23 January 2012

How To Handle VOC Issues — Lessons from Japan crisis: Anticipating Improbables with Irreversible Consequences

This is a QFDI newsletter from April 2011, discussing the danger of using ordinal scale math in FMEA, namely for computing risk priority number (RPN) for assessing black swan events. The topic is too important that we thought to share it again for those who missed it.


"The role of Quality in Fukushima nuclear crisis"

1. Centralized consensus vs. triage leadership in disaster preparedness and decision making.

One of the tenets of quality management is "Plan-Do-Check-Act." We find that when the planning has been done properly and consensus built among constituents, most processes will fulfill requirements, and the Check-Act serves to fine tune the process. In Japan, this consensus building is called "ne-mawashi" or going around the roots of a tree before transplanting it to make sure everything is ok.

While TQM experts praise consensus as good for planning, there is a downside that Dr. Deming warned about in chapter 6 of his book The New Economics. That is — "with shared responsibility, no one is responsible." Thus, ne-mawashi can lead to finger pointing and blame instead of collaboration, as well as increased murkiness in accountability and delay in critical actions.

2. This raises these quality questions:

(a) In a disaster, do we go back to Plan or do we go directly to Do-Check-Act (sometimes called Do-Redo) at the local level?

'Planning' may require subject matter experts who may not be optimally located since the exact location of the disaster may be unknown until after it occurs, and time which may be limited by threat to life or subsequent failures in other systems.

Also, in terms of 'planning' resources, are the same resources being competed for various emergency operations (such as fire, police, medical), or should different resources be planned? From a time perspective, should the priority be given to allocating the resources to take care of those who are still alive and need immediate assistance, or should the resources be expedited first to cooling nuclear fuel to address the medium term risk to the life and livelihood of survivors?

In the case of Japan, were certain needs more urgent than others? Such as the need to verify the emergency level vs. the need to issue a quick evacuation order; the need to determine resources for disaster relief vs. the need to add resources to prevent a nuclear event, etc. And how should those priorities be made, by whom, and when? Should such priorities have changed the way the leaders approach the 'planning,' 'doing,' and 'checking'?

(b) In disaster preparedness, how has the extent of the disaster be predicted?

If the disaster falls within the predicted parameters, the planned response may be sufficient. If the disaster rises to unanticipated levels, however, as is the case in Japan, the response plan can easily become insufficient.

"Beyond expectation" was how virtually everyone — from Tokyo Electric Power Company (the operator of Fukushima power plant) to the government nuclear power regulators and safety commission— described the March 11 earthquake and tsunami in Tohoku region, although retrospective review of historic data begins to hint otherwise.

The probability of a nuclear fatality was set in 2003 by the Japanese Nuclear Commission (JNC) to not exceed 1 × 10-6 per year or about 1 in a million years. On the Japanese nuclear event, Nassim Nicholas Taleb, author of The Black Swan, cautions, that model error causes underestimation of small probabilities and their contribution (see his web site). This highly improbable event with massive consequences is what Taleb calls a "Black Swan."

(c) Is standard FMEA practice adequate for for a Black Swan event?

In FMEA (Failure Modes and Effects Analysis) we try to account for this Black Swan by looking at not only frequency of occurrence, but also impact and detection. Assuming JNC's probability estimate for a nuclear fatality of 1 × 10-6, the likelihood of a M9.0 earthquake at less than 1 per 100 years or 1 × 10-2 (worst case prediction), and the likelihood of a 20 meter tsunami at less than 1 per 100 years or 1 × 10-2 (worst case prediction), the probability of all three occurring simultaneously would be 1 × 10-10, or 1 in 10,000,000,000 (one in ten billion).

In Design FMEA, we might calculate a risk priority number (RPN) for such an event as:
  • Severity of Impact: Hazardous - without warning. Ranking 10 out of 10 (scale maximum)
  • Frequency of Occurrence: Remote - failure is unlikely (<1 in 1,500,000). Ranking 1 out of 10
  • Detection: High chance of detecting failure mode (Japan has some of the best earthquake and tsunami detectors in the world, but radiation detection has proven to be less competent). Ranking 3 out of 10.
When calculating the RPN, the standard FMEA approach is to multiply the three rankings, 10 x 1 x 3 = 30 (out of a possible 1,000 points or 3%). This low score would not normally catch the attention of engineers. This is due to the low ranking of frequency of occurrence which has reduced the overall RPN.

(d) More appropriate way to address this kind of FMEA is by weighting the criteria of Severity, Frequency, and Detection by using Analytic Hierarchy Process (AHP) — a method long suggested by Dr. Akao and other QFD experts.

As an example for nuclear plant design, this weighting might work out to Severity 77.7%, Frequency 15.5%, and Detection 6.9%, with an inconsistency ratio of 0.07. Then to preserve accuracy, instead of the traditional RPN calculation which improperly multiplies ordinal rankings, it would be necessary to convert the FMEA rankings to ratio scale first.

The RPN using AHP would then equal 40.1%, making it much likely to catch the attention of engineers (see below). Multipy this by the number of the nuclear reactors in operation currently and future. That may be a better estimate of your actual risk.

The AHP tools to do this kind of FMEA are detailed in the QFD Black Belt® Course.
 
an example of FMEA using AHP (Mazur)
 
Japanese letters for
"fu-an" = uneasiness
 3. Perhaps, a new technique which I call "fu-an" system (uneasiness reporting system) might be useful for workers who worry something might be wrong but cannot articulate the problem or solution.

Japanese TQM uses a suggestion system called "tei-an" which allows front-line workers to identify problems and suggest improvements. Of course, this requires some process knowledge by the workers so that they can test the improvements before suggesting them. Often, this is combined with another Japanese TQM technique called "pokayoke" or mistake-proofing a process.

In complex systems like nuclear reactors, and where some workers are contractors or subcontractors as in this case, however, such knowledge and experience may be lacking or not communicated adequately among all levels of workers. In fu-an system, workers might still be able to register with management their uneasy feeling about anything that is related to their job even when they do not have expertise to come up with a solution to suggest. The management then has an obligation to follow up.

In the U.S., we do have "whistle blowers" protection in many organizations, but that is an adversarial relationship. Like tei-an, fu-an system should be collaborative.

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"How to handle VOC issues :
  Lessons to be learned from Japan's nuclear crisis"


Among the ongoing discussions regarding the earthquake-tsunami-nuclear-power crisis in Japan, is how to handle Voice of the Customer (VOC) issues.

VOC is typically concerned with the various users and stakeholders along the value chain. For an electric power company, for example, we certainly can think of household consumers as customers.

"When I plug a device into the wall, it works properly" may be one of such consumer Customer VOC in power projects. There may also be some safety and reliability VOC such as "My home is safe even when devices are left plugged in," "My home is safe from power fluctuations," "My devices are safe from power fluctuations," etc. These are basic expectations among electricity users in developed nations.

When we broaden the definition of consumers, we begin to see a larger system-wide picture and deeper implications that the quality and design of our product or service can have on business, society, and country.

For example, Japanese automobile and electronics companies are currently experiencing secondary effects of the nuclear power problem in obtaining consistent power for their factories and even power for electric trains that transport labor, raw materials, and finished goods. The result has been decreased availability of critical components for both domestic and export sales. Radiation decontamination procedures have also constricted materials and foodstuffs moving both into and out of the affected regions.

What about the VOC of other members of the value chain? These can include electricians who install wiring, line workers who climb the power poles to install or service the local infrastructure, workers in power plants (both non-nuclear and nuclear plants), and others.

We can expand the definition further, since utilities are a business that directly affects the public. These stakeholders (VOS, Voice of Stakeholders) include the community, the nation, the world.

With QFD, we can explore any part or the full range of VOC along the the whole value chain. This is not new to QFD. Since the 1990s, Dr. Akao has frequently written about QFD for education and how the general community was also a stakeholder because what students study impacts their families, future employers, and the public.

What we may be seeing and hoping to see further in Japan is for nuclear facility owners to consider all these stakeholders and their needs when designing and building new facilities, or retrofitting existing ones. The entire value chain should be mapped out, including emergency workers, who should be interviewed and observed to better understand their spoken and unspoken needs.

Then, when prioritizing their needs, additional weighting can also be applied to the various stakeholders to gain a composite understanding of all needs to all stakeholders. In addition to these stakeholder needs and the functional requirements to address them, other design concerns for safety, reliability, and other "-ilities" must be included in sufficient detail.

House of Quality
matrix
This type of study is certainly worthy of a full matrix deployment, from House of Quality (HoQ) through all the required tables including:
  • safety deployment
  • reliability deployment
  • service deployment
  • technology deployment
  • process deployment
  • training deployment
  • construction and assembly deployment, and many others
Thus, the priorities of all the stakeholders' needs can be transferred into priorities for safety, reliability, serviceability, technology, process, training, construction and assembly, etc.

Cost deployment could also be useful in identifying areas where costs can be minimized, as well as the areas where costs must be secondary concerns because of the impact of a failure.

It should be cautioned, though, a House of Quality and other matrices requires advanced QFD skills beyond what is covered in most six sigma classes on QFD, which have preserved 30 year old methods truncated for auto parts suppliers in the 1980s. QFD Institute trains facilitators with the QFD Black Belt® Course. For the next public offering, please see Calendar.

Now, all of the above is, of course, part of QFD's "market-in" approach. However, with a large scale public project that would have significant societal impact such as a power plant, another "market-out" approach may help fill the needs gaps of the conflicting stakeholders.

In other words, in addition to power companies researching the value chain and stakeholder priorities, the public must make their demands known to designers during the process of government licenses and concessions being granted.

In order to elucidate the citizens' spoken and unspoken needs and expectations, communities should encourage QFD studies based on the needs of the citizens and "push" these onto government agencies and corporations.
This should go hand-in-hand with the rush of local governmental entities wooing companies in order to attract economic benefits (jobs, growth, taxes) for their citizens. In order to sell their location to companies, QFD may help local governments package their "product" (educated workforce, infrastructure, tax incentives, etc.) to those companies in order to demand certain protections in return.

The role of QFD in such situations has been discussed in the Kentucky Transportation case study. This governmental agency-led initiative demands stakeholder and constituent input during the early design phases of infrastructure projects involving both public and private entities. QFD is used to understand spoken and unspoken stakeholder needs, and then uses AHP (Analytic Hierarchy Process) to extract priorities from all stakeholders, so that projects remain sensitive to the needs of the stakeholders.

Even as the crisis in Japan continues to unfold numerous problems that demand immediate solutions, it is essential to use design quality methods like QFD to assure a better future.

There are also new dimensions for future QFD deployments to consider in such areas as political science, civic education, environmental education, community initiatives, international study, regulatory standards design, etc.

Please share your thoughts with us by email to QFD Institute.

Glenn Mazur, QFD Red Belt®
Executive Director

QFD Institute

Copyright © 2011-12 QFD Institute & Glenn Mazur.

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