Thursday, July 30, 2009
Do You Know Your Pathway to Lowering Transactional Costs? – Chris Haydon shares the importance of knowing your transactional pathways and the cost implications of all of them.
How Does Your Team React to New Person – Mark Graban shares a discussion about another way to judge your transformation to a “lean culture” by gauging the team’s reaction to a new person.
Inexpensive (But Powerful) Visual Controls – Ron Pereira reminds us that simple no-cost visual controls can be effective.
One Point Lesson: Kamishibai – Jon Miller talks about the use of a lean tool called Kamishibai board, the use of a visual management board to perform standardized work checks.
The Trouble with Performance Reviews by Jeffrey Pfeffer – John Hunter brings awareness about the weaknesses of performance reviews from an article by Jeffrey Pfeffer (The Trouble With Performance Reviews).
Lean Accounting is the Key – Bill Waddell discusses the weaknesses of standard cost accounting and how lean accounting uses “real numbers” based on cash.
The Ongoing Struggle Between the Crises of the Day & Improvement Work - Connor Shea shares statement of the tyranny of crises and improvement and provides several countermeasures to reduce crisis time and increase improvement time.
Evolving Sources of Information – Kevin Meyer highlights an article by Baekdal about the sources of information in the market that makes you think about future evolution.
How Far, How Fast : The CPO Game - Konstantin Penz explains the role of the chief procurement officer in transformation in today’s economic environment.
You Can't Forget Eli – Bill Waddell reminds us about the power of Theory of Constraints by Eli Goldratt in pursuit of Lean flow.
Training - Tom Southworth talks about the second, often ignored, pillar of Lean - Respect for People. More specifically, that most companies ignore their "most important assets" - their people.
A Lean Roadmap - where do we start?- Norm Bain shares his approach on where to start your Lean Roadmap
Lean Job Guarantees are Practical - And Ethical – Ralph Bernstein highlights a column about employee who come up with process improvements should not lose their job as a result.
I'll Take My Lean with Water on the Rocks – Jon Miller talks about the classic “rocks and water” metaphor and the “iceberg” metaphor as it relates to continuous improvement and behaviors.
On the Nature of Commitment - Xavier Quesada Allue explains the difference between “hard commitment” and “soft commitment” and why it is important.
Signs of Hope for Customer Focus – Mark Graban brings attention to recent reports by companies to strive harder to please customer in this down economy.
Wednesday, July 29, 2009
How many miles does the average person walk in their lifetime?
Well, it turns out to be about 115,000 miles or more than 4 trips around the world. (You can confirm by a quick search on the Internet.)
Here is the math for those you like to see the rationale for the answer.
The average moderately active person takes about 7500 steps a day. Assuming every day the person walks, an eighty year old person who began walking at one year of age, would have taken 216,262,500 steps in their lifetime. An average person, with an average stride, living to this age of 80 will walk about 108,131 miles.
That is a lot of transportation. Is all of that necessary? Does this add value? Some may argue this is exercise and therefore valued from a healthy perspective. There are a number of ways of maintaining an active and healthy life style. So given that statement you might be more inclined to think at least there is some opportunity for improvement.
Just consider the time involved to walk 115,000 miles:
115,000/3mph (a decent speed) = 38,333.33 hrs
38,333.33 hrs/29,200 days (=365*80 years)= 1.3 hrs/day of walking
Now, that might not seem like a lot at first glance. Consider some of the other things you do with in a day like sleeping and eating for example and this starts to be a larger percentage of your time.
If you commute a relatively long distance you have probably thought about the value added time versus non value added time of your trip. This probably why so many people listen books on tape and other learning media while driving.
Have you considered the walking you do everyday? In lean wasted transportation of all sorts is very much considered. This is a key measurement in spaghetti diagrams for example. In our daily life we often do what we need to do without considering these wastes and whether there could be a better more effective path.
Monday, July 27, 2009
A recent survey by Deloitte LLP and The Manufacturing Institute shows that Americans view manufacturing as the most important industry for a strong national economy. Americans also believe that a strong manufacturing base is important to our standard of living and national security. Manufacturing ranked higher than technology, energy, healthcare, financial services, retail, and communications in terms of industries essential to a strong national economy. This probably comes from the belief that we can’t spend our way out of this recent economic downturn.
However, only 3 out of 10 Americans would encourage their children to pursue a career in manufacturing. This view is possibly due from an opinion shared by one third of Americans that manufacturing pay is lower than other industries and not a clean and safe place to work. The survey further shows young Americans are less likely to think manufacturing is high tech or requires educated, highly skilled workers.
"This survey sheds light on a massive disconnect we are facing in manufacturing," said Emily DeRocco, president of The Manufacturing Institute. "People have an outdated image of manufacturing and the career opportunities available. Cutting-edge technology has transformed manufacturing in ways that are hard to imagine if you haven’t visited a factory lately. Jobs now require postsecondary education, skills certification and credentials across a broad range of high-quality, middle-class career paths. The reality is that manufacturers offer high-paying jobs and rewarding careers for American working men and women. Our job is to close the gap between perception and reality, which will help fuel the industry’s growth and prosperity."
Manufacturing only ranked 5th out of the above 7 industries as a career choice. This is unfortunate since 30% of employers surveyed worldwide say they still face skilled-workforce shortages despite the slow economy and rising unemployment. Manufacturing-related occupations including skilled trades, technicians and engineers rank among the top five positions that employers are having the most difficulty filling.
The survey found less than 2 out of 10 schools encourage students to pursue manufacturing as a career. Some educational institutes have recognized that academic and customized training programs must align with the needs of business and industry. To meet these needs, the Minnesota State Colleges and Universities system plans four steps: strengthening programs to ensure students have the necessary skills; expanding internship and apprenticeship options and on-the-job training; adding more online education and flexible programs; and continuing to work and communicate with local businesses. Some celebrities are even joining efforts to motivate students in America to consider careers in the unlikeliest of places – the factory floor.
While manufacturing is a priority most American (with the exception of young people, 18-24) want to see a more strategic approach to developing manufacturing in the US with further investments. Only 60% of Americans believe that the US manufacturing industry can compete globally. Americans also believe that various government policies including trade and taxes are creating a disadvantage for US manufacturers in the global market place.
Saturday, July 25, 2009
I have never really been an Enterprise Resource Planning (ERP) or a Material Resource Planning (MRP) fan since they are really push systems based on sales forecasts. Some recent failures of our system have made me re-visit Lean vs ERP solutions.
With traditional manufacturing resource planning (MRP II, the planning engine in most ERP systems today), manufacturers base production levels on sales forecasts. In contrast, lean manufacturing -- also called flow -- ties production levels to actual customer demand.
Nor does the conflict end with production levels. Lean emphasizes getting the manufacturing process right and then continually improving it; with ERP the emphasis is on planning. The former has the goal of eliminating all wasted time, movement, and materials; the latter seeks to track every activity and every piece of material on the plant floor. Lean is action-oriented; ERP is data-dependent. One has workers doing only things that add value to the product; the other has them recording data and bar-coding to keep track of inventory and labor.
I believe that ERP and Lean are compatible and beneficial if done correctly. The problem is we often let the ERP solution run our business instead of making the software suit our business needs.
How is your ERP solution helping you meet today's challenges of rising material costs, increasing competition, and ever-changing customer requirements?
A colleague recently sent me an interesting article which describes the warning signs that an ERP system is killing a business, causing bottlenecks, excess cost.
Check these 10 warning signs to see if your ERP system is killing your business.
1. The ERP system can’t integrate mission-critical business data.
2. Changes to the system are costly and time-consuming.
3. Your disaster-recovery plan involves tapes.
4. Beefy PCs or “fat clients” are needed to run the system.
5. Maintenance fees are high.
6. You can’t access the data easily if you are traveling.
7. Upgrades are disruptive to the business.
8. Trading partners can’t easily interact with the system.
9. New employees need time to learn the system.
10. Globalization is too difficult.
Your company may experience some of these issues and you might decide to find a new ERP solution or upgrade that would resolve these challenges so you can get back to innovating and manufacturing products. But before you do that you may want to review CIO.com's brief and semi-chronological history of 10 famous ERP disasters, dustups and disappointments as a warning. Whatever you do make your system work for you and not the other way around. Taichi Ohno often said “Never put the solution or tool in front of the problem…follow the scientific method and you’ll come out better in the long run.”
Thursday, July 23, 2009
Thanks to my fellow bloggers Ron Pereira and John Hunter for sharing these values with us. In a web video by Jeff Bezos to the Zappos employees about the acquisition he explains everything he knows. Click here to view Jeff's values.
While Jeff doesn't mention Lean in these values that he explains is exactly the same principles we are familiar with in Lean. Lean embodies customer focus, innovation, long term thinking, and continuous improvement. Not surprising these principles mirror Jeff's values.
I also like how Jeff admits to making mistakes. He understands the importance of making failure acceptable. Without failure there can not be success. Learning from mistakes is the essence of problem solving and continuous improvement.
I am glad Jeff Bezos has shared these values with all so we can all learn these important tenets.
Wednesday, July 22, 2009
In the Lean community the eighth and often hidden waste is unutilized talent or resources. I especially like to highlight this since human capital is the vital engine needed to support a business. It is this talent where innovation and continuous improvement comes from. The challenge for all business management is learning how to tap into these resources effectively.
Cyndi Laurin and Craig Morningstar have co-authored a book called “The Rudolph Factor: Finding the Bright Lights that Drive Innovation in Your Business” where they talk about how to empower your innovators.
"The recession has underscored it in bold double lines, and added a string of exclamation marks for good measure. Bright, empowered, innovative people – the people we're calling 'Rudolphs' – have always been important. Now they're imperative."
"An innovative culture is the antithesis of the 'we pay you to work, not think' mentality that defines many companies and causes employees to mentally check out," adds Morningstar. "Unless all employees are fully engaged and empowered to solve problems, you'll never be able to think your way out of a financial morass."
So here's the real issue: How do you infuse this magic ingredient into your culture? The Rudolph Factor answers that question. Along the way it tells the story of The Boeing Company, one of
The authors use the holiday character Rudolph, the Red-nosed Reindeer as an analogy to delve inside a corporate culture that reinvented itself in record-breaking time. In the process, they share lessons Boeing learned about innovation – lessons that can be applied and replicated in any business.
Laurin and Morningstar say Rudolphs account for 10 percent of an organization’s people. These are people who can identify the root cause of problems and determine countermeasures quicker than others. These are people who have more answers than questions. They tend to see things that others can’t.
The authors recommend a system to identify, foster, manage, and leverage today’s uniquely creative and involuntary thinkers in business continues to be the missing link in the quest for sustainable, global competitive advantage. Five ways to empower the Rudolphs in your company:
1. Lead in ways that don't force people to check their red noses at the door.
2. Embrace the AVTAR approach to creating a Rudolph culture.
--- Awareness: Generate awareness of a proposed change.
--- Value: Share information that inspires employees to find value in a proposed change.
--- Thinking: This "shift in thinking" requires managers to let go of their own agendas
--- Actions: New actions and behaviors begin to appear based upon new ways of thinking.
--- Results: Results flow organically.
3. Learn to recognize Rudolphs. (16 Ways to Recognize Rudolphs)
4. Identify (and meet) your Rudolphs' unmet needs.
5. Put systems in place to encourage innovative thinking.
Creative thinking, breaking down barriers, identifying talent/resources, empowerment, encouragement, reward, and recognition is what the “Respect for People” pillar and the eighth waste is truly about. This is something you can’t ignore if you want to be successful especially with this recent downturn in the economy. It often does not require using or spending any additional money or resources. So what are you doing to find your Rudolphs and making them lead your sleigh of innovation and continuous improvement?
Tuesday, July 21, 2009
Saturday, July 18, 2009
We have all been to meetings that don’t start on-time because people are late in arriving. Waiting is one of the eight wastes that we find in meetings. This is one I particularly loathe. No organization has endless resources so wasting human capital is senseless and unfortunately far too common. Have you ever stopped to consider the cost implication of this waiting?
Let’s consider that there are 10 meetings a day that start 5 minutes late and the average hourly rate of the 10 attendees is $30/hour. This would mean we have lost 500 minutes (8 1/3 hours) of non-value added time per day at a cost of $250 per day. If you carry this analysis through for a year you get 125,000 minutes (260 days wasted) at a cost of $62,500. So the impact of 5 meetings per day starting 5 minutes late for one person per year would be about 12 days of lost productivity.
In doing some research for this post I came across a great device related to this issue. We have all heard the saying that “Time is Money”. Well, Brad Johnson invented a time management tool that displays the cost of every second of your meetings. You enter the average hourly rate and the number of people in the meeting and the calculator counts up the cost of your meeting. Bring TIM! to any meeting as a great visual reminder of the investment in human capital at the meeting.
Waiting is only one of the eight wastes present in many meetings and rather then detail the other wastes let’s characterize those meeting as ineffective. The res of this post will focus on strategies that can be used to make your meetings more effective.
Ron Pereira suggests the use of a good SPACER before each meeting. SPACER is an anagram for Safety, Purpose, Agenda, Conduct, Expectations and Roles.
Safety – is always the top priority, discuss safety protocols like evacuation, PPE or safety equipment needed in the facility, bathroom location, etc.
Purpose – “what is the meeting for?”, discuss what is in scope and what might not be.
Agenda – no matter what type of meeting or for how long there should be some sort of plan
Conduct – what are the rules the team participants should adhere to while in the meeting like cell phone us, side discussions, etc.
Expectations – what do we expect to get out of this meeting especially if it is a training session
Roles – what are the roles of the participants in the meeting, is there a note taker or time keeper for example
Performing SPACER with the meeting participants can take as long or as short as you need to set the framework of the meeting. This can be a great way to start building team work from the first meeting.
The use of a flip chart can be valuable in supporting SPACER as well as for creating a “parking lot” of topics out of scope during the meeting.
Stephanie Calahan reveals some other tips to help you save time and money by running effective meetings.
- Don’t hold a meeting if you don’t need to or if another way will work like phone, email, etc.
- Start at unconventional times like 10:10 so participants don’t come late
- Make sure key stakeholders attend your meeting if their attendance is critical
- Try standing so the meeting will be shorter since participants won’t be so comfortable
- Use timers to keep on task and follow an agenda
- Review action items at the end of the meeting and schedule a follow-up to ensure there completion
One of the biggest challenges to meeting effectiveness is we are essentially creatures of habit. We do things this way because we have always done things this way – status quo. In a Lean environment we need to learn to “see” the wastes in our business including how we conduct business like meetings and find better ways to do these activities.
Thursday, July 16, 2009
In a study last year(2007), Dr Thomas Jackson of Loughborough University, England, found that it takes an average of 64 seconds to recover your train of thought after interruption by email. So people who check their email every five minutes waste 81/2hours a week figuring out what they were doing moments before.
It had been assumed that email doesn't cause interruptions because the recipient chooses when to check for and respond to email. But Dr Jackson found that people tend to respond to email as it arrives, taking an average of only one minute and 44 seconds to act upon a new email notification; 70% of alerts got a reaction within six seconds. That's faster than letting the phone ring three times.
Try these simple techniques to save time and get your productivity back:
1) Turn off email alarms to prevent interruptions and temptations to react now.
2) Don’t check your email in your first hour of work.
3) Check email only at specific times during the day (no more than twice a day).
4) Filter your emails into folders for easier management.
5) Set-up your email to display a preview of a few lines to help decide the importance of dealing with it urgently.
Try these techniques to help others save their time:
1) Be specific in the header.
2) Don’t hit “reply to all” when not needed.
3) Write at a 6 grade level (use readability statistics in word to check).
4) Keep emails short and specific (on average a reader will give you about 11 seconds to decide whether to read).
5) Limit your email recipients (the more people you send an email to, the less likely any one will respond to it).
Fewer interruptions means more time spent at work on value added activities.
Wednesday, July 15, 2009
Sunday, July 12, 2009
The idea of fire fighting is to let a problem fester until it becomes a crisis, and then swoop in and fix it. Fire fighting is popular because it is exciting. Furthermore, it is a win-win situation for the fire fighter. If the fix works out, the fire fighter is a hero. If it doesn’t, the fire fighter can’t be blamed, because the situation was virtually hopeless to begin with. Notice that it is to the fire fighter’s advantage to actually let the problem become worse, because then there will be less blame if they fail or more praise if they succeed.
In many cases awareness is a key issue. Work goes on day-by-day, and the urgent and pressing needs of today's problems can be totaling absorbing. Some research suggests there are distinct differences between an organization culture that fights fires and one that solve problems.
But the real problem is the people in charge. Fighting fires instead of developing a plan to stop fire fighting and make sure it will not happen again. Most of us deplore the firefighting style, yet many managers and organizations perpetuate it by rewarding firefighters for the miraculous things they do. In fact, it may be the absence of a vision and plan that cause your organization to be so reactive, and spend a lot of time fire-fighting rather than proactively meeting the needs of your customers. This is all easier said than done, of course, but if you get things right the first time, there's usually not much fire-fighting later.
Mark Graban suggests that after putting the fire out you need to stop and fix the process:
Two simple questions to ask:
How and why did this problem occur?
How can we prevent it from happening again?
For the first question, you might use the "5 Whys" method of continuing to ask why until you reach something that really is a "root cause" rather than being a symptom/result of a more fundamental problem. With the second question, we focus on prevention. Use "error proofing" methods or ensure that a standardized process and method is in place.
“The problem is not that there are problems. The problem is expecting otherwise and thinking that having problems is a problem – Theodore Rubin”
Problems (fires) can be avoided and the resulting fire fighting by trying these proactive steps:
- Stop rewarding fire fighting and start recognizing fire preventing.
- Create a corrective and preventative action process based on root cause analysis.
- Put corrective action in place on the root cause of the problem
- Conduct follow-ups on corrective and preventative actions to ensure effectiveness.
- Share lessons learned from past opportunities so they are not repeated with another customer, order, project, etc.
- Use a strategic planning tool like SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).
- Use mistake proofing and standard work practices.
- Implement “layered audits” (an ongoing chain of simple verification checks, which through observation, evaluation and conversations on the line, assure that key work steps are being performed
How are you going to stop fire fighting and start fire preventing? Only you can prevent company problems – a twist on what “Smokey the Bear” would say about wildfires.
Thursday, July 9, 2009
Now you might say, what does this have to do with Lean? Well, the answer is every thing. Lean is about learning to “see”. Many of the tools in the lean tool kit are about visualization. For example, it could be 5S for organization, value stream map to visualize the waste in our processes, spaghetti diagram for excess movement, kanban to signal a task to be done, or standardized work to display work steps. They all allow us to easily visual something that we ordinarily have difficulty seeing.
In this case Matthias took something that is hard to understand (large financial numbers) and related that to a simple visual that enables anyone to clearly see the difference. To me this visualization technique is exactly what we do with Lean and Six Sigma. Using data and actual observation there are various methodologies to visual problems. You can’t improve something you can’t see or you can’t understand. I recently blogged about a visual system using ping pong balls that helps us visualize inventory quantities in terms that anyone could understand and interact with. What Matthias did is the same thing just with a different visual and on a different subject.
Next time you observe someone having difficulty with a situation think about how you can help them make it visual. It is true that “a picture is worth a thousand words”.
If interested there are several other videos using various methods including legos, water, and more pennies to visualize some recent political news stories at Political Math Blog.
Wednesday, July 8, 2009
I believe those in the Lean community who are practitioners and educators are always learning from our own experiences and from others. There is great benefit in sharing what you have learned along the way with others. It is from this activity real learning, reflection, and improvement takes place.
Ron Pereira from LSS Academy has compiled his over 13 years of experience and knowledge into an eBook call LSS Academy Guide to Lean Manufacturing. Ron believes that lean manufacturing and six sigma can and should work in harmony as a continuous improvement process using them as needed and when needed.
This eBook does not read like a novel since it is comprised of individual articles or posts but it does have then benefit of linking to various other articles and websites. Ron covers a wide range of topics in this guide from the basic elements of the House of Lean. He doesn’t necessarily go into great detail on each topic but gives a great overview highlighting the important parts such that you will know what each element means. There are examples from manufacturing as well as from the office or transactional world.
I particularly enjoyed the sections on Value Stream Mapping (VSM) and Kaizen. Ron uses an example of a peanut butter and jelly factory which people can relate to in order to demonstrate the steps of VSM. Some many think this example is a bit corny but if you can relate to it then you are apt to remember it and isn’t that the point. Ron also explains the difference between a kaizen for a specific issue in a specific area called “point kaizen” versus a more encompassing “system kaizen”. In this he shares 10 kaizen rules which originate from Masaaki Imai’s Gemba Kaizen.
This is a guide that everyone can benefit from but it may be especially helpful for getting senior managers and frontline managers (technicians, leads, supervisors) introduced to Lean manufacturing.
Monday, July 6, 2009
As inventoried product is consumed by the customer a card signal is sent to a processing area to consume a buffer inventory to replace the finished goods product. Upon relieving this buffer inventory a kanban (golf ball) is sent to the upstream process to replenish this buffer.
The golf ball is returned to the upstream process via a pipe in order of the customer demand and hence priority of replenishment is in FIFO (First-in, First-out) order.
The golf balls can then be staged as shown above according to what product type is running on the process equipment or manufacturing cell. The golf balls are returned with the product to the down stream buffer inventory location via simple slide.
Ping pong balls and pvc pipe can also make other effective visual control systems like this one.
You don’t need elegant computerized kanban solutions. Golf balls, ping pong balls, and some pipe can create quick efficient methods to manage your operations. These visual aides also allow everyone to “see” and interact with the system.
Sunday, July 5, 2009
He asked “Is the glass half full or half empty?” The optimists will likely say it is half full and the pessimists it is half empty. Maybe some will say it depends on whether you are pouring or drinking. The Lean Thinker says the glass is twice as large as it needs to be (my answer). And to that the consultant said “you’re right”.
Lean is about learning to “see” the wastes in front of us. It is a mindset of challenging status quo. A case of questioning the question you might say. It would be easy when presented with this example to say the glass is half full or half empty but if you observed the situation you might question how much water is needed. What does the customer want? If you understand the value from the customer’s point of view then you be in a position to eliminate everything else (the waste of the excess cup). This line of thinking is why the Lean Thinker questions why the glass is too large.
This is a great question to add into various training opportunities to lighten the atmosphere and re-iterate the Lean way. The audience will enjoy it and remember it.