TOC Thinkers

Q1 - Kevin Kohls

Q1: Hi, Kevin! You’ve got a great TOC blog with some excellent advice and stories. I’d like to come back to some of those stories, but first can you tell us a little about your background – both personal and professional?

Sure. Let’s start with professional. I spend 29 years at GM, starting as a GMI (now Kettering University) student in Electrical Engineering. I got a chance to work at the new Cadillac Detroit/Hamtramck plant that was under construction, so I went there for about a year. As the plant started to launch its new vehicle program, I went to Purdue to get an MSEE. 

When I came back, the plant was STILL in launch, a year and a half later. I was assigned to help solve some of the many electrical and software issues there were in General Assembly. I fixed a lot of things that were wrong, and a few made a difference, but most did not. I then got assigned as the Manufacturing Systems Analyst for the plant, about a year after I got back from Purdue. The plant was still struggling with throughput.

The plant manager, Larry Tibbetts, asked me to go talk to an Operations Research scientist at GM Research named Dave VanderVeen, after seeing a presentation Dave was showing around the corporation. Dave gave me a copy of The Goal, and a disk containing a program called C-Thru, which helped identify bottlenecks. I read the entire book in two sessions, and started putting the program to work.

Something odd started to happen after that. Whenever we fixed a workstation that was a predicted bottleneck, the throughput of the plant went up! That was a new concept – prior to this, we just created long lists of things to fix, and then made a best guess at what to fix first. Most fixes had no obvious impact on throughput. We just assumed there was too much variation and too much complexity to actually predict cause and effect, so this was a surprise to us. We were pretty excited, and wanted to keep it going.

So, we created a continuous improvement process called the Throughput Improvement Process (TIP) to help keep it going. We also got some help from an outside TOC consultant, Paul Henderson, who was hired by one of earliest TOC executive supporters in GM, Rich Rachner.

We got the plant up to rate soon after that. They asked me to come to the divisional offices to help set up a team to do this for multiple plants. We put TIP into more and more plants, especially right before a product launch. We then started to design new plants using TOC concepts. We figured out how to “design in” the bottleneck. Throughput improved, productivity increased, vehicles that were in demand got out into the markets, launch times decreased – GM made money. At that time, our stock prices started to head toward the 90’s.

I became an executive doing this work, and the program grew and grew. I soon had controls engineers, TIP engineers, simulation engineers, and lean engineers working for me. Now, it’s in all North American plants, in most of GM Europe, and GM is rolling out to plants in South America. We didn’t talk about what did outside of GM, and I wasn’t really allowed to talk about my job much. But the GM Research scientists did some great work on C-More, so we did decide to try for the INFORMS operations research Franz Edelman award in 2005. We were up against some tough competition, including P&G and Eli Lilley, but we won. All told, our efforts generated an additional $2B in profits for GM while I was there. 

But all good things come to an end. The constraint moved out into the market, and I couldn’t get out of manufacturing to help impact this. I got an opportunity to take a buyout, and decided to try and do TOC on the outside with my own consulting firm, Bottleneck Busters, LLC (www.bottleneckbusters.com). I also work with PMC in Dearborn (www.pmcorp.com).

Personally, I am married to Denise, a wonderful, beautiful woman who puts up with me. We live in Novi, Michigan, which is about 30 minutes northwest of downtown Detroit. We don’t have kids, but two dogs and a cat keep us pretty busy.

Q2 - Kevin Kohls

Q2. What is your primary professional focus these days?

I am trying to get TOC integrated with Lean in some of the companies I consult with, combining the best of both. I’ve been working with PMC to develop classes on Accounting, Metrics, and analysis that use the best of Lean and TOC. I’ve developed my own Bottleneck Analysis tool based upon simulation, and we are using it as part of those classes. It helps demonstrate the powerful impact that comes from improving your bottleneck on a company’s metrics and bottom line. We’ve got some pilots approved at a major medical devices division.

We’re also starting to put TOC for Healthcare into one of the local hospitals. Finally, I am also trying to apply basic Lean and TOC concepts to improve and implement a new software implementation at a major healthcare insurance provider. You can see a pattern here – with the local auto economy in such poor shape, Healthcare is a good place to be.

As most of you know, consulting goes through ebbs and flows, and I am pretty busy right now. During the ebbs, I’m also writing a book about my automotive experience with TOC, called The Conflicted Middle. It talks about why the “frozen middle” in large corporation ends up that way.

Q3 - Kevin Kohls

Q3. Was it difficult to market TOC and TIP within GM?

Well, it took about 15 years to get it to the “Tipping Point,” where terms like bottleneck and constraint became part of the everyday lexicon. In some ways it was easy, because there were many plants in the 90’s that were not making enough popular vehicles, like big trucks. GM understood how much money it stood to lose if those products didn’t reach customers. So we had internal customers who were motivated, lots of support from upper management, and the tools and knowledge to make it happen. We also had the dedicated team to do this work, so the usual obstacles of lack of budget and lack of headcount were eliminated.

In other ways, it was difficult – lots of conflict, a huge challenge to the traditional way of thinking, and we were seen to be in competitive with other programs, like TQM, GMS (lean), etc. We stumbled across a lot of skeletons buried in the backyard, so to speak. We also had to be the ones to say “the baby’s ugly” when it came down to demonstrating with data and analysis that a bottleneck was not performing as designed. I got kicked out of some of the finest plants in GM, only to be brought back the next day. Quite a ride.

Q4 - Kevin Kohls

Q4. What were some of the critical success factors in getting TOC into GM?

Well, over the years, Eli has spent a lot of time with GM management, trying to get them to understand the basics. That helped. We also had a lot of top executives, like Gary Cowger, Tom LaSorda, Don Hackworth and Larry Burns, who got it, and supported it. And we had C-Thru (which later became C-More) for finding bottlenecks. Methods described in The Goal for finding bottlenecks didn’t apply well to automobile manufacturing. You couldn’t just look for inventory, since SUV’s took up a lot of space. Inventory on the production line is minimal, especially after lean methods like kanban had been installed. GM Research’s development of this tool was a big factor. 

Of course, training was a big part of the solution. To overcome logical objections to TIP, we used developed a lot of simulation games. Having a “flight simulator” to validate concepts and work through examples was very valuable, and added an element of fun to the class. The using simulation (and C-More) for trying out fixes ahead of time was valuable – it allowed middle mangers to focus on the problems and solutions that had the most impact.

Finally, we try to make sure we talked in terms of dollar impact. Gaining a half a job an hour might not seem to be a big deal. But taking the Throughput Dollars (Selling Price – Total Variable Cost) times the number of hours works in a year, ending up being a lot of money, even when divided in half. That number was a shocker for many when they first got involved with TIP.

Being successful in increasing profitability allow us to create quite a team as well. People in my group spend a lot of time and effort making it successful. They, at least, knew they were doing the right thing, but they all faced adversity and conflict. None of us thought we had the easiest job in GM, but a few of us thought we had the best. I consider myself fortunate to have led such a great team.

Q5 - Kevin Kohls

Q5. What’s been your biggest challenge as an outside consultant?

TOC is not a main line solution yet, so I rarely get customer’s coming to me and asking for a TOC solution. They might be frustrated with their company’s ability to implement Lean, or are growing and want to improve throughput. Sometimes it’s a future design they are concerned about. All of these problems are addressed by TOC, but none of customers came to me wanting TOC solutions. So while I started out thinking I could market TOC, I have found more luck using simulation, scheduling, and lean as marketing tracks, and then providing TOC solutions in those areas.

Q6 - Kevin Kohls

Q6. Tell us more about The Conflicted Middle.

It’s a book about why middle management seems so resistance to change, and what can be done to overcome that resistance. At GM, middle management was called the Frozen Middle. Senior leadership is frustrated that their ideas are not being implemented, and outside consultants feel like their banging their heads against a brick wall trying to implement change. Having been in middle management for most of my career at GM, I lived within the frozen middle. Originally, I had the same viewpoint – it’s a cultural thing, and you’ll never be able to change it. That perspective changed when I took the Jonah program. I realized that middle management was behaving logically! As in a cloud or a CRT, it was the assumptions and policies that they were operating under that was causing this resistance to change. 

What was shocking to me about the Jonah course was that my scope of influence was much larger than I originally thought. When it came to proposing a change to middle managers, I originally thought, “They’ll never change, so why bother.” Now I want to understand what their conflicts – why are they choosing not to adopt a new program when there are indications it will help. You soon come up with a fairly common list of logical objections. Overcoming these objections in your sales pitch is a critical aspect of securing their support and reducing the number of obstacles that will have to be overcome. 

So the book describes the conflicts the middle management faces, and why I now look at them as the Conflicted Middle vs. the Frozen Middle. For those with a TOC background, there will be little that is new. But I am writing more for the few middle managers out there who would like to become change agents in their organizations.

Q7 - Kevin Kohls

Q7. How did you "design in" the bottleneck?

That took a lot of time to work out. We had a need to figure out the maximum capacity of the plant, if we had to run full out. We knew this would not be a situation that plant would be in all the time, but it was important if demand got to be so high, we had to consider moving the product to another plant, versus taking on an aggressive improvement plan.

We were also struggling with the basic question of whether we should design in the constraint. But, it seemed more logical to know where it would be, if demand were high, versus just letting fate decide where it would end up. So we started kicking around the issue.

Location was the obvious one. If we had the constraint at the beginning of the system, then we would end up needing less inventory in the facility. The first set of operations in a plant have are typically welding operations (the area is called the Body Shop) that are highly automated with robots and tooling. If we designed it at the beginning, it could be easily moved, just by buying more robots to do more welding in a station. Thus, the bottleneck would not be very “rooted”, and that would defeat the purpose of designing in the bottleneck.

Assembly was the last set of major operations, and there were many good reasons to make that the bottleneck. Assembly has the most operators, and they would be highly utilized as the bottleneck. There were many merge points as well, and choosing the biggest one, where the engine and powertain were merged to the rest of the vehicle looked to be a good point. In Simple Drum-Buffer-Rope, this operation is a perfect point to attach the rope to pull in material.

But line rates could be changed in Assembly, by adding people and changing conveyor rates. The designed in bottleneck could be moved in the matter of a few weeks, if desired. The bottleneck would not be strongly “rooted.”

In the Paint Shop, however, chemistry and physics came more into play in how the area was designed, and what rates were used. In particular, the “dip tanks” became an area of focus. The body, which has been welded and cleaned, is dipped into a tank of paint that provided the undercoating and rust protection. The body has to spend a very specific amount of time in this tank. We cannot speed up the conveyor if we want to increase the rate of production. Expanding the tank is a huge project, and production would have to be shut down for weeks to make it happen. Designing in the bottleneck in here would ensure that it would be rooted. We could improve the system, add robots and people, but the rate of these tanks decided how fast the system would run.

We took advantage of this by adding sufficient buffers around these tanks, and ensuring that the other conveyors in the paint shop ran faster than the dip tanks. We couldn’t do this in all the plants, since a typical Paint Shops last 20 years, but we did get a chance to influence a few of the new plants. The Paint Shop management was doubtful in the beginning, but with strong product launch results, we managed to convince the majority. Now all Body Shops, Paint Shops, and Assembly areas are simulated to ensure excellent launch performance.

Kevin Kohls more on C-More

A new comment from “Kevin Kohls” was received on the post “Q4 - Kevin Kohls” of the weblog “TOC Thinkers”.

C-More, as it now called, is a GM internal product, and will probably never see the light of day outside of the corporation. Its strength is speed and focus - its really designed for the auto industry and the types of systems they run. Because it is performing a set of calculations (vs. a simulation, which tries to discretely describe every event) it's very fast. But it cannot be used for all manufacturing situations, and its not programmable by the user. However, it doesn't mean its the only tool out to identify bottlenecks. Using simulation software, like Simul8, is another option, although slower. For basic systems, C-More will predict the bottleneck in seconds, and a simulation in minutes. If you have a small plant, that may not be a big deal. But for an auto plant, with hundreds of workstations, that can mean the difference between looking at the results today (with C-More) or tomorrow (with simulation). Finally, its important to point out that we rarely started with C-More at GM, nor do I start with simulation in consulting. Usually the traditional method of looking for buffer accumulation is the best way to start. You can also start data collection at that time. Over time, the system becomes more "balanced", and bottlenecks will be harder to identify. With data collection now in place, having a bottleneck analysis tool is worthwhile.

For anyone who is interested in seeing how simulation is used to find bottlenecks, I am presenting a webinar through PMC (www.pmcorp.com) on the topic on June 18, 2008, at 11 AM EST. You can register by contacting Claudia Gdowski on 313-441-4460, Ext 1131. Be sure to tell her you found out about the webinar on TOCThinkers.

Kevin Kohls     * Commenter name: Kevin Kohls     *
Commenter email: kkohls@bottleneckbusters.com 
Commenter URL: http://ww.bottleneckbusters.com