Category Archives: Lean Manufacturing

Dealing with Bottlenecks

Regardless of the nature of your operation, there are two major pacesetters:  Demand and Bottlenecks.  Demand is self explanatory:  the operation has to adjust to sales or service market demand.  In the case where demand is not limiting, bottlenecks set the pace and restrict potential of your entire organization.  If you are molding parts and can only mold 20 key parts per hour, that is all the plant can produce.   Any increase in the number of molded parts will yield an increase in the output of the entire plant.  So all efforts become focused on relieving the flow constraint, or bottleneck.  The most common reaction to limited capacity in one area is to work overtime.  Overtime can be switched on and off as the need arises, and many workforces relish overtime opportunities, but overtime comes with a steep price.

The High Cost of Overtime

Overtime is the quick response to bottlenecks, but not being very judicious with OT can have a rapid and disastrous effect on the bottom line and ware out your workforce.  Here is a calculation of average unit cost using overtime:

otcost4

Working Saturdays alone and assuming no decrease in output per day per person, average part cost increases by 8%.  Working both Saturdays and Sundays increases average part costs for all units by 21%.

Applying this increase to an accounting model, with direct labor at 20% of costs, shows a % profit reduction of 17% for working Saturdays and profit erosion of 43% working both Saturdays and Sundays:

otcost

Working  Saturdays and Sundays may also be accompanied by lower productivity.  Either the team is worn out, missing a few key members, or supervision is lax, so productivity  suffers on the weekend.  In addition, people are worn out or the queue of parts is eaten up with extended use of overtime, so productivity suffers on the following Monday due to lack of parts or personnel.  If so, we can expect the average cost of overtime to be calculated as follows, with up to 25% increase in overall labor costs:

otcost3

Applying this to the accounting model as before cuts profits in half:

otcost2

Overtime is a great tool to balance plant flows – use it for that.  If a new process still has some kinks, or we are training some new personnel or on a new process, or even to meet some strict deadlines, OT may maker perfect sense.  But overtime should be reserved for extreme situations, and only for bottlenecks or make-or-break scenarios.  It should always be carefully monitored.  As labor content is increased, the effects on profit is magnified – if labor is 40% of sales all profits are consumed by working weekends.

Other Ways to Relieve Bottlenecks

  • ensure quality is high so the bottleneck is not driven by a “factory within the factory”
  • split shift – staggered hours in department
  • second shift on certain machines or departments
  • split shift – covering lunch and breaks
  • improve setup times
  • expand setup crew
  • increase equipment or machinery
  • fastest operators
  • direct traffic – make sure limiting resource always busy
  • break task down into smaller steps – pre-do or post-do some work (may include vendors)
  • off load some processes that can be done by other machines

We need to adjust our thinking and improve the processes or balance the labor force.  Overtime should be a last resort:  working Saturdays and Sundays is not the answer.  At the very minimum, OT just be justified and pre-approved, with an estimate up front of cost and benefit.

© 2013 Value Stream Focus LLC.  Let Value Stream Focus help you get your organization moving on a path of Continuous Improvement and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com. 

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Change Management

Who wants to change?  Nobody, really.  Change is threatening.  Change is difficult.  We tend to get comfortable with the status quo – “go with the flow”.  Trim the sails a little, perhaps, to accommodate slight change in prevailing winds and business currents.  Corporate leaders have built the organization in their image – so far they have been successful.  It takes a lot of self awareness to envision a better future and lead the march into uncharted territory.  Even if they knew they needed to make a major change, who do they trust?  How do they do it?  Middle management, from Directors down to Supervisors and Team Leads, have the most to gain from lean efforts yet also have the most to lose.  It is likely they got their position by being really good at making things work in the current system.  They’ve customized it and tricked it out so they know what buttons to push and where all the bones are buried.  They answer all the questions, but with varying amounts of certainty, and have everything to lose when we talk about giving a voice to the operators or front line workers.  Production associates, office workers and those who do the everyday work that adds value are almost universally suspicious of change – with reason.  They know things can improve, but know from experience in the first downturn or “improvement in efficiency” their livelihood is threatened.

Change Model

Change models break down the change process into clear steps to help change agents enable the transition.  Well known among them is ADKAR model, created by Prosci founder Jeff Hiatt.  It is easy to understand and use, so I will walk you through it:

  • Awareness – know the change is necessary and on its way.  This is the What.
  • Desire –  feel the change holds something good for the organization and for us as individuals. This is the Why.
  • Knowledge – the tool set for change.  Knowing the tools with some context in their use.  Lean and Six Sigma tools with an emphasis on problem solving.  Also awareness of organizational issues affecting the change process.  Those with knowledge help shape the Who, Where, and When.
  • Ability – knowing which tools to use in what circumstances, and how to apply them effectively.  This becomes better and better as our problem solving muscle memory improves.  Knowledge + Ability = How
  • Reinforcement – New cultures and behaviors must be adopted, along with metrics to ensure the change is both effective and sustained.  Without Reinforcement, there is no sustained change.  New habits generally take 20 repetitions to stick.  New culture takes far more.

Oftentimes people are aware of the need for change, but are not comfortable with it so they convince themselves the change is unnecessary, burying their heads in sand.  This anxiety, knowing but not wanting to know, creates stress throughout the organization and wears and tears all levels.  This is where Leaders need to be out front, selling the change and reducing the fear of it.  Suspicion may be high, especially if the proposed change may have been sold before but did not stick.

Desire is achieved by connecting awareness of the need for change with something good that will come of it.  It makes us realize why we need to change, and whets our appetite for the impending change, lowering resistance and fear associated with both the change process and the change itself.  It is important to instill desire in ALL levels of the organization.  Each level of the organization must see the positive effects of the change, even if the only positive is the plant’s survival.  Senior management is usually a well known entity and a small enough group that those most resistant to change are easily identifiable and can be addressed individually, either by educating them or marginalizing them.  Middle management will often be split on any major change.  Some will become early adopters, even evangelical, of the change.  Others will resist and spread negativity.  Many of these are formal as well as informal leaders, so every effort should be made to meet this group and get them on board.  The fervent resistors will have to be asked to move on or will forever be eroding change efforts.  Front line associates may be wary, but are generally reasonable and adaptable to changing circumstances.  Harley Davidson confronted its union in York, Pennsylvania plant with a choice:  either we change how we operate and lay off half of the workforce, or the plant will close and move out of state.  The union chose to lose half their members to make it work, and the plant flourished.  Usually the change is not that drastic, but it can be done effectively.

Knowledge is the tool set for change.  Just how are we going to effect this change?  How will we operate?  Many of the tools are basic blocking and tackling:  learning the four drives of Lean (workplace organization, uninterrupted flow, quality at the source, and single minute exchange of die).  Other tools include problem solving (basic and advanced using Six Sigma tools), business literacy, leadership (communication, human resource skills), and risk management.

Knowledge alone will not affect change.  Knowledge needs to be put into practice in order to build your Ability to drive change.  This ability grows with practice implementing the knowledge.  Early attempts will likely struggle, so early kaizen attempts should be easy to win (focus on Workplace Organization at first).  Focus your efforts on a few key areas and seek to make lasting improvements (see section above).  Part of your selection should be based on personnel – managers and supervisors who are early adopters should be in your initial target areas.  As people find their voice with early victories, more difficult issues can be addressed.

Reinforcement, both positive and negative, is the key to sustaining change.  The simplest tools of reinforcement include a visible and visual KPI metric system reviewed daily along with visible problem solving efforts. Seek Lead Measures for goals and strive to improve on those metrics.  Lead Measures foretell the result:  they are both Predictive (measure something that leads to the goal) and Influenceable (something we can influence).   Some examples of predictive goals include the number of sales calls required to get a request for bid, or the number of safety “near misses” before an accident happens.  Go after high sales calls and bid requests will follow:  elevate management of “near misses” to identify and reduce safety hazards, and thus accidents.  Just as “near misses” foretell accidents, quality and or delivery problems will foretell costs:  focus on quality and your costs will decrease just as deliveries increase.  Repeated selling of successes and a focus on problem solving by all levels of management will reinforce the change and make it stick.

What to Change

“It’s easy to decide what you’re going to do. The hard thing is deciding what you’re not going to do.”  – Michael Dell

Once you have a vision of change and are convinced change is in order it is very tempting to launch 1,000 ships to make it happen post haste.  Be careful with your limited resources – many of those ships will run aground.  Others will be lost, never to be heard from again.  A few ships will find a welcoming port and start some islands of excellence, but the disjointed effort will be easily unhinged, or at best be very difficult to sustain.  It is much better to plan carefully and roll out the change in a strategic manner.

One strategic maxim is concentration of force:  Focus.  A planned, concentrated effort is more likely to yield positive results than a general blast.  McChesney, Covey, and Huling, in their book The 4 Disciplines of Execution maintain that an excessive number of goals (more than 3) lead to dilution of effort and lower achievement levels.  The key to success is to carefully select a very few goals identify and focus on what activities drive that goal (rather than focus on the goal itself).   So review your proposed changes and develop a logical sequence for moves towards the desired end.  Put in lean terms, start with a good map of your current state, develop a future state, and a series of kaizen events to get you where you want to go.

Planning for Change

“Everyone has a plan until you get hit in the face” – Mike Tyson  

Many have written that a lean journey is like driving across the country at night.  Our headlights give us a limited view, but we basically know where we are going and we have a map.  I like to think of a lean journey, especially if it is a major transformation, as sailing to a distant island.  Even with the most sophisticated navigational equipment, we have to deal with currents and the weather.  Sailing requires constant attention to detail and trimming sails to stay on course.  Sometimes the winds are favorable and the sailing is smooth.  Other times we are in a tremendous storm – wet, nasty, and a little scary.  Nevertheless if we trust our ship and our captain, we can take heart and sail onward, all the while wearing our life jackets.  And some of the sights and experiences we take in along the way are fantastic – they are life affirming.

vsm2

The act of drawing a Value Stream Map (VSM) lays bare the current state and prompts valuable discussions of possible future states.  Included in the mapping process is the developing of appropriate metrics, including market rate (takt time), current process times, and the development of standards through time studies.  The VSM and time studies become the center of debate and teaching, both learning to see current operations more clearly and evaluating future opportunities.  One powerful effect of mapping any process is that it can be viewed objectively – it is no longer “your process” or “my process” but rather, THE process.  That prompts objective discussions and keeps personalities out of the discussion.  This then becomes the basis of planning and the transition to the future state.  Keep your maps posted on walls as both a reference and a teaching tool.

Baby Steps:  Toyota Kata

Mike Rother’s landmark book Toyota Kata codified Toyota’s change management system as one of baby steps, always moving from current condition towards a desired target condition, analogous to stepping up a staircase.  At each step (or “landing”) processes are controlled and stabilized in preparation for the next step, cementing the gains.  Some attempts at change fail – if so we can always go back one step and resume our efforts to climb forward.

The problem solving engine in the illustration is a PDCA cycle, further explained in my post entitled Kaizen Progression and Continuous Improvement.

pdca-cycle

Where Change Fails

Change efforts are tremendous undertakings, and can fail at any point in the change process.  In some cases, the effort never gets off the ground; in others huge investments are wasted or returns are diluted due to failures late in the process.

  • Awareness:  If the organization is not aware of the need for change they will often be overcome by the changes around them.  This is the case of disruptive technologies or insular management.  In such cases, by the time management is aware of the need for change they don’t have enough runway or resources to make it happen.  By the same token, if leadership is aware of the need for change but does not communicate it well and often they will not have the support they need to pull it off.
  • Desire:  Even if we are aware of the need to change, we may not want to change.  Consider an obese middle aged man.  He knows his life is threatened by his poor eating habits and lack of exercise, but he cannot come to grips with it and grabs beer and chips for game day.  The same could be said for a supervisor who has risen up the ranks by knowing the little things but may feel threatened by some of the changes he is learning about.  Until he desires the change he will sit it out and wait for it to go away, as it likely has in the past.  Change without desire will fail.
  • Knowledge:  some change failures can be traced back to a lack of training or training concentrated on too few individuals.  A few people may know what is going on, but if a key individual gets on a bus or gets hit by a bus the whole effort is in jeopardy.  An associated problem is the fact we tend to want to solve all the problems with the tools we are most comfortable with.  Just as everything looks like a nail to a man wielding a hammer,   we all tend to migrate towards our comfort tools.  Some believe kanban systems will cure World Hunger, while others are sticklers for visual planning boards.  The truth is, there is a myriad of common sense lean tools out there, from Workplace Organization to SMED to 5 Whys.  All have their place, and all should be used as the circumstances dictate.
  • Ability:  Sometimes well-intentioned change efforts fail because of the team’s lack of ability to control the process through the change.  This usually manifests itself in quality problems – excessive process variation.  Without a stabilized process, we cannot take the next step in our journey.  It may be there are too many demands on too few resources – people are stretched thin and don’t cement the gains, moving from one fire to another and lacking focus.  Or perhaps the team is not good at problem solving or facing a particularly difficult set of problems.  This would have the same effect – high process variation (defects) and a loss of momentum.

What to do if You Are Struggling

The change process I propose is an iterative one – step by step.  Each step leading to the next.  If things get out of control, step back, and center yourself.  Re-establish Workplace Organization.  Regain process control.  Take a good look a flow through the process.  Where does the flow get interrupted?  Find your bottleneck, be it due to a lack of resources or a weak process, and concentrate your efforts there.    Trim back and get back to basics of blocking and tackling.

Also be sure to review the ADKAR model for missed steps or breakdowns.  If you are far down the change path it is likely your problems are due to lack of sustained leadership or reinforcement.  What gets measured gets done.  Are you measuring and emphasizing the right things?

Let Value Stream Focus help you get your organization moving on a path of Continuous Improvement and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com.

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The Culture Beast

change-monster

Culture is a living embodiment of what the organization is – reflecting its past, its current customs, and foretelling its future – culture is a beast.  Culture is defined as a “blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time” – governing how people interact and even determining the organization’s ability to grow and change.  The organization creates its culture but is also bound by it.

Culture Eats Strategy for Lunch

Any organization interested in developing and successfully implementing strategic initiatives must understand and incorporate the culture of the organization.  Culture facilitates the status quo and will gobble up attempts to change – unless the culture beast is aligned with the change.  Most failed attempts at lean transformation come back to culture.  Even if there are some obvious gains, they will often be in the form of “islands of excellence”.  A stifling culture will render change attempts stuck in the mud.    These “brown fields” are common – where top management attempted lean but could not get it to stick.  The culprit?  Unyielding culture.

Leadership can influence culture most directly through its actions – or inaction.  Depending on the company’s leadership and values, certain corporate cultures form which enable change and growth, while others stifle creativity and change.  A culture of fear will stifle any change.  If people feel threatened, they will not take risks – least of all driving change.  Even if there is a movement towards change, an organization beset by fear and uncertainty will quickly withdraw into a blame game and more effort will be spent on covering their butts and pointing fingers than on achieving company goals.

Dozens of studies have been made of the NUMI (New United Motors, Inc) plant, a joint venture between Toyota and GM, staffed by the UAW.  The plant was universally recognized as one of the best in North America, if not the world, for a number of years before being shuttered in 2010.  Despite sharing plant management duties, with complete access to training and learning, “General Motors lost and Toyota won” (Steven J. Spear).  The one lean lesson GM could not take back to its headquarters was the culture.  Tools can enable major change but will not by themselves instill a culture of Continuous Improvement.  Nevertheless, tools is where you start…

Want Change?  Feed the Beast

Culture is a living thing.  It changes over time and feeds on daily activity.  Changing its diet in the form of daily work habits and interactions changes culture, little by little. If culture eats strategy for lunch, structure shapes culture.  Structure is the fulcrum to leverage a change in culture.

structure

Change happens only with sustained effort or major upheaval.  Entropy, the tendency for change efforts to dissipate or degrade, is enhanced by nay-sayers and those comfortable or benefiting from the status quo.  Existing patterns, relationships, and mores will only change with a shift in self interest.  If employees at all levels can see the benefit – resistance will be lowered and the possibilities for real and significant change increased dramatically.

A change in structure, or how information and product flows in the organization, can effect a change in culture, and thus in how we interact with one another.  Implementation of Lean Tools such as leader standard work, workplace organization and visual systems, pull systems controlled by kanbans (min-max), and kaizen events which promote communication, learning, and rapid change all have the effect of structurally changing how we work.   Lean Tools promote a Process Centered organization.  The schedule is no longer dictated from high up in the organization but rather based on pull from the customer, and replenishing kanban bins become the province of the employee.  The system itself drives work, and human effort is spent on improving the system.

What culture do we want?

In the traditional, Employee Centered Organization, information flows from top to bottom.  Command and Control functions are easily recognizable.  Directives are passed down to those who actually add value to the product or service, and little information flows back upward.  Little information transfers between functional silos, either.  Meaningful lateral connections are at the management level, and change is identified and implemented by Management.  Virtually all organizations see the value of employee participation.  How do we get it? How to get employees involved in improving their workplace, and consequently, the company?

ci-flip

In the Process Centered Organization, information flows both up and down the organization.  The conversation changes.  Management finds itself in the position of asking their employees, “How can I help you do your job better?”  Opportunities for improvement are readily identified and implemented across the organization, resulting in a continuous cycle of improvement.  Leaders still lead, managers still manage, and the entire organization is in step.  Culture has effectively flipped.  Instead of a few minds working on improving company processes, all employees own their processes and are seeking continuous improvement.

Continuous improvement is just that:  continuous.  As the organizational culture flips from a people centered one to a process centered one, people improve their problem solving abilities at all levels of the plant to achieve the organizations’ True North. The process is done in steps.   An upside down triangle is not initially a very stable structure; it needs a lot of attention to achieve balance.  Critical to sustaining this new process centered culture is turning workers into problem solvers, so they can truly control and improve their own processes.  Empowered workers will strive for ever greater productivity and waste elimination, especially if they share in the gains.  Conflicts and turf battles dry up in favor of joint collaboration to resolve problems.

Keeping the Beast Happy:  Servant Leadership

Managing from the “bottom of the pyramid” takes a completely different skill set than managing from the top.  It’s watering the horses, then the men, and finally, the officers.  The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.  Implicit in servant leadership is the belief that every person has value and deserves civility, trust, and respect and that people can accomplish much when inspired by a purpose beyond themselves – both foundations of a lean culture.

Chris Edmonds’ The Culture Engine, details five practices to servant leadership:

  • Clarify and reinforce the need for service to others, educating through their words and actions, encourage their team to do likewise.
  • Listen intently and observe closely, actively soliciting group participation, their ideas, and their feedback. They get to know each one of their employees, and they tailor their leadership approach accordingly.
  • Mentor others, guiding them and helping their employees learn vital skills that will both improve their performance, grow as people.
  • Demonstrate persistence – be tenacious and invest whatever time it takes to educate and inspire servant leadership practices in the members of their team.
  • Hold themselves and others accountable for their commitments.  Practice what they preach.  Push for high standards of performance, service quality, and alignment of values throughout the team, and they hold themselves and their people accountable for their performance.

Only through sustained, vigilant effort by leaders can the culture beast be happy with its new diet.  But a diet based on continuous improvement principles and practices is a healthy one indeed, and the organization will flourish, along with its culture.

Let Value Stream Focus help you get your organization moving on a path of Continuous Improvement and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com.

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Leader Standard Work

“The culture of a company is the behaviour of its leaders.  Leaders get the behaviour they exhibit and tolerate. You change the culture of a company by changing the behaviour of its leaders. You measure the change in culture by measuring the change in personal behaviour of its leaders and the performance of the business.”  Larry Bossidy (former CEO of Honeywell) and Author of the book Execution.

Think of a lean system as a house with a foundation, pillars and a roof.  If the system is not ‘tied together’, it becomes weak; even if one wall or pillar is strong.  If something is missing and you don’t know what it is, it may be poor habits of its leaders.  Standard work is the nails (or glue!) that holds the lean structure together and gives it the leverage and strength to maintain gains.  Structure amplifies our efforts enables change.  In this case, the structure is Leader Standard Work.

Value added work is done on the shop floor, so standard work must start there.  Each level of standard work must support and overlap the level below it like shingles on a roof to ensure alignment of efforts and full coverage of initiatives. It also serves to identify opportunities of improvement, training and coaching, and serves as an audit mechanism.  Together, we walk the walk.

Roles and Responsibilities

Roles and Responsibilities vary throughout the organization.  Leaders closest to the shop floor or value added operations have pretty clear and explicit and easy to identify day to day tasks.  What often gets lost is building systematic problem solving and improvement into daily routines, and standard work can help.

lean-leadership-responsibilities

Checklists

lsw

Leader standard work varies by management level.  At the very lowest level of management, daily tasks are more explicit.  Checklists are a quick, easy way to organize leader standard work, and can be adapted to any environment and management level.  Would you want to fly in an airplane that had not gone through a rigorous pre-flight checklist?  How about surgery?  We should treat all of our operations environments the same.

Group and Team leaders have daily checklists emphasizing startup, material supply, process audits, and first level problem solving.  Supervisor standard work centers on problem solving and process improvement. “How can I help you improve your process?” should be on her lips every day.  In addition, she focuses on coaching and mentoring her team, along with several deep dive process audits.  Production manager standard work is broader still, focusing on problem solving and team development.

The point of the checklist is to build good habits and organize thinking.  Were we ready to go at the start of the shift?  Are we ready to go next shift?  Are we getting our materials promptly?  One checklist can serve for the entire week and should serve as a quick view of major themes – not a detailed drill down of a specific issue.  Those should be handled in Problem Solving sheets or other documents.  Spend a little time at the end of the week to review the standard work sheets – some themes may come up repeatedly requiring a deeper dive in problem solving or other improvement opportunity.

leader-standard-work-sample

Leader standard work also helps to ensure goal and efforts are aligned throughout the organization.  In fast moving, matrix organizations this is especially important to ensure we avoid the dreaded “death by meeting”.  KPIs associated with Leader Standard Work should be tracked via the SQDC Boards.  Kaizen Newspaper should track problem solving efforts at all levels.

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Kaizen Progression and Continuous Improvement

Adapting Continuous Improvement Tools to fit the Situation

Kaizen is a Japanese term meaning “improvement”, or “change for the better” – referring to the entire Continuous Improvement process. Lean Enterprise is modeled after the Toyota Production System, and most Lean Tools were generated at Toyota. A Lean Transformation is a journey taken by an organization to realign its processes around what their customer considers valuable – those features, benefits, and activities which physically transform the product. The task becomes one of identifying and eliminating non-value added processes when and wherever possible. The method of eliminating waste changes as the organization’s lean journey evolves.

There are a number of means of achieving kaizen in the organization. The change method varies based on what stage the Lean Journey is in, the problem at hand, and the “maturity” of the people involved in the change. They range from full blown classes to department shutdowns to a mentoring/coaching process. Like other lean tools such as kanban and visual controls, each has its proper use.

Leadership issues and advanced training

Leaders in the organization should strive to create a vision and mission for the organization and align principles and policies to encourage Operational Excellence. The vision and principles act as a compass for the organization and become the foundation for all corporate policies and decisions. A good model for principles supporting concepts can be found at Shingo Prize.  Changing an organization is like turning a battleship – it must be done carefully and it doesn’t happen in an instant. Of course with practice and a committed commander and leadership team the change will happen much quicker. If the change is led from the Top, much of the early training can be more widespread. If the change is being led from the Middle, the training will be more concentrated in pockets of early adopters (see my post on the The Guerilla Manager“). Regardless of leadership issues, many change efforts are over sold and suffer from high expectations, which are quickly dashed. It is often wise to start small and gain some victories in order to establish and build momentum in your change efforts. As the organization begins to experience change the change leaders need to continue to exploit easy opportunities and continue to spread a foundation for further change (see The Four Drivers of Lean Manufacturing).

Early in the journey the most urgent need is to educate the members of the organization in the principles and tools of the Lean Enterprise. Of course those who will lead the change must have a much more profound understanding of the tools as well as having very good teaching skills and emotional intelligence. Much of the early education may take place in a classroom setting and would ideally by punctuated by tours of other organizations farther along in their lean journeys, both for learning and benchmarking.

Kaizen Events

The next progression of the Lean Journey is typically a series of Kaizen Events, specific multi-day change events focusing on improving one specific process or series of processes in a specific area. Kaizen events, or Kaizen Blitz (for rapid change), are concentrated improvement efforts involving the Process Owner along with members of her team and representatives of the process customers and suppliers as well as support from the Continuous Improvement team and Quality or Engineering, as appropriate. Typical Kaizen events include value stream mapping to “see” the current process and ideal future state. The value stream map can be used to identify the scope of the current event as well as identify opportunities for future Kaizen Blitzes. The scope of the kaizen event must be limited to what the team can accomplish during the event (typically 2-5 days) along with some follow-up activities taking no longer than 30 days. If the scope is larger than that, it is a project, not an event, and must be managed as such.

vsmcurrentnotitle

 

Due to their focus and concentration of resources, multi-day kaizens events can be very powerful in both discovery and elimination of waste. Each kaizen blitz participant becomes owner of the solution, and they can have a strong way to build commitment to the lean process. Participation builds engagement, and engagement builds momentum.

Mini Kaizen

An alternative to full-blown multi-day Kaizen events is the Mini Kaizen, consisting of two half-day sessions followed by a full day session (can be a Saturday) in which the major implementation takes place. Mini Kaizens are appropriate for many smaller efforts and may in fact be the only type available to lean efforts which don’t have budget or air cover from Top Leadership. Despite their obvious limitations in time and resources, the power of Mini Kaizens to effect major change should not be underestimated. Though the scope is limited by the time resources, the participation builds engagement, just as the multi-day full-blown Kaizen Events.

Problem Solving

At the heart of any Continuous Improvement effort is problem solving. Kaizen events help identify and define the problem. The principle problem solving technique employed by the lean enterprise is the Deming Wheel, otherwise known as PDCA cycle, short for Plan, Do, Check, Act:

pdca

PDCA cycles are a vehicle for rapid and robust experimentation.  Upon encountering an obstacle or setback on its approach to its Target Condition (the Future State or an intermediate Future State defined by your value stream map), the organization uses the PDCA approach to overcome the obstacle, quickly isolating one variable at a time and testing until a new standard work is achieved.

The progression of PDCA cycles continues as the organization approaches the Target Condition, or Future State, much like climbing a stairway.  Each small improvement (kaizen) is followed by a period of rest and reflection (standardized work), and each improvement gets you closer and closer to achieving the Target Condition.  Properly designed, each step yields process improvements and a reduction in waste.

pdca-cycle

A whole host of six sigma techniques focus on problem solving and can be used in conjunction with lean improvement efforts. Six Sigma employs a technique known as DMAIC (Define, Measure, Analyze, Improve, and Control). The sigma toolbox includes brainstorming, Pareto and fish bone diagrams, data analysis, process capability analysis, root cause analysis, design of experiments, and others. These tools are often used in conjunction with Lean and called Lean Six Sigma.

Coaching and Mentoring with A3

Many of the obstacles to achieving Target Conditions are either too small in scope or are simply too large a project for a kaizen event.  As the management team improves their knowledge of lean tools and problem solving techniques, many of these problems can be addressed using what is known as an A3.  Simply put, A3 is the name of an 11″x17″ paper, and the A3 process consists of analyzing the entire problem on a single sheet of A3 size paper.  The idea is to tell a story, from beginning to end, using pictures and charts, graphics, and bullet points.  To do so, each element must be concise and show clear thinking (one of the benefits of the A3 method).  A sample storyboard is as follows:

A3 formats may vary – just make sure the entire story is included in the A3. I have seen a wide variety of formats from Sales Analysis to Product Development to designing a garage.  All of the principle problem solving elements are there:  Background/Problem statement, analysis of current conditions, goals and targets (future state), analysis, proposed counter measures, improvement plan, and follow-up.

a3storyboard

Like PDCA, the A3 is an iterative process.  The background and problem statement should be clearly worked out before too much thought can be given to analysis and countermeasures.  It’s a good idea to fill one out with pencil – there will undoubtedly be lots of erasing as the story develops.

The A3 is an excellent basis for mentoring.  The mentee, presumably less experienced in problem solving, presents the mentor with a partially developed A3 for review.  It is vitally important that the Mentor merely ask thought-provoking questions of the mentee, sending her back numerous times as necessary until the actual problem statement is well-defined, and so forth.  The A3 documents the interchange, the problem gets closer and closer to resolution, and the mentee sharpens her perception of both problem solving and the problem at hand.

In addition to mentoring, the A3 can be used in conjunction with other forms of kaizen (multi-day event or mini kaizen) as the “storyboard” and as a means of capturing the knowledge in one succinct document.  A3’s are an excellent digest capturing the “critical few” key points – the essence – of the problem and its resolution.  The A3 can be easily circulated and the learning shared distributed if it follows the 5:5:5 rule:  It should take a mere 5 seconds to see what the purpose of the A3 (or event) was, 5 minutes to study and capture the learning points, and 5 hours to thoroughly investigate and understand the findings.  Think about ways to capture the knowledge contained in the A3 through a good filing and archival system.  Each A3 should have keywords and an easy abstract and retrieval.

Copyright 2012 by Paul Yandell.  Let Value Stream Focus LLC help you get your organization moving on a path of Continuous Improvement and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com.

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Employee Training

What if we train them and they leave?

The importance of a well trained workforce cannot be overstated.  A well trained workforce is the link between the company’s technology and the customer.  A well trained workforce combined with process improvement can reduce the need for specialized labor and pass down skills and decision-making to the lowest possible level, improving speed and quality while saving costs.  Indirect labor must orchestrate the transformation process, from concept through design, manufacture, delivery, and aftermarket.  This includes connecting the organization to external vendors and collaborators, banks, and distribution, as well as continually improving the entire process and planning for future growth.  A well functioning organization requires constant training of both Direct and Indirect employees in order to maintain and improve its current condition as well as incorporate new processes and products.

Some companies have very well developed, structured training systems for both new and existing employees.  For many companies, however, a minimum safety training and new employee orientation (such as SB198 “right to know” – legally required) is where training starts and ends.  Companies with short seasons or suffering from high turnover may feel training is not worth its significant investment.  I am reminded of two questions asked at Motorola:  “What if we train them and they leave?” and, better still,  “What if we don’t train them and they stay?”  Typical on the job training (OJT) consists of taking one of the best operators out of their routines and placing them with a new employee.  Neither employee is working near their potential, and the new employee typically picks up 80% of the experienced employee’s habits – good or bad.  There has to be a better way – and there is.

Employee training is a huge opportunity for companies to ensure short term success and to shape their future.  Training and development offers an upward career path for employees, leading to higher job satisfaction and retention rates.  Training also offers management an opportunity to identify and develop high potential employees.  It is not uncommon to see a different side of an employee that may lead to an acceleration of or a change in their career path.  There is a balance between the company training the employees (at company expense) and the employees seeking out their own training opportunities.  Those employees who go the extra mile to continually educate themselves are gems, and whose request for company support will more likely be met with success.

On-boarding New Employees

Even with extensive recruiting efforts that may include ID verification, background checks, physical exams and drug screens, a quick study of most organizations will show employee turnover is very high in the first days and weeks after hire.  Some employees are not up to task or are simply not interested in working hard.  Some are out of shape and find themselves thrust into an early morning, highly repetitive task and just can’t handle it.  Others find themselves not “fitting in”.  Still others were there just to check it out or fill out their unemployment paperwork and had no intention of staying.  In these cases a training cell for new employees might be the answer.

A training cell keeps new employees together for the first week or so in the company and provides both company and new employee with a chance to check out one another.  In the cell new employees are taught basic job skills and do some repetitive tasks (on short rotation) such as filing or bench assembly process.  They receive basic safety training and plant orientation and get a feel for the type of work they would be doing.  They also have a chance to make some friends with other new employees (feeling alone can be a major reason for job abandonment).  The cell trainer can be trained to spot goof-offs or potential workman’s comp scams and they can be quickly weeded out.  At one of my companies we cut new employee turnover by 50% by using a training cell, while cutting accident rates significantly.  It sounds like a big expense up front, but it should be considered.  How much work do we get out of new employees anyway?  A training cell accelerates learning for both the employee and the company.

New office employees face many of the same questions and challenges.  How do I fit in?  How to contribute?  Handing a new employee the company handbook is only the start.  A well structured first 30 day program will help get these employees up to speed and contributing as well.  Scheduled lunches with key office employees (peer level and above) coupled with attending a mix of regular scheduled meetings as an observer and some sort of job rotation (could be sitting in different departments for 1 full day each) will get the new employee up to speed and contributing quickly.

Other Training Options

Options for training are numerous and don’t have to be hard on the pocketbook:

  • “Getting to know one another” lunches.   Senior managers from different departments may take new employees out to lunch as an opportunity to get to know one another and to learn about the company’s various functions and departments.
  • Reading (either technical or managerial).  This can include trade and technical journals as well as managerial ones such as Harvard Business Review and Fast Company.  I encourage employees to read anything and everything.  Many of these can be shared via a company lending library.
  • Brown bag book discussions.  Reading and discussing key books can be central to some companies’ culture.  My short list would include
    • The Goal by Eli Goldratt
    • Good to Great by Collins,
    • Kraig Kramers’ CEO Toolkit,
    • Prosen’s Kiss Theory Goodbye,
    • Peshawaria’s Too Many Bosses, Too Few Leaders,
    • Covey’s Seven Habits of Highly Effective People
    • Dale Carnegie’s classic How to Win Friends and Influence People
    • Pat Lencioni’s The 5 Dysfunctions of a Team.
  • Excellent books to get Lean Enterprise rolling would include:
    • Lean Thinking by Womak,
    • Learning to See and Toyota Kata by Rother and
    • The Toyota Way by Liker.  There are SO many others!
  • Videos.  Videos are great for individual or group instruction.  Most community Safety Councils have good lending libraries to start with.  Technical Videos from Society of Manufacturing Engineers and others are excellent.  They can be kept in the lending library as well.  Some of the best team building videos are full length films (mostly sport themes).  Hoosiers has notes all over the Internet dissecting it as a team building movie.  Another is Miracle.  These are great to view over several pizza lunches – prepare discussion questions to keep people engaged.
  • In-house classroom training.  Though they can be time consuming (use sparingly) in-house classes are a powerful way to bring a lot of people up to speed very quickly.  Whenever possible, challenge your own employees to teach the class – they have to learn the material to teach it, and the process will enrich both student and teacher as well as serve as a good team building exercise.
  • Outside classroom training.  This may be through the local university or trade schools, and professional societies.  Classes may include basic Supervision, Materials Management, Welding or other technical certification, or even English as a Second Language.  Let’s face it, GED training may be the best investment possible and instill a huge pride in the recipient.  Often all that is required is for the HR department to share some research on available programs.
  • Kaizen events should include a brief educational segment as well as the discovery, learning, and sharing of the event itself.
  • Mentoring (see Managing 360)
  • On the job training using Work Instructions (see below).

Standard Work

The best way to reduce the training investment is to simplify and standardize jobs – something Henry Ford figured out 100 years ago.  Standard Work and associated repeatability is the Holy Grail of Manufacturing, where the goal is to efficiently complete repetitive tasks.  It may or may not be the best way, but Standard Work is accepted as the “right way” to do a process until a better way is agreed upon.  Standard work can then be used to train others in the same task and to audit the work of an extended workforce to ensure a minimum of variation.  Lastly, standard work is the basis for process improvement – the new process is compared to the Standard Work and is either adopted as the new standard or not, based on its merits.  Lacking standard work, the organization is compelled to rely upon tribal knowledge and existing skilled labor, both of which limits the organization’s ability to grow and respond to change.

During WWII the United States mobilization efforts were hampered by a surge of unskilled workers into factories.  In response, the Defense Department developed the Training Within Industries (TWI) program.  Then new approach, called Job Instruction Training helped develop skilled workers as quickly as possible to do the work of those who left to fight the war, at the same time the factories were retooling to war-time production (sound like a challenge?).

The three components of Standardized Work as identified by TWI are:

  • Important Steps
  • Key Points of each step
  • Reason for each Key Point

These components are recorded on a job breakdown sheet (Work Instruction) to create the basis of both standard work and for training.  In keeping with the Visual Factory with the goal of simplifying things, I recommend all Work Instructions be loaded with graphics illustrating each step.  A heavy dose of illustrations and photos helps to quickly communicate key points in the challenge of diverse languages and experience.

Training Scorecard

Standard Work should be posted in the workplace and used as the basis for training and process auditing – NOT in a binder gathering dust.  The idea is to make Standard Work the centerpiece of your operation.  Managers and Auditors should routinely reinforce their importance by referring to them and auditing work to the published standard.

teamskills

The workforce’s overall skill level can easily be tracked using the same Standard Work.  Simply rate all employees against a list of all standard work processes.  Assign a letter grade to for each employee skill according to the following criteria:  C = trained to standard work – can perform with supervision, B = trained and skilled at task – can perform without supervision, and A = highly skilled – able to train others in task.  Then, award 1 point for a C, 2 points for every B, and 3 points for every A each employee is rated.  Composite scores can then be calculated for each employee as well as an average score for the entire workforce.  Raising both individual and group scores is done by adding new skills (C points) or by increasing skills in a given task.  Both benefit the company and are reflected in a higher overall skills rating.  A simple, low cost one-time award for each “A” earned incentivizes employees to seek new skills.  For the cost of a much appreciated $50 or $100 gift card at a local grocer (no tax bite) you will find employees seeking new training without long term raises or financial obligation. At the same time the metric “average employee training level” is a great company-wide scorecard.

Process Improvement then becomes a function of stabilizing the process (i.e. following standard work) and then a stair-step kaizen approach, re-establishing the new standardized work and training against it to stabilize the new, improved process.  See Kaizen Progression and Continuous Improvement for more information on process improvement methods.

Copyright 2012 Paul Yandell.  Let Value Stream Focus help you get your organization moving on a path of <strong>Continuous Improvement</strong> and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com.

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Lean Primer

Many of us are new to Lean Manufacturing.  This is to help orient you to what we are trying to do.   In traditional supply and demand models, uneven demands are amplified – little spikes are seen as big ones, subsequent overproduction results in delays in true demand items.  Unmodified supply chains usually have excess inventory, production, labor, and capacity, while being unable to satisfy demand even though on average they are able to produce more goods than are being sold.

To avoid this, everything in Lean Manufacturing is based on demand-pull systems rather than planning or push systems.  General levels of activity are forecasted to allocate most materials, labor, and facilities, but actual activity is based on demand pull.  All processes should be in a lot size of one.  That is, if the demand is for one part, build one part.  If the demand is for 43 parts, build 43 parts.  If the demand is for 8 copies of agendas, print 8 agendas.

All of our systems and activities must be highly flexible.  That includes people.  Multi-tasking means cross-training, cross-learning, and cross-teaching.  Not to mention an appreciation for what others are doing and a break in monotonous tasks.  “Efficiency and execution will be at least as important as products and services” – Michael Dell

The primary way we achieve Lean Manufacturing (upon which the Shingo Prize is based) is by mapping the Value Stream and eliminating or reducing non-value added processes.  If we start our analysis of any given process by merely listing all of the steps we currently undertake, and then evaluate them in terms of what adds value in the eyes of the customer, we can identify those non-value added activities we can eliminate or reduce.

Common wastes (non-value added activities) include:

  • Defects (any error in processing, order entry, misinformation given, etc.)
  • Inappropriate processing (over-building, over-doing, repeating work that can be done by a computer or is duplicated by another department)
  • Overproduction (anything we build should be paid for or paid for almost immediately.  Any excess production on one item takes away resources from building something someone is willing to pay for. Inventory has the shelf life of lettuce” – it gets damaged, needs to be insured, occupies valuable space, etc.
  • Transport – any additional warehousing and handling operations.  Ideally, inventory should be delivered to point-of-use, such as the sheet.  No customer wants to pay a forklift operator to drive parts or spas around, especially back and forth through our own facility.  Drawing a “spaghetti diagram” of part or paper flow can be very enlightening.
  • Unnecessary movements – any excess bending, stooping, walking to the printer, looking for something, etc. should be avoided.
  • Excess Inventory – any inventory of any type we don’t need is a cost (excess brochures, pumps, spas, pencils).
  • Waiting – delays due to waiting for review and or approvals, editing, drying time, cure time, all are waste and do not add value.

We use Kaizen (a Japanese term for continuous improvement) to involve people in identifying and eliminating waste in their own areas.  By now, most of you have participated in a Kaizen event.  If you have participated in several, you will know each Kaizen is unique, based upon the participants and the problems the group is attempting to solve.   One element of every Kaizen of which I have participated, though, is the satisfaction the entire group feels upon identifying and beginning to tackle the problems before them.  What employee doesn’t want to improve their operation?  If you find one, fire him.

One very important aspect of Kaizen is its “continuous” focus – “A good solution applied with vigor now is better than a perfect solution applied ten minutes later.” – General Patton.  Let’s keep innovating.  If we can improve things, if only slightly, let’s do it.  The little things add up.

Copyright 2012 Paul Yandell.  Let Value Stream Focus help you get your organization moving on a path of Continuous Improvement and Cost Reduction.  Call 760-500-6006 or email pryandell@valuestreamfocus.com.

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