Think like a dead Italian economist... Simple Team Leader Skills Part 2 (#11)

My last blog "Time for a Change (Point)" covered the first of 3 simple skills that make a real difference to the life and effectiveness of a Team Leader. This second skill covers the much underrated ability to think like a dead Italian economist. More formally, how to peer out onto your manufacturing empire, big or small, and separate the vital few from the trivial many using the Pareto principle (80:20 rule)

Vilfredo Pareto can't help us in person, at least not without a heater and some serious smelling salts (to quote Good Will Hunting) as he died almost a century ago. His pareto principle however, helpfully reaches across the generations to support Team Leaders today.

Vilfredo, who appears to have sported an early hipster beard, observed that 80% of the land in Italy was in the hands of 20% of the population. Whilst this isn't particularly interesting to us, the extension of this principle is. If you're a Team Leader on the end of a sharp admonishment to "sort out your quality problems", the knowledge that...

...If you have 19 part numbers coming through your patch, 4 of them are likely to account for 80% of your scrap, or...

...if you have 25 machines in your patch, 5 or so of them will generate 80% of your breakdown losses... pretty useful. This simple logic takes you from wandering around in your fizzy drink canning factory hoping to get lucky and spot where to start, to hand-drawing a pie chart and a couple of pareto charts (see below) to work out that you need to go to the Orange line and look for Dented Cans.

Of course, It's not always exactly 80:20 but the principle works pretty universally. By the way, hand drawn is almost always best as we learn by creating. I've trained too many operational leaders who had been blindly plugging numbers into excel spreadsheets of NASA level complexity, without the faintest idea what the outcome meant. No understand = no action = no kaizen.

To sustainably improve you generally need to measure where you are now, find a focus and check after whether you've made an impact or not. Data Analysis gives you this.

A word of caution though, data is a dangerous beast. Analysing data is NOT the purpose of analysing data, improving your business is.

15 years ago I stood complaining to one of my Toyota senseis that a rubber moulding supplier we were helping had no data collection, so I couldn't help them. Upon hearing this tragic news via our interpreter his face screwed up as he turned and headed to the shopfloor. Once there, he established when the scrap bin had last been emptied and proceeded to tip the rubber defects out onto the floor. In front of my eyes he created a live pareto of parts. "No data, Russell-san?" 

Another day, another lesson. Data is more than numbers. If you'd like my blank pie and pareto pro-formas drop me an email, and I'll send them over.

Next time, the benefits of ferreting around in waste skips like a feral child.



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