The Hindu Business Line : Keep processes simple and measurable

The link between strategy and results is management, or the so-called middle management, says Praveen Gupta in Six Sigma Business Scorecard (www.tatamcgrawhill.com).

"Conventionally, management by objectives (MBO) has been the mantra for the way of doing business. The MBO approach led to a system in which managers focus heavily on narrowly defined results." Since the objective is set in terms of numerical goals, there is a danger that MBO degenerates to `a manipulation of numbers at all company levels — from the president to the operator'.

You can smell the malaise around you if you find managers complaining, "My plate is full... I have a million things to do... I have so many fires to fight, I do not even know where to start."

A dangerous situation, this is. Because, "This very mindset on the part of managers is what leads to the high cost of poor quality, which many consultants estimate to be as much as 40 per cent of sales."

To drive home the point, Gupta narrates a process example: "A manager told the engineer to produce electronics boards as fast as possible. The engineer bought a machine for soldering and set it at the highest temperature and belt speed to produce the highest number of soldered boards in the shortest amount of time."

What was the result? "On paper it appeared that capacity goals were achieved. However, the high temperature of the machine caused some parts on the electronics boards to melt." Therefore, to correct the melting, the manager complained to the design engineer, who came up with a solution: `a heat sink to absorb the extra heat'.

Additional heat was thus absorbed, but there was a different problem, now: the thermal profile of the board got changed, as a result, and caused `some connections to become unsoldered and displaced'.

Directed by the manager to tackle the high defect rate, the process engineer recommended the setting up of a repair and rework station. This increased the number of good boards. Alas, `field performance of the boards, however, had degraded.' Also, `warranty cost increased.' A series of visits became necessary by the customer service personnel and the manager, to go and observe the failures in the field.

Worried about the falling profitability, the manager established a quality improvement programme, and hired a consultant, who trained the employees in problem solving. "But most of them didn't get much out of it because they could not understand why they were being trained — they currently had no problem." The programme eventually led to insignificant gains.

"Just as one punctured wheel disables a car, a poorly managed process can kill a company," observes the author. "Similar examples exist in almost every company, whether service or manufacturing, software or hardware, or private or government... One process can eat away the profitability of the entire operation."

Management must keep the processes simple, measurable, and managed, advises Gupta. "Management's job is to enable its people to do well at work, accomplish a lot, and have fun doing it."

Important lessons.

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