Thursday, May 27, 2010

Transparency = speed

Transparency, the willingness to expose problems when they occur, is an important component of any kick-butt lean enterprise. Unfortunately, most companies have created an environment that fosters problem avoidance, where employees feel compelled to hide problems for fear of reprisal. Conversely, a company that practices transparency, where problems are not only exposed, but are readily discussed with passion and directness, will solve their problems faster and more effectively.

Most information about problems exist as bits and bytes in a database, invisible to most. The trick is to get the problems out into the open, where they cannot be ignored. One of our clients literally puts poor-quality customer returns in red bins on the floor in front of their daily communication boards where people almost trip over them. These returned products get addressed pretty quickly.

Imagine the call center that shows the number of dropped calls real-time on a huge screen for all to see. If the trend gets worse, how long until someone notices? Right away. What if the screen didn't exist and all of the dropped call info was being collected in a database? How long until a problem would be addressed? Who knows.

Imagine the hospital operating room with an "on-time start" percentage posted right on the door to the OR every day, with all of the reasons for starting a procedure late. Would the root causes of late starts get addressed quickly? Probably.

Before embarking on a journey to transparency, it is critical to establish some rules:

1. Blame the process, not the person
2. Don't shoot the messenger
3. Data collection should be simple and fast
4. Use color, red and green, to make hits and misses obvious
4. Reward people for following the transparency process

All companies have problems every day. Do you want to be the company that knows what's going on so you can fix the problems, or do you want to hide the problems and rely on hope and luck. When it comes to business, ignorance is not bliss.

Tuesday, April 6, 2010


"How do we sustain our improvements?" This is the billion dollar question. If I had a nickel for every time someone asked me this, I could buy a cup of coffee by now. Since this topic is huge, I will address it in a few posts.

The most important element of any sustainment is human. Quite simply, people have to want the change to stick. If the people that have to use the new process don't want it to be successful, it won't be. It's a myth that most people are against change. What's true is that most are against meaningless, arbitrary or someone else's change. The next time you see your new process falling apart, ask yourself these questions:

1. Is it change or is it improvement? There is a difference. It's improvement only if the workers see it as "better", not just different. They have to believe there is a business reason for making the change that directly or indirectly helps the company, the customer and them.

2. Can you quantify the improvement opportunity? You need real measurable objectives. Without metrics, it is difficult to demonstrate actual improvement. For example:

Wrong: The objective is to improve our visual management of tools.
Right: The objective is to reduce walking distance, eliminate safety hazards and improve productivity.

Add targets for a bigger impact. Then measure, post and celebrate. It's also appropriate to communicate the qualitative results that make people proud of their project. For example: We reduced walking distance by 80%. We also are less frustrated and have found it's easier to train new people.

3. Did you involve all of the stakeholders? Remember, sustainability is mostly a human issue. People need to feel respected by the company. Respect doesn't mean that we just treat workers fairly and call them by their name. It means we believe they have something to contribute to the betterment of the business, and we give them the ability and opportunity to be a part of the problem solving activities. People don't argue with their own data and their own ideas. Often it's who decides, not what is decided, that's critical to success.

4. Is the leader of the area actively supportive? The key word here is "actively". The workers need to know they have the support of the leadership. The leadership must be seen, not just heard. The leader must understand how big the impact is when they take the time away from their "normal job" to spend time at the point of action. This behavior in the leader will create trust in the worker, leading to a belief they they are part of something important.

If you spend your time planning and executing your improvement project with only one thought in mind, it should be this: "How can we ensure everyone believes this new way is the best way?". Then design all of your planning and execution processes accordingly.

Tuesday, February 23, 2010

Strategy Deployment

To be successful in a highly competitive, global business environment, companies must have a sound strategy that provides a clear direction, along with the ability to execute the strategy with focused alignment of efforts by all employees. Where most companies fail to be successful isn’t in the choice of their strategy. Failure comes from the inability to execute the strategy. Most companies, at all levels of the organization, lack a defined, standardized process that allows the strategic plan to become reality. There is a gap that exists between the strategy and the actions that people take every day to try to improve the business. The lack of a good execution process creates inefficiencies, confusion, low morale, and no competitive advantage.

The Strategy Deployment (SD) process is the missing link that companies need to be more successful. When used rigorously, the SD process will provide a structured process, with clear focus and alignment of efforts, and proper commitment at each level. The SD process ensures that the most critical processes get addressed, business improvement decisions are fact-based, everyone knows what needs to be done, and people are accountable for supporting their piece of the strategy.

A rigorous SD process will give your company the following benefits:

1. Clear communication of the strategy to all employees

2. Alignment of everyone's effort

3. Accountability, not only for meeting targets, but also for process discipline

4. A timely and accurate measurement system, allowing for fact-based decision-making

5. Agreement and commitment at every level of the company

6. A common language

7. The use of logic, not opinion or intuition, to develop objectives.

Once understood, SD is a very logical process. Logic, however, isn't always prevalent in a company's culture, leading to one of the pitfalls in implementing SD. Company leaders are used to doing things their way. In introducing a new process, just like for anyone in any organization, there is typically resistance found in at least some of the group. Some leaders feel constrained by facts and logic. They are more comfortable using intuition, experience and other inputs to determine objectives and action plans.

Other pitfalls include:

- Not involving the right people, preventing consensus

- Not taking the time to do necessary research

- Setting targets as too high or too low

- Not performing regular, structured reviews of progress

- Not requiring countermeasures when a periodic target is missed

- Not reviewing progress often enough

- Not taking the time to train people on the SD philosophy and process

- Not making the process visual

When people ask me where they should start their lean transformation, and I tell them they need to start with SD, they are disappointed and confused. They want to start taking real action, jump in and start making changes. The changes, however, must be derived from the right strategy, and we have to know if the changes lead to the expected outcome. Sun Tzu said, "Tactics without strategy is the noise before defeat." It is critical that your company take the time to ensure that the objectives you communicate, the people you engage, the tactics that you use and the changes that you implement will lead to the efficient and effective realization of your strategic plans.

Friday, February 5, 2010

Trade Reform - A Macro-transformation

Most of us in the Lean Transformation world are focused on "micro" transformation issues, making individual companies more competitive, more sustainable, more profitable. We are making gains throughout various industries, in companies small and large. This is good stuff. There is, however, another issue that requires as much, if not more, effort from US manufacturing companies. It has to do with global trade policies and practices. Unfortunately, in trying to compete with China, companies making products in the US have barriers to deal with other than higher wages, greedy CEOs, restrictive unions and an apathetic society.

Did you know that much of the glass for the New World Trade Center in New York will be produced in China? It shouldn't surprise you that the Chinese glass was chosen by the Port Authority of New York. They wouldn't want to be viewed as wasting money on a more expensive product, or practicing protectionism. But, you gotta wonder how a low-labor-content product like glass from a Chinese manufacturer can be the lowest bid? Shipping costs alone should negate most of the gain from low labor costs. Unfortunately, the ugly little secret that's been ignored for years is that the Chinese government provides huge subsidies to certain industries in China. Many of these subsidies are illegal, in violation of trade laws.

Part of the problem is that we have no national manufacturing strategy. President Obama promised that his manufacturing czar (did you know we have one?), Ron Bloom, will develop a strategy, with emphasis on "21st century technologies". That's good, unless you're one of the millions of US workers in a 20th century industry. Who is going to help them?

We can't continue to allow jobs to be lost in this country by rolling over and allowing other countries to continue to violate trade policies and laws. Obama recently told the Senate, "If we are able to compete on a level playing field, nobody can beat us". Great statement; I just hope we have the guts to do something about it.

Friday, January 29, 2010

The Lean Organization

Some companies wait too long to make changes to their organizational structure. Changes should be considered fairly early in any lean transformation. As processes are eliminated, improved and combined, the ownership and responsibilities change. The people responsible for supporting the new processes and ensuring follow up and ongoing improvement are critical to the success of the transformation . Effective support comes from 1) organizational and 2) geographical changes.

Organizational changes:

People on the front lines of the any new process improvement need the authority to make things happen. If you have "Team Leaders" with no direct supervisory authority, they will struggle to be effective. They are armed with only the ability to influence others and report to a higher authority. The "Team Leader" position, invented years ago to keep payrolls low while trying to get the most out of people, is one of the worst ideas in modern management.

During a transformation, your first line of defense against backsliding and poor results, is the Supervisor. (call this person whatever you like, as long as they have the first level of authority in your company. They hire, fire and give performance reviews and raises) If you have inexperienced or weak Supervisors, your changes won't stick effectively. Weak Supervisors can be effective at running a "status quo" operation; but, throw some significant change their way, with all of the challenges and headaches associated with them, and they often crumple like a thin tortilla chip in chunky salsa.

The Support Triangle: The other organizational change involves the direct support of the value added activities. We call this support, the Support Triangle. In a manufacturing operation, there are 3 people that have the primary responsibility to ensure the success of the company's value added activities, which have the biggest immediate impact on the customer. They are the 3 people responsible for:

1) People - the right amount, with the right skills and motivation.

2) Process - equipment, tools, layout, problem solving, etc.

3) Material - the right stuff, in the right amount, at the right time.

Geographical changes

The support triangle team needs to work closely with each other, and be accessible, most of the day. Therefore, they need to be located next to one another, with no barriers to communication, at gemba (the real place where the real thing is happening). We call these work spaces gembicles (gemba + cubicle). The gembicle allows for:

1) more frequent communication

2) more effective communication

3) building teamwork and better relationships

4) a single focal point for the rest of the company

5) a location for visual management/metrics boards, etc.

Although organizational changes and the idea of the gembicle make some people uncomfortable, they are just 2 more changes we must consider in the quest to make continuous improvement really stick.

Tuesday, January 12, 2010

Standard Work - Closing the Loop

We have noticed many companies struggling to use Standard Work in a meaningful way. First of all, Standard Work is more than just establishing Standard Operating Procedures or documenting Work Instructions. It is much more powerful than that. It includes determining the right work sequence for every individual and how that work sequence changes when demand changes. It ensures the work load is appropriately balanced among all of the team members. And, most importantly, it aligns all work content, equipment, and inventory to customer demand. More than just simple work instructions, it provides a baseline for making sustainable process improvements.

Once you have established Standard Work and your "Playbook", Standard Work is only effective if you "close the loop". In the graphic,

we describe the process of closing the loop. In this example, we show a typical "Day-by-the-hour" chart for a manufacturing process. Step 1 is to identify causes when they occur. The more frequently a team member can identify the cause of a Standard Work failure, the more accurate it will be. Therefore, it is important that this step be quick and easy to do. Step 2 is to quantify and prioritize the causes. Normally. a Pareto chart is best. At the appropriate frequency, the team, including support members, should meet and agree on the top one or two causes to be addressed. The third step is to identify the actions that will lead to sustainable process improvements in order to eliminate the cause. It is important at this step to ensure the true root cause has been identified. Using a 5 Whys process can be helpful here. We recommend that you have a structured, documented, repeatable process for identifying root causes. A common question when using a 5 Whys approach is, "How do you know when you have the root cause identified?". Typically you should stop asking why when:

1. You start to blame a person or their behavior. For example, "He forgot to do it it right", or "She needs re-training". These are not root causes.

2. It is something out of your control. For example, "It was hot outside" or "It's the economy".

or 3. You lose sight of the original context.

Step 4 is to understand the causality between action and result. It is good to make a plan and execute the plan efficiently. But, that's not the end. The end is when you have learned as a company whether or not your actions have had the desired effect. You will know this if the cause doesn't reoccur and your performance metric improves. Therefore, part of your review (gemba walk, asaichi meeting, daily standup, etc) has to involve learning. Ultimately, Standard Work hasn't been fully utilized until sustainable improvement is made and learning takes place.

Standard Work vs Work Standards

The ghost of Frederick Taylor is still among us. We still see companies using Talyorism, or Scientific Management, in the form of Work Standards. Work Standards are an anachronistic method for measuring hourly employees' performance. Typically, an Industrial Engineer, with stopwatch in hand, will determine how long it takes a nervous and distrusting individual to perform a task or process. After some manipulation of the data (an ambiguous process), a Standard is established. There are a few problems with the Work Standard and the way companies use it:

1. The standard is set by "someone else". Most people don't trust data developed by other people. If you want someone to believe something, they have to be a part of developing it.

2. The intent of the practice is to measure a person and not the process. Although this might make it easier to conduct performance reviews, it dehumanizes the work force and results in no improvement. If you believe, which we do, that most people come to work with a desire to succeed and do well for the company, how can you believe that "missing" the standard is the the fault of the individual?

3. It leads to distrust and more waste. If you measure people's performance on a standard of time, and base their performance and compensation on that number, their goal becomes to ensure the number is attained. Unfortunately, it becomes common for people to manipulate the system in order to succeed. No one cares if the process has been addressed or not, because the focus is in the wrong place: the numbers.

4. Scientific Management does not support "respect for people". Quite the opposite.

I have seen what this environment looks like and it isn't healthy. At one company, we estimated that 5-10% of each employee's day was spent "managing" the standards. That includes the time keeping, the reporting, the manipulation of the time codes, and more. The question I ask Management is, "Imagine what we can do with that 5-10% that will actually benefit your company."

An effective alternative to using Work Standards is Standard Work. Now, Standard Work is one of those tools that have different meanings at different companies. For our purposes, Standard Work is defined as the prescribed work sequence and cycle time for each employee, balanced to takt time (or other time goal). What makes Standard Work more effective is INTENT. The intent of Standard Work is to improve the process, whereas the intent of using Work Standards is to evaluate individuals. Improvement comes from being able to indentify the causes of failure. Failure is identified as a goal not being met. The goal not being met is because of a process problem. We leave the employee out of the cause for failure. Instead, the employee will be a part of identifying and eliminating the cause of failure, which leads to improved morale and improved process performance.

The most common struggle with using Standard Work is how to determine the goal, against which each work sequence will be measured. Do we include changeovers or leave them out of "available time" when calculating takt time? Do we include a PFD (personal, fatique and delay) factor? The answer is both simple and complex. First, remember the INTENT. Why use Standard Work? Since the purpose is to improve processes, you need to establish goals and work sequences that will uncover when a "special cause" problem occurs. So, the simple answer is, as long as the Standard Work process uncovers process problems, and not normal variation, you are using Standard Work correctly.

The challenge, therefore, is how to make this calculation repeatable and eliminate subjectivity. This is where it's important everyone understand the intent and the concepts behind Standard Work. Most importantly, the individuals and teams that are working the process need to know that Standard Work is in place to help them and to suppport them in their efforts to make beneficial contributions to the company, and should never be seen as a threat to their compensation or recognition.

Thursday, January 7, 2010

10 things lean consultants should stop doing

Here are some New Year's Resolutions for 2010. They aren't for me exactly. Well, maybe some are. I have been guilty in the past of some of these transgressions. Mostly, this list is for all of those consultants out there that frustrate the heck out of you. Since most people are too courteous to say these things out loud, here they are. Feel free to comment with any I haven't listed.

1. Stop "improving" established words and phrases to try to make you look more unique/smart/insightful/cool than the other 100 guys that came before you. Did 5S really need to become 6S?! Is Value Chain Mapping really different than Value Stream Mapping? Lean Sigma??!!

2. Kill your PowerPoint presentations, start over, and understand how adults like to learn. Those 100 slide "decks" with 100 words per slide that put us to sleep or make us want to tear our eyes out are not effective. Remember: brevity is genius, and a picture is worth a thousand words. I remember some of the better Shingijutsu consultants. They didn't use computers, wouldn't speak English, and were somehow able to teach us a heck of alot.

3. Stop pretending that your training material is proprietary or unique. Let's face it; you stole your content just like everyone else did. Deleting the Danaher/Rockwell/Boeing, etc logo and adding your logo on the bottom doesn't make it yours. And, heaven forbid, don't try to sell it!

4. Don't inundate us with Japanese words, half of which you don't really understand anyway (and you pronounce wrong).

5. Is it time to throw out the word "kaizen" once and for all. "Kaizen" is probably the least-standardized, most mis-used Japanese word out there in the lean transformation world. I hear it used as noun, verb and adjective, and pronounced 3 different ways. And almost nobody uses it the right way anyway (tongue is in cheek).

6. Stop dressing so nice. If you want to establish rapport and be viewed as a coach and mentor, you don't have to dress like a consultant all of the time. If we all wear jeans on Fridays, why can't you? And those golf shirts with your company logo on them... soooo 1990s.

7. Stop with the cliches. We know we need to think out of the box, break down our paradigms and embrace change. And, at the end of the day, if we take a 30,000 foot look, we shouldn't throw anyone under the bus. Unless of course, they have failed to pick the low hanging fruit and they are being reactive, not proactive.

8. When you don't know the answer. Admit it. Be honest. Don't just say,"Well, what do you think?" Teaching by the Socratic method has its time and place. We all have lots to learn.

9. If you worked in automotive, we don't want to hear about automotive. Help us understand how we can use the same principles, but in different ways, that can work in our environment. All industries have unique challenges. It's good to talk about Toyota, but not too much.

10. Stop regurgitating everything you've read in books or heard at a seminar. Although it's great to know what Ohno or Shingo or Deming said, we want to hear your words and about your own experiences. I think its important to know the history of lean and keep up on the latest thinking, but we need to know you can think for yourself.