Wednesday, October 28, 2009

Toyota Misconceptions Debunked

Mark Graban from the LeanBlog recently posted about an article in Quality Digest that attempts to set the record straight on ten common misconceptions of Toyota.

Stewart Anderson's Ten Common Misconceptions about Toyota

The article does a good job of making the point that TPS is really the “Thinking” Production System and not the “Tools” Production System. Toyota solves problems that interrupt flow in operations from three sources: muda (non-value-adding activity), mura (unevenness), and muri (strain or overburden). Tools like 5S, SMED, TPM, A3, Kaizen and others are countermeasures to reduce the problems in the current state. Toyota believes that if you are not improving your processes then they are declining.

In Anderson’s explanation of these misconceptions that many have about Toyota and the way they operate he offers a definition of Lean. If you want to understand Lean then reading his rebuttal to the misconceptions will piece together a definition of a Lean Enterprise. Toyota was the first corporation to embody this definition in modern time and of course made it famous.

What is important and subtly mentioned in the article is Toyota is not at perfection or the ideal state. They recognize this better than anyone and focus on improving the current situation to get closer to that target everyday. I had once heard that even at Toyota their ratio of value added to non-valued added work content is like 35 or 45%. Toyota understands solving problems while providing value the customer wants is what gets them closer to the next target condition.

Check out Mark's comments on the article as he highlights a few of these misconceptions.

Tuesday, October 27, 2009

Lean, Competition, and the Bear Story

In lean and in business much is often said about growing and improving our organizations so that our competitors will not steal our jobs. This is especially true during these times of global recession. With our recent economic downturn there are more supply lines then there are. All organizations, markets, and industries are and will be affected by this.

Of course, I think those companies practicing lean and innovating new products have a better chance to minimize their exposure during this downturn period and be positioned to capitalize on growth on the upside.

Companies need to remind themselves of The Bear Story:

Two friends went camping in the north woods. In the middle of the night they were awakened by the sound of a bear outside their tent. One friend was busy panicking when he looked over to see his buddy calmly lacing up his running shoes.

“Why are you doing that, you fool? Everyone knows you can’t outrun a bear!”

His friend looked at him and said, “I don’t need to outrun the bear. I only have to outrun you.”

This simple story illustrates a strategy many organization practice especially important during times of recession. We need to execute better than our competitors or our customers will go somewhere else. The company that handles the recession better, responds better, treats its customers better, and executes better is the company that will lead the way out of the recession by taking market share from its peers.

As you work on new product development and operational excellence through Lean share the Bear Story so others truly understand why this is so important.

Sunday, October 25, 2009

Crisis-driven versus Kaizen-driven Thinking

The global marketplace has created a new game whereby forcing companies and their leaders to change the way they think and operate. The object of this game is to consistently provide even-higher quality products and services at lower costs relative to the quality produced. This is contrary to our societal belief that higher quality must cost more.

Three fundamental shifts in an organization’s mindset make it possible to understand how to achieve high quality and low cost in every action taken. First, there is a shift from a purely externalized view of the world to one that combines the internal with external. Organizations not only focus on strategic external activities but understand the importance of internal capability. Second, there is a change in focus from content, or results - a focus that only sees outcomes - to one that appreciates the process leading to them, as well as the results. Finally, a shift from acting in response to external crises or stimuli, to being internally driven by the freely chosen will to improve and create something better. I am going to focus on the later for the remainder of this discussion.

Tom Lane and Alan Green wrote about this change in thinking in their book “The Way of Quality, Dialogues on Kaizen Thinking” in1994. They talk in detail about the shift from what they call “crisis-driven” thinking in which people react and respond to problems once they occur to what they call “kaizen thinking” where people prevent problems before they occur. The table below contrasts the way of thinking of these two approaches.

MENTAL FRAME

CRISIS-DRIVEN

KAIZEN-DRIVEN

Psychological Need

To be right and best.

To be improving continually.

Method of Perceiving

Looking at results with desire to control outcomes.

Looking at process to increase comprehension and performance.

Object of Measures

Fix blame, determine what / who is wrong.

Get data on current performance to help improve and adjust.

Source of Mental Energy

Threats / fear, fire-fighting excitement.

Problem elimination, challenge to improve.

Psychological Reward

Short-term fixes, immediate feedback

Long-term system upgrade, indirect feedback.

Attitude toward Change

Avoid major system change because it implies wrongness.

Expectation of constant small and large changes.

Guiding Principle re: Change

If it ain’t broke, don’t fix it.

It can always be done better.

Learning Approach

Quick analytical skill and remedial action.

Curious about large system: act to create quality, prevent recurrence.

While there may be a strong desire to shift from crisis-driven to kaizen-driven thinking, the transition must be made carefully. The crisis-driven system requires ongoing attention, even while it is being phased out, because it lies at the heart of all our current systemic structures and till maintains order.

Moving to kaizen thinking may be difficult but not impossible. It requires us to change our action behind thinking. Below is a table of key drivers of action behind crisis and kaizen thinking.

Crisis Thinking

Kaizen Thinking

After the fact

Before the fact

Event-focused

Process-focused

Judgmental/critical

Curious/investigative

Right/wrong-based

Data-based

Non-systemic/narrow

Systemic/broad

Short-term fix

Long-term change

Expedite out-of-control operation

Upgrade in-control operation

Immediate/direct reward

Long term/indirect reward

Immediate problem fix

System/operation improvement

Minimum diagnosis

Continuous thorough diagnosis

Work/problems come to you

You go to the system

Internal –hero oriented

Customer oriented

Narrowing of thinking scope

Raising/widening of scope

Time to redo

Time to do it correctly

Progress is tangible only

Progress often intangible

Working harder gets it done

Working smarter gets it done

Variance to fixed standard

Standard continually upgraded

Fragmented jobs

Work as unified flow

Disconnected individual effort

Connected joint effort

Things always break

Things are prevented from breaking down

Don’t fix it if it isn’t broken

It can always be improved

Give me simple answers now

Let’s see how this works

Don’t ask questions –do it

Questions help us understand

Don’t confuse me with data

What are the data?

Job security comes from their depending on my ability to fix

Job security comes from increasing our capability

Learning takes too long

Learning is continuous

Learning means you are inadequate

Learning is necessary to deal with change

Getting by is good enough

Fixing it permanently is the only solution

Quality is passing inspection

Quality is no variances

Quality is not as important as quantity/low cost

Quality is everything we do and think

Don’t challenge the system

Everything can be improved

Success is individual

Success is of the whole

Work manages me

I manage my work

Customer reactions drive improvement

Customer input blends with technology and capability input to create improvement

I get paid to react quickly

I get paid to think, then do

Who is to blame is important

What went wrong is important

Targets are to be hit

Trends of improvement are tracked

Don’t worry about the big issues

Work on seeing how large issues affect the small ones and vice-versa

Mistakes mean failure

Mistakes show where we need to improve

External simulation from crises (especially bosses)

Internal simulation from exploring, discovering, improving, understanding

Physical energy dominates

Mental energy dominates

Bored with discipline, routine, energy goes into complaining

Dislike disorder, maintain orderliness; cleanliness, standards, safety; self-managing

Thinking is what shapes our actions. Not only what we think but how we think. World-class products and services result from breakthrough thinking. If companies are going to deliver higher quality and lower cost in the increasingly competitive global economy, they must change the way they think about work, organization, and themselves.

Thursday, October 22, 2009

Standard Work for Flu Season

With the start of flu season in the northern hemisphere and the growing concerns about H1N1 Flu companies and individuals are looking at ways to prevent the spread of infection. Proper education, simple prevention techniques, and limited exposure around sick people have been recommended.


I recently observed a form of standard work displayed at the point of use in regards to preventing the spread of illnesses by hand washing. Frequent hand washing is one of the best ways to avoid getting sick and spreading illness. Hand washing requires only soap and water or an alcohol-based hand sanitizer.


Mounted in a restroom area at the sinks was a simple posting reminding individuals to wash their hands.



The posting described a 6 step process detailing the proper technique to effective hand washing. The process followed a simple clockwise flow with pictures and text describing the actions needed.



In this case a standard was created for hand washing that is easily visible at the point of use. Are you using Lean Thinking to tackle all your opportunities for improvement or just the manufacturing or service related ones?

Tuesday, October 20, 2009

Simple Visual in Hockey to Curb Violence

My oldest son has been skating for a few years and started playing competitive ice hockey on a team this year. On the back of the opposing team’s jerseys was a simple visual we all recognize, a stop sign.

This simple visual on the back of the jersey is a great way to make players STOP and think before they act. As it turns out this patch on the back of the jersey is part of a program called Safety Towards Other Players developed by Kevin Stubbington in 1996.

The STOP Program teaches participants about the dangers of checking from behind and other safety tips as well as values such as sportsmanship. “Checking from behind” is viewed as one of the most potentially dangerous actions in the game of hockey.

The STOP Patch is the focal point of the program. It is a three inch wide patch that is applied on the back of the jersey, centered just above the numbers and below the name patch. It is a reminder for players to “STOP” immediately and not make body contact when they see the patch because you are in a potentially dangerous position.

In operations we use this simple visual in much the same. Whenever we get an outcome that is different than expected we must STOP and think. Lean is about uncovering issues and solving these opportunities for improvement. We have used this visual to support changing our mindset toward Lean Thinking in our factories.



Simple recognizable visuals can be effective in changing behaviors just as this STOP sign on the back of a hockey jersey or in a manufacturing plant.

Sunday, October 18, 2009

The Changing State of U.S. Manufacturing

Everyone has likely heard about the shrinking manufacturing base in the United States especially as we go through the current economic downturn. We all know people affected by organizations downsizing and off shoring jobs. It has been said that we have become a service based economy.

In a recent Industry Week article by Ralph Keller, the president of the Association for Manufacturing Excellence, he found that the data tells a different story. While the manufacturing sector has shrunk over the last several decades there is an upside. As a results of continuous improvement efforts manufacturing value-add has grown.

The number of people employed in manufacturing companies in 1977 was over 18.5 million but employment declined almost 29% by 2005 to just over 13 million. The number of hours worked by production operators also declined by the same amount to just over 18 billion.

Over the same period, the value added by manufacturing operations in the United States increased 377% from $585 billion to over $2.2 trillion, and manufacturers' sales increased 349%. The combination of increased value-add and reduced production hours results in the manufacturing value-add per production worker hour increasing by 530%.

This is really a case of increased productivity, not a shrinking manufacturing base as a result of continuous improvement and technological innovation. None of this would be possible without two key elements in businesses today. The first is the availability and use of capital to drive innovation in technology.

During the 29-year period of the Census data, capital investment in manufacturing companies increased from $51.9 billion to more than $128.3 billion, almost 2.5 times the investment in 1977.

The second element is the widespread adoption of Lean Thinking to improve our capability and efficiency in terms of value to the end customer.

Increased capital investment and increased productivity has resulted in less manufacturing jobs. But for those employed there is an upside in terms of higher wages.

The wages paid to production workers rose from just over $157 billion in 1977 to almost $337.5 billion in 2005. The average hourly wage (not including benefits) rose from $5.89 per hour to $17.70 an hour over this period.

The advantage the United States has over other low-cost countries is the access to higher-skilled workers with knowledge of continuous improvement methodologies using more capable equipment. This means the future of manufacturing here is value added products with higher profitability for US companies and higher standards of living for those US workers.

Wednesday, October 14, 2009

DOWNTIME and the Eight Wastes

Acronyms can be a very effective tool for remembering new concepts, objectives, and processes. We use acronyms in virtually all aspects of our lives to aid our memories. In learning the Eight Wastes (of which I prefer over the 7 wastes for highlighting the human element of waste) the acronym DOWNTIME is a useful memory aid.

Defects

Over-production

Waiting

Non-utilized Resources/Talent

Transportation

Inventory

Motion

Excess Processing



This is especially effective in relating to value added work and non-value added work.

In manufacturing or service orientated processes there are a series of steps that make up the total lead time to provide the customer with a product or service. This lead time is characterized by value added activity and non-value added activity as shown below.


Now of course we know that our goal is to reduce the waste or non-values added activity so as to maximize the value to our customer. This value creating activity is the only activity the customer is willing to pay for resulting in the company paying for the non value added activity. Non value added activity essentially delays the time to complete the product or service which in essence can be characterized as DOWNTIME.




By focusing on reducing or eliminating the Eight Wastes associated with DOWNTIME we can shorten the lead time to the customer as shown above. This will result in lower costs, higher capacity for more demand, and increased customer satisfaction which are all desirable to grow your business profitably.

Using the acronym DOWNTIME to remember the Eight Wastes is an effective tie in to the concept of value added activity and how it relates to the cycle time of satisfying your customers.

Tuesday, October 13, 2009

One Stop Resource at The Lean Library

Do you like one stop shopping? It would certainly be Lean to be able to get everything you need in one place. Well, you can find everything Lean at The Lean Library. The Lean Library offers insightful book reviews, guides to help you find the right book and quick links to help you purchase them. There are sections for useful links, research articles, current lean news, and updates from the Lean Blog Community.

The Lean Library is comprised of the following sections:

Card Catalog consists of books on virtually every Lean subject with links where you can find them.
Reviews are a compilation of book reviews by experts on the Lean body of knowledge.
Periodicals are a collection of lean articles with an emphasis on new research.
Links are a collection of online resources and information on Lean.
Latest Lean News provides news update on Lean Manufacturing.
Lean Blog Aggregator allows you to check out what other blogs are saying about Lean including this blog.

And probably the best section for those just starting out or trying to learn a new concept is the Ask the Librarian section. This allows you to find books for the topic you are interested in most.

The Lean Library is the concept of Jamie Flinchbaugh, co-founder of Lean Learning Center. I wrote about the Lean Learning Center before and if you have not checked it out you should. All the proceeds at the Lean Library go to charitable organizations focused on educational programs, mostly at universities, that promote lean concepts or other cross-discipline collaboration efforts.

Sunday, October 11, 2009

The Tipping Point of Lean Culture

If you haven’t read The Tipping Point: How Little Things Can Make a Big Difference yet you should. This book by Malcolm Gladwell is a must read for anyone involved in change management. The Tipping point is when an idea, trend, behavior, product, or message creates enough critical mass crossing a threshold where change becomes unstoppable. It is this epidemic of change that many seek to make their Lean journey sustainable.

Gladwell describes three rules (or agents of change) in the tipping point of epidemics:

1) The Law of a Few
According to the 80/20 principle 80% of the work will be done by 20% of the participants. This 20% who are responsible for starting word-of-mouth epidemics are described in three essential roles called connectors, mavens, and salesmen. Connectors are people with the ability to bring the world together. They know lots of people, particularly important people. Mavens are teachers and students of information with an abundance of knowledge. Salesmen are the persuaders, charismatic people with powerful negotiation skills.

2) The Stickiness Factor
Stickiness refers to the specific content and presentation of a message to make it contagious, memorable or sticky.

3) The Power of Context
Human behavior is a lot more sensitive to and strongly influenced by its environment. The Broken Window Theory suggests that crime is the inevitable result of disorder and my reduced by improving the environment and thus perception of the environment. Another example is the rule of 150, which is the maximum number of individuals with whom we can have a genuine social relationship.

These three elements of change are the same elements used in successful Lean transformations. Jim Womack and Daniel Jones talked of a similar action plan describing Wiremold’s transformation in the early 1990’s in their book Lean Thinking. “The trick is to find the right leaders with the right knowledge, some type of crisis to serve as a lever for change, and quickly creating dramatic change in the value-creating activities.”

The sensei is symbolic of the mavens who have the knowledge for change. Sensei’s show us how to change. The salesmen and connectors are often referred to as the change agent. They are committed to convince us to improve. In lean transformations you hear bout creating that “burning bridge” which is analogous to the stickiness factor. This is often related to protecting our jobs from global competition but there can be other crises for which change is necessary and vital. Many lean transformations start with some sort of 5S initiative which is the broken window theory of lean. You may also find value stream maps, visual factory elements, and pull systems in the beginning. These are all about changing our comfort zone in our current environment toward a Lean Thinking organization.

Gladwell concludes with this insightful comment about how an organization can support successful change:

What underlies successful epidemics, in the end, is a bedrock belief that change is possible, that people can radically transform their behavior or beliefs in the face of the right kind of impetus.


If you are not using these rules for creating a tipping point in your lean transformation this may be the reason it is not spreading like wildfire in your organization.

Wednesday, October 7, 2009

Strategy Deployment Video

This is the time of year in which many organizations are working on preparing the plans for the following year. It is from this process that budgets and the subsequent goals are forged. Unfortunately, many organizations suffer from improper measures of performance which are poorly communicated through out the organization. This results in confusion and a workforce not fully engaged in supporting the company's plans.


Lean's answer to this problem is Hoshin Kanri, commonly referred to as Strategy Deployment. Pascal Dennis is probably the foremost expert on Strategy Deployment with his book Getting the Right Things Done. If you have not read this Shingo Prize wining novel you are missing a way of aligning the effort of good people in a systematic way on your strategic objectives. Pascal Dennis, Author of Getting the Right Things Done was recently interviewed on this newest book explaining strategy deployment.


Lean Pathways a firm dedicated to eliminating waste in all forms where Pascal Dennis is an Associate has provided a series of videos on strategy deployment. This video series found on YouTube - Lean Pathways' Channel is from a presentation titled "How do you focus everyone on doing the right things using strategy deployment". This presentation on Lean Leadership was delivered at the Lean Transformation Summit in November of 2008 in the UK.


If you want to make your planning process more than "PowerPoint Junk" then why not listen and learn from someone who knows strategy deployment first hand.