1. Thinking About Kaizen - A Systems View Presented by Dr. Bill Bellows Presented by Dr. Bill Bellows October 24, 2009 The Second Annual SoCal Quality Conference October 24, 2009 The Second Annual SoCal Quality Conference Associate Fellow Pratt & Whitney Rocketdyne Canoga Park, CA 818-519-8209 William.bellows@pwr.utc.com Associate Fellow Pratt & Whitney Rocketdyne Canoga Park, CA 818-519-8209 William.bellows@pwr.utc.com President In2:InThinking Network Canoga Park, CA 818-489-3005 bill@in2in.org President In2:InThinking Network Canoga Park, CA 818-489-3005 bill@in2in.org

2. ABSTRACT: Systems Thinking is one of the cornerstones of Lean, but how many of us really understand what it means to be an "enterprise thinker?" In the new economy, the proficient utilization of thinking will be a necessary condition; fundamental to business competitiveness. The aim of Enterprise Thinking is to elevate the consciousness of individual and collective thinking about sub- systems, variation, knowledge, numbers, interactions and thinking patterns. Are the following sufficient to be successful in the future? Continuous Improvement Reducing Cost, Waste, Inventory, Variation, etc. Talking about "Working Together“ Striving for "Zero Defects” Striving for "Zero Waste“ Striving for "Satisfaction" Using Metrics for Alignment*

3. Among the topics of discussion will be the concepts of "better thinking about thinking" and "thinking together." A deeper understanding of these ideas and examples of their everyday use will provide direction for organizations to learn together and work together in new ways. This session will introduce you to these ideas through a series of questions that are specially selected to create awareness of a new approach to working together, learning together, and thinking together. The presentation will introduce the potential energy of integrating the management theories and thinking of W.E. Deming, Peter Senge, Edward De Bono, Genichi Taguchi, Taiichi Ohno, and others. Participants will leave with a renewed curiosity about the interdependencies of our enterprise, and new ways of thinking about value and waste.

4. Aim Introduce the potential energy of integrating the management theories and thinking of and many others... Dr. W. Edwards Deming Dr. Genichi Taguchi Dr. Edward de Bono Dr. Russell Ackoff

5. “A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market” Source: The New Economics, W. Edwards Deming, 1993 W. E. Deming on Quality W. E. Deming on Quality

6. Production as a System Source: The New Economics, W. Edwards Deming, 1993 Receipt and test of materials Production, assembly, inspection Tests of processes machines, methods, costs Distribution Consumer research Consumers Design and redesign Suppliers of materials and equipment A B C D

7. We all live downstream

8. Deming and Toyota “There is not a day I don't think about what Dr. Deming meant to us. Deming is the core of our management.” These glowing words were spoken at the 1991 Deming Prize ceremony by Shoichiro Toyoda, president of Toyota Motor Corp.

10. Resource Management

11. ● Allocation

12. Resource Management ● Allocation – Ours

13. Resource Management ● Allocation – Ours or Mine

14. Resource Management ● Allocation – Ours or Mine ● Focus

15. Resource Management ● Allocation – Ours or Mine ● Focus – Problem

16. Resource Management ● Allocation – Ours or Mine ● Focus – Problem or Opportunity

17. ● Quiz ● Present State ● Future State Agenda Agenda

18. Quiz

19. What is the leading use of alligator skin in the United States today? Q1: Alligators Q1: Alligators

20. Describe how to make an Arnold Palmer (drink) Q2: Arnold Palmer Q2: Arnold Palmer

21. Arnold Palmer

23. Q3: Pepsi Flavor Profile Q3: Pepsi Flavor Profile Taste Time

24. Possible Answers to Q3: Pepsi Flavor Profile Possible Answers to Q3: Pepsi Flavor Profile Taste Time

25. Possible Answers to Q3: Pepsi Flavor Profile Possible Answers to Q3: Pepsi Flavor Profile Taste Time

26. Who makes the best automobile tires in the world today? Q4: Automobile Tires Q4: Automobile Tires

27. Trip Report ET OrganizationNon-ET Organization

28. (physical) (people) ET OrganizationNon-ET Organization Trip Report

29. How much time is spent discussing parts which are good and arrive on time? Q5: Good

31. How important is customer satisfaction? Q6: Satisfaction

33. Expectations Value Disappointment Expectation

34. Expectation Dynamics Value Disappointment Expectation Satisfaction

35. Expectation Dynamics Value Disappointment Expectation Satisfaction Delight

36. Q7: The Last Straw

37. Q8: Grades RS-68 What letter grade is required for all parts purchased? Maserati Gran Turismo

38. Q7: Cutting Wood Q7: Cutting Wood

39. target Cutting Wood Cutting Wood

40. Upper Specification Limit Lower Specification Limit TARGET (desired value of parameter) “Loss to Society” Taguchi’s Quality Loss Function

41. target Cutting Wood Cutting Wood

42.  “Zero defects is another way of saying ‘do it right the first time’”  Quality is defined as conformance to requirements Source: Let’s Talk Quality, Philip Crosby, 1989 Philip Crosby on Quality Philip Crosby on Quality

43. Q8: Addition Q8: Addition What does one plus one equal?

44. Counting Heads Counting Heads

45. Addition “You think because you understand one you must understand two, because one and one makes two. But you must also understand and.” Donella Meadows

46.  Reducing Cost, Waste, Inventory, Variation, etc  Talk about “Working Together”  Striving for “Zero Defects”  Striving for “Zero Waste”  Striving for “Satisfaction”  Continuous Improvement  Using Metrics for Alignment* *without a thinking transformation Present State

47. “The significant problems we face cannot be solved at the same level of thinking we were at when we created them.” Albert Einstein

48. What is needed ? Thinking that promotes better discovery

49.  Resource & Relationship Management (Striving for Balance)  Thinking & Learning Together - Then Working Together  Managing Customers’ Expectations  Continuous Investment  Using Thinking for Alignment  InThinking and Enterprise Thinking Future State

50. “ How the world we perceive works depends on how we think. The world we perceive is a world we bring forth through our thinking.” H. Thomas Johnson

51. PWR’s Thinking Roadmap

52. RS-68

53. Questions/Comments/Feedback: Bill Bellows william.bellows@pwr.utc.com Additional Information In2:InThinking Network www.in2in.org Questions/Comments/Feedback: Bill Bellows william.bellows@pwr.utc.com Additional Information In2:InThinking Network www.in2in.org