Checking Out Measures

In continuation with performance measures I want to talk a little about how to review your measures.  Any discussion on Lean measurement should begin by recognizing that measurement is waste. It should be limited and minimized. It has been said "You can't fatten a calf by weighing it." At the same time, you must recognize that an effective measurement system is one of the most powerful tools for change, and for Lean transformation, that exists. 

A good method to check out your measures is to consider Kipling's Six Honest Serving Men or the Five Why's and One How.

Measure: a self-explanatory title

Purpose: why is it being measured?  To which business objective does this measure relate?

Target: what is to be achieved, and by when?

Formula: the formula or ration used.

Frequency: how often should the measure be taken, and reviewed?

Who measures?  Who is responsible for collection and reporting?

Source of data: wher does it come from?

Who acts?  Who is responsible for taking actions?

What to do? What action should be taken?

Limits: What are the control limits within which no action is required?

Since we would like to have the minimum set of measures to evaluate our performance as possible using this approach is vital.  If the measure is ineffective or ineffecient then we can expect more waste in our system then necessary.


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Measuring System Performance

With the end of the year approaching organizations are working on coming up with next years plan.  Hopefully Lean organizations are using Hoshin Kanri or policy deployment to shape their future.  Nonetheless, next years objectives will certainly include performance measures.  I am going to highlight some thoughts on good measurement systems in this weeks Daily Tips on A Lean Journey's Facebook Page.  In the mean time I will start the week with a look at how to define performance measures.

It is useful to start with question "what is a performance measure?" 

Andy Neely of London Business School proposed these definitions of performance measurement, a performance measure and a performance measurement system:

“Performance measurement can be defined as the process of quantifying the efficiency and effectiveness of action.”

“A performance measure can be defined as a metric used to quantify the efficiency and/or effectiveness of action.”

“A performance measurement system can be defined as the set of metrics used to quantify both the efficiency and effectiveness of actions.”

An effective measurement system is one of the most powerful tools for change.  The measurement should:

- Provide short-term indicators of problems - and no problems.
- Be part of a feedback or capability of the process or people.
- Focus on improving performance.
- Be capable of being acted upon.

Having identified what is meant by performance measurement, the next post will cover how to check out your performance measures for effectiveness.


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Lean Quote: Leaders Communicate

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.

"The more elaborate our means of communication, the less we communicate." — Joseph Priestley

 

Every form of multimedia is at our doorstep and they are all fighting for our attention.  We are inundated by ellectronic media like email, text, notifications, and others.  More than ever, we cannot live and prosper without information.  Not in business, not in our private lives.

Reliable, fast, and complete information has never been as important for success as it is today.  Yet, there is a new headache to deal with: excess information by email or cell phone.  The leader must now be more selective, and restrict the exchange of information to what is important.  We can't allow the loss of precious time reading and forwarding unecessary messages.  Everyone needs information to work as a team striving to achieve common goals and to share responsibilities.

A breakdown in communication can result in:

• Rumor mills due to unreliable information
• Wrong information due to interpretation, distraction, and incomplete information
• Conflicting priorities among peers and departments

There must be an open exchange of ideas among peers and between managers and their reports.  In this process all people must be treated as equals and fresh ideas encouraged, whoever they come from.  Information must reach all levels and involve everyone to achieve common goals.

Among all forms of communication, nothing equals a face-to-face exchange.  There is no substitute for body language; the tone, facial expressions, and gestures that accompany language cannot be expressed in writing or even over the phone.

It is important to stress that even the best of all new technology must remain subordinated to the needs of the business.
  

 

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Lean Tips Edition #6

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.

Click this link for A Lean Journey's Facebook Page Notes Feed.

Here is the next addition of tips from the Facebook page:

Lean Tip #76 - When creating a cell consider the location of support teams.

Locate design and engineering areas close to manufacturing.  Place production control in the middle of the plant floor.  Make them share common break areas.  Foster communication and visibility by sharing information on visual displays and have common meeting areas.

Lean Tip #77 - There is much to be said for combining operations rather than specialization in a series.

Think about the checkout line at a grocery store.  Would you rather progress through a series of checkouts, each one specializing: the first on fruit and vegetables, the second on drinks, the third on dairy, etc.  Shopping would be a pain.

Lean Tip #78 - Batching causes time lost while waiting of three components.

The waiting time has 3 components, which are the time lost while waiting for:

 - Completion of the batch a particular product or service is part of

 - Completion of the batch ahead of the batch a particular product or service is part of

 - Management to get around to making and executing the decision to send the batch on to the next step of the value added process

Lean Tip #79 - Use problem cards as an SOP for troubleshooting.

Problem (Trouble shooting) cards are "what if" cards to cope with relatively rare but important contingencies.  What to do if the chuck breaks, for example.  Most air force pilots are used  to the idea of these cards in an emergency in order to avoid potentially disastrous mistakes in a time of crisis.

Lean Tip #80 - A test card can help you with your tasks.

Test cards include a small number of questions on the task - true or false, or multiple choice - used for standard ops where:

•Tasks are done infrequently

•A new operator requires confirmation

•There is a job rotation amongst the team.

Lean Tip #81 - Single Point Lessons can be used as a reminder of a training aid.

A single point lesson is sheet of paper focused on a single lesson that can be covered in 5 minutes of less.  It is often used in TPM (Total Productive Maintenance).   The purpose is to reinforce ares where difficulties have been experienced in quality, safety, downtime, etc.  It can be used as a reminder or a training aid.

Lean Tip #82 - A RACI chart is a good practice for SOPs (Standard Operating Procedures).

RACI denotes who is R = responsible, A = accountable, C = needs to be consulted, I = needs to be informed.  For example:

                           Supervisor    Operator     Facilitator  Area Manager

Prepare SOP              C                 C                   R               A             

Write SOP                  C                 R                   I                A

Approve SOP             R                 I                   C                A

Audit SOP                R & A             I                   I                 A

The RACI charts also has a wide application outside SOPs like use on A3.

Lean Tip #83 - Standards are not to be used for a 'Gotcha' moment.

Standards should not be used to catch people but to enable them.  This is  like a tennis or golf lesson.  You don't hide your weaknesses from the coach, your bring them out because you want to improve.  This is the essential spirit that needs to be fostered with standards.

Lean Tip #84 - When reducing changeovers consider categorizing adjustments into three.

Adjustment is an important consideration that can consume much time.  Moreover, adjustment is the root of many quality problems.  List all adjustments on paper, then categorize into three items.  First, adjustments that should not be made.  Second, adjustments that have a limited number of standard settings.  And third, adjustments that truly need adjustment.  Start by attacking the first category.

Lean Tip #85 - Variation in changeover time is almost as important as the changeover time itself.

 If a changeover has large variation, then good scheduling practice is made difficult.  Therefore, track the major elements of changeover and determine which stages have greatest variation.  Then tackle variation as a separate exercise.

Lean Tip #86 - Successful changeover comprises of four key elements.

There are four elements to successful changeover.  Attitude, including workplace culture and receptiveness to change.  Resources, including time, money, personnel, training, tools.  Awareness,  including the contribution of changeover to flow, flexibility, inventory, capacity and awareness of different  possibilities achieving quick changeover.  Direction, including leadership and vision. priority and ranking, (and presumably impact on the value stream).

Lean Tip #87 - Address the four areas of changeover for real improvement.

In all changeovers there are four areas to address:

1. 'On line activities' - by internal and external task reallocation, or by designs that allow the sequence to be altered - for example simultaneous rather than sequential steps

2. Adjustment - by reducing trial and error by for example indicators and shims, or by design which allows 'snap-on' adjustment

3. Variety - by standardization and standard operations or by design which reduces the possibilities of variation - poka yokes

4. Effort - by work simplification and preparation or by design which incorporates simplification - for example fixing multiple hoses by one fixture.

Lean Tip #88 - For Lean supply to work there must be a few or even single suppliers per part.

The idea is to work with a few good, trusted suppliers who supply a wide range of parts.  An objective is to remove the long tail of the supplier Pareto curve by 10% whereby perhaps 10% of the parts are supplied by 80% of the suppliers.  Generally, collaborative long-term supplier partnerships make sense for 'A' and possibly 'B' parts, less so for commodity items.

Lean Tip #89 - There are essentially two basic and opposing models of how to relate to suppliers.

The two models: the cost-driven adversarial model and the long term collaborative model.  The former is the traditional model where you aim to negotiate hard, get the best unit cost.  And if next year another supplier offers you a better price, you switch.  The Lean model is very different.  Here the relationship is built on trust, and long-term commitment.

Lean Tip #90 - A Lean supplier partnership features 4 key elements.

The features of a Lean supplier partnership are:

1.  Long-term collaborative relationships: where trust and commitment, as well as respect of the right of mutual existence are the prime directive.

2.  Dual sourcing: each component will have few, but at least two sources.

3.  Joint improvement activities: there is a strong collaboration with suppliers on operational improvement.

4.  Operations and logistics: Level production schedules are used to avoid spikes in the supply chain.

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10 Things to Avoid During a Kaizen

Kaizen is the Japanese name for continuous improvement.  While Kaizen is really about improvement involving everyone everyday it is often associated with a structured event.  Kaizen events fill the gap between individual, very local improvement initiatives and bigger initiatives such as value stream improvement.  They are essential to get cross-functional and multi-level teams involved in a Lean transformation.   In that respect, kaizen events have a dual role – to make improvements but also to teach and communicate.

In order for a kaizen to be successful it requires a great deal of both preparation and follow-up.  Here are 10 things I have learned over the years to avoid during a kaizen:

1. Lack of a charter

A charter is used to establish the framework of the kaizen.  It determines what the problem statement is, relevant background information, time frame, team members, some estimation of the resources involved, and how the improvement will be measured.  Without a charter the kaizen could take a very different direction.

2. Lack of identification of critical success factors

In order to make the kaizen successful you need to identify what elements are critical to the process.  You must determine how you will measure the success of this kaizen so you know if your countermeasures are effective.  Without measurement the kaizen can go on and on.

3. Scope is too large

The size or amount you will tackle within the kaizen is important for getting things done.  If the scope is too large you run the problem of never implementing an improvement.

4. Kaizen event not linked business plan

You want to do kaizens that will help you meet your organization's goals.  It can be wasteful to improve processes that are not part of the plan since resources to perform kaizens are limited.

5. Poor team selection

The team members on the kaizen are the brain power and manpower behind the improvement.  Picking the team members should be an important part of planning the kaizen.  You need to consider people's skill sets, expertise or knowledge, individuals within and outside the process, and who will provide the learning.

6. Striving for perfection

If you try to achieve perfection you may well be at the kaizen a very long time.  Perfection is elusive.  If you can accomplish 80% of what you set out to and meet the goals of the charter then call it complete.  You will be back to improve from this new state again.

7. Poor follow through

In some kaizens it can be difficult to complete all the items you want within the time frame of the kaizen.  Failure to follow through on these can undermine the team's efforts.  It is also necessary to ensure the improvements that are made are maintained to prevent backsliding.

8. Not presenting results

Failure to present the results after the kaizen can cause the team to feel unappreciated.  It also restricts learning throughout the organization.  Another area can have a similar situation that can benefit from knowing how this team solved the problem.

9. Lack of visibility for non participants

Getting the buy in from those who are not participating on the team is important for sustaining the improvement.  When you are part of team you are involved in the solution.  For those who are not we need to make them aware of the improvements the team is making.  If you don't they will naturally resist the improvement.

10. Lack of management commitment

Management must not just support the kaizen but actively participate.  Kaizens are as much a learning opportunity as anything else in the organization.  Management must ensure the team has everything they need to be successful and when they are management must recognize the accomplishment.

Learning what not to do is as equally important as learning what not to do.  Don't make any of these mistakes on your kaizen and it will be a success.  From your experience what advice would you give others to be successful at kaizen?

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Lean Quote - Inventory Buffers A Lack of Information

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.

"Inventory is a substitute for information: you buy them because you are not sure of the reliability of your supplier or the demand from your customer” - Michael Hammer,The Economist, 2000

To continue with the theme from A Lean Journey's Daily Tips on supply chain this week I thought this quote was appropriate.  This is also the season when the news is covering stories of Christmas toy shortages due to supply chain issues.

Improving in-season inventory positions requires getting merchandising, planning, supply chain, marketing and other functions to work off “one version of the truth.” It also means aligning these teams around the same critical metrics.

Numerous functions play a role in a retailer’s inventory management—not just the planning or supply chain functions. These functions may have quite different information on what’s selling (or not) and why, when product is due to arrive and when and where it is needed. This lack of common information leads to errant plans and disjointed operations, or simply put, the wrong inventory in the wrong place at the wrong time. 

Where you have perfect information, you don't need any buffer stock.  The less reliable information you have, the more inventory you need to hold.  On a basic level there are two pieces of information needed:  the reliability of the supplier to deliver to you and the stability of the demand from the customer.  Inventory is a buffer for fluctuations in these two components of the supply chain.

Art Smalley, President of the Art of Lean, has a great visual explaining the basics of Toyota's inventory logic:

To improve the information you have about your supply chain these are some questions you can ask:

What is your on time delivery performance?
What is your lead time?
What is your inventory level?
How much time do you spend looking for components?
How good is the quality of your supplier?
What is your supplier's on-time delivery performance?

Art demonstrates that making improvements in your supply chain with the emphasis on lead-time can have a big impact on inventory.

So if you want to reduce your inventory substitute distortions or uncertaninty in your supply chain with good information while continuously improving your cycle time.

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Lean in the Fast Lane

Earlier this year I was fortunate to work with MassMEP to create a unique training opportunity for one of our facilities.  The goal was to support transformation in a rather challenging area of our unionized plant, the maintenance trades.  We thought learning about Lean in this fun and energizing way would win them over.  We have seen many Lean improvements as a result of this approach.  Here is a summary of the first exercise we did called "Lean Management in the FAST Lane":

On Wednesday, June 30, 2010, the first “Lean Management in the FAST Lane” event was held at Thompson International Speedway in Thompson, CT. Teams from both Yankee Candle Company located in South Deerfield, MA and OFS, Fitel in Sturbridge, MA made up our first event. The day began with an introduction to a number of Lean Concepts which would be critical to the success of each team’s pit stop rounds to be held during the afternoon. Presentations and discussions included Continuous Improvement, Building a Winning Culture, Metrics and Measurement, Teamwork, Standardized Work, Job Instruction (JI), Job Methods (JM) and Sustainability. Each lean concept included examples demonstrating the use and application of the concept in the world of NASCAR racing.

The afternoon consisted of a walk around Thompson Speedway lead by former NASCAR Winston Cup Series 1988 Rookie of The Year and NASCAR Whelen Modified Tour driver Ken Bouchard. Each team then “suited up” for their training and 5 rounds of pit stops. Each round was video taped and critiqued including continuous improvement concepts and suggestions to improve their pit stop time in the next round. The results were amazing with each team able to cut their time in half by the fifth round. The OFS, Fitel team has set the bar for future teams with a “lightening fast” time of 19 seconds to change two tires and fill the tank with fuel.

“This was a very positive activity with lots of potential” said Tim McMahon, Lean Manufacturing Leader for OFS, Fitel. “I would highly recommend this event to others who are interested in further developing their lean concepts and teambuilding activities. Thompson International Speedway is also an excellent venue for this event” continued McMahon. Peter Dowling, Manager of Operations for OFS, Fitel had similar comments stating that “This program can go in so many positive directions, I really think you have something here.”

Now there is a video demonstrating the application on Lean thinking to solve problems utilizing team work from this training event.  If you look closely at the video you can see the transformation from the baseline to the last improvement which over the course of several hours is quite dramatic.  My company OFS is the blue team. 




OFS was able to improve from 30 seconds to 19 seconds using video analysis, job breakdown, poka yoke, and standard work.

A couple of key points I would like to emphasize:
1. Tailor your approach to Lean training to you audience if you want it to stick.
2. Emphasizing team work is essential in problem solving.
3. Competition is a always a good motivator.
4. People want to win, so help them win by providing the know how and the time to improve.
5. Learning can be fun, but you must bring the learning back to your organization.

Get in the Fast Lane with your Lean training.