Labor Productivity and Six Sigma

Key drivers from your culture, leadership change and accountability, simplicity, strategy in organization cost leadership in Six Sigma, and to be honest with you, we also have the significant economy tailwind. Yeah, you can say, in the capacity last year. Because of the restricting we could anticipate fairly fast on this. So we were very fast and early in the process in the pricing in the market, and made the right choice as to where to go after pricing, and where not. So you can say those are intermingled, and yes, we had this tailwind, but we could respond to this environment very fast.

A little bit about sweep of the house. I like this language, not to be blunt, but because, I think, it tells a story clear. If you would like to sweep the house, you do not start to sweep on the ground floor. You start at the top floor. That is an efficient cleaning process. I call this step zero. We have seen all kinds of processes today, and the kind of steps you need to take to drive an important change. For me this is step zero. You need to ask yourself, “Do I have the leadership team in place to make the major change?”

Yes, you do not need to be drastic if you only go after a relatively smaller incremental change and improvement, but if you need drastic improvement, like we need in AVEBE? Yeah, you need to also make drastic binary choices on leadership teams. In our situation we moved from a 20-plus direct structure to a six direct structure. From a complex product business organization, before product businesses, we each own a direct team of directors and overarching group directed teams to control those product businesses. They still do the wrong things together.

We went to in a very simple functional organization. So I am responsible for operations-so everything in between order process, and global distribution, including sourcing. I have a second operational colleague; he is taking care of marketing, and sales and product innovation, and that is about it. There you have the typical classical…like HR, and finance, and of course, I also have a boss and that is our CEO.

Then our CEO will also make a call at a moment of time. He made the call, I want to do Six Sigma as a key driver for this change, and basically because he made that call, I was hired for GE to help him to take care of the operational part of the change. It is an important starting point.

There are two more points to make on this one, on leadership. So it is not only about structure. You need to be leaned on a leadership structure otherwise you cannot drive a lean organization. It is also to do with quality. Quality in a way like, How can you ask the establishment to lead a significant change? Because the establishment has failed. So that for me it is an important one line, it is a little bit anecdotal perhaps, but one of my learning rules is never ask these establishments to drive a major change. It does not make sense.

Define a simple strategy. So basically our strategy was based on a three stage process. First, rationalize. Stop with hiding that your core activities have a significant disease, by starting all kind of ship standard, non familiar activities to compensate the losses. Then there you are, basically, you go moving in the wrong direction. So it is a kind of camouflage.

So basically we made a decision to peel that away again. So we stopped all the activities that were not our core activity. We had operation units in the Pacific, in Brazil, on all kind of other starches not coming from potato, and basically we did not have the system or the size to control that business that way. So it was only a risk to the core activity. We are now basically in the second phase: I call it Six Sigma optimization.

So optimized the core activity, and basically that put us in a very competitive position, when we go to the free potato economy, because as you might know, there are subsidies going on in this real world, also in potatoes. Those European subsidy systems that will change and subsidies will dissolve when we move into what is roughly 2013. So we need to be ready for that free potato economy. So the takeaway here is this, we need to have a sustainable healthy future, and give the best potato price to farmers, and get prepared for the free potato economy. I think yesterday some speakers talked about vision.

I have a very simple lesson regarding vision, but then from an operative perspective they talk fairly different about vision. Vision in the definition of an operative is, if I have a boss who can tell me, and treat different occasions the same way, that guy has vision. Most of us are incapable to do so. So that is the incentive, it is as simple as that, you only need to make a story for yourself which can repeat in two minutes. You need to repeat it in three different occasions, and you will be rewarded by your team, and it is powerful, because it is not so much about the content of the vision itself, it is about whether you can make it repetitive, and I like to make pictures, because I like-I love-elevators, if you cannot all make a story in two minutes you do not have a good story.

I really like pictures, because it memorizes. I used this picture already two and half years ago, and when one of my MT members is doing a presentation on one of the locations, he always used this kind of simple…To be honest, this is not a smashing vision that you need to improve basic processes like we have a lot of pitches about it these days, and that you need to grow through Cross Leadership. There is something nicer than restructuring. I want to grow through Cross Leadership, because that will provide me with cash for innovation, otherwise I cannot fuel my innovation.

So I can only work on productivity if I have fixed my basics, so now we can repeat a story. I can only lead Six Sigma productivity programs if I have fixed my basic processes, and it can only do innovation if I have the money to fuel it. Now that I can repeat that one, that is not so easy. And then for a year plan alignment, every year we link nine key topics to that strategy. So everybody, to be honest, independent, whether you work in commerce, or in operations, you can find your nine points linked to this vision. And then the only check to John’s point yesterday, you might need to make sure that those are tied to the ledger as well, and then you basically have a simple framework recognizable for the total organization.

Little bit on the labor productivity, this is what I like, most of you recognize that labor productivity has two dimensions, and that is nice, because one is in the…than the other one. It is such tons of contribution margin per year, per employee. So if you work on free capacity by stable operations, and on organizational redesign simultaneously, this is what is happening, I do not like this kind of incremental targets of 2 percent or 3 percent, that is why I am a GE grown-up, I like to stretch targets. So you need to talk 25-30 percent kind of targets. If you do that, you put yourself a target of 25 percent on both, you get this for free, because this is just mathematics, you will 67 percent. So it multiples, and helps you here on labor productivity.

So if you do two things at the same time, you will get incremental on 17 percent on labor productivity. We do a redesign with DFSS, and a little bit on the consultancy, I do not like to talk about consultancy too much, but I like to talk about consultancy to start things at every moment. So we start at a lot on DFSS, both in capital investment, but also in organizational redesign. If we have a project above 500,000, it is just AVEBE law that you have to follow the (Inaudible) process otherwise you simply do not get money. Now I will do the toll gates myself, I should step in the middle of it, and I know what it is. So you cannot come with poor quality DFSS with me, otherwise you simply do not get the money. We also do that with 10 minutes, we are tough.

So we also do that with redesign, and each time we make a step in doing something new, we look for a consultant who can help us with that. But only in that initiation phase, in the stable ops period, and DFSS and GE helped us very well, but it does not say that I am married with L&G. For instance, in another example, in the back room optimization, we have a lot of end to end kind of process, which we feel that optimizing that kind of processes helps us with SubApp, and I work for instance with IBM on the implementation of SubApp in AVEBE, here is an example. I think I covered this already. It is organization redesign, you can treat it exactly in the same way as if you would start a new facility. It is a kind of mental mode, the traditional way is that you take your organization headcount diagram. That you said, I do not need this, I do not need, but that is not restructuring. You need to restart, you need to think as if you start again from scratch, so we basically designed our organization as if we would start again in 2010. And how would you then organize, what is then your designed state organization, then basically then you build your transition plan, and you manage that fear of DFSS process.

A rich test that you would take as a starting point to keep processes of value chain, or whatever you name them, and not how I can satisfy the boss in the most efficient way, that is not how you make an organization. We did it on teamwork, so do not go in a kind of direction boardroom and tell how the organization should look like. You should do this design process together with the teams, and that is how you get buy-in for your aggressive plan. So this then it gets something energizing, rather than a threat. It is too nice if people really like it, that would be too beautiful, but it helps that you can create your own working environment, and that you can create meaningful jobs which might sustain in the future. That takes at least I would say, most of the heat away. For speed reasons, I will skip this one.

We have seen this before I think. I want to talk a little bit more on granularity, because this is one of the biggest leadership problems this bridge. How can you learn from variants if managers continue to ask questions about evidences? This is also a financial department asking this kind of question. I ignore them. Finance should provide me with variance based information by production line, contribution margins by lot by line, that kind of detailed analysis, then he helps me to see the opportunity. He should not ask me a question about why is the average (Inaudible) cost on gas high, I in that manufacturing side? I said, if you want to ask me that kind of questions, you better can leave my room, because I am not going to answer it.

So that is the paradigm-we want to learn, and we can only learn from variance, and that means that managers should ask questions about variance, and should stop asking questions like, how much did you produce yesterday? A site manager reporting to me asking these kind of stupid questions, they do not get appointed, they do not stay too long. It is a stupid question, and they do not get to point, he will not stay too long. It is a stupid question, how much did you produce yesterday? So this is about the power of granularity that is what we are talking about, how can you lead an organization if you do not know what a viable distribution and granularity and…elasticity is or you cannot pronounce or articulate it?

So you need to understand the power of granularity. So stop talking about days, weeks, and months. You need to compress this to hours, minutes and seconds, and also the granularity of your operation you need to improve, you need to talk line unit operations on equipment level. Then you come into the world of Six Sigma Stable Operations. This is traditional stuff for guys who do not want to improve.

So I think in the…presentation yesterday, I think I liked that, I can see that there was kind of same school education, that is, you need to change your glasses, otherwise you cannot see the opportunity. If you remember this one, it is only a takeaway from my pizza, I would say that is OK for me. If you need to be aware, if you want to improve things, you need to change your glasses, otherwise you do not have the right level of granularity, you cannot see the variance, and as a result of that you cannot learn.

I need 10 seconds extra. I mean this is interesting about statistics, because if you look to a distribution, you have your normal process of stable operations, and then you have affiliate process, which is viable distributed. That is the reason why, when you first reduced the variance, your mean will shift. If you would have a normal distribution, your mean would not shift, right? So that is why this is firm. So if you work on your defects, and you work on your affiliate process, you will shift the mean. But your mean will shift more than just cutting off the viable distribution. It will also improve, because you will learn how your processes really work, so you know exactly where your bottlenecks are, and therefore you can basically increase your capacity with very small investments rather than building new production lines.

So it is understanding the variance, and again, the leadership point here is that you need to ask variance-based questions, that you have your measurements systems, different measurement systems to see that variance at the right granularity. So this time we talked also about standard. For me, standard is law, and I use that word. Standard is law. It is not something like, Shall we do the standard today? But the most problem is that we even do not have a standard in most plans, that we have a standard where we expect that we need to produce 400 tons per week of something. But what does it mean on the variable, which is leading a stability of that production line?

So that feet flow-that is the standard in cubical meters per hour, that is the right granularity on the standard, and if you have that granularity, you can see the variance, because if you have then a dent, then you know you have an event on your viable distribution, and you have a learning opportunity. If you have organizations that also have this, this is a reflection of both, that is what I call a behavior issue. That is because you have leaders beneath, who are asking the wrong questions, because if my response is not operated on, a manager would be disappointed. I will try to catch up, because I do not want to disappoint you tomorrow, right?

As a result of that he is going to tweak the process, and he creates the instability of tomorrow. So this kind of deviation, that is an undesired behavior issue, and it is not the behavior issue of an operator, it is the behavior issue of both. Then you can learn; if you have this kind of simplicity in your day-to-day improvement process, this is what I call the essence of table operations. Then you can have continuous free capacity improvement brochures. So the positive version is-and in English it is more beautiful than in Dutch. So each dent is a learning event. So it is not something where a traditional leader would say, why the hell did you have to technical disturbance yesterday, oh, that is not nice communication? The right question is, when did you have a deviation from the standard? Oh, it was 10 minutes past 1o yesterday morning.

OK, what happened? What is the cost? What could you do to prevent that from happening again? Or can I contribute as a leader to help you in preventing that tomorrow? Then you have the right dialog. Well, for time reasons, I think this is summarizing what has already been said. But Six Sigma, so you can say stability is a kind of open door, and yes of course, everybody wants their operation stable, but you need to lead that differently to make it really happen, that is the point I would like to convey. So it needs some brochure steps and cookbook to do so. You need different management behavior to really come to spectacular improvement due to stabilizing your day-to-day operations.

A little bit on organization. So it is not about again about support, you need to encapsulate your whole organization with Six Sigma DNA.

So that is why I got this role in AVEBE, because I was a Master Black Belt certified. I want to have a Master Black Belt in my team as well, but Shivona, she is sitting over there, do not touch her, because she is valuable to me. But that is how you can do this together, and you need a lot of Black Belts in your organization as well, and your leaders need to be trained as least Green Belts. I stole it from General Electric, I call it Six Sigma DNA, and you can say the top rendered finishings in operations, we have now 80 percent DNA, 80 percent, so 80 percent of the rendered operations are minimum trained for Green Belt, and the last 20 percent we will fix in the next two years. You need to take care that you cannot escape, so you need to encapsulate that with metrics and operational redemption. So organize for success, because this guy is winning the marathon, not because he was running fast at a moment, but he was running stable the whole match. I think this is the last page for your convenience. I think many speakers already talked about how to sustain and align things.

I laugh as I memorize. I give employees their passport, because it can only on be an AVEBE joiner, if you have a passport, if you want to go with me, and the passport has your individual year plan tied to the strategy. That has some reflection on your personal competencies, and has your personal development plan included. Then the more senior managers do have personal cockpits, so they have a kind of finished version of their individual year plan. So it is a very personal dashboard. But you can only make that meaningful if you will also talk about it.

So I included it in all my operational…if I have my one on ones, I talk about this cockpit. If we have a strategic and team meeting, we always talk about the cockpits. I need to make sure that you have to write functional deployment of your year plan also crucial. I will not dwell on this too much. I would like to complete with this. I think I did not forget about the most important points here. So the year starts here, we start with the question on leadership quality as a kind of step zero to your change program. Keep it simple, stick to the guidance, more results with less projects. Lead by example, so support by senior management is not the right wording, you need to be in the middle of it, so you need to lead it by example. This is kind of key mechanism from a process point of view; it is basically what I would like to share with you.

The Different Types of Loading Dock Equipment

Loading dock equipment is used for the easy and safe loading, unloading, and movement of material at docks. There are different types of loading dock equipment. Here is the brief description of some of them.

Dock Levelers

Dock levelers are used to allow easy transfer of goods from the docks to the trailers. They create a bridge between the dock and the trailer thus ensuring easy and safe movement of material. Depending upon their drive mechanism, dock levelers are of three types – mechanical, hydraulic, and pneumatic. Mechanical levelers are the least expensive. In this type of leveler, the spring and chain action causes the deck to move up and down. The docks that handle large volume of material generally use hydraulic levelers. This type of leveler is automatic and gets activated with a push button. Pneumatic levelers use air bags to move the deck up. These are gaining popularity because of their simple and easy operation and low maintenance.

Another type of dock leveler which is extensively used in climate controlled ones is vertical dock levelers. These are hydraulic levelers that remain vertical when not in use. It helps them to maintain cleanliness and improve their energy efficiency.

While choosing one leveler, one should keep in mind the volume of material handles, the load that the leveler should be able to carry, and the height adjustment.

Vehicle Restraint

Another dock loading equipment is vehicle restraint. This equipment is used to enhance the safety at the dock. Since the accidental movement of truck during loading, unloading or parking at it can cause mishaps, vehicle restraints are used to keep them in place. One can use mechanical, Electro-mechanical or Electro-hydraulic vehicle restraint in their facility. While selecting this loading the equipment, one should ensure that it is user friendly.

Dock Seals

This loading equipment is used to fill the gaps between the trailer and the dock door. This helps to prevent the leakage of air, which is the major cause of loss of energy at them. Also, it improves the safety of material and helps prevent contamination of the stored material, which could occur due to air infiltration. There are different types of dock seals. Among them, inflatable seals are the most widely used. They seal both the sides and top of the trailer. Pad seal is another popular dock seal. It is popular because of its low cost.

Besides the above, there are several other types of loading equipment which includes lights, bumpers, doors, lifts and so on. There are several things that one should consider while buying loading dock equipment. Some of them are reputation of the manufacturer, cost of the equipment, specifications of the equipment, and its safety features. One should only trust a reputed dock loading equipment company for buying such equipment. The most important specifications that should be checked are the weight bearing capacity and size of the equipment. Also, one should pay attention to the material of construction of the equipment.

Disposable Dental Handpiece Drills and Supplies

With the development of single use Dental Instruments, including hand pieces, the Dentist as a Health Care provider is now able to effectively control the spread of infection. In the past, we have purchased high quality sterilizable hand pieces that we hoped would survive year after year. However, the reality of the situation is that we put those hand pieces through hell each and every day, cutting off crowns and prepping teeth, in an environment that breeds infection. Even our best attempts to kill off every little microorganism that penetrates the shell of those durable hand pieces, doesn’t eliminate all of the cross infection risk. So ideally, if we could just find a product that fulfills our power needs while being totally disposable at the same time, we could all rest a little easier at the end of the day.

Introducing the Azenic DHP (Disposable Hand Piece)!

The Azenic DHP is an American made product that is FDA approved. The DHP offers enough performance that you will be hard pressed to argue that it is not equal to, or greater than other industry leading metallic hand pieces.

We are all forced to remove old Crown and Bridge restorations from time to time, and these difficult cases create intensive wear and tear on those conventional metallic hand pieces, and that leads to expensive maintenance and refurbishment costs in the long run. Even if the DHP were utilized by your practice for just these procedures, a significant cost savings from the repair guy can be realized each year.

The DHP also comes in handy when you know that bleeding is inevitable. In the case of the third molar extraction, when the roots are angled just enough to get your temper going, using a disposable hand piece to section those stubborn roots is invaluable. And when we introduce the possibility of a patient having an unknown or compromised health condition, why not protect yourself and your staff, and your patients from cross contamination.

So where is this landfill that all these DHP’s are headed to?

The DHP is 100% Recyclable! No landfills are required because Azenic has coordinated with the Sharps Recovery System – an innovative system designed for simplified environmentally responsible treatment and repurposing of medical waste and used healthcare materials. This system creates a resource used in the manufacturing of raw materials for other industrial applications.

The cost of using Sharps Recovery System is minimal. By ordering 2-3 gallon Sharps Recovery System buckets, a total of 280 DHP’s can be recycled at a cost of $133.97, which is equivalent to just 48 cents per hand piece.

The cost of the DHP itself has an introductory price of $15 per unit and is sold in a case of 12, so for less than $16 you get superior performance, and finally have the opportunity to sleep well at night. Most patients will readily agree that the extra cost of protection from cross infection, is money well spent!

Actually, when we factor in the cost of metallic hand pieces, and the staff time and money spent on sterilization equipment and supplies, and then repairs, the disposable hand piece is beginning to sound a whole lot more practical for the overall costs of operation.

Although these hand pieces are adaptable to almost any set up you may have, the DHP connects to a standard Midwest Style 5-hole supply line, as well as most 4-hole supply lines. If you are already using a quick-disconnect coupler, first remove the coupler by unthreading it to expose the standard 5-hole connection site. As long as you have the hand piece fully seated, and you have tightened until the supply line threads are no longer visible, you are good to go. In addition, the DHP utilizes an internal light rod that works off your light supply box, so you can still enjoy light directly where you are working.

To be perfectly honest, the DHP has some noise and vibration issues that many will find to be exhausting. However, the Catapult Group (Clinical Evaluation 2011) reported that 81% of clinicians thought that there was a direct application in their practice and would recommend the DHP to their colleagues. Most clinicians have suggested, and I agree, that the Azenic Disposable Handpiece is not intended to replace your everyday metallic workhorse. Rather, the intent is to increase the longevity of our much more expensive equipment by using the disposable as an alternative for more demanding situations. And in the event that your sterilization unit decides to take a break, these hand pieces are a ‘no brainer’ to have as a backup in every dental office today.

Be aware, there are other disposable hand piece companies out there, specifically those from China which include Hunan Jinme Dental Handpieces, All Pro Disposable Dental Handpiece, Henan Hongtaiyang Instrument, and Huaer Technology. These products sell for much less than the DHP, typically quoted on the internet for $1.50 to $3.50 each, but according to some sources, these products have not received FDA clearance as of yet, so Shop Carefully!