Chet Richards has a blog dedicated to applying John Boyd’s work to business.  I wrote this article that appeared on his site.  www.chetrichards.com

Introduction

There has been much written about OODA and maneuverability strategy as it applies to business, particularly in the area of marketing and product positioning. What I have not seen much of is specific and practical examples of internal company practices that support these strategies. If you read the Lean blogs you understand that the key to success is really establishing the right culture within the organization. There is no one size fits all text book on how to create a lean or maneuverable culture, it has to come from within and meet the needs of the specific organization.

 

I’d like to share an actual implementation of a production system whose design was influenced heavily by the key elements of John Boyd’s OODA loop and Maneuver warfare doctrine. I had the advantage of starting with a blank slate at high tech startup company, with a small and focused staff. At this time I am not permitted to share details about the company, such as the name and actual product specifics but I think general details will suffice. The company was launched in 2003, manufacturing products in the homeland security market. The products are large pieces of capital equipment, weighing over 3000lbs with a cost of over $350,000.

Background

An early strategy decision by the company was to focus internally on the development of the technology and to outsource the actual assembly work to a lower cost contract manufacturer. The company would own the design and would also perform the final calibrations and testing before shipping off to a customer. Small levels of production and new product development were kept in house. The manufacturing standards for the product were very high and had to meet Defense level configuration management and testing requirements.

In the early prototype days of the initial product, all quality and production status data was maintained on spreadsheets and paper forms which resided in a binder that traveled with each system. There was an accounting system (Great Plains) which handled inventory and material transactions, but did not interface any further with the actual assembly and test process.

An information system was needed that would allow for the rapid and easy collection of production and test data. The system would need to be accessible from multiple locations, to facilitate the offsite production in one or more facilities. Given the early and immature stage of the product, a system that allowed great flexibility and easy customization was also desired.

The system that we choose was Quickbase, a web based custom database tool. We first designed the optimal process for the product and then created the database to match the process (Lean Point). With our contract manufacturer (CM) we implemented a consignment business model, by which we would order all of the material and have it dropped shipped to their location. Most CM’s prefer a turnkey arrangement, where they source the material directly, but in our case it made sense to kick off production in this manner.

Our high level process was pretty simple:

  • Order Material
  • Receive items
  • Create work order in our Great Plains ERP system
  • Issue Material
  • Assemble product
  • Test product
  • Close work order (Great Plains)
  • Ship the product.

In practice the process was a little more complicated. There were close to 1500 unique parts that needed to be managed. Over 40 different assembly and sub assembly level. Over 50 unique test stages, some of which had checklists over 100 steps long. In addition to these product driven challenges, our production system needed to handle the more traditional process issues of discrepant material, incoming inspections records, and process quality logs.

What is OODA?

OODA is the acronym for Observation, Orientation, Decision and Action. This concept was developed by Col. John Boyd an influential military strategist. Boyd proposed that these actions occur in all conflicts and that the competitor who cycles through these stages the quickest will have an advantage in the battle. Boyd arrived at this conclusion after studying the performance of fighter pilots during the Korean war. The US pilots flying in the F86 Sabre were shooting down the MIGs at a ratio of 10 to 1. On paper the MIG was a superior aircraft with higher top speeds, more armament and a longer range. Boyd observed that the Sabre, while not as fast was able to gain and lose energy at a quicker rate, also the pilot had a larger field of view due to the bubble canopy design. The F86 also had boosted hydraulic controls, which allowed the pilot to change direction without having to struggle with the control stick. All of these factors led to the F86 being a quicker more maneuverable airplane. This Maneuverability allowed the pilots to react to changing circumstances quicker than their opponents, thus gaining an advantage.

My goal in applying OODA to a production operation is to create a system that is nimble and quick and can support the changing needs of our companies market. My intent is not to shoot down aircraft, but to build an operation that can quickly react to production realities such as quality problems, material shortages, and worker training.

The key to the OODA loop is to keep learning. Once you make a decision and then an action, there will be some sort of effect from your action. You must continuously observe your operation to ensure the effects of your actions are positive. You need to be learning and reacting at the quickest rate possible

The Key Elements of a Maneuverable Company

John Boyd’s work with his OODA loop has evolved over the years and influenced many different operations. One important evolutions of his work is the strategy of Maneuver Warfare, which seeks to defeat an opponent not by attrition and direct damage, but by sowing confusion and creating a climate in which tactical decisions cannot be made and the opposing fighting force becomes unorganized and ceases to be an operational threat. I do not want to go too much into the details of Maneuver Warfare, it is not in the scope of this paper, but I do want to highlight on the elements that are common to a maneuverable company.

In maneuver warfare one of the keys to success is having front line soldiers that are motivated to seize objectives and make rapid decisions without direct communication from commanders that might not be at the scene. The Marines call this “Taking Initiative”. The same desire for initiative is important to a maneuverable company. You need employees that can be independent and make rapid decisions, without waiting for a boss’s approval.

How to you build this level of initiative? Boyd delved deep into organizational designs that foster initiative. His conclusion was that you needed the following:

  • Mutual Trust – Mutual trust between team members or employees traditionally arrives as a result of working together in a positive manner for an extended time. Respect levels grow and we develop comfort levels with our colleagues based on our estimates of their skills, and character. In a company setting, the best way to build trust is to consistently live up to your commitments. Also, investing and supporting internal training programs is a great way to build capabilities which when demonstrated also leads to increased trust.
  • Clear Sense of Mission – When management presents clear goals and objectives for the organization, the employees are better able to perform their roles. Understanding that there is a goal and how their individual efforts contribute to that goal goes a long way to building moral and a positive work environment.
  • Focus – Having motivated employees at every level is a great thing, but it can quickly devolve if the individuals are not focused and channeled toward a common goal. Having strong leaders that can guide the organization is important to maintain focus. Also, being able to recognize when an activity has veered off course from the mission and being able to rapidly adjust is extremely important.

A climate in which these three elements are fostered will lead to soldiers or employees with a strong sense of initiative.

I kept all of these concepts in mind while designing our production system. Any information system on its own cannot create these different elements within a company; our intent was to create a system and climate that did its best to support these objectives.

If the company is successful in building and maintaining trust, establishing a clear mission, and enabling the ability to focus, the end result will hopefully a be a work force with a high level of initiative and motivation. We also want the employees to be confident in their ability to make decisions and willing to make them at the appropriate times.

So, how do we build a system that will track the production and quality details of highly complex product in multiple locations while concurrently fostering trust, mission, focus and initiative?

Master Schedule

We started with the mission. We had a master schedule and plan that had firm dates for the next 4 to 6 months worth of production requirements. Rather than have this plan live on a spreadsheet or on a wall that no one ever saw, we created a Quickbase database to house this data. The information was online for all to see, both internally and at our manufacturer. The intent was to share the Mission information with all those affected, the mission being to ship certain product on certain dates. The database contained scheduling information, such as kitting dates, lot numbers, customer, configuration details, etc… A summary report of the schedule was emailed out to all team members once a week. This automated email is a quickbase feature.

Whenever a schedule record was created or updated, an automatic email is immediately sent to the appropriate individuals. This immediate notification results in the most rapid sharing of information and allows for the maximum reaction time for dealing with any corresponding production or labor issues.

The company found that by sharing the schedule in real time with the CM and the employees that many issues that might affect delivery were raised very shortly after the schedule update email was sent. This sharing of information showed “Trust” in the employees, who immediately responded with the “Initiative” to resolve any schedule threatening issues.

Assembly & Test

Now that the mission was clear to all, it is time to actually make the product. Given that the product was complex and had many decision and potential delay points, it was important to create a system that at every level fostered rapid problem solving and decision making. Using Boyd’s OODA loop as a guide, we created our Assembly & Test database.

The product manufactured by the company required the logging of many assembly and test related records. Initially stored on paper, the Quickbase application was created to allow for the online recording of all assembly, process and test data.

The parts for the product were sourced and purchased through a traditional ERP system. The maintaining of purchasing and inventory records was performed by this system. Quickbase was not utilized for any of these items. These tasks were best performed by a robust accounting/ERP system, and part of our challenge was to track production in multiple locations. Some of these locations might be contract manufacturers that would utilize their own systems to purchase and inventory the components.

The Assembly and Test Quickbase application presented an online process flow that would take the assembler, regardless of location through the entire assembly and test process. Starting with the assembly sequence, the operator would log which step he worked on, status of that step, and date completed. A method was provided to record deviations from the standard process, such as being short a certain component that would require later rework.

Fields and tables were created to track configuration requirements, serial numbers from key components, and test records on sub assemblies and components. This data when summarized showed a detailed configuration record for the product. Additional fields and tables were created to log any assembly problems and other quality data.

The gathering of each piece of data in the process was equated to the Observation step in the OODA loop. The system was designed to allow each operator to record the data quickly and in real time. Each operator was issued a laptop PC with wireless internet access. There is no lag time in the entering of the process data.

Quickbase allows for the creation of highly customized reports. A number of these reports were created to allow the operators and management the real time ability to disseminate the data. This equates to the Orientation stage in the OODA loop. The reports were designed and programmed to best display (orient) the data. Certain reports were set up to be emailed automatically to certain team members. This formatting and sharing of data helped to build one consensus view of the process and data, which served to eliminate debates and enable rapid decisions.

The Orientation stage relies heavily on items such as education, heritage, past training, etc…. The creation of the Quickbase reports allowed us to create a common Orientation perspective that drew on our collective experience and expertise.

The Decision and Action stages of OODA were performed as needed based on the results within the process itself. At the production (tactical) level, if all things went well no D’s or A’s were really needed. The process was followed as designed. But, as often happens with complex products, troubleshooting or deviations are required. In these cases the operators and technicians were empowered to take the necessary steps to correct the problem. These deviations were recorded within the database and were analyzed regularly to isolate trends and ensure ongoing process quality.

One particular loop that worked rather well was how notice of a problem was reported to the root cause location. Most of the products were assembled at offsite locations but put through final test at the company’s location. If a workmanship defect was found during the final test, it was logged into the Quickbase application, an email notification was immediately sent to the assembly location. This instant notification allowed for Actions to be taken to prevent repeat occurrences on other product. Quite often the issue was traceable to a new assembler who had not been properly trained. Identifying the issue and quickly reporting it the root cause location served to prevent future occurrences.

The data within quickbase, particularly the summary reports were reviewed regularly by the production and quality managers. As part of ongoing continuous improvement areas, this data was extremely valuable for spotting and isolating quality and performance trends. We viewed this as a Management Level OODA activity.

Incoming Inspection, MRB and Shortage Report

Our consigned business model presented a few challenges in regards to the management of the material. Three particular areas were solved with Quickbase applications.

Shortage report

With a product with 1500 components, making sure they are all in the right spot at the right time is a challenge. Our Great Plains MRP system handled all of the product purchase orders and inventory tracking. But like most companies, we wound up tracking the problem issues with an excel spreadsheet. We have a daily morning shortage meeting to address and resolve these issues. A Quickbase application was created so that both the company and the contract manufacturer could be working to the same list of issues. The morning meeting would be a conference call with both teams looking at the same information in real time.

As issues were closed or vendors provided delivery dates, the information was entered into the database and all parties automatically notified. This system improved data accuracy and eliminated many phone calls and shortened the length of the morning meeting.

Incoming Inspection

Some, but not all materials that are purchased require some level of incoming inspection. Lean thinking teaches us that Inspection is a non value added activity and should be avoided. Our processes require incoming inspection for new vendors and for first article approvals. Once a vendor completes a minimum number of successful inspections, they are moved off of the incoming requirement. Since the material would be arriving in multiple locations, it was once again necessary for an online solution. Quickbase allowed for a common data repository, capable of producing the necessary quality reports.

MRB

MRB stands for Material Review Board. All discrepant material is physically isolated and logged into a MRB database until it is reviewed by the board for disposition. For most companies this is an important production/quality process. If a bad component is identified, it is important to isolate it from the general stock population and then figure out a corrective action. To log and trend these issues, a quickbase application was utilized.

All three of these functions; MRB, Incoming Inspection, and Daily shortages, received improved data accuracy and increased usability by being located in an easily accessible tool like Quickbase.

Adaptability

An underlying theme of Boyd’s OODA is that as an engagement proceeds, adjustments are made to better position yourself for victory. The competitor that adjusts quicker will often have an advantage. This adjustment concept can be applied to business operations as a part of the continuous improvement process. Quickbase allowed us to adjust and grow our applications in a fast and cost effective manner. As new requirements were presented or new products added to our lineup, Quickbase was easily modified to handle the new data needs.

Culture & Communication

I’ve talked a bit about our Quickbase Production Systems design, but there a few other aspects of our production system that fall into the cultural category. The best, most flexible information system on its own will not create a motivated and maneuverable workforce. In an effort to achieve this objective we implemented an internal program to cross train our production and test team on all aspects of the product. Most of the operators were trained and qualified to do every process, from assembly all the way through final tests. Not all operators were proficient at every stage, but the ones who were proved to be extremely flexible and very valuable. This effort to train the team is a direct result of our desire for Mutual Trust. A trained operator is a trusted operator.

We also encouraged the production technicians to perform tasks outside of their normal day to day job. This often involved exposure to our customer installation locations and to our suppliers. This variation in the routine was a great way to further build the skills and capabilities of the technicians. These assignments reinforced the trust that we had in the employees and helped with maintaining moral and team cohesion.

With my team I tried at all times to reinforce that all employees were equally valuable, and that a manager is not more important than a technician. I worked hand in hand with the employees and was trained and qualified to do each production tasks. I believe this willingness to “do the work” helped with the mutual trust and bred an extremely loyal and dedicated team.

Conclusion

Our company was able to implement a cost effective information system that contained the flexibility to support our optimal product assembly and test process. The system was designed in a way to rapidly assimilate information and provide a common reference point and environment for decision making. The employees had ownership in the system at every level, which helped foster initiative. I believe that Boyd’s OODA philosophy can be implemented at almost all levels of a production management system. The details provided here are but one example

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