Guest Post on Lean Blog about Lean and Green

I had the pleasure to guest post on Mark Graban's Lean Blog while he is on vacation.  I took this opportunity to present my thoughts on Lean and the environment (commonly referred to as Green improvements).

Many manufacturers know the benefits of Lean manufacturing: higher productivity, better quality, reduced cycle time, plus enhanced employee engagement. Lean is excellent at marshalling different groups and individuals into a high performing team focused on rooting out waste. That relentless focus on eradicating waste makes Lean a necessary partner for Green...

Learn how the the acrynom WASTE can help you prevent or reduce the 5 key enviromental wastes.

Also, I highlight 10 things you can start doing right now to reduce environmental wastes in your business.  The benefits of reducing these wastes goes beyond just cost savings.

Click here to read the complete post on LeanBlog.com.

...While the pursuit of Green and Lean is not a destination but a journey it is clear that organizations that stretch themselves to build a culture around the values of Sustainability, Excellence, and Equity will ultimately have a big advantage those who do not. Green and Lean is not a dichotomy rather it can be said being Green is Lean.

Lean Quote, June 25, 2010: Desire

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

Feel free to share some of your favorites here as well.

“The winner ain't the one with the fastest car its the one who refuses to lose” - Dale Earnhardt, #3

I picked today's quote in part because I am on my way to the NASCAR race in New Hampshire this weekend and in part from it's lesson.  Desire and drive to win (no pun intended) can't be replaced by tools, technology, or engineering.  You still need a willingness to win and an overall refusal to lose.  Winners aren’t afraid of challenges, they go after them.  Winning isn’t something that is handed to you. You must do the preparatory, ground work if you’re going to win. This translates into our lives and our work in the same manner.  To improve you must truly want to change and be willing to work hard to make it successful.  It is this desire that sets successful individuals apart from others.

Everyone has to start somewhere and not everything will go to plan. The achievers of this world are not discouraged by initial failure, this is fundamental to their success.  There is no shame in failing before you finally succeed as all successful people will testify.  With every failure comes the chance to learn something new for another opportunity.

All achievements no matter how significant they are to others begin with a burning desire to get the result intended.  In the human mind there is a power that is hard to explain.  It is the ability to focus positive thoughts on achieving the thing that is wanted most. Success is sometimes a thing that at first seems impossible. The word 'impossible' has no significance to someone who possesses a burning desire.



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Guest Post: The “Process” to Improve Your Bottom Line

Today I am pleased to be able to share a guest post by Thomas Pesaturo.  Tom is a Principal at Exceeda Consulting, Inc. in Seekonk, MA.  He has over 20 years of lean operations experience in Fortune 500, small to large, multi-site, domestic and international companies.  At Exceeda Consulting, they believe "only people raise the bar by continually improving processes, technology supports it, so people can raise it again."   Tom is active in the local Lean community where we met.  He also shares a number of great lean examples on Exceeda's Facebook page.  I encourage you to visit his website and facebook page for great Lean tidbits.  In this post Tom is going to demonstrate a value added process approach that can improve the bottom line in your business.

The "Process" to Improve Your Bottom Line
by Tom Pesaturo

We need to change our thinking about cost reduction from the traditional approach of slashing overhead to the sustainable "process approach".  By modifying your internal business culture, you can directly, and positively, impact your bottom line.

Instead of using the traditional approach of overhead expense reduction to cutting costs, which is often not enough or sustainable, organizations must take a more disciplined process approach.  This type of approach reviews work actions and evaluate their value with the goal of eliminating non-value added activities.  Non-value added activities add waste and ultimately, cost to your business.

The purpose of using this value-added analysis is to identify potential areas of improvement.  To deliver a product or service, we perform actions and these can be classified as "value-added" or "non-value added".  Non-value added is defined as waste, or "MUDA", and a key concept in the design of a Lean system.  The Japanese term "MUDA" is defined as any human activity that absorbs resources, but creates no real value.  Estimates have placed non-value added activities in most businesses as high as 95%!!!  These non-value added activities can be classified as avoidable or unavoidable.  The goal is to eliminate the avoidable and streamline the unavoidable so they are performed in the fastest, most efficient and least costly manner possible.

What do you see?

Step back and look at your operation with a critical eye.  Complicated office layouts, customer orders taking too long to be filled, in-baskets that fill up and never get emptied in a day, poorly planned meetings, teams with incomplete or no direction, duplication of work, correcting other peoples work, quotations not completed in time, extra signatures needed that hold up completion, documents handled too many times by too many people . . . all examples of "waste" and non-value added activities.

The first and most critical step is to abandon the "if it's not broken, don't fix it" mentality.  You should ask the questions: "what value does the task deliver" and "how much does this task actually cost us".  It is vital to see the operation yourself, remember, if the work and process are invisible to you then chances are the savings are too!

Implementing the process approach:

Choose one problematic process and draw out the current state "as-is" process (how it is done today) in the form of a flowchart, with each box representing one step in the process.  Then evaluate every step to see if it is needed.  When complete, eliminate non-value added steps from the process and then design the future state "to-be" process (the way you want it done in the future).  Remember to design steps to be done simultaneously instead of in sequence whenever possible and avoid unnecessary hand-offs between people, typically a large source of error and waste.  Always, always, always chose error reduction over speed.

The most successful way to improve profitability is to effectively and permanently eliminate waste which reduces cost.   Using the process approach explained in this article will lead to enhanced profitability and cash flow and will provide a model for sustainability.  In conclusion, you should consider a "fresh set of eyes" to examine your process.  An outsider can avoid the company culture and politics that often cause a faulty diagnosis and can also recommend best practices from other companies and industries.

Change is Difficult

To survive and thrive, we must be prepared at a minimum to modify, adjust, adapt and then adopt.  It's a little like trying to go up the down escalator. Stand still and you can be assured of moving backwards, farther away from your goal.  Change is necessary if organizations want to continue to improve and grow, but change instantly raising resistance from some people.

Here are four common reasons people resist change:

It's unknown –One of life's greatest fears is the unknown. It causes us to resist those things for which we cannot easily discern an outcome.

It's challenging – Change stretches us out of our comfort zone.  Some of us like to be stretched more than other people do.

It's uncertain – When we change, we are often introducing untested waters.  We prefer certainty.

It's unpopular – The resistance to change is universal.  Change invites animosity and tension.

The behavioral change can be the most difficult part of any change. We have all heard the adage "Old habits die hard."  Whether or not we like to admit it, we often are creatures of habit.

Try this experiment. Cross your arms. Now look at how your arms are crossed.  Which arm is on top? Now quickly re-cross your arms so the opposite arm is on top. Keep them crossed as long as you can.  Is that as comfortable? Probably not. Does that make it wrong? No, just different.

Crossing your arms is a very simple task, yet when you tried to do it differently, it felt uncomfortable.  In fact, for some, it may have been so uncomfortable that you couldn't even concentrate.

Yet, if you were to cross our arms differently for three weeks, the "new" way would start to feel comfortable. Many people won't take the time or will feel they can't stick to it that long. Would you ever slip back to crossing your arms the other way? Yes, especially when you are under stress or facing problems.

Dan Heath of Fast Company says that change wears people out—even well-intentioned people will simply run out of fuel.  In the following video (which is also transcribed), Dan explains why changes in behavior requiring self control are so difficult:

We are so ingrained in the way that we do things that to do it a new way, or to stop doing something, causes us to feel uncomfortable and even exhausted. We equate uncomfortable with wrong, instead of different, and there's a tendency to go back to what was comfortable.

Change is one of the most difficult things for humans to readily accept.  Charles Darwin said "It is not the strongest species that survive, nor the most intelligent, but the ones who are most responsive to change" which holds true for culture change. There are several factors that will help any organization make the change they make lasting.  Change agents need to recognize, understand, and interpret resistance to change and develop skills to manage it effectively.  Successful initial implementation and ongoing maintenance of process improvements requires overcoming the resistance to change.

Lean Quote, June 18, 2010: Respect for People

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

Feel free to share some of your favorites here as well.

”If you have some respect for people as they are, you can be more effective in helping them to become better than they are.” -- John W. Gardner

In the end Lean is all about people.  The power behind Lean is a management's commitment to continuously invest in its people and promote a culture of continuous improvement.  The Toyota Way can be briefly summarized through the two pillars that support it: Continuous Improvement and Respect for People. 

Jim Womack, founder and chairman of the Lean Enterprise Institute (LEI) explains showing respect for people in a lean company means more than always congratulating people.

Adam Zak, an executive recruiter specializing in lean, operational excellence and sustainability leaders, wrote a great article on respect for people on his blog Lean Connections.  In this article Adam highlights 5 points that gets to the essence of getting people engaged and energized throughout an organization:

1. Everyone needs to know and feel that he or she is needed.
2. Everyone wants to be treated as an individual.
3. Giving someone the freedom to take responsibility releases resources that would otherwise remain concealed.
4. An individual without information cannot take responsibility.
5. An individual who is given information cannot help but take responsibility.

With the recent passing of John Wooden, famous basketball coach, I think it appropriate to end with one more quote:

"Respect a man, and he will do all the more." - John Wooden.

The Scrap Market: A Place for Defects

Quality problems usually appear in the form of loss (defective items and their cost).  It is extremely important to clarify the distribution pattern of the loss.   Most of the loss will be due to a very small number of causes.  Thus, if the causes of these vital few defects are identified, we can eliminate almost all the losses by concentrating on these particular causes, leaving aside the other trivial many defects for the time being.  This is the basis of the Pareto Analysis method.

A number of Lean techniques utilized in problem solving are really methods to visualize and control our work.  In new product development quality is not always as well understood as we would like.  Despite our best effort to understand and exceed our customer's expectations sometimes a long the way Murphy's Law comes into play.  The adage is "anything that can go wrong, will go wrong."  There is a technique that can help identify defects so they can be solved quickly called a scrap market.

You have probably heard of a supermarket or even used one in your organization. As defined by LEI's Lean Lexicon a supermarket is a location where a predetermined standard inventory is kept to supply downstream processes.  In this context a scrap market is a simple visual control where parts are identified as scrap or that could be suspect are categorized by the type of defect found.  

The following visual is an example of a scrap market for a new assembly cell.  Several red bins (universal visual for defects) are labeled with defect types that can occur in the line.

This provides real time feedback to those in the cell where the defects are occurring.  Now the team can work to eliminate the root cause of the defects by starting with the highest impact defects.  The bin with the largest quantity of defects has the highest contribution to poor quality.  This is essentially a visual pareto chart where focusing on the vital few is possible.

As you can imagine this visual technique has a number of advantages but where I think it has a large impact is launching new manufacturing processes.  When you develop a new product and you transition from prototypes to a large scale production cell a number of new challenges can arise.  The scrap market is a great way to capture those opportunities for improvement so they can be addressed promptly.

Don't let quality problems affect your products.  Your customers depend on it.  Nothing concerns a customer more than defects on a new product they are trying to launch.  Defects have a negative effect on market acceptance of new products.

If you enjoy this post you may want to connect with me on Linkedin or follow me on Twitter.  You can also subscribe to this feed or email to stay updated on all posts.  For those Facebook fans join A Lean Journey on our facebook fan page.

Simplicity: When Details Matter

According to Occam's razor, all other things being equal, the simplest theory is the most likely to be true.  A simple solution always takes less time to finish than a complex one.  So always do the simplest thing that could possibly work next. If you find something that is complex replace it with something simple. It's always faster and cheaper to replace complexity now, before you waste a lot more time on it.

I came across a TED Video by Rory Sutherland that illustrates the need for simplicity within problem solving in a compelling and humorous way. It may seem that big problems require big solutions, but ad man Rory Sutherland says many flashy, expensive fixes are just obscuring better, simpler answers.



Some noteworthy highlights from the video:

So there seems to be a strange disproportionality at work, I think, in many areas of human problem solving, particularly those which involve human psychology, which is the tendency of the organization or the institution is to deploy as much force as possible...

Our own sense of self-aggrandizement feels that big important problems need to have big important, and most of all, expensive solutions attached to them. And yet, what behavioral economics shows time after time after time is in human behavioral and behavioral change there's a very, very strong disproportionality at work. That actually what changes our behavior and what changes our attitude to things is not actually proportionate to the degree of expense entailed, or the degree of force that's applied...

What is completely lacking is a class of people who have immense amounts of power, but no money at all.

... what is happening in the world is the big stuff, actually, is done magnificently well. But the small stuff, what you might call the user interface, is done spectacularly badly. But also, there seems to be a complete sort of gridlock in terms of solving these small solutions....

Based on this backdrop Rory suggests a simple 4 way approach to looking at problem solving:

Rory asks, "what do you call this fourth quadrant?"  I would call this "simplicity".

He suggests that every business needs to add a Chief Detail Officer to be in charge of the tiny things that don't cost a lot but if successful have a big impact.  I wonder if this is not another name for the Lean leader in your organization.

In my experience with problem solving in a Lean environment it is often those simple creative solutions at the source of the problem by those who do the work that are the most effective.  Lean leaders understand this well and work to create a culture that fosters and develops the use of this ingenuity.  A focus on what I call the three e's: education, engagement, and empowerment are effective at establishing that culture.

I think it was Leonardo da Vinci that said it best "simplicity is the ultimate sophistication."