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.