A lot of the reaction to the Target security breach has fixated on the backwardness of the physical data storage of American credit cards. The story goes that if only banks would hurry up and get us onto the "Chip and PIN" Europay MasterCard Visa card, we'd all be safer from breaches like this. Chip and PIN cards have some security advantages over the magnetic strip, but it's not likely it would have made much difference in this case.
by Dr Will @ Iconic
There's at least one case in which pushing for maximum efficiency can actually slow down an operation. This particular instance involves a certain muda I didn't discuss in my "Lean on the Green" series: defects. If something goes wrong in your process, and you don't catch it promptly, it's going to cost you. When it comes to quality control, it's pay now or pay later. Every step in the process adds to the potential cost of a defect, and the farther along the flow unit gets before a defect is found, the more it costs to start over. This cost is especially bad if you don't catch the problem until after your flow units have passed through the bottleneck. Before that point, each of your resources has some capacity to spare, so that the extra motion won't be too taxing. But the bottleneck by definition is already operating at capacity.
Keep in mind that a flow unit can be anything that undergoes a defined process, whether it's a widget on the shelf or a customer in the store. Just as you would want to inspect materials or ingredients early in a process, you want to verify the quality of your customer's experience before they get too far in.
All of this is one more reason to identify your bottleneck, so you know where to concentrate your quality control, and also to anticipate normal attrition, lest you count your chickens before they hatch. Stay tuned for a complete demonstration of how to make these calculations.
So what's been the point of this series? (In case you've missed any of these, here are the first four posts.) Hopefully, I've convinced you that the insights behind the famed Toyota Production System are not just for gigantic manufacturers. Anyone who does work (i.e., exerts mental and/or physical energy to make things different from the way they are) can benefit from a study of the muda with an intent to eliminate them. If even a country club -- which is in the business of fostering leisure and extravagance -- can operate more efficiently without destroying its essence, then so can any service or retail operation.
It should be pretty obvious that forcing members to wait is a serious problem at a country club. But, as with the other muda, not all cases of waiting are equally obvious. The mere fact that something is happening does not mean that an operation is moving forward. Anything that a member experiences or has to do that is not a part of the integrated experience of your club is actually a case of waiting, because it is a stage the member has to pass through in order to get to his reason for being at your club. For instance, inefficiencies in your POS, including cash payments at the beverage cart, can extend the customer's waiting inadvertently. Even if they don't generate overwhelming queues, they can still arrest the paying member at a point of the process that does not add value to the club experience.
Let us resume our inquiries, then, dear reader: how would the sources of waste identified by Taichi Ohno apply to a Country Club?
Before continuing our discussion of Taiichi Ohno's concept of muda as applied to the country club, there's one simple, but important distinction I want to make. Identifying an activity as waste does not always mean that activity should be eliminated or reduced. Every operation has to carefully distinguish between waste that is strictly waste and waste that is necessary auxiliary work, even if it doesn't directly add value. In the case of a country club, a certain amount of excess has to be sustained in order to keep up the aura of extravagance which is so essential to the members' experience. No matter how nice and well-kept everything is, a country club that doesn't maintain this aura is just a golf course with amenities.
What does producing Toyotas have in common with managing a country club? If you've heard of Taiichi Ohno, you might know that his lean manufacturing system has been an inspiration for operations managers in areas far afield from building cars. His insights extend beyond the production line to any operation whatsoever, because they reveal some of the underlying common texture of all purposeful human activity (also known as work), and foster productivity by eliminating waste in all its forms.
In the last installment of our Operations series, we showed you how to create a process flow diagram, but we didn't show you what to do with it. The usefulness of the diagram is that it makes it easy to see which groups of customers are placing demand on each resource. This information, combined with the inherent capacity of each resource, gives you the "implied utilization" of each resource, that is, the work that each resource would do relative to its capacity, if all the flow units moved unimpeded through the system. Whichever resource has the highest implied utilization is the bottleneck.
"This course would be a lot more fun if it didn't have beverage carts," said no golfer ever. Club managers are another story.
The funny thing about "the average customer" is that no such person exists. No matter how much you learn about this fantastical creature, you still know nothing about any particular person who comes into your store. If some of your customers are spending a lot of time setting up registries, others are making exchanges, and still others are just browsing, the "average customer" might be staying for 20 minutes, while all of the actual customers fall above or below that number.