have happened and why. I was capable of setting up a model of their operation in my own mind and proving to my own satisfaction that unless the system were fooled into treating my order that had four separate SKUs as four separate orders, I would absolutely never receive any part of my order. I was upset that the whole of the customer service organization was completely oblivious to this glaring problem and that it meant that people with smaller orders who ordered after I did always got their stuff first.

The special quality of the idealized operation we described above is that it assures that most parts are on backorder most of the time. It is not an accident. It is not even viewed as an undesireable side effect of minimizing inventory. It is the operational goal of the inventory management system. Now, if regular deliveries always brought in more parts of every SKU than there were backorder quantities, one could still recover.

But if one were designing the system to be brutally efficient on a day-to-day operating sense, then one would take deliveries five days a week. And it would almost always be the case that some SKUs would arrive only on certain days of the week.

On a given week blender jars would arrive on Monday. And they would all ship out Monday. Food processor blades would arrive Tuesday. And they would all ship out Tuesday. And so on. Such an arrangement would distribute labor over the week and achieve certain returns of scale in the process of moving parts from incoming queue into outgoing queue.

So, if a person placed an order that included a blender jar and a food processor blade; and if that person specified not to ship until all the parts were in stock, it was a mathematical certainty that they would never receive their order because it could never ship. The parts would never be in the warehouse at the same time. It was not an accident of the design, it was a goal of the design.

It is at this point that an enlightened business manager might begin to understand how lean-thinking fundamentalism is strangling his business. The lean-thinking model eliminates all sales to customers who order more than one part at a time. It assures that their broken appliances remain broken forever. It drives them to buy from competitors with inferior products who have business processes that allow them to actually ship product against complicated orders.

Now, I am absolutely certain that if some person from Kitchen Aide were to read this essay they would categorically deny every part of it. That’s fine; but as I write this I am still waiting for those parts my wife ordered in November. I am still waiting for those same parts I ordered in mid-May. The explanation may be subtly different; but the results are the same.

In the mean time we bought an Oster blender that turns ice cubes into snowdrifts in a way that my Kitchen-Aide blender never could approach. But it makes such a godawful racket that I fear it will cause hearing loss. And while it boasts “all metal drive” it also has a base that has the look and feel of really cheap plastic. I look at it, and I feel sad because all I can see is the day i throw it out, another tangible symbol of the gap between the hopes we have for products and what they deliver.

We live in a marvelous age where all sorts of stuff is incredibly cheap. We have learned to manufacture efficiently. We have learned to distribute efficiently. But there are still gaping holes in our ability to manage effectively. I just want a blender that can be made to work, even after parts break; and one that does not make me deaf. I’m sure that there exists a solution to this problem; but the first two tries were failures.

When you have to throw away the first two instances of any good before settling on one that works, you begin to wonder whether the current world is not built upon false economies. You begin to wonder whether lean thinking has not just cut the fat but also amputated important organs; the principle organ of thought, for instance.

05.02.07

The New Microwave

Posted in In the Kitchen at 8:33 pm by steve

Every once in a while an old idea is recycled. The old is reincarnated in a new form. And in its reincarnation, it is better than it ever was. I was reminded of this principle recently when I bought a new microwave. It does a number of things that the old microwave doesn’t.

It allows me to tell it what I am cooking and it decides the best way to do it. It’s a little like having an experienced cook cooking your meals. It knows how to cook things, and it has a sensor that detects when things are warm by the amount of water vapor they produce. It even asks you, midway through cooking a potato to turn it over. And this helps a lot. Ingenious.

I’ve already alluded to great feature, its conversational style. That’s right it talks to you. Or, more correctly its display displays messages. One of these is to turn the potato over. And when you have done this, it tells you to close the door and press start. All of the messages are helpful and timely. And when you take your meal out, it says “Enjoy.” I know the microwave is not a sentient being. But I also know that it was programed by one. I find this little pleasantry very attractive. I always feel happier about my meal after noticing the message.

The microwave has an “inverter” exactly what this gadget is or does I am not entirely certain, except that I know it modulates the power that goes into the food - sort of like the knob on a gas or electric stove modulates the burner heat. This causes things to cook longer. It takes six minutes for a potato instead of the usual three. That sounds bad, but it is not. When the potato comes out of the microwave it is more evenly cooked, especially if I have been compliant and turned it over midway through.

My favorite feature, however, is the knob. That’s right, the knob. For almost two decades I have been saddened by the demise of the knob. It was as if electrical engineers had gone mad and forgotten that in the world of numbers there are two distinct sorts. One type is integers enumerating distinct, discrete categories. The other type is real numbers describing quantities that are infinitely or highly divisible. When one wishes to select a mode, that is a thing that is easily enumerated. But when one wishes to select a quantity, it is not.

In short, the knob is ideally suited for tasks like tuning a radio, adjusting volume, setting clocks, or selecting how long to cook something in the microwave. It is, unequivocally, the best choice for adjusting things on a quantitative scale. And this it does.

If you use the knob to set cooking times, it is a sort of logarithmic scale. This sounds all very technical, but the benefit is simple. The difference between ten and twenty seconds is 50%. If there is something that could cook completely in ten seconds, setting it for twenty would ruin it. But the difference between a minute and seventy seconds is, on a percentage basis, relatively small. It doesn’t usually make a great deal of difference. So maybe the times that you can select by the knob go something like this 10,15, 20, 30, 45, 60, 1:20, 1:40, 2:00, and so on. With such an arrangement, one can get good results with a single quick twist of the knob which is much easier than using the keypad.

Interestingly, the clever engineers at Panasonic asked another question, too. They asked “If we go to the bother of putting an expensive knob on this microwave, can we make it do more?”

And of course the answer must be affirmative or we wouldn’t be here. That clever knob also allows one to select cooking courses. Six is for a baked potato, five is for a frozen dinner, and so on. Surprisingly, the knob works marvelously in this mode as well, selecting individual, finite settings. Part of the reason for it is that it has a series of very subtle detents that make it feel like a discrete control when one wishes it to be so, yet subtle enough to make it feel like a continuous control otherwise.

This magic knob does one other remarkable thing. It knows that if you turn it quickly, you intend to make a large adjustment; but if you turn it slowly you intend to make a small adjustment. For those of us who are highly intuitive, it saves a lot of time. We can be deciding precisely how long to cook something as we set the timer. With a keypad, going from two minutes to a minute and forty seconds involves starting over. With the knob, it’s just a slow turn of the knob one detent.

There is, of course, one downside to a piece of equipment this marvelously wrought. One has to learn something to use it. My wife still uses the old microwave because it works with old habits. When I wish to preheat three eggs for exactly 22 seconds, I do too, even though I could do exactly the same with the new one. And I do so because I do not have to learn anything new.

It’s funny how a well designed piece of equipment can be a joy to own and operate. But I suppose our expectations just keep going up. Once I learned the joys that come from using a microwave for just the right things, I learned I cannot do without. It stopped being a marvel and started being a necessity. Now this microwave establishes the expectations at a much higher level. It may even make me resent other electronic equipment lacking knobs. Thus do our sources of joy become sources of discontent.

07.28.06

That Infernal Beeping

Posted in In the Kitchen at 10:19 am by steve

It was with some trepidation that I set the timer on the bread machine last night at 10:30. The bread machine approaches a year’s age, but I have never loaded it in the evening and set it for morning bread. I was not sure what to expect. Would the yeast go crazy, eat all the flour and turn the whole batch to some sort of alcoholic slime? Would the raisins in the bottom soak up all the water and instead of bread I would end up with a giant flour-dusted crumb? Would the bread somehow magically expand at night, push the top of the machine open, crawl across the counter… These are the flights of fancy of a person who needs sleep.

By my calculations, the bread machine should beep around six thirty. And since I was going to bed early, I had some hope of waking up to fresh-baked bread. It would be good stuff. One might find the recipe on the back of a King Arthur Flour company bread flour bag or at Chef Home . It contains just enough raisins and brown sugar to tease the taste buds, and it has a pleasing assertive yet soft texture.

Being a sleepy-head by nature, I was surprised when I awoke to beeping down stairs. I came down to find a perfectly done loaf of “oatmeal toasting bread.” My wife, who eats her own different kind of toast, eggs, and microwaved blueberries for breakfast, was sitting at the table eating her toast. She had already been up for hours.

I removed the bread from the breadmaker, sliced two pieces, ground coffee beans and brewed a pot of coffee, and sat down to eat. As soon as I sat down, the beeper beeped. I got up and hit the reset button on the breadmaker. I ate my toast, drank my coffee, and went into my office - which is near the kitchen - to work. No sooner had I sat down, when I heard the beep. I rushed to the kitchen and hit the reset button again. But this time the breadmaker objected. It thought I wanted to start baking, but it will not start while it is hot.

I went back to work. Several minutes passed and there was another beep. “Well, I thought, I shall just have to let the bread machine cool down and I will start another batch of bread, this kind for my wife. ” So, while the bread machine rested, lid open, I went about my work ignoring intermittent beeps for about ten or twenty minutes. Then I started malting millet for my wife’s millet bread. I loaded the machine with millet and flour, set it to the jam cycle, and told it to go. This time it did not object. “Good,” I thought, “farewell beeping.”

Not five minutes later, I heard the same infernal beeping that had been bothering me for almost an hour. I ran to the bread machine, and I pulled the cord out of the wall and muttered a few unfreindly things under my breath. I worked in peace for some minutes. The blue streak I had sworn had just about dissipated, and my mood had just about returned to normal when I heard yet another beep.

I flew into a rage, raced into the kitchen. I managed to suppress my urgent temptation to take a baseball bat to that pesky bread machine. Good thing, too. It was the microwave. My wife, an hour before, had forgotten to remove her blueberries.

07.26.06

Coffee and Me

Posted in In the Kitchen at 9:41 pm by steve

Muttering “Coffee, Coffee, Coffee, Coffee..” a dishevelled graduate school house-mate of mine, John, started every day. Or prolonged one as he consumed and digested the ideas of Locke, Descartes, Montesquieu, Hume, Kant, and J.S. Mill. He was reading for his ‘comps.’ It somehow seems appropriate that one would drink strong coffee, and lots of it, when one is reading the words of men who changed the course of history. Their ideas were revolutionary then and as many as three centuries later, living in a world bounded by their ideas, those same ideas can sometimes seem as fresh as a morning cup of coffee.

My house-mate had his own French Press and his own stove-top percolator. He gravitated toward the dark roasts. Presumably the jolt of bitterness served with the caffiene to sharpen his senses as he read and comprehended the work of these masters. Sometimes wisdom is a bitter pill.

We sometimes think of coffee as being just a beverage, but it is a food. And it is a drug. Caffeine is part of a number of over-the counter painkiller medications because it tends to dilate the capillaries. And in some cases, especially the case of headaches, this dilation increases the effect of the anaglesic. Presumably this dilation improves blood-flow to the brain and helps us think more clearly even when we drink coffee and don’t take analgesics. Perhaps it is the caffeine or perhaps it is some other chemical, but people who drink coffee live in a slightly different space from people who do not. Or we might have the causal relation backwards. It may be that people who live in a slightly different space tend to have a special relationship with coffee.

When coffee was first introduced to Europe in the dark ages, it was served in coffee houses. Before long the churched banned coffee because they believed it turned people into rebelious malcontents. The observation was that coffeehouses were where they all seemed to gather. Quite possibly coffee has this effect. Or, it could be that something in coffee or coffeehouses appeals to the malcontents.

It is more than the occasional malcontent who enjoys coffee. There is no question that coffee is consumed not just for its flavor, but also for its ‘buzz.’ Those well along on their addiction to the stuff may no longer experience the buzz, but anyone who gets through three or four days of withdrawal and resumes drinking coffee will likely be reminded what it is.like. It is a kind of profound feeling of well-being that makes the external world feel slightly less important. Sometimes it allows one to focus or concentrate more clearly. Sometimes it might make one just want to sit and enjoy feeling good. And somettmes it creates a nervous-system overload, causing a person to metaphorically ‘bounce off the walls.’

The feeling can pass rather quickly, almost always lingering for less than an hour. And when it does fade, one begins to pay the price. One feels just a litte more tired, just a little more irritable, just a little bit less focussed, just a little less patient, just a little less tolerant than one did before the first cup. The usual practice is to have another cup. This restores some of what was lost, but after some time, perhaps an hour or so thngs are a little worse still. Five or six stiff cups of coffee before lunch can turn a slightly grumpy person into a full-blown curmudgeon by mid-afternoon. And perhaps if one drinks coffee like Balzac - who was reputed to go through fifty cups a day - one will become either a frenetic writer or a veritable revolutionary.

Everybody responds to coffee in a slightly different way. And in fact, different coffees from differrent geographical locations and from different suppliers will produce different effects Each person must judge for himself whether the net effect is good or bad. Coffee is a good source of some useful minerals. And there is no doubt some health benefit that the coffee industry will come to claim for the material.

I drink it because I am a coffee addict. Coffee makes me feel good. And I like its flavor. Five or six days after quitting it I am still getting over it. Two weeks after quitting it I am starting to recover. But just the smell of freshly brewed coffee, just the odor of the ground beans, and I am back at six cups in the morning. Nothing helps. Not throwing away all the coffee and all the paraphenilia. Not substituting tea. Not giving up all caffeine. I have not tried hypnotism or electroshock therapy or being run over by a freight train, but some addictions are not regarded as having serious enough consequences to warrant such exotic or painful measures. So I am still drinking coffee. I am reading Descartes, Locke, Hume, J.S. Mill. I am a curmudgeon in the afternoon, especially if I do not get my nap. In my spare time I post oddities to … ergo sum, or help other poor coffee addicts get the most out of their addiction Chef Home

07.24.06

Fixing Riced Potatoes

Posted in In the Kitchen at 7:47 am by steve

It was two minutes until the salmon steaks would come out of the oven and the riced potatoes were broken. I had peeled six Yukon Gold potatoes and popped them into the microwave uncovered for six minutes. The outer shells got tough as nails and would not go through the ricer. As a result, I had about a third the amount of riced potatoes as I new I needed. So, even though I was pretty sure that the potato problem was due to overcooking rather than undercooking, I decided to cook some more. I put the smushed up tough potatoes back into the glass bowl I had cooked them in, added two or three tablespoons of water, covered tightly with plastic wrap, and cooked in the microwave for three more minutes. At this point they were perfect: moist, tender, easy to rice, and full of buttery flavor.

Normally I would have cooked these potatoes in their skins and covered them with film in the microwave. But I had peeled these potatoes because they were turning green, and green potatoes can be bad for the health. I simply neglected to use film for no particular reason. So I rescued the potatoes just in time, riced them as the salmon rested, and we had our salmon, salad, and riced potatoes. And lived happily ever after.