Wednesday, May 4, 2011

Daily Lean Tips Edition #13

For my Facebook fans you already know about this great feature. But for those of you that are not connected to A Lean Journey on Facebook or Twitter I post daily a feature I call Lean Tips.  It is meant to be advice, things I learned from experience, and some knowledge tidbits about Lean to help you along your journey.  Another great reason to like A Lean Journey on Facebook.
Here is the next addition of tips from the Facebook page:

Lean Tip #181 - Eliminate overproduction to solve your Lean and Green wastes.

Identify areas of overproduction and root causes of waste in the current manufacturing system and find ways to reduce or eliminate them in the future. Some raw materials can be recycled meaning your carbon footprint will be reduced, however energy consumption will increase and the amount of unnecessary products needing disposal is a distinct possibility.

Lean Tip #182 - Don't neglect quality if you want to improve Lean and Green efforts.

Although manufacturing companies want to reduce costs and increase efficiency, they neglect quality control. If this area is overlooked, you end up with defects and added waste which will need to be disposed of. More space is required if these products are stored for reworking or repair and therefore means an increase in energy use for heating, cooling and lighting.

Lean Tip #183 - Going digital saves the environment and saves you money.

Is it necessary to print out a meeting agenda for every member? Or can you incorporate it into a slide show, or simply send it via email? How about posting employee manuals and other materials online rather than distributing — and onerously updating — print copies? Increasing numbers of digital storage devices and systems for businesses make going digital very easy to do.

Lean Tip #184 - Use multi-purpose machines to reduce Lean waste and save energy.

Each piece of office equipment you buy produces heaps of toxic substances in both the manufacturing and disposal stages. So the fewer office machines you buy, the smaller your footprint will be, and the less you have to travel to them. Consider using multi-purpose machines that handle copying, scanning, faxing, and printing, as well as other multi-tasking machines.

Lean Tip #185 - Make recycling easier for your employees and customers.

Recycling is about more than separating your waste into a few different bins and waiting for somebody to take it away. By finding creative ways to recycle and reuse in the office, you can save waste, and in most cases save money while you're at it.

Lean Tip #186 - A Lean Accounting System needs to be a minimalist system.

A Lean Accounting System needs to be a minimalist system - tracking only the absolute minimum transactions with the lowest frequency possible. A simplified system that cuts waste and unnecessary transactions. A system that highlights when to take action and when not to.

Lean Tip #187 - Kaizen results don't show up on the bottom line.

Kaizen results don't show up on the bottom line. Of course they don't! Actual savings are only made when people actually leave or less material is purchased. Lean is not about cost reduction but rather a growth and competitiveness over the long term.

Lean Tip #188 - If profit is seen more important than cash, then overproduction can be an issue.

Overproduction, at least in the short term, may generate positive variances and increase the book profit. However, your cash flow is likely to decrease. If profit is seen more important than cash, this is an issue. Cash flow is a good measure of a Lean system taking profit and inventory into account.

Lean Tip #189 - Buying supplies at a discount can help your variance but at a cost.

If supplies are acquired at a discount this will generate a positive variance. But what if that means that delivered batches will be bigger and more inventory will need to be stored? Buying more than you need at a volume discount also means more cash outlay. Since all the material is not needed collecting money for your goods and services takes longer as well.

Lean Tip #190 - Frequent product costing encourages number manipulation rather than focusing on improvement.

Product costing on a monthly-by-monthly basis. There is an obsession in the west with detailed product costing brought about by the belief that costs can be controlled by the financials. They cannot. Only productivity improvement can make a difference. Variances often encourage game playing managers who spend an inordinate amout of time manipulating figures rather than focusing on improvement. Plan and machines are sunk costs. These costs cannot be changed in the short term, only manipulated. In fact, there is no such thing as the true product cost, at least in the short term.

Lean Tip #191 - When Value Stream Mapping Identify the Basic Process Steps Before Hand.

Identify the basic process steps before conductiing your value stream map. This helps your Value Stream Mapping team be familiar with the process and understand the level of detail that will be captured. For each step in the process agree to the measure/data requirement needed for the map.

Lean Tip #192 - Don’t be shy – visit the workplace when doing a value stream map.

Before, during and after – walk your value stream to ensure that you understand the process – you will gain far more knowledge of the process if you witness the events yourself. An incorrect VSM can lead to wrong conclusions being drawn and can waste valuable time of improvement teams. Spend time at the workplace to ensure that what you map is accurate.

Lean Tip #193 - Make your value stream map with pencil and paper.

These days there are lots of value stream mapping software available but for first timers who may not be familiar with the software its just one extra thing to learn. Excellent results can be obtained through traditional pencil and paper. When drawn in pencil it is easier to make changes. Just remember to stick with basic value stream mapping icons.

Lean Tip #194 - Take your time and validate your value stream map.

There is a lot to think about when undertaking value stream mapping so be sure not to rush. Create a check list of items that should be included in the map and cross them off as you go along. When you think you’ve got your map complete – validate it with your stakeholders – ensure its representative of what actually happens. Use this to iron out any problems with the map. Don’t take this stage for granted – get it wrong and you can find your improvement suggestions shot down in flames as stakeholders trash your map!

Lean Tip #195 - Remember keep your value stream map simple.

Remember that there is no perfect value stream map and you should set out to capture all the sufficient information. Keep the mapping process simple and allow for corrections. This will allow everyone to participate and be engaged in the improvement part of the process.


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4 comments:

  1. Can you explain this further: Lean Tip #189 - Buying supplies at a discount can help your variance but at a cost.

    I don't see how it helps variance.Buying in batches implies and drives alot of variance. Using heijunka to smoothen out the batch purchasing decreases variance...

    managementbyninjutsu.com

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  2. Tommy, let me clarify for you. In traditional companies purchasing often buys in bulk to get a volume discount. This discount creates a favorable purchase price variance. But you pay for it in lower cash flow, more storage, obsolete inventory, and transportation. In contrast a lean company levels the production based on demand and purchases only what is needed to meet this demand. The later is the preferred method.

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  3. So you mean that it decreases variance in purchase price but not in other aspects? how is a discount price not variance?

    buying in batches means that inventory goes up and down from maximum down to reorder point, thus also variance in storage. transportation is infrequent and probably not in a stable takt and thus it also have variation. Buying in batches mean buying alot thus paying alot at certain points while not paying anything at all for long periods, thus also variance. discount prices instead of paying the same price when ordering in small batches delivered in daily milk rounds also increases price variance.

    by using a kanban system variance in storage, transportation, payment etc is decreased. payment, transportation, storage replenishment etc all will have a stable takt, and less variance. Dont you agree?

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  4. Tommy, it is a variance. Often in traditional settings there are silos and many try to optimize their metric. In this example purchasing teams often have a goal of buying at lower prices. This is done by buying in bulk where a purchase price variance occurs. This of course is not lean since you suffer other wastes due to buying in bulk as you point out. A Lean system by contrast is about level flow. We know this produces the lowest cost most efficient process. Yes I agree with you. My point was that you should not be concerned with lower price as with lowest total system cost.

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