NC State of Business

There is always a level of risk associated with managing projects. Often discussed as individual topics, risk management and project management are now being integrated into general discussions of systems management. More specifically, the new version of AS9100 – Quality Management Systems - Requirements for Aviation, Space and Defense Organizations actually includes specific references to the need for risk and project management processes.

Risk Management

AS9100 (Rev. C) has now added requirements for companies to assess and manage the risks involved with providing their product or service. So what is risk? Risk is that element of doubt you feel when you tackle something new and aren’t quite sure of the final outcome. Risk is defined in the AS9100 standard as “an undesirable situation or circumstance that has both a likelihood of occurring and a potentially negative consequence”. Risk Management consists of defining those potentially “undesirable situations”, assessing their probability of occurring; understanding what the impact may be should the event happen and determining what to do if the risk level is too high. A simple matrix can help you understand the level of risk associated with the products and service your company provides.

Once the risk level has been defined, then you develop action plans to reduce or eliminate the risk. If the risk level is low, you may be able to accept it without taking any action. Understanding and managing risk as it relates to Special Requirements, Critical Items, and Key Characteristics is the intent of the new requirements in the AS9100 Standard.

Project Management

Why add a Project Management requirement into the standard? If you are working on an aviation, space or defense project, you could be working on something that is quite large and complex, involving multiple suppliers or partners and takes place over a long time period. To be successful, these programs should be effectively defined, planned and executed in a controlled manner in order to meet the customers’ needs and expectations. Defining, Planning, Executing, Controlling – are key activities of project management. The new requirements in the standard promote additional focus on up front planning and encourage adequate controls throughout the whole “product realization” process to meet schedules and stay within resource constraints.

The revised audit standard for AS9100 Rev. C has not been released yet, so no companies can be certified to the new C version until the auditing documents are released, which is estimated to be mid-year 2010. What do you do in the meantime? If you are planning to get registered before the middle of next year, you can set up your program to meet the requirements for both B & C versions and get certified to the B version changing to the C version at an audit cycle. If you are already certified to AS 9100 Rev. B. you will need to add these and the other new requirements into your program during the next 30 months or before your next audit cycle if it occurs after mid-year 2010.

What do Mobile Home Manufacturers, Nursing Homes and Marine Cargo Handlers have in common? They, along with 19 other industries, appear on OSHA’s list of industries being targeted for recordkeeping compliance.

In light of several studies suggesting that businesses may be under-reporting workplace injuries and illnesses, OSHA has announced plans to initiate a national emphasis program (NEP) on recordkeeping!In the press release, acting Assistant Secretary of Labor for OSHA Jordan Barab stated that “accurate and honest recordkeeping is vitally important to workers' health and safety” and indicated that OSHA’s plan involves (1) inspecting occupational injury and illness records prepared by businesses and (2) enforcing regulatory requirements when employers are found to be under-recording injuries and illnesses.

According to the directive released by OSHA, inspections will include a comprehensive records review, employee interviews, and a limited workplace inspection. Records that will be reviewed include medical records, worker’s compensation records, insurance reports, and payroll/absenteeism records. OSHA’s Compliance Officers will use information from these records and interviews with staff to independently construct Form 300 Log entries which will then be compared to the recordable case entries on the employers From 300 Log.

Are you confident of what gets recorded? Consider this: At a company-sponsored Pizza Party celebrating your company’s exemplary safety record, an employee burns the roof of his mouth on the hot cheese! Under OSHA 29 CFR 1904 is this a recordable injury? Submit your answers, thoughts and opinions below.

Did you know that over the last decade, more than 65% of new jobs were created by Small Business. In these difficult times, the Small Business might be our version of the ‘Small engine that can!’

Innovation and business growth programs try to teach Big Business to act like Small Business; to act entrepreneurial with a purpose! Maybe the small business guys really have the edge. I have seen some reports that indicate that a small business is 10X more likely to be successful than the Big ventures. More than likely, you can count on dedication and perseverance as contributing factors.

An area that could be lucrative to small business but isn’t heavily mined is the magnitude of Government Contracts earmarked for Small Business. Government contracts worth over $1 trillion are issued to small businesses every year but roughly 2% of them participate in any type of government contract bidding. Unfortunately there are a number of loopholes in the system that allow for a number of big companies to participate in the small business bidding and contract process.

I see this as an opportunity for our Small Business owners to step up their efforts and pursue these contracts and use the same tenacity that makes them more successful than their big brother counterparts.

I recently was talking to the owner of a small business about a process to help innovate the company’s product line and expand into new markets. He told me that he “ has interest in exploring the government contract and bidding process, but the thought of exploring the vast chasm of unknown is a bit daunting”.

There is a roadmap to help navigate this process and can be found through your State agencies supporting small business development and export.

I had the privilege of recently seeing one of the great guitarists of my generation, Robin Trower, at a small venue in Charlotte. Although Robin is about 65 years old, (and looks every bit of it) he performs with the talent he has always had and demonstrates a passion for the guitar. You can see the passion in his face, and feel it through his music.

You see this same passion in the faces of other great musicians (from my generation) such as Bruce Springsteen, Robbie Robertson and Eric Clapton. And their talent and success shines through this passion.

I believe a similar passion inspired many of us to pursue a career in manufacturing. Transforming raw materials into a product that a customer really wants, adding value and continuously finding ways to do it better, faster and cheaper can be inspiring activities. I still see the passion in the faces of managers and production operators in many of the plants I visit.

There is a somewhat dated best selling publication from 2001 titled “Good to Great” by Jim Collins (Harper Collins Publishers) that still holds some excellent core concepts about passion and success. Jim describes 3 intersecting circles to help determine your business and personal passions that take you from good to great. He names it the Hedgehog Concept and describes the 3 concept circles towards a personal analogy as:

1. You are doing work that you have a genetic or God given talent and perhaps you can become best in the world in applying that talent (I feel I was born to be doing this)

2. You are well paid for what you do (I get paid to do this, am I dreaming?)

3. You are doing work that you are passionate about and absolutely love to do, enjoying the actual process for its own sake (I look forward to getting up and throwing myself into my daily work and really believe in what I am doing)

Jim indicates that if you can drive toward the intersection of these 3 concept circles and translate that intersection into a simple crystalline concept that guided your life choices then you’d have a Hedgehog concept for yourself. But you need all three concept circles to be successful.

So, maybe by evaluating ourselves personally or in our business we can see how we stand within this Hedgehog concept. Focus of our personal talent and passion will drive our business success. It may be in manufacturing or it may be in music.

"It does not happen all at once. There is no instant pudding." – Dr. W. Edwards Deming.

Lately, I’ve had the opportunity to be in a number of conversations with managers and continuous improvement specialists about “lean transformation”. I’ve also been reacquainting myself with Dr. Deming’s 14 Points for Management. This experience has reinforced my belief that Lean implementation is one of the more misunderstood and underestimated activities a leader can undertake, and probably will only be successful if managers follow the spirit and intent of Deming’s 14 Points.

We need to be very honest with ourselves and face the facts that many don’t want to believe. Yes, organizations need to learn and implement Lean tools, but in order to sustain any gains over the long haul, they must also implement Lean thinking.

You cannot develop a Lean culture overnight. As Dr. Deming said, “there is no instant pudding”. It will take a long time and a lot of hard work. It’s a bit like gardening. You till the land, fertilize, and seed. But you can’t sit back and expect your vegetables to grow on their own. You must water, weed, and be vigilant to potential pests and assorted critters (yes, you squirrels – at least in my yard) looking to wreak havoc. It takes involvement (“going to gemba”) and hands-on leadership.

If your organization is considering embarking on a lean journey, or is somewhere along the path already, you need to do an honest assessment of leadership attitudes and actions. It is not enough for management to provide resources, time, and consultants, and then feel as they have made their contribution to the CI or Lean efforts. They must realize that this is not like a technical project to be managed and implemented by a small group of employees. This will take hard work and hands-on involvement by everybody on the corporate ship, including the captain and senior officers. If management is not committed to a long-term cultural shift with heavy involvement on their part, or if leadership is in a state of flux, then the idea of full-blown lean implementation should be very carefully reconsidered and quite possibly postponed until there is organizational stability and the appropriate mindset. Otherwise, Lean will soon be relegated to the list of previous “programs of the year”, most of which started with a roaring fire, then fizzled out and became another unsustained effort.

What do you think? What has been your experience? Please share!