Dr. Timothy Hill
Dr. Timothy Hill is an Industrial and Organizational Phychologist and Certified Lean Six Sigma Black Belt with global expertise in Human Resources/Human Capital.
It’s more than story telling with pictures. Visual management allows for direct communication without the need for long reports. Visual management tools are all around us. We have gauges in our cars, but fewer than we used to. Some of our cars’ systems have become reliable enough that we no longer have gauges or dials for cylinder temperatures, oil pressure and more. Gone are the days of unreliable Smith’s gauges and Lucas (“Prince of Darkness”) electrical systems! Instead, we have simple visual tools to tell us when something is awry.
The same simplicity comes from visual management. It’s more than painted lines on the factory floor. It is a tool for communicating information efficiently, for knowing when a process is under control and stable, and for knowing when an operation is doing what it shouldn’t.
One client that I had didn’t know how much (or how little) they were producing. We arranged for an easel to be set up in the production area. It contained a card swipe unit (so that people would swipe in and out), the hand tools that they needed and a display. The supervisor wrote down the number of units that the team was supposed to make in 10 minutes. Above that they wrote the number that they were actually making in those 10 minutes. This easel was set up so that everyone could readily see it. The supervisor would randomly time out a 10-minute interval, count the units produced and amend the sign.
Visual management is where information is communicated by using visual signals instead of texts or other written instructions. The signals and signs reflect standard work and, therefore, require less policy. Their design focuses on allowing quick recognition of the information being communicated in order to increase efficiency and clarity. As well, these signs can take many forms — from different coloured clothing for different teams, to focusing measures upon the size of the problem and not the size of the activity, to kanban (a simple visual sign for replenishment), obeya (the large Lean “war” room) and heijunka boxes (used in load levelling). In The Toyota Way, it is also known as mieruka.
Visual management does not need to be expensive. It must, however, tell a consistent story. No more having each group with its own charts. Keep them simple, keep them obvious and keep them closely tied to the job at hand. No one should be running to a computer keyboard. This distracts them from the task at hand. Keep the visual management consistent across the factory, across the offices and across all of your value stream areas.
In another client, we had a tremendous problem with determining how long a process should take. It was taking up to 11.5 hours to do. They had been working at this speed for several years. The time that they wanted the job to take had become their culture. We asked their industrial engineering team in another plant how long it should take, and their team told us 2.5 hours.
To get them closer to the industrial engineering time, we created one of the first Andon boards in southwestern Ontario. We took scrap 2x2-inch little metal squares from the metal shop, drilled holes in them and painted them red, yellow and green. The team decided that green would mean that they’re right on time, yellow would mean that they should hurry up, and red would mean that they’re going too fast and need to slow down. We had a little Andon board set up and I told them that they would each get a hand-made piece of chocolate when that board was all green. They were up to the challenge. Within about three weeks, I received a phone call telling me that I had better make good on my promise!
They never had any feedback about progress towards their goals. The simple visual management tool told them how they were doing and, importantly, how their success (or lack of success) was impacting the upstream and downstream processes. They saw that when they went yellow, everyone affected by that went yellow, too.
Lastly, we can think of visual management as being divided into two groups — display and control. A visual display group relates information and data to employees. For example, charts showing the monthly revenues of the company or a graphic depicting a certain type of quality issue that group members should be aware of. A visual control group is intended to actually control or guide the action of the group members. Examples of controls are readily apparent in our day-to-day lives: stop signs, handicap parking signs, no smoking signs, etc.
Question from the floor
Question: We’ve got Lean boards up throughout our factory now. Some teams are really taking to them, while others not so much. Is there any way to get them all up to the same rate of suggestions?
Answer: Watch out that some areas are not tackling more difficult issues than others. Is one group putting up more suggestions, but they’re all a bunch of simple “just do its?” Is another group putting up fewer, but bigger suggestions? One thing that I like to do is to have a “kaizen off!” This is where all of the groups put forward their best idea for the month and then compete to see whose is the best, reduced the most waste, decreased the number of footsteps taken, reduced the number of mistakes and so on. Have a monthly meeting where the teams can present their kaizen suggestions and then let the people vote on which idea is best. Incorporate this idea into the monthly management meeting and gently shift the management meeting away from presenting dry reports to actively sharing within your facility the peoples’ ideas and innovations. I think you’ll find that the enthusiasm for using your Lean boards will go way up. For those of you who may not be familiar with the term “Lean board,” it’s a simple whiteboard that people put their kaizen suggestions on. It also serves as a communications tool, with people checking in to look at the status of their suggestions or even just checking in after they’ve been away for some time.
From the bookshelf
The Lean 3P Advantage: A Practitioner’s Guide to the Production Preparation Process
by Allan R. Coletta, Productivity Press
This book is another winner of the Shingo Research and Professional Publication Award, and readers know that I like to highlight these. “3P” stands for “Production, Preparation and Process,” and basically means to try out the new process before you implement it. I’ve used this in sectors as diverse as manufacturing to health care, and people have always been impressed. You can literally “cut it out in cardboard” to demonstrate how a new process will work. You can use paper representations of the actual workplace. In some cases, we taped off areas that corresponded to the proposed work flow areas. Or we can start with a “paper doll” layout. This uses an architectural layout and scale cutouts of tables and equipment.
The book is really quite valuable because it provides details on how to design the 3P Lean design process a step at a time, all while providing many real-world examples. It presents an operations-based perspective that combines the experience of many different companies.
The book details the 3P Lean design process, explaining how and why it works so effectively. You really can think of it as a guide to help you mock up your proposed changes, how to simulate them and what things you need to watch out for. It is a form of simulation that everyone can do in the gemba. The Lean 3P Advantage includes various product planning and evaluation criteria, selection of alternatives, timing considerations, construction of prototypes, and measuring effectiveness. Reading and using this book will definitely help you to develop work layouts and other designs that will foster innovation. With greater innovation, shorter development cycle times and less waste, you will be able to meet or best your customer expectations.
This column originally appeared in the November/December 2013 issue of Manufacturing AUTOMATION.
Is Lean applicable to finance? Yes!
Let me explain. Lean is often mistaken as belonging only on the factory floor. But when you can apply Lean everywhere, you’re creating value for the customer. The problem is that we don’t often think of our finance departments as creating value for our customers.
I often tell my manufacturing clients that about half of their orders are late before they ever start on the production floor. There is so much muda (waste) in all of the processes that go before production ever starts, that start dates are rolled back, inventory doesn’t get ordered in time (much less “just in time”), and once production starts late, that delay is propagated throughout the production schedule.
People often think of Lean as belonging to the factory floor because that’s where it’s easy for the untrained eye to see waste. Unfortunately, they are only looking at waste in the loosest sense of the term. If they see a pile of unwanted material, that’s waste. If they see an obvious blockage or bottleneck, that’s waste. But what about when it’s not as obvious to the untrained eye?
That’s where having a value stream mapping session that truly includes the whole value stream comes in really handy. Look at the back-and-forth discussions between yourselves and suppliers, between you and customers and between your departments. Do you have standard work for any of this? Or does your sales department make a call or write an email and then wait for a reply? Is there a checklist for followups? I can’t tell you the number of times I’ve heard, “But I sent them an email and never heard back from them!”
In one manufacturer of large transformers, we discovered that more than 60 per cent of the time that an order was late, it was because it started off late in the front office. When we did the value stream map for the entire value stream, we found that more than 80 per cent of the time that the office took was waste. When we introduced standard work in this setting, the waste disappeared, orders started to ship on time, and we were able to trim the office staff by attrition and early retirements. No one lost a job.
In another company, we found that once we had applied Lean and some 5S to the production floor, they made significant gains in their rework, their cycle time and their ROI. We then did Lean in the office, and the finance department looked at how they were communicating between the office and the floor. What we discovered was that the customer orders were mixed up when they came in, they weren’t communicated well with anyone, and the finance department wasn’t setting up the orders right to begin with. So the orders would start in a haphazard way — there was no queuing; no first in, first out; no allocation of the order based on delivery date; and so on. We introduced standard work, simple checklists and other simple Lean tools to remedy this situation. The result is that now they have a simple visual system to look at the status of any order, they build in order of the delivery dates, they have better communications at all levels, and now the office shares the same successes as the plant floor!
In my last example, there was a complete divorce between the production half and the sales/finance half of the business. The one hand didn’t know what the other was doing. This was a new facility and their largest extruder was not working. Production knew this, but the sales department did not. As a consequence (and because the margins were greater on the larger extruder), sales and finance were closing deals that were profitable (on paper) but could not be delivered until the issues were settled with the large extruder. We brought the production, sales and finance people in for a value stream mapping session, indicated the strengths and weaknesses, outlined remedial actions, and brought everyone to the gemba (the place where work happens). It might not sound like we did a lot, but it was real work getting the office, sales and finance staff out of their offices and off the road to look at the gemba! And as soon as we did that, things started to improve. All of the parties were working together. The sales and finance teams co-ordinated with the production people. We developed a simple visual system for their entire system. It let everyone see at a glance where the orders were, where the production capacity was, and which orders were ready for shipment.
The take away from these stories is that Lean isn’t just for the factory floor. It’s for everywhere. Lean is excellent for reducing waste and increasing flow. It takes a little bit of time to see where waste can be reduced and flow improved in finance, but with practice it will become easier. Look for multiple handoffs, multiple back-and-forths, lack of one-piece flow, interruptions to flow, customers (internal or external) kept waiting, places where there is a constraint, bottleneck or blockage, or any other waste. For these, I like to use the acronym DOWNTIME: Defects, Overproduction, Waiting, Non-utilized staff creativity, Transportation, Inventories, Movement and Excessive processing.
Question from the floor
Question: We’ve had several starts with Lean and Lean-like methods. They all started off well, but then they dropped off. We’re considering starting Lean again. What advice can you give about making it stick this time?
Answer: I’ll try to keep this short. Do you know why the other approaches failed? Was it because they were pitched as projects, each with a start and end date? Was it because the people attached to the initiatives were redeployed, leaving no one as champion? Did you have Lean boards where employees put up their Lean suggestions? Did the enthusiasm simply drop off? Did you keep people engaged and have showcases where people could present their Lean suggestions? Did you make it fun as opposed to drudgery? Look back over what happened and then learn from your mistakes. That’s being Lean. Don’t make the same ones going forward. Mistakes are all right as long as you learn from them. Make this point to the people that might be a little disillusioned. That was then, this is now.
It’s important to realize that even though you may have had Lean or Lean-like overtures in the past, it’s going forward that is what it’s all about. Now I’m not being flippant when I say that you’ve got to make it fun as well as serious. Have a kaizen-off! Have divisions present their best kaizens (continuous improvement suggestions) and applaud the winner. It doesn’t have to be anything serious, just keep it light-hearted. Celebrate your successes. I once gave away coffee cups that said, “I survived Lean training!” with a pouch of really good coffee. I had people all sign a simple piece of flip chart paper that said pretty much the same thing, and then we took a group photo. Celebrations don’t need to be expensive, just meaningful!
From the bookshelf
Creating Continuous Flow by Mike Rother and Rick Harris
I always like to read books that have been nominated for or won the Shingo Prize. Not only did this book win the Shingo Prize in 2003, but one of the authors (Mike Rother) was responsible for The Toyota Kata, a book I recommend to my clients who are well along in their Lean journey, as well as those who aren’t. This is a short book, and its brevity definitely leaves some things out. But it does do a very good job of showing how you can achieve true continuous flow at your critical pacemaker processes. In this regard, it’s much more of a hands-on book than Learning to See from Rother and Shook.
This workbook explains in simple, step-by-step terms how to introduce and sustain Lean flows of material and information. Importantly, it will show you how to do this in pacemaker cells and lines. This is centrally important to achieving a Lean value stream. Now it doesn’t do a very good job of helping you to ask, “Who owns this value stream?” or other critical questions, but that really isn’t the point of this short book.
There is much more detail about how to implement in-cell improvements. I would argue that you are not really doing Lean until you start doing what this book teaches. You should be able to start applying the principles in this book immediately. Lastly, I like this book precisely because it cuts to the quick. I find that many authors of Lean books are in a hurry to impress you with how much they know, and this adds fluff when I’m looking for content.
This column originally appeared in the October 2013 issue of Manufacturing AUTOMATION.
Early in my pilot days, I remember reading a magazine that had a backstory called “I learned a lot about flying from that.” I would flip over the magazine to read that column first, partly because it shared a lot and had a fair amount of “hangar flying” stories, but mostly because it made me a better pilot as I could stand on the shoulders of those that had gone before me. In that spirit, here’s my list of “what I learned from that” items from over the years!
This list comes from my observations of where Lean has really grown and taken off, plus those times where it hasn’t.
1. Yes, the tools are important, but Lean is more than tools
Lean’s successes are due to the culture changes and not the training in the tools. It’s about 80:20 in favour of the culture. I’ve seen trainers that spend all day on the tools when all their audiences need is how to do standard work, a 5S or something simple. They train on the tools because that’s an easy thing to do. They never talk about culture change, either driving it or sustaining it. It’s not as big an issue as some would have you believe, but you’ve got to include it. Nor are those that train on the tools very good at looking for waste in non-production areas like the office, sales, human resources or other areas. Yet all of these areas need Lean as well. I often tell my manufacturing clients that about half of their orders are late before they even start out on the production floor! They have become tied up in sales, engineering and other non-production areas.
2. Don’t expect continued success if you’re not continually supporting Lean
Lean is not a one-time, introduce it and leave it proposition. You will get out of it about what you put into it. If you do nothing, don’t expect a lot! Now, if you’ve got engaged people competing for the number of suggestions per month award plus you’ve got engaged leadership and you’re starting to build a Lean culture, then you’ve really got something that will stick!
3. Lean works best if you keep the senior team in the gemba
The senior team is responsible for setting the strategic, stretch goals to be sure, but you want them out of the boardroom and down in the real place—the gemba. You want them to be close to those closest to production, to the customers, or whomever is important. In this way they can see the real problems, provide real coaching and see for themselves how employee suggestions are helping the company. What will likely happen is that they will set stretch goals that are grounded in reality.
4. Lean must evolve organically, not be forced down from above
I’ve noticed that when Lean fails, it very often fails because someone has tried to push it down from above. They’ll have project management people, performance management folks or just someone who went to a place where they had some Lean successes. These people do not allow Lean to evolve organically by building on one success after another and spreading out to other groups. Rather, they try to force a timetable, impose limits and bring levels of bureaucratic overhead. If it’s not directly related to the doing of the work, then it’s overhead and should be eliminated. I’m quite harsh on this—if it’s overhead, eliminate it.
5. Don’t start off with quotas for the numbers of accepted suggestions per month
This is a little bit of carry-over from the one above, but I truly believe that you should not force the suggestion process with a quota for the number of suggestions per month. When I tell people about the number of suggestions a month that Toyota gets, for example, I am always cautious to mention that Toyota is a fully engaged and Lean workplace and that they get between one and several suggestions per person per month. It’s better to start off with a little bit of communication that lists each department’s number of suggestions per month and let some gentle competition take it from there!
Question: We’ve recently started our Lean board initiative. It started out really well and we got lots of suggestions. Now we’re in the second month and the number of suggestions has gone down. Can you help?
Answer: Is this just the second month? Please have some patience. It’s perfectly normal for the number of suggestions to drop off a little after the first month. Just make sure that you’re going around, checking in on them and helping where you can. Sometimes they don’t put up their suggestions because they’re a “just do it” item and those items never get put up on the board. In the rare case, they’ll be testing you to make sure that this “Lean thing” isn’t a flavour of the month. I once had a government office that started a Lean board and they told everyone that they could have $500 of discretionary money to do project improvements. That fellow called me up and was a real lather! He said that the people wanted a coffee pot! I suggested to him that perhaps he was being tested and to allow them their coffee pot and to call me in two weeks. Well he did and he reported that everything was going very well once he passed their “test!” Give your people some support and give them some time.
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Reis
As soon as I read Marc Andreeson’s (founder of Netscape) review, I was captivated by this book. “Eric has created a science where previously there was only art. A must read for every serious entrepreneur—and every manager interested in innovation.”
It’s true, most startups fail and those failures are largely preventable. The book focuses on the familiar aspects of a Plan-Do-Check-Act cycle as a means of testing the vision continuously. In this way, it’s possible for them to take a small step, adapt and adjust their implementation all while still hitting their stretch goals. The stretch goals do not change, the leaders still rally the people around them but they allow the people to determine (for the most part) how to meet those stretch goals. This truly is a scientific approach to creating and managing successful startups, particularly in a time when companies need to be faster on their feet, bring more real innovative thinking to the table and stay ahead of the competition.
The book sidesteps all of the time wasted in planning. Let’s face it, most organizations plan themselves to death, rather than do something. It’s as if the PDCA cycle has become a PPPP cycle. If you’ve got something, do something. In this light, the Lean Startup brings about greater capital efficiency and does a better job of leveraging your human creativity.
It is inspired by lessons from lean manufacturing, relies on “validated learning” and rapid scientific experimentation. It brings forward a number of counter-intuitive practices that shorten product development cycles, measure actual progress without resorting to vanity metrics as well as brings forward the voice of the customer. Finally, it allows people to reach those stretch goals while empowering their people.
One question that I get asked a lot is about how big a pilot project should be. Here are some rules to help you navigate these waters.
If you’re just starting your Lean journey…
Be very mindful of biting off more than you can chew! Keep the pilots down to a manageable size and then make them a bit smaller. Remember, you don’t want to complicate things and you do want your people to experience success.
Lean isn’t rocket science. It’s about getting people to the gemba, to get the three reals: the real facts, the real place and the real problem. Get this idea into their heads first. You won’t be having them do an A3, but what they’re doing should still involve some critical thinking and some A3 thinking.
And remember that using the PDSA (Plan-Do-Study-Act) or A3 as a pilot will let you check out the changes before wholesale implementation and it will give everyone the chance to see if the proposed changes will work. Once they see that the ideas worked, they’ll be more willing to try the next one.
If you’ve at an intermediate level…
Let’s say your people have several PDSAs or A3s under their belts. They’ve done some value stream mapping and you’re feeling pretty good about your team’s level of proficiency. Make their pilot follow a simple A3—introduce some root cause problem solving, some critical thinking and some A3 processes and thinking.
Think about having a moderate pilot, with more than one person acting on it. Ensure that they’re measuring pre- and post-intervention, that they’re following up and auditing their success and ensure that the accountability loop has been closed.
If you’ve at an advanced level…
Think about having a pilot that will involve both critical thinking and root cause problem solving and be a full-fledged A3. It might take some time to represent the problem you’re having on one A3 (11” by 17”) sheet. I like to think that there are three levels of a problem:
• Level C—Causes are clear and immediate actions can be taken.
• Level B—Causes may not be known and there is medium impact from the problem.
• Level A—Again, causes may not be known but there is high impact from the problem.
Level C problems can be taken care of with a very simple pilot using a very simple “just do it.” You still want to ensure that you’re treating a root cause and not a symptom, so you’ll apply some rudimentary problem solving or root cause analysis.
Level B problems require A3 thinking and more in-depth root cause problem solving because it’s not that clear why there’s a problem. Apply root cause thinking and A3. By definition, the pilot will be bigger.
For Level A problems, with their high impact, you’ve really got to search for the actionable root cause and really do an A3 well. The causes may not be known, so you’ll have to dig deeper.
The pilot will be the largest for these problems but you’ve probably got many successes under your belt.
From the bookshelf...
American Icon by Bryce G. Hoffman
I like this book because: 1) It was a very good read. It gave “fly on the wall” accounts of Alan Mulally negotiating deals and Ford overcoming challenges from the inside and outside. But I also liked it because: 2) It made it very clear that Mulally earned his stripes when he was with Boeing and his visits to Toyota in that capacity.
Mulally and his team pulled off one of the greatest comebacks in business history. As the rest of Detroit tottered towards collapse, Ford went from the brink of bankruptcy to being one the most profitable automakers in the world. It brought over cars from Europe and the U.K., consolidated efforts in North America and generally got its act together.
American Icon is compelling. On the verge of collapse, Ford did two things. One, the company encouraged employees to do better and then it went outside the auto industry and recruited Mulally to lead a sweeping restructuring of the company.
Mulally had already saved Boeing from the deathblow of 9/11 and he was able to overcome decades of mismanagement and denial. Mulally applied the principles he learned at Toyota and developed at Boeing to streamline Ford’s inefficient operations, force its fractious executives to work together as a team and spark a product renaissance in Dearborn.
Question from the floor...
Question: I’ve got a team that’s doing a value stream mapping. It’s their first time doing something like this. It all went well until just after they identified their actionable root causes. I say this because they did a good job of identifying what they needed to change, but when it comes to actually addressing the change, they’re stuck! Any help?
Answer: You’ve partially identified an answer. It’s their first time. You shouldn’t expect them to “get it” all on their first time. I know that many people do get it on the first crack, but typically this is after they’ve already had some Lean training. You didn’t mention whether or not they had any previous Lean exposure, so I’ll assume that they have not.
I’ll assume that you’ve got a “worst case” scenario—people that have been in their jobs for a long time, they don’t have standard work and they think that they’ve been doing a good job.
I generally don’t push things too much in a value stream mapping exercise—it’s best if they can be pointed in the right direction, rather then pulled. But when this Socratic method doesn’t work and they fall back to old habits, I will draw them a line (after I’ve made sure that I’m not jumping the gun).
This article originally appeared in the June 2013 issue of Manufacturing AUTOMATION.
One thing I hear time and time again from Western companies is about what a hard time they have showing their cost savings to the CFO. The CFO wants to see your cost savings in such a way that he or she can enter them into the budget books.
I know that it’s not very realistic, but you do have some companies that just haven’t learned that if you reduce waste and increase flow, the costs will take care of themselves.
When I’ve dealt with companies in the Far East, they get it. If they can reduce costs—by whatever amount—then they can reduce the sales price, remain competitive and still generate profit.
So to those people that are in combat over saving with their CFOs, I say: show your CFO your gains. All of them. Some of them you’ll be able to spell out in dollar terms; some of them you’ll be able to spell out in the language of the gemba:
• Spell them out in dollar terms. Be prepared for the CFO to see some of the gains, but he or she probably won’t see all of them. You’ll be able to show how you’ve saved some money. But be sure to at least make note of your other, less pragmatic savings, such as increases in quality, decreases in cycle time, listening to the voice of the customer and the like. And you really should phrase your savings in dollar terms if you’re speaking to the CFO, proposing a business case or handing up your accomplishments to anyone in the C-suite. After all, that’s the language they speak.
Now there’s a bonus if they’ve ever heard of Lean accounting. There’s even more of a bonus if they’ve heard of accounting for Lean. What I mean by “accounting for Lean” is showing in the books how much they’ve saved by practicing Lean. If you can’t win them over to Lean accounting right away, you can at least make a start at it.
• Spell them out in the language of the gemba. This goes for the kaizen teams as well as those you might be passing these gains up to. Keep the gains phrased in the language of the gemba. If they were aiming to reduce the number of steps in a process, keep the outcome phrased in the number of steps. Remember that these people have worked hard to bring their changes forward. Don’t go confusing those gains by restating everything in dollar terms. Keep the description of the savings true to what was in the A3s. Also, keep the savings pretty standard across different areas. It doesn’t matter if you’re talking healthcare or manufacturing. Talk about the number of steps removed in a process, the cycle time improvements in a process, the number of mistakes removed from a process and the like. In this way, you’ll be serving to keep the metrics more similar right across the enterprise.
I know that some of you work in very cost-conscious environments and Lean is often taken very literally—how much will it save me? Accept that they’ll see part of the savings that you’re bringing, even if they don’t see it all. Continue to show them the “less tangible” savings. They might not see the enduring savings that you’re bringing to the table, but they will see the month-by-month ones.
From the bookshelf...
Kaizen Express by Toshiko Narusawa and John Shook
It’s often easy to get confused about kaizen. With so many authors in a hurry to show you how much they know and so few prepared to tell what you really need to know, it’s easy to see where this confusion happens.
What you need is a simple description that’s bundled into a logical sequence that lets you implement Lean kaizen continuous improvement well, and that’s what this book delivers.
It doesn’t fill you up with theory but it does offer a description of Lean principles and implementation. I like the fact that it practices what it preaches—it stresses the importance of learning by doing at the individual and team levels. That’s exactly what kaizen is—the rapid doing at all levels. Whether you say it’s an A3, a PDCA or kaizen, it’s all the same. It’s all about showing that you can become the change that you want to see.
I’ve seen places where people want to argue about the A3 form for six months, where they want to have a committee to supervise Lean or where they’ve argued interminably about the philosophy of Lean. To them I say, just do it. Then do it again.
Then do another PDCA or A3 and remember to talk about your successes, share them and embed them into everything that you do. Get your managers out of their offices and down to the gemba. It’s really all very simple, but most people miss that simplicity. Until they read a book like this!
Question from the floor...
Question: How can I become a better Lean coach?
Answer: Whew! That’s a huge question. Atul Gawande (author of the Checklist Manifesto) noted that he improved his surgical techniques daily in his first two or three years, but after that his performance seemed to plateau. After asking a mentor to serve as his coach, Gawande was able to reduce his complication rate during operations. Coaches are invaluable resources for anyone seeking to improve performance.
So I say you need to know the processes that you’ll be participating in as a coach. Know them cold. Know them until you can answer the questions about the process. What do you have to do to remove what’s in the way? How might you reduce or eliminate all the extra walking or the waiting. Can you remove the blockages so things will flow smoothly? Or to be able to tell your people, “You really can accomplish more for the workers by asking them to do less.” Once you can get people to see what’s in the way, trust them to be able to get rid of it.
As I heard someone say, “If traditional managing is about thinking (often trying to do the thinking for others), leading through Lean thinking and practice is about getting others to think… and to think about the right things.” And that’s the essence of good coaching.
This article originally appeared in the May 2013 issue of Manufacturing AUTOMATION.
I get this question a fair bit. People that have had some exposure to Lean and to Lean culture change typically want everyone to see what they see. They see that improvement opportunities abound and often can’t figure out why everyone doesn’t want to tackle everything at once!
First, I urge them to remember that they won’t convince everyone at once. I tell them to start with the third of their population who is OK with change. Do some Lean events so that you can build up your credibility and have some legitimate bragging rights. After you’ve got two to three successful kaizens or “just do its” done, then you can add to the roster the people who are from “the show me state.” These are the people who are also OK with change, but will sit on the fence until you show them that Lean really works. Lastly, reach out to the CAVE people—Citizens Against Virtually Everything. You know the ones: they resist just about everything. Don’t spend time trying to talk them into Lean; let your successes speak for themselves. Those successes and the people you’ve already converted will help you turn around those CAVE people.
Plus, here are some simple rules to ensure that you’ll get maximum buy in when you start your Lean initiative.
Get buy in from senior management
Almost everyone will tell you the buy in from senior management is absolutely necessary before you start, but if you don’t have this, do a pilot to show them what Lean savings you can bring.
Understand that starting a Lean culture takes two years
Get them away from thinking that Lean will happen overnight. I’ve seen this happen when the senior team thinks that company ABC had Lean happen and all they need to do is copy it at their site. Don’t fall into this trap. Take what works at their site and at yours. Don’t do an outright copy or you’ll be bound to fail.
Get the message out there
Communicate out your successes! Start with sharing your local and small successes. Get the teams together to discuss what worked and what didn’t and have them write it down. Put the successes into your local newsletter, post them on your Lean board and talk about them at monthly meetings.
Start with your first wave of people
Like I said, don’t expect to change everyone all at once. Stage it out and start with your strengths. Don’t have the very first team tackle a huge issue—keep it smaller and more manageable.
Share your successes
Start with your teams. Have them do small celebrations for the team members as they go along and deliver on their improvements. This really does help. Have a tailgate meeting with them as soon as you’re done. Talk about what worked and what didn’t and write it down on your A3. Remember that in most organizations, the all-important “how we do this” or standard work exists not on paper, but between someone’s ears! That’s part of the reason that standard work so rarely catches on.
Convince others with your deeds, not your words
“Be the change that you want to see.” It’s not a platitude, it’s a central part of Lean leadership. If the people can’t see you behaving like a Lean leader, why would they participate in Lean? I am constantly telling senior managers and executives to get out of their offices and meeting rooms and to get themselves to the gemba. They need to make themselves a real resource. They need to participate in hoshin planning (i.e., playing catchball to ensure that the people’s continuous improvement ideas fit with corporate objectives). They need to see the three “reals” for themselves to deliver solutions that will work and fit with the reality of the work floor and not just “what should work.” Sales should never work in isolation from production. HR should not work in isolation from the floor. Practising Lean leadership is important for everyone.
In the words of John Shook, going to the gemba and completing the A3 has three surprising outcomes:
1. Almost always, the problem that you’re facing is different from the one that you thought you were facing.
2. Most of us are so eager to find and deliver the solution to a problem that we jump to conclusions instead of truly investigating the problem’s root cause.
3. The A3 process provides a framework for learning in the “place where the work occurs.”
Question from the floor...
Question: How do you get people comfortable talking about problems and doing daily problem solving?
Answer: You should see problem solving as something you talk about daily. As long as people see that there aren’t negative consequences to me talking about my problems, they’re going to keep talking about theirs. Encourage people to do it. As Mike Morrison, VP and dean of the University of Toyota, said, “We have a crisis of meaning in organizations today… Unfortunately the dominant image of leadership is that we are better, above and ahead of everyone else which makes us poor integrators… Ninety per cent of what we do doesn’t add value.”
So once you’ve got people talking about their problems, ask “What are the problems you’re running into?” If we’re not seeing problems, we have a problem.
Encourage your manager to get out to the floor and see the three “reals”: the real problem, the real facts and the real situation—get them to go to the gemba.
Culture is critical. If you go out onto the floor, you will build a culture of getting problem solving going and getting people engaged. Whenever I bring people in and do development, I tell them they’re also responsible for company culture. But being on floor has to count. Taiichi Ohno once said that if you could walk a hundred metres in less than 10 minutes, you weren’t doing your job. If it took you a lot more to walk that distance in your factory, you were being an asset to your people!
From the bookshelf...
Toyota by Toyota By Samuel Obara and Darril Willburn (Eds.)
I just love reading about Toyota Senseis. Having worked with the Toyota world for more than 25 years, I can really appreciate the changes that they’ve had to make from the Socratic style of teaching the Toyota Production System, through to the Toyota Business Practices and other, more modern, methods for training in TPS. This book brings together Toyota leaders in sales, training, marketing, logistics, human resources and manufacturing and provides the basis for them to tell how TPS grew and developed, the challenges they faced and the experiences that really shed light on how well TPS really works.
It’s a shame that Taiichi Ohno is no longer with us, but the authors present more than a century of TPS experience and many of them had worked with Ohno. Of particular interest is the fact that most had to learn their lessons about TPS the hard way. As the back cover notes, the authors hope that by sharing their struggles, the readers will avoid having to go through the same pitfalls. There is no magical silver bullet for learning Lean, but this book will take off most of the rough edges. I highly recommend this book for anyone that wants to learn Lean, but particularly for those that will be practising any sort of leadership function.
This article originally appeared in the March/April 2013 issue of Manufacturing AUTOMATION.
I often have people ask me about where they should spend their training dollars. Do they spend them on job-specific training or should they spend those dollars on broader, more conceptual training? Do they attack a specific issue within their Lean training, or cover the basics of root cause problem solving. The recent economy has helped to answer that question—spend it on job-specific training. But don’t be so quick to do this; there’s a false economy there.
That false economy is based on the idea that you’ll get a better ROI (bang for your buck) if you train for what you believe you need immediately. It’s false for a few reasons:
1) You’ll be training your people for the problem of the day. Tomorrow’s another day, right? What goes wrong today isn’t necessarily what will go wrong tomorrow.
2) If you heard that company X down the road had tremendous success with training package “A” you might feel that’s what you want for your company. Wrong. More than 95 per cent of training fails because it fails to generalize from one organization to another. As W. Edwards Deming said, “I think that people here expect miracles. American managers think that they can just copy from Japan. But they don’t know what to copy.”
3) You get the whole general-specific thing backwards. Although it might seem tempting to train for specific items first, often it’s not.
While there’s little doubt that TWI (Training Within Industry) works, it works best when people have been trained how to recognize and solve problems first.
When I do training, I generally start with root cause problem solving to make sure they really tackle the correct root cause. It’s rather like taking your child to the emergency ward if he or she is spiking a fever. What you don’t want is the doctor to say take the child home and put them in an ice bath to reduce their temperature. Sure that might address the largest presenting symptom (the fever) what about the malady that’s really causing the problem? What happens if it’s an inner ear infection that causing the little one to spike a fever? Putting the child in an ice bath won’t help.
I’ve seen the equivalent of “putting the child in an ice bath” countless times, across many different organizations. They are not training to ask “why” five times and get down the one root cause that they can do something about. They never learn that most problems have more than one “real” root cause. They never learn to select the one actionable root cause that will lead to measurable gains.
So when I’ve been asked about where to spend that training dollar, I say concentrate on building up an understanding of root cause analysis.
How to train for RCA
• Use simple, everyday, examples to begin with, like the one I provided above with the child and the temperature. That way, everyone will get it. Do this before you attempt to train a naïve group with an example from their workplace. Remember, they’re not getting it, which is why you need the training in the first place!
• Remember to measure! Use a baseline measure, then train, then follow up your measurements. Almost no companies do this and, as a result, almost no companies can tell me if their training was a success! They can mark people down as having received the training, but until you can show pre- and post-training increases in the desired behaviour, what you’ve got is expensive adult daycare.
• Once you’ve got the first wave of people trained, have them train the next wave. Not everyone is going to move on to become a trainer, but for those that do, remember to support them, facilitate their progress and don’t make being a “trainer” a new job. Rather, integrate being a “trainer” into what they do. Do this enough times and you’ll build a real learning organization and this will help your Lean efforts tremendously.
Also remember why you’re training – to see an improvement in the desired behaviour. Research has shown that if you can increase workplace performance by one standard deviation, there will be considerable cost savings to be had. That same research has shown that the standard deviation of employee performance, in dollar terms, is about 40 per cent of salary. That’s the same as saying increase employee performance by one standard deviation, and you’ll save 40 per cent of the payroll from the people trained.
When you think about the average costs for a day’s worth of training and what you get from it, it should come as no surprise that training has fallen by the wayside. In terms of the economy, people think that they should be pulling back on such things. But in reality, a downturn in the economy is just the time to train. When the economy picks up, even a little, the race will be won by those who have a trained workforce, can get it done right the first time and, as Taiichi Ohno said, get the right piece to the right place at the right time and price.
From the bookshelf
Lean Cost Management by James R. Huntzinger
One area that I have been arguing for North American managers to get training on is Lean accounting. This is the book that I would recommend for people to get started.
While I’m not an accountant (by any means) I do know about the importance of obtaining and developing useful accounting information and how that’s required by any organization to share information—for managing costs, showing where savings come from, linking performance to profits and for other internal and external purposes. Huntzinger makes clear how today’s accounting systems don’t really tie into production and fail to reflect the realities on the floor. While he speaks about a manufacturing environment, these lessons will be helpful to healthcare and the office alike.
Huntzinger says, “For the most part, traditional accounting methods have failed the test. Indeed, rather than being part of the cure as to what ails American business, management accounting systems have been part of the disease.” In the second chapter, “Why Traditional Accounting Methods Fail,” Huntzinger describes the three failures of traditional accounting and notes that Henry Ford and Taiichi Ohno both disliked cost accounting. Ford wrote, “They (the accountants) think of a factory as making money, not goods. They watch the money, not the efficiency of production.”
This is an excellent book for those who want to bring their understanding of Lean to the next level. It offers a combination of principles, philosophies and technical attributes for a transition to a Lean enterprise and the role cost management plays in this new enterprise. It also includes a working model of a production factors spreadsheet for tracking value stream costs and argues that “managerial-cost accounting” should be about designing, executing and improving the business system. Lastly, it illustrates very nicely the techniques, principles and philosophies developed by the architects of Toyota’s very successful operational accounting system.
Question from the floor…
Question: I am familiar with the term “kaizen” but what about the term “kaikaku?” I’ve looked it up and it’s supposed to mean “radical change.” I’ve just started Norman Bodek’s book, Kaikaku: The Power and Magic of Lean.
Answer: First, congratulations on getting this book. I found it to be an enjoyable, autobiographical narrative and I particularly liked the bits about dealing with an eccentric Shigeo Shingo! Both terms have their origin in the Toyota Production System. I find it helpful to think of a kaizen blitz—a radical improvement in a limited area during an intense week.
• Kaikaku means a radical change, during a limited time, of a production system
• Kaizen is the continuous small changes of a certain area of a production system
We want to keep doing continuous improvement (kaizen) but every now and then, we need a more radical change (kaikaku). In kaikaku, people get together and effect a large change. Then they return to doing kaizen. Ideally however, the number of kaikaku that you’ll need to do are much less in number than the number of kaizens!
This article originally appeared in the January/February 2013 issue of Manufacturing AUTOMATION.
One question that I’m often asked is, “how are we going to roll out our new Lean efforts when we’ve tried to adopt Lean before and it failed?” This goes for any other approach to continuous improvement that has failed in the past. Firms that have had world-class manufacturing, TQM, Six Sigma, TPS and even Lean have had a rather mixed history of successes!
There are basically two conditions I’ve seen. They’ve occurred about equally. They are:
1. They’ve tried it a long time before.
2. They’ve tried everything under the sun.
They’ve tried it a long time before. This is when they’ve tried Lean before and probably had some hit-and-miss successes, but they were never sustained. I’d give them a three out of five Ss because they failed to standardize and then sustain their Lean gains. They may have sorted (Seiri), kept things in their proper place (Seiton) and then cleaned the workplace (Seiso), but they failed to maintain the above three principles and standardize (Seiketsu). Not only that, they likely failed to sustain the efforts – to practice self-discipline and respect for fellow workers (Shitsuke). Getting to three out of five Ss is still pretty good, but without the last two, your Lean efforts will be doomed to failure.
They’ve tried everything under the sun. The other condition that I’ve run into comes about for any of a number of reasons. They’ve had a change in senior leadership and therefore a change in their continuous improvement activities. It could be that Lean was run like a project and when it was “done” it was time for another continuous improvement effort. It could be that they tried to change too much at once, management pushed something down or even that they were too scattered in their thinking. Regardless of why Lean was part of “everything under the sun,” they’ve already tried it and are reluctant to try it again.
In this case, there are some things that you’ve got to emphasize.
1. Lean is about making quick changes quickly! When you’re just starting, you need to be able to show evidence that Lean works. You’ll need this evidence to demonstrate to the people who are from the “show me state” as well as the CAVE people (Citizens Against Virtually Everything!). It’s not like dealing with people that will be good with change; you’ve got to demonstrate that Lean will work in your environment. In all of the cases where I’ve delivered Lean, presenting people with data that Lean works is the best way to win over the “show me state” and the CAVE people. Schedule some quick wins before you tackle any larger issue. Do a quick 5S (not 3S), a rapid improvement event or even a quick value stream map. Celebrate the successes after you’ve met your goals, or when you’re close to meeting your goals.
2. Lean is 20 per cent tools, 80 per cent culture change. Many Lean trainers emphasize the tools and the language of Lean. Terms like Hansei and Yokotan discussion, heijunka boards, Overall Equipment Effectiveness and the like will scare the uninitiated away! Learn to phrase your Lean words in terms that fit your organization and culture. I’ve watched others fail at Lean because they did not take the existing culture into count. While many people are familiar with terms like kaizen and value stream mapping, don’t take it as an article of faith. Do introduce them to root cause problem solving because you’ll be able to change the culture from reacting to everything to one of asking why. If you can get them to ask why five times, you’ll start to change the culture. I find that showing them how an A3 works is also a great way to start to change the culture.
3. Keep it simple, stupid – standardize and sustain! Follow the KISS rule and always keep your Lean deliverables simple. Keep them connected to the main goals of the leadership (so that you can do effective Hoshin planning), keep them apprised of progress with simple visual tools and celebrate your successes as they occur.
I’ve included senior leadership members at the start and training of the Lean delivery so that they can be seen to be participating and a part of the solution. I’ve also had them make a short presentation about what their goals and aims are for Lean.
When it comes to reporting out on a team’s progress, I’ve gone as far as making small spreadheets that show the various progress on things to date, who’s doing what and what their deliverables are. Those spreadsheets are very simple and visual. I also use that spreadsheet for my own project management and for communicating with the senior leadership.
If you can do these three things, then it won’t really matter how well (or poorly) your organization introduced Lean in the past. You’ll be able to tell them that things will be different now and make it stick!
From the bookshelf...
Follow the Learner: The Role of a Leader in Creating a Lean Culture By Sami Bahri
This book is a 2011 Shingo Research Prize winner and it deserves to be one. It details the introduction of Lean to a dentist’s practice and nicely emphasizes the differences between looking at processes from the practitioner’s view as opposed to the customer’s or the patient’s view. The nice thing about this book is that we’ve all had to wait at the dentist’s office, so when Bahri asks the following questions, they’re asking the same ones that many in manufacturing have asked.
1. What does it really mean to be a “learning organization?”
2. What does it take to get the people in a non-manufacturing environment to think of work in terms of flow?
3. How do you build a culture based on lean principles and lead that culture as it continuously evolves?
Bahri describes how he and the staff in his dental practice tackled each of these questions and how their organization transformed their work and thinking from a traditional batch-and-queue approach to one focused directly on the needs of the patient, not on the needs of the practitioners.
The book is organized into three sections – Creating the Practice, Leading the Transformation and Discovering the Principles of Lean Leadership – that describe a personal and professional journey in terms that anyone, at any level, can learn from.
It explains the technical changes that they made in the way that they scheduled and treated patients, as well as the understanding of the human interactions needed to make this new model succeed. Along the way, it demonstrates the universal application of Lean concepts and methods in an environment with which we are all familiar. It is both a long way from the traditional manufacturing roots of the Toyota Production System and a simple extension of same.
This article originally appeared in the November/December issue of Manufacturing AUTOMATION.
Taiichi Ohno once said that without standard work there cannot be any kaizen. We’ve probably all quoted this in some form or another when we’ve done our training, but what does it really mean? Let me offer my two cents worth.
First, let’s remember that fourth S from our 5 Ss – standardize. It’s the driver behind the fifth S, which is sustain. Most 5S programs fail because they really only achieve the first three Ss – sort (Seiri), straighten (Seiton) and shine (Seisco). Standardize (Seiketsu) is what will connect the new task to peoples’ accountabilities and make sure everyone understands it. Sustain (Shitsuke) follows that closely, as it reinforces the link to accountabilities, ensures the follow-ups are done and more.
So the driving force behind any 5S implementation can be thought of as standardize. Getting three Ss is easy, but translating that into standard work and making it stick can be difficult.
I once interviewed a young worker at the then-new Honda plant in Alliston, Ont., and asked him if he knew the five Japanese words from 5S. He said he didn’t, but that the spirit of 5S was simple. What it meant to him was that his mother didn’t work there, so he had to pick up after himself!
When it comes to understanding standardized work, there are a few things it should and shouldn’t do. Standardized work should:
• Include photographs and/or drawings.
• Ensure tasks and activities in a process are performed in the same way every time.
• Be developed with staff input and expertise.
• Include guidelines that are posted throughout the process at each point of application.
Standardized work should not:
• Specify absolutely everything. General guidelines are a good place to start, then improve them with kaizens once you have buy-in. Address the big gaps first, just as you would do in a Pareto diagram.
People often forget that 5S and standard work suggestions should come from the floor and not the boardroom. If you try to force the change top-down, you will lose your opportunity to really connect people to their continuous improvement efforts. They will view this as another “project” and lose interest as soon as the “project” is done. This is made worse when organizational leaders try to manage Lean by assigning it to the Project Management Office. It’s not that I dislike the PMO, but very often they’re only getting check marks for project highlights and not really engaging people in a Lean delivery.
Kaizen is the change process to apply the Lean tools and target waste. As such, it should keep true to the following guidelines:
• Kaizen is not a traditional project management deployment; rather it has an intense focus on action and speed.
• It emphasizes action. Here’s a key concept: “try-storm” a new idea. This is the opposite of “brainstorm,” where nothing gets done.
• Kaizens are where new ideas are tried quickly.
• Kaizens should involve fairly quick iterations: Try-Observe-Improve. (Hence the synonymous nature of Kaizen, PDCA, A3 and the Deming Wheel. They all mean the same thing.)
• Lastly, a kaizen is not about how much something will cost, it’s about creativity. This is particularly true if you’re just starting on your Lean journey. You want people to become familiar with the process, not in having the process “win.”
Remember, Toyota says that it uses “wits not wallets” to bring its Kaizen suggestions to bear on any problem. Sound simpler than having it run through the PMO? It is. In fact, there’s even a Kaizen “top 10” list!
1. Discard conventional fixed ideas. Be creative.
2. Think “how” to do something, not why it can’t be done. Penalize negative thinking.
3. We do not have bad people, just bad processes. The process needs to be simple enough that anyone can follow it.
4. Do not seek perfection. Do it right away. Quick and crude is better than slow and elegant.
5. Correct mistakes immediately. Defects inhibit flow.
6. Do not spend money on Kaizen. All that this proves is that you have a lot of money.
7. Question everything. Ask “why” five times.
8. Seek the wisdom of 10 people rather than the knowledge of one.
9. Wisdom will surface when faced with hardship.
10. Ideas are infinite. Execution is the key.
Remember that without standard work, there can be no kaizen. Standard work is the means by which a kaizen becomes standard operating procedure. Without standard work, the level of improvement can drop to below where it was when you started!
Finally, if you’re implementing kaizen, here are a few dos and don’ts:
• “Just do it.”
• Be creative, especially in adopting the tools.
• Include a target sheet and use it. Fix an end date to all kaizen activities. Keep that date tight and follow up and report out.
• Have a hansei discussion (right after the implementation).
• Have a yokotan discussion (to bring the implementation to everyone’s attention).
• Have fun!
• Resist change.
• Make it a “big budget” action items list.
• Make all action items IT-oriented.
• Forget to use proper tools.
• Forget to talk about your successes.
From the bookshelf...
The Lean Manager: A Novel of Lean Transformation by Michael Ballé and Freddy Ballé
This book has won the Shingo Research and Professional Publication Award and it’s the sequel to The Gold Mine. It addresses one area that I’ve noticed many struggle with – how to become a Lean manager and to transform themselves and their workers through the discipline of Lean.
I’ve often argued that Lean is the single most important business tool you can master. I’ve even said that it’s more a way of life than just a “tool.” Yet companies still struggle to sustain their Lean gains. They ask about advancing beyond isolated gains from deploying lean tools to fundamentally changing how they operate, think and learn.
The answer to the question of how can they learn to go beyond Lean turnaround to achieve Lean transformation can be found in The Lean Manager. It will help you to go beyond what James Womack called “the era of Lean tools” to where you will be able to help sustain their ability to learn and improve operations and financial performance, while continually developing people.
In this book, we follow plant manager Andrew Ward as he goes through the challenging but rewarding journey to becoming a Lean manager. Ward learns to use a deep understanding of Lean tools, as well as a technical know-how of his plant’s operations, to foster Lean and sustaining continuous improvement. In doing so, the authors show you Ward moving beyond fluency with tools to changing his behaviour as a manager and leader. He shifts from giving orders and answers to asking the right questions so people do the right root cause review. He learns to use tools to unleash the creativity of people, so they learn how to solve problems as well as teach others to solve problems. Ward learns how to create Lean managers.
Question from the floor:
Question: I’m sure you’ve had this question before. I can’t seem to get my employees to get started in a standard work initiative. They’re OK with doing a short-term kaizen or 5S, but they’ve got all kinds of excuses for not doing standard work. Can you help?
Answer: Yes, I can! I’ve heard it all, from “that only works for the Japanese” to “we tried it once and it failed.” Although, to be fair, most of the time I hear it now from healthcare. They say that they’re dealing with people and people aren’t cars. While they’re right, people are NOT cars, they still have to go through a process. It’s not right that medicine just “wings it” and it’s not right that you do, either.
In his book, The Birth of Lean Conversations, Taiichi Ohno once said, “Improve things little by little. Make sure that the process that caused problems this morning doesn’t cause problems this afternoon. The way to increase your hourly production volume is to recognize problems when they occur and to make the necessary improvements to prevent them from recurring.”
With standard work, checklists or best practices, you’ll be making sure that the “morning” problems are taken care of permanently and don’t become “afternoon” problems!
As Masaaki Imai, a mentor of mine, once said, “Good kaizen depends on the active cooperation of your employees. You might think you’re on the right track. But unless your employees are taking part actively, you’ll never get the full potential of the improvements. That’s why we’re going to keep working on this until the people in the workplace think we’ve got it right.”
Some research released in June 2012 from the Chartered Quality Institute and Chartered Management Institute of England, entitled “The contribution of quality management to the U.K. economy,” sheds some light on the benefits of adopting quality management approaches – both to an organization and to the economy as a whole.
The report calculates that:
• For every £1 spent on a quality management program, costs were reduced on average by £16;
• For every £1 spent on a quality management program, revenues were increased by £6;
• Overall, quality management practices contributed 6 per cent of U.K. GDP or approximately £90 billion to the U.K. economy in 2011; and,
• Lastly, if quality management programs were adopted fully throughout the British economy, an additional £52 billion could have been added to the country’s overall GDP and upwards of 500,000 jobs could have been created.
So now we know there are real outcomes, but what do we want to measure? A recent LinkedIn discussion on the Toyota Production System Network asked “Which KPIs are most important or vital for the manufacturing industry?” In short, they were asking about the top five KPIs.
One person wrote:
1. Sales orders
4. Profit margins
5. Warranty costs
2. Effectiveness (OEE)
3. Labour efficiency
5. Operator skill level/flexibility
Yet another wrote:
1. Material management KPI
2. Purchase order management KPI
3. Productivity KPI by functional group
4. Quality assurance KPI
5. Plant maintenance KPI
These are quite good, but they do reflect the hands-on bias of many readers in this group. I prefer the following for “top” KPIs because they tie into the larger view and they include safety and morale. Some of the suggestions for the top five include items that are seasonal (e.g., sales orders) or might not be preventative – like quality “assurance” and inspections as opposed to building in quality at source.
Here are my top KPIs:
Let’s take a look at these items one at a time.
1. Quality: Define it however you want but make sure that everyone in the plant (this includes the office, sales, warehousing, etc.) knows what you mean. Everyone should have a measure that ties directly into the top-level KPI for quality. They need to see how their quality impacts overall quality.
2. Cost: All said, the cost of production should be going down and the profit should be going up. Finding sources of waste and eliminating them is the best way to reduce costs. Otherwise, you’ll try to fix your costs as given and then add to the purchase price to achieve your profit.
3. Delivery: Whether it’s on-time delivery to your client or simply on-time delivery to the next stage in the production process, you’ve got to make sure that everyone is aware of this important dimension. An andon board is very useful here. When everyone is green for good, the delivery will be on time.
4. Safety: “It hasn’t happened yet” is not good enough. You may not have had a major accident yet, but that doesn’t mean your workplace is safe. I encourage you to read Charles Duhigg’s book, The Power of Habit, and his description of Alcoa and the safety “habit” – it prepared the way for Lean changes.
5. Morale: Go ahead and post your standardized morale survey results. Lean is all about bringing respect to people, so why not show your gains?
So now we know what we want for our top level KPIs. And we know what we’ve long assumed – that Lean process improvements really do pay off. To separate your plant from those that have tried and failed at Lean, keep everyone’s eye on their site-specific measurable and how they connect to your top five. Don’t let their attention wander or allow them to become distracted by the most recent “fire.” You’ll always have challenges, but you’ll be judged by how you keep people on track!
Creating Mixed Model Value Streams: Practical Lean Techniques for Building to Demand, 2nd ed.
By Kevin J. Duggan
Duggan’s expertise pays off when discussing high product mix, scheduling problems, shared resources and unstable customer demand. Many times I find clients wondering about how their Lean initiatives will fare when addressing these issues. They wonder about how their Lean tools and best practices will get them by when considering such things as mixed model production, for example. Now I can point out how Toyota does it or present them with different texts and examples, but Duggan’s book is an excellent alternative.
This second edition builds on the real-world complexity of implementing Lean in a mixed model environment that the first edition introduced so well. It contains new information for constructing product family matrices, updates to sections on mixed model value streams and expands on mixed models by taking on such issues as takt capability, heijunka (load level scheduling) and sequenced first-in, first-out (FIFO) lanes
Becoming familiar with the use of straightforward value stream maps is certainly good. For anyone who is trying to make improvements beyond those embodied in a basic value stream map, this book is well worth reading. It will show you how to implement a Lean value stream in a way that everyone will understand. It translates the theory of Lean into practical guidance for use in the day-to-day events that we all face. An issue that I see clients struggle with is, “How do we make product flow when there are a variety of products in the same value stream?” This book will help you understand flow in complex situations.
QUESTION FROM THE FLOOR…
Question: I’m a trainer with some experience in Lean. Could you give me a few examples of illustrative cases to use in my teaching?
Answer: Be happy to! Here are some cases and stories I’ve used across different sectors.
• Just ask people how they would feel if they came home and found out you had just purchased 10,000 tins of canned beans and stored them in their garage, and your only defence was that they were on sale! It’s not a saving if you’ve got to pay for storing it.
• Ask them about their drive into work or home. You can teach the concept of flow relatively easily. The traffic is not going to “flow” if people brake for random hallucinations! Or you can show them a YouTube video on the formation of a “phantom traffic jam” to show how traffic should flow and why it doesn’t.
• A good example of poke yoke is the kill function on the handle of the mower. If the handle is let go, the mower engine is turned off.
• A good example of one of seven deadly wastes is waiting. Ask someone who’s taken a person to the hospital about “hurry up and wait!”
• Another is over-processing. I once asked about a multipart self-carboning form. Only the top sheet (of five) was used. I asked about the other four. They said they didn’t know. They were, in fact, collected at the end of the day and put into the dustbin! (I watched!)
Be imaginative and you’ll soon see examples of where Lean is needed everywhere!
This article originally appeared in the September 2012 issue of Manufacturing AUTOMATION.