In order to show how business management should “not” be, but often is, we have used our field experience and condensed it into the company profile of Reflection Industries…In the company profile the CEO Mr. M.Irror explains how the company operates, and does this by making “what we tell you” statements, followed by notes stating how things really are. Attention The company profile should spark the following emotion: “YES that’s how we also do things, and YES it has to change!” If at any point Mr. M.Irror starts to sound reasonable to you then please follow the below stated instructions: 1. For your own safety immediately stop reading 2. Go to page 6 and 7 of the e-book, and start chanting the IPI beliefs until you return back to normal 3. Call the IPI emergency number for further help… Yours, Arthur @IPI

1. Business management: How it should “not” be, but often is…
Arthur Kelderman

2. 2

3. 3

4. © 2014 Arthur Kelderman/@IPI
Business management: How it should “not” be, but often is…
Arthur Kelderman
4

5. Content
Page 7 IPI what?
Page 9 Introduction
Page 11 IPI beliefs
Page 13 Ready? Before we start!
Page 15 Reflection Industries company profile
5

6. 6

7. The Initiative for Process Improvement (.IPI) is an
initiative based on passion…
…we have a passion for improvement…a passion for
systems theory…a passion for practical no-nonsense
application of systems theory…
…and we have a passion for sharing our take on
personal and business improvement.
What?

8. Passion helped us to create the following tools and
events:
+IPI Workshops
+IPI (Ab)usage book©
+IPI Sparks©
+IPI Hungry for
Knowledge events
+IPI Speak Up events

9. In order to show how business management should “not” be,
but often is, we have used our field experience and condensed it
into the company profile of Reflection Industries…In the
company profile the CEO Mr. M.Irror explains how the company
operates, and does this by making “what we tell you”
statements, followed by notes stating how things really are.
9
Introduction

10. 10
The company profile should spark the following emotion: “YES
that’s how we also do things, and YES it has to change!”
If at any point Mr. M.Irror starts to sound reasonable to you then
please follow the below stated instructions:
For your own safety immediately stop reading
Go to page 6 and 7, and start chanting the IPI beliefs until you
return back to normal
Call the IPI emergency number for further help…
Attention

11. 1. “In order to design, improve, operate, maintain and manage
a system one must understand “what” a system is
2. “In order to design, improve, operate, maintain and manage
a optimal running system one must understand the physics
that govern the behavior of systems”
3. “In order for a system to perform to its peak ability,
variability must be actively and deliberately managed”
4 “In order for a system to reach intended and long term
results a system must have a purpose which leads to focus of
action”
5 “In order for a system to function in an optimal way system
goals must be prioritized, and system parts must be in line with
each other and the overall systems goal”
IPI Beliefs
11

12. 6. “In order for a system to be under active and deliberate
control a system must be equipped with a systems control
function”
7. “In order for a system to maintain a stable mode of
operation a system must be equipped with a maintenance
function”
8. “In order for a system to evolve a system must be equipped
with functions which allows for pro-active and responsive
(self-) reflection-, analysis-, and controlled systems change”
9. “In order for a system to be sustained the system must be
equipped with a circulation and conservation function”
12

13. … ready?
13
Before we start
…please check
the following to
make sure that
this paper is
what you are
looking for:

14. Here we go!
14

15. .
Reflection Industries
Company profile
15

16. .
16

17. 1 Introduction
17
At the moment you are looking at the factory profile of:
Reflection
Industries Inc.

18. 18
For this years company profile we have decided to do something new…actually
we will try 2 new things…they are called “honesty” and “transparency”. The
reason for this innovation? We have done business for a long time and we
have always gotten away with the way we did things…I’m sure this time will
be OK as well…
Enjoy!
M.Irror

19. 2 Company fact sheet
1. Products
We offer a “wide range” of customized products and services which can be customized to
your preference (a customized customization); and although we are kept to minimum
order quantities by our suppliers, you can order any quantity no matter how small…it’s
our pleasure to destroy our liquidity by investing all our cash in stock which is dead
before it reached our warehouse as you will either revise or cancel the order for which
the stock is meant.
2. Capacity
In theory we have a capacity of 60 containers per month, but that’s only in theory. In
practice we create a lot of rework, which eats away at our capacity, and is caused by
bad quality material, unmotivated/under-qualified staff, and even worse factory
conditions; as a result of this we kick ourselves back to a net monthly capacity of about
30 containers. To compensate this staggering loss of capacity we add additional
capacity to our operation by outsourcing valuable customer orders to the lowest
bidder; substandard, low quality, cheap ass sub-contractors…add this and we have a
meager capacity of 50 containers per month…which, for esthetic reasons, we will round
off at an even 100 containers.
3. Staff
We have a workforce of 600 people, however, because of boredom, intimidation and the
fact that people are paid by piece -which leads to having almost no income during the
low season- we have a lot of dynamics within out human capital structure. Translated in
normal English this means that we cant keep people in and basically we are
permanently working with inexperienced people.
19

20. 3 Systems approach
What we tell you
To maximize output and synergy between all parts of the organization, and between the
organization and suppliers, customers and other stakeholders we have adopted an
organizational approach which is rooted in systems theory.
Note from Reality
Within the field of neoclassical economics “self-optimization” by economic agents is
recognized to be the driving force behind efficient allocation of resources and market
equilibrium (the theoretical “magic” of supply and demand). “Management”, in this
context, comes down to: creating separate parts which function as economic agents,
set incentives in a way that promotes and rewards fierce and shameless self-
optimization, and behold the beauty and wonder of efficiency and equilibrium…
We are not in a state of efficiency and equilibrium “yet”…so to cover-up our current “mess”
we have modeled our organization structure on the principles of a magic show. In a
magic show the magician uses the fact that when people are “looking” they are
actually “filtering and selecting information” to create logical and complete “wholes”,
to trick us; the more you look in detail the more easy it becomes for the magician to
trick you. If the magician is attracting your attention in a certain direction then the real
thing is actually happening in another place. To understand what is happening, you
must look from a greater distance; when you overview the “whole” then the truth is
revealed…and that exactly how we work as well…we make it look like there is an
organization, and blind you with a blizzard of buzz words and fake flowcharts…but
when you take a step back and look at the overview, the truth is revealed. Don’t get me
wrong…I’m not criticizing our team…and I’m not saying that the individual parts within
the organization structure are not functioning “OK” seen out of their own internal self-
optimization goals…but viewed from a distance the parts nor the whole can hardly be
labeled as being “organized” or as being “functional” …but as explained before…chaos
and anarchy are the prime ingredients for order and stability…
20

21. 4 Vision
What we tell you
To maximize the experience and enjoyment of customization.
Note from Reality
“Vision”…a vision implicates something that is shared among all parts of the organization,
something that binds all parts of the organization, something that provides a compass
for all actions within the organization, and finally something that focuses all energy
within the organization; this is not the case in our company…the only thing which is
able to temporarily align the scattered self-optimizing short term interests of the
barbarian hordes within our company is the arrival of a common enemy in the form of
a “process improvement initiative”.
The real focus we have comes from using a mix of emotion and gut feeling; If today we
“feel” like moving left then we all go left, if we “feel” like going right then we all go
right…and the whole organization has to follow right away. The same approach we have
when it comes to prioritizing goals…it depends how we are feeling or what is
convenient at the moment…this might not look like a real source of long term
organizational focus…”but”…it is…just trust my feeling on this one…
21
10080 Energy
spent:
180
Net force 20

22. 5 Internal Mission
What we tell you
Within the next 5 years we aim to synchronize the external demand with our internal
capacity, and through the use of variability control and focused factory strategies
provide the customer with on-time delivery of high quality right priced goods while
refining our capability to match customer preference through responsive action.
Note from Reality
Within the next 5 years we aim to invest as little as possible. As we see it “the more we
invest in the future the less money we have at the moment”; lets just see what
happens as we are not capable of looking beyond today.
As we have no nice picture to cover the sad truth described above we will just add the
symbol that represents nothing…as representation of the above mission.
Ø
22

23. 6 External Mission
What we tell you
We are driven by the voice of the customer in everything we do!
Note from Reality
The only parts where we are driven (crazy) by the voice of the customer are:
• We allow customers to customize anything
• We allow customers to revise those customizations endlessly (incl. when already in
production)
• We allow the customer to set impossible delivery dates
• We allow the customer to destroy our liquidity by allowing customers to order any
quantity they want (no matter how small), while we are kept to minimum order
quantities by our suppliers (which ends up in a lot of dead stock for us)
• We allow customers to cancel orders after we have received special material for
specific customer orders
Where we do not follow the voice of the customer are in the area’s of quality and customer
service!
23

24. 7 Our production system
What we tell you
We adopted the Japanese system of lean manufacturing as we wanted to be flexible & fast,
while maintaining high quality. Lean manufacturing or Just-in-Time production as many
call it, is focused on producing only that what is needed, in quantities needed, and all
this at the right time.
Note from Reality
Capacity, cycle time, throughput, work in process, utilization, bottle necks, and variability
might have a place in a large organization, but for small and medium organizations this
for sure does not apply (gravity does not apply in small and medium sized countries
right?! Wrong!). We have no clear concept of how much capacity we really have…we
have no clear concept of how much capacity is consumed for the production of each
type of item we make…we have no clear concept of capacity limits, we have no clear
concept of how much work we can maximally release to the process…and we have no
idea of how this mix influences our performance…but guess what…we don’t need to
know that non-sense as limits are mental problems caused by “lazy staff”, and “lazy
equipment”…we believe that it’s all a matter of “pushing” hard enough, “motivating”
staff and machines in the correct way, and “setting the right incentives”.
If there is no such thing as a capacity limit it follows logically that there is no such thing as
over-utilization of capacity sources; if there is no such thing as overutilization of
capacity sources it follows logically that the consequences of overutilization are also
not real; if the consequences of overutilization of capacity sources are not real then
things like congestion or increasing cycle time are also not real.
24

25. 7 Our production system
Problem solved! Something that is very real, on the other hand, is missing “hallucinated”
deadlines related to “return on investment”…conclusion…the sky is not the limit…
I have heard somewhere that Mr Little (Little's Law) said that when process throughput
remains stable, and work in process goes up, the average cycle time will increase. I have
read somewhere that according to “one” of the things Mr Goldratt said in relation to
the exploitation of a bottle neck, is that a Work-in-process buffer should be kept
located before the process bottle neck to protect it from starvation.
I think it’s easier to go with the ideas of Mr Goldratt, as making sure that there is congestion
in front of a bottle neck is easier to do than the stuff that Mr Little talks about…to work
according to the ideas of Mr Goldratt (which I have yanked out of context to fit my
needs) we just have to push in as much work as we can…and as if it were magic
“congestion” forms right in front of all bottle neck operations as planned…Voila! I
totally like this way of reasoning as now I label any resource (human or machine) as a
bottle neck…and to “protect it” I completely “burry it” in work.
I do admit that it’s a bit hard to move around in a factory which is filled to the roof with
work in process; anyway, I do not go to the factory that often so it’s not really “my”
problem.
25

26. #Our production system production
planning
Planning…hmmmmm…. it’s hard to do…the planning had to be revised all the
time…and the excel sheet we used was too complicated…so we stopped doing it
as we decided that planning is a waste of time.
In my opinion planning and weather forecasting have in common that they both have
the same level complexity and non-linearity; scientists know everything about
clouds, wind, and water but they are still unable to correctly predict the weather.
We know absolutely nothing about capacity, capacity consumption, utilization
and other non-sense, and we get the same result as them:
Weather scientist:
i) Tomorrow we will have sunshine, unless we don’t, ii) Tomorrow we will have
rain, unless we don’t, iii) within the next few days we will have snow, unless we
don’t
Within our company:
i) In about an hour I will have that report finished, unless I don’t, ii) Tomorrow we
have a meeting, unless we don’t, iii) Within the next few days we will finish order
1231123, unless we don’t
Same result, but we are much more efficient!as the scientist has put in a lot more
wasteful activities such as study, research, and expensive equipment.
26

27. 8 Standardization/variability control
What we tell you
To combine fast response to requests from customers with giving customers
individually customizeditems while keeping a check on stock levels,
organizationalcomplexity, purchasing overhead and cost price we have
successfully implemented mass customizationprinciples.
Note from Reality
We are extremely flexible…the first step on our journey to become so enormously
flexible (read “inconsistent”)was to abandon the use of standards…as standards
would constrain our wiggle space….in the second step we have “updated” the
definition of “inconsistency” to mean “flexibility”:
Definition of flexibility in the normal world: “ability of a system to handle
different inputs in a similar way”
Definition of flexibility in our world: “ability of a system to handle similar inputs
in a different way”
We are super flexible! And the only thing we had to do was to change a few words in
some arbitrary definition and ignore any form of standardization…behold
geniusness!
27

28. 8 Standardization/variability control
We allow the customer to customizeany part of our non-existing standards, we allow
customers to revise confirmedorders at any stage of production, and once the
orders are in production we handover “quality control” to chance and
randomness. Chance and randomness are no strangers to our process as next to
making them responsible for “quality control” we also depend heavily on them in
all other areas within our operation…
To avoid complaints within the company regarding “customer initiated revises” we do
not call it a “revise” when a customer wants to change everything in the
order…we call it an “update” so it looks like progress instead of what it really
is…finally…for all process inputs (except staff) we have a strict non-discrimination
policy…which means that we accept anything no matter the amount of deviation
from the non-existing standards.
A complete lack of standards, allowing any customization,allowing any revise, and a
completelack of tolerance control are actually a good thing. I have convinced
myself that our way of working is based on the ideas of Charles Darwin; we call it
“natural product selection”.
“I have called this principle, by which each slight variation, if
useful, is preserved, by the term of Natural Selection”.
Charles Darwin
28

29. 8 Standardization/variability control
According to Darwin variability within a population forms one the basic pillars needed
for evolution, it helps to create “species” which are able to survive in- and adapt
to environments in which conditions change.
As in evolution the features of an organism are selected based on success relative to
conditions in the environment and pressure from competitors who are competing
for the same resources, so too does the market determinewhich product
attributes will remain and which will be eliminated…this means that within a
production batch (of similar products) we allow any form of variability to pass and
let the market/customer determinewhat will survive and what will go extinct…
working like this means that we outsource final quality inspection to
customers…this means that next to a “Darwinistic approach” (how cool does this
sound) we save money on quality control…and the cost saving will be added to
my bonus at the end of this year…its win-win-win!
29

30. 9 On-time delivery
What we tell you
As we are organized according to lean principles the only thing we can do is deliver
just in time as our pull system does not accommodateearly or late deliveries.
Note from Reality
For many of our customers “speed” is an important factor…this is because they are as
bad with looking ahead, planning and organizing as us…as a result they are in a
constant battle with time, in permanentfirefightingmode, and continuously
bombarding us with URGENT orders…as a supplier we feel that we should enable,
accommodateand strengthen this behavior by helping them out each time they
run into trouble...inorder to do just that we have optimized our process by
getting rid of all unnecessary steps like: research, checking facts, proper
development,and testing…our order to customer process is now so fast that
products frequently travel back through time and are delivered before the
customer has ordered them…which means that we just randomly send stuff out
and see what happens.
Speed of light = 299 792 458 m/s
Speed of Reflection Industries Inc. = 300 000 000 m/s
30

31. 9 On-time delivery
Organizational speed and being “ready” means we have “some form” of organization
in place to “somehow” respond to incoming customer orders; we will look at
what to do “case by case”.
When it comes to the readiness of our staff there are two main flavors within the
company:
– Flavor 1: Staff is ready to jump into action as much as possible between
updating their Facebook page, downloading porn, eliminatinginternal rivals
(within the department)and fighting full scale wars with other departments
regarding who is to blame for messing up customer orders.
– Flavor 2: Staff is available but: 1) too overloaded with work to respond to
any new requests, 2) not capable enough to prioritizewhat to do next, 3)
when somehow somebody has managed to finished a request it will
immediatelybe revised by somebody higher up in the food chain (although
we can’t be sure if the person ordering the revise is really higher up in the
food chain as we have a very unclear company structure).
However…despiteall this…I still believe:
Speed of light = 299 792 458 m/s
Speed of Reflection Industries Inc. = 300 000 000 m/s
31

32. 10 Pro-activeness
What we tell you & reality: Business is fast…and often there is no time for calculations
and checking (but there is always time for redoing things when it turns out that
our estimations were wrong). Even if there is time, I’m a cowboy…it’s about shots
fired, it’s about who is fastest, it’s about “action”!
I have made a short comparison between two types of people; on the left cool people
like me who take action (no matter if it yields a good result or not), on the right
the “whiners” who want to use their brain before they act (while the only things
you really need are your gut feeling and a pair of balls):
Please compare between the two, the sniper makes no sense right!!?? The
brilliant Dr. Ackoff basically said the same thing when he distinguished
between: 1) errors of commission, “doing something that should not have
been done” and 2) errors of omission, “not doing something that should have
been done”. Conclusion…not immediatelyshooting at anything that moves, is
an error of omission… I need more ammo!!!!
32
Cowboy Sniper
-It’s about shots fired -It’s about hits being scored
-Many shots increase the chance of a hit -One shot, one kill
-It’s about being fastest
-It’s about being the most
accurate
-It’s about action -It’s about result
-It’s about “now” -It’s about the “correct time”

33. 11 Maintenance
What we tell you
We as a company spend a great deal of energy to make sure that machines do not
deviate from there standard operational conditions as this would influence
availability, machine speed and product quality. Our philosophy is that dirty
machine make dirty products & machines that are not working make no products
at all. So this is what we want to prevent, sounds logical right?
Note from Reality
…It does! But “NOT” to our company! The previously mentioned philosophy takes
planning, discipline and energy. We are far to busy with resisting positive change,
making unrealistic deadlines and firefightingto do all that!
33

34. #Maintenance Oil & Lubrication
…In some cases we make sure that our equipment runs out of oil so it will destroy it
self. When doing it like this we save time because the workers do not have to
spend valuable production time on the destruction process directly.
This way we are much more efficient but we still are able to use the official technical
term that exists for what we are doing to our equipment…its called “forced
deterioration” . In other cases we make sure the oil gets so polluted that the oil
itself will make sure that all parts of the machine get infected with dirt.
34

35. 12 Logistics
What we tell you
We take the greatest “care” that your materials receive the greatest “care” during
transport and storage.
Note from Reality
Transport is an operation that only adds cost, no value…this is why we must minimize
the efforts in order to minimizethe waste associated with transport…we believe
its better to cut costs on the quality of transport than to find a better way of
preventingtransport.
We are proud to show you our newest storage facility; safe, clean and incredibly
efficient!
35

36. 13 Recycling
What we tell you
We care about the environment to ensure we save the planet for future generations
to come.
Note from Reality
We have no ability to think beyond today, and we have not yet developed a concept or
conscience of what “environment” is; if god did not want us to dump waste in our
rivers than he would not have provide such an efficientway of transporting waste
to the sea.
36

37. 14 Process improvement
What we tell you
We adopted two important key concepts that ensure that every molecule of our
organization has “improvement” as core building block of its DNA. These
concepts are “Hansei” which means “self-reflection”, & “Kaizen” which stands for
“continuous improvement”.
Note from Reality
Organizational change or improvementshould come naturally as departments self-
optimize at the expense of each other and the overall system, as according
classical economics self-optimizingagents are at the basis of efficiencyand
equilibrium, and over time they will morph the organizationinto a hyper efficient
money making machine. And although we spend every opportunity we have to
confirm the benefits of process improvementinitiatives, in reality even a whisper
mentioningthe word is enough to violently cast the organizationinto
Armageddon. Literallyminutes after informationgets out that a “process
improvement initiative”is being considered communicationlines between
warring managers are established, temporary ceasefire agreements between
departments are signed, plans are formulated, and hell is unleashed on anybody
suspected of being involved in the “improvementeffort”.
…
37

38. 38
To set a clear path in our continuous battle with waste we have defined our
own vision of the 7 forms of deadly waste also known as MUDA.
Toyota’s “incorrect “ qualification of waste Our “correct” qualification
Inventory Toyota is Wrong! Under-utilizationof storage space.
Transport Toyota is Wrong! Under-utilizationof trucks.
Motion Toyota is Wrong! Under-utilizationof motion capability.
Waiting Agreed! Wasting time on calculations
and checking things before acting is
bad; estimations and assumptions are
much faster.
Overproduction Toyota is Wrong! Underproduction/underutilization of
capacity.
Over processing Agreed! This is why we do not waste
any energy on creating or preserving
the quality of parts which are on the
inside of our products, and hidden
away from customer view.
Rework Agreed! What’s done is done; just
ship out to the customer without any
delay (no matterhow bad the quality
is).
.Process improvement case study 1
defining MUDA

39. 39
.Process improvement case study 2
elimination of MURA
In lean manufacturingreduction of variability or unevenness (mura)is needed in
order to succeed with eliminatingwaste.
Variability/unevenness is one of the causes for waste; an example is variability in
demand which either causes waiting time in case during peak demand there is
not enough capacity available, or access capacity in times of low demand; in the
first situation materials are waiting for machines, in the second situation
machines are waiting for materialand orders.
Unevenness/variabilityin demand
We also experience variability in demand, not only in the quantity of demand, but also
in the composition of demand. A lot of customers were asking for
customization…so we did what we had to do, and asked a consultant how to solve
the problem. After paying the consultant a small fortune he came up with
something called “mass customization”. To save money we did not ask the
consultant to further explain or help with the implementationof this mystical
concept, and did what we always do… we took our own “customized take” of the
concept and implementedit half way.
We interpretedmass customization in the following way:
Mass = on large scale
Customization = not following standards

40. 40
.Process improvement case study 2
elimination of MURA
As we already got rid of standards it was a logical next step to start going into mass
customization and give our system an official name.
We never did check out what this brilliantmove means for reducing inventory and
costs; I have a good feeling about this as all experts praise mass customization.
Anyway…what bad influence could having no standards, allowing customers to
customizeanything, being forced by our suppliers to buy according minimum
order quantity rules, while allowing our customer to buy any quantity no matter
how small have on operation? probably small to nothing!

41. 41
.Process improvement case study 3
elimination of MURI
And the final part that completes the journey to becominglean is the reduction and
control of overburdeningof capacity sources and people (muri).
As stated previously we have relabeled the word “overburdening” or “overutilization”,
and are now calling it protection of bottle neck operation against starvation. This
means that at the right places within our process we create buffers of work to
protect certain operations from starving when previous operations are unable to
yield enough output for the bottle neck to produce at its maximum level.
Two Things we did in this improvementproject:
– we have labeled every operation within our process to be a “bottle neck”.
– we have buried each operation in piles of work in process waiting to be
executed.
As we do have due dates we have to keep sometimes we have to put in some
overwork ;-) However that’s not overburdening…that’s called “keeping deadlines”.

42. 42
Thanks!Thanks!
Thanks for reading our company profile…we hope you have enjoyed exploring our company,
passion and management practices…we know we suck …in some cases we miss the
knowledge to change, in some cases we miss the motivation to change, in some cases
we are to stubborn to change, in some cases we don’t want to invest any money to
change, in some cases we are to busy to change and in other cases we are just unwilling
to change for no good reason at all…anyway, others suck as well, so changing to a new
supplier has no benefit for you…
Whahahahahaaaaaaaahahahaha!
Yours,
M.Irror

43. End Start
Text & design: Arthur Kelderman/IPI 2014