Key Learnings From 2011

In our strive for continuous knowledge sometimes we fail to look back.  Reflecting on our key learnings is an important part of the learning process. My friend Marci Reynolds has done just that in a new post on her blog The Operations Blog. Marci, the Director of Operations at ACI Worldwide, surveyed 12 top operations experts across the globe and asked them to share their most impactful learning or most important piece of advice.

I was fortunate to contribute to this post with first learning:

Developing Leadership Skills Must Be Intentional “This past year I’ve learned the value of continuous learning for the development of leadership skills. Far too may business executives believe leadership skills stem from some sort of wondrous epiphany or other such flash of insight. Sure, great ideas can come to any of us, but being a bona fide leader also means study. It takes reading books and online articles on all sorts of subjects, attending workshops/seminars, and learning from others for instance to develop leadership abilities. It can be a long education, but one with rewards that multiply with the more knowledge you have under your belt.” Tim McMahon, Founder of A Lean Journey Blog

Another favorite is from our friend David Kasprzak at My Flexible Pencil Blog:

Attendance Is Not Synonymous With Performance “In 2011, I discovered the need to ask the question, “Why are we here?” in the operational sense. A tremendous amount of waste is produced from the belief that being in attendance is the same as, or necessary for, producing results. How much of this waste could be avoided if we shattered the assumption that attendance is synonymous with performance, and managers followed the principles of the ROWE (Results Only Work Environment) to measure people only on results?” David M. Kasprzak, Author, My Flexible Pencil Blog: Discussing management excellence and the pursuit of work/life synthesis

And, one last one to share was from Marci herself:

Practice Process Improvement – Before Executing Process Improvement “In 2011, I learned the value of teaching and helping others practice new process management skills, as an alternative to traditional training and immediate implementation. Professional athletes practice their moves over and over again, before they actually compete. The same can easily apply to the process of learning new business skills. If we practice first, we will be much more successful when we begin to apply them. I described this in more detail in my earlier post “A focus on learning will fuel more doing”.” Marci Reynolds, Director Global Customer Operations, ACI Worldwide, The Operations Blog, @marcireynolds12

The remaining list of learnings can be viewed on Marci's Blog -  12 Operations Experts Share Their Key Learnings From 2011.

What would you say?  Share your advice and key learnings from this year in the comment section here.

Lean Quote: Hoshin Kanri is the Structure that Creates Results

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.

"Unless structure follows strategy, inefficiency results." — Alfred Chandler

Traditional planning methodologies focus on steering an organization in the direction desired by top management. Often referred to as management by objective (MBO) since top management establish the objectives, targets, evaluate whether employees meet these targets. Unfortunately, as we know, you can’t achieve the desired results by just dictating individual targets.

Hoshin kanri translates the strategic intent into the required day-to-day behavior. It is not another attempt to improve MBO. While hoshin kanri and MBO both aim to deploy company goals and encourage employees to achieve them, there are several radical points of departure. Specifically,

• Hoshin kanri deploys the voice of the customer, not just profit goals. More than the traditional MBO description of projected market share, profit goals, and revenues, hoshin kanri maps and controls the path to a new design based on customer priorities. It describes the behaviors needed to achieve the policies that support the strategic vision.
• Hoshin kanri depoys breakthrough strategies. It concentrates resources on strategic priorities and chronic problems by going after root cause(s) of obstacles to achieve dramatic improvements in performance.
• Hoshin kanri controls the means and methods, not just the results. It manages cause and effect linkage of supporting strategies, measures, and targets to ensure that employee efforts are realistic, synergistic, and add up to the total effort required to meet corporate objectives.
• Hoshin kanri is a continuous improvement management process, not calendar-driven system. MBO typically establishes a set of quarterly and annual goals. In contrast, hoshin kanri identifies a few critical breakthrough objectives that require coordinated and focused effort over an extended period of three to five years. Annual objectives are established within the context of these longer term objectives.
• Hoshin kanri emphasizes frequent reviews up and down the organization. In MBO, the performance review, often an annual event, does not capture or communicate valuable feedback to inform future rounds of planning. Hoshin kanri uses an explicit inter-level communication system to continually distill local lessons and channel them upward to the leaders of the organization. It routinely tracks performance, reviews the capability of the entire planning system, and modifies it accordingly.
• Hoshin kanri is not tied to performance appraisals. Authentic hoshin kanri separates the evaluation of personnel from the evaluation of the strategy. It focuses not on personnel, but on the quality of the strategic assumptions and the discipline of the planning system.

 Features like these make the hoshin kanri process an attractive alternative for MBO. It emphasizes Lean management principles: customer focus, process control, employee participation, and management by fact.



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Guest Post: Applying Electronic Content Management Technology to the 7 TPS wastes

Today I am pleased to introduce a guest post by Samantha McCollough. Samantha is Director of Public Relations at iDatix, an award-winning leader in enterprise content management and business automation solutions. When not writing, she enjoys Scuba Diving, spending time with her dogs and painting. Follow her on Twitter to see her daily antics @smccollo.

Lean manufacturing has roots in the Toyota Production System (TPS), which is focused on minimizing waste for increased business optimization and value. Through reducing the top seven wastes outlined in the TPS model, a company can effectively improve efficiency and productivity while cutting costs for the most optimal business processes possible. The key concentrations include a reduction in waste regarding: transport, inventory, motion, waiting, overproduction, over processing and defects. Advanced technology now allows for modern, electronic tools to further enhance and improve this established recipe for lean manufacturing success. One of the ways to leverage technology is to adopt an electronic document management strategy as a way to engage in efficient processes. An integrated workflow solution enables a company to control tasks, manage workers and have full visibility of the working process. Let’s look at how a mature ECM solution can be applied to the 7 muda to increase the effectiveness of lean principles.

Transport Waste. This is seen as the transportation of staff and products with no purpose both internally and externally, a common pitfall in organizations with limited process management and a lack of visual control. Often times, this problem is marked by the over shipment of products, the underutilizing of equipment, or the complex physical path of parts when moved through the plant. The ideal is an organized production line leading to delivery of the correct amount at the correct time, an objective met through efficient communication and quick customer response times; all aided through workflow management.

Inventory Waste. Monitoring and managing your manufacturing line properly minimizes the work in process and the amount of unfinished parts in queue. An electronic management system allows for total control of the workflow to effectively manage production and reduce or eliminate any inventory waste.

Waiting Waste. The traditional method of manually reviewing and delivering documentation can choke the core business processes. Idle time for both man and machine is considered the waste of waiting and is often caused by inconsistent processes and low man/machine efficiency, problems reduced or eliminated with business process improvement. An electronic management system allows for synchronization of work orders and worker instructions across each assembly step. A workflow ensures that staff members have the necessary requirements to complete a job at their fingertips without waiting for instructions or sign off to begin the next project.

Motion Waste. Time spent hunting down documents and hand delivering work orders drains resources. Through a decrease in man hours spent on manual tasks, such as traveling across the factory floor for worker instructions, searching for parts or moving heavy machinery, companies can see measurable cost savings and a quick return on investment. Utilizing workflow provides a means for workers to interact in a centralized environment; all work tasks and required information are accessible and viewable.

Overproduction Waste. Besides the inherent issues with excessive amount of unneeded goods, overproduction also results in added storage costs, increased transportation waste and a decrease in productivity due to the lack of demand. Symptoms of overproduction include inventory stockpiles, unnecessary equipment and additional storage space. An optimized and streamline business process offers complete management of the production line. Increased visibility ensures that only the required tasks are being worked on and a lean approach enables organizations to plan according to demand.

Over Processing Waste. Over processing is commonly identified as overlapping worker responsibilities, doing more than is required to meet the final goal, or printing documents that will quickly getting discarded just to share information. Standardizing processes and making documents quickly and easily accessible to all workers from a centralized repository will begin to eliminate over processing.

Defect Waste. One of the most highly regarded benefits is maximizing productivity rates with existing equipment and resources. A workflow management system allows for tracking and monitoring each work step along a process. This allows for identifying potential trouble areas or bottlenecks and reducing the chance of errors or defects. If a weakness exists, it can immediately be isolated and addressed. Companies must be able to anticipate what kind of volume they can push through with current staff, and go further by pinpointing the areas where improvements can be made. Functioning at peak performance, sometimes referred to as being at rate, is a goal facilitated through an electronic workflow solution.



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Use the Catchball Process to Reduce Ambiguity

To reduce ambiguity and misinterpretation during the planning phase of Hoshin Kanri management uses a fact-based inter-level negotiation process known as “Catchball”. The word “catchball” denotes a simple social game in Japan in which a circle of young children throw a baseball back and forth. It metaphorically describes a participative process that uses iterative planning sessions to field questions, clarify priorities, build consensus, and ensure that strategies, objectives, and measures are well understood, realistic and sufficient to achieve the objectives.

Hoshin planning begins with the senior management identifying the strategic outcomes/goals to be achieved, complete with deadlines. Once determined, the ‘challenges’ are sent to the operational units who break them down and determine what each unit and person has to do to be able to achieve the management objective. They then bounce the ‘ball’ back to senior management who catches it and determines if the execution committed to will be satisfactory or not. If it is not, the ‘ball’ is bounced back to the operations folks again who catch it and respond accordingly.

The conversation about strategic objectives and means widens as top management deploys its strategy to middle management because managers throw ideas back and forth from one level of the organization to another. There are three major benefits to catchball. First, it opens up new channels of communication between company leaders and process owners, which greatly improves the quality of the organization’s shared knowledge about its processes, people and relationships. Second, it forges new relationships necessary to execute the strategy. Third, by engaging middle and even front line managers in genuine give-and-take negotiations—that is, by getting their buy-in—Hoshin dramatically reduces the cost of getting people to do what they’ve agreed to do.

In short, catchball is a disciplined multi-level planning methodology for “tossing an idea around.” It takes strategic issues to the grassroots level, asking employees at each level of management to “value add” to the plan based on data analysis and experience of their functional areas.

President Dwight D. Eisenhower was on to something when he said, “A strategic plan is nothing but a dead letter. It comes to life only through discussion and negotiation.”

Catchball requires that the people who deploy downward engage in some kind of data-based conversation with the people who design the plans. There must be sufficient coupling and discussion during the planning process to ensure the strategic plan is clear and realistic otherwise it will be nothing but a dead letter.



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Hoshin Kanri: Setting Management's Compass for Alignment

If management by objectives is so deficient in communicating direction and ensuring cross-functional coordination, then how can managers develop, communicate, and monitor their corporate road maps? The answer is to find an alternative management methodology to disseminate and implement strategic policy in a turbulent operating environment.

Such a planning process already exists. The Japanese call it Hoshin Kanri. The word hoshin is formed from two Chinese characters: ho stands fro “method,” shin means “shiny metal showing direction.” Kanri stands for “planning.” Together, hoshin kanri is used to communicate a “methodology for setting strategic direction,” in other words, a management “compass.”

Hoshin kanri is not a strategic planning tool, it is an execution tool. It is a system to deploy an existing strategic plan throughout the organization. In other words, hoshin management is an idea handler, not an idea generator. It depends on a preexisting statement of direction typically generated by an augmented strategic planning process.

There are many versions of hoshin kanri. However, certain themes recur in many stages of the planning process, at many levels of the hierarchy, and at many levels of abstraction. These principles include:

• Align the organization’s goals with changes in the environment.
• Focus on the vital few strategic gaps.
• Work with others to develop plans to close the gaps.
• Specify the methods and measures to achieve the strategic objectives.
• Make visible the cause and effect linkages among local plans.
• Continuously improve the planning process.

These principles describe certain basic practices associated with the school of total quality management (TQM). In the context of hoshin kanri, they are specifically applied to achieving dramatic and measurable breakthroughs.

At the heart of hoshin kanri is the Plan-Do-Study-Act (PDSA) cycle. Promoted by w. Edwards Deming, this management cycle (sometimes called the PDCA cycle) is an iterative process. A closed loop system, it emphasizes four repetitive steps:

• First, start with an idea and create a PLAN to test it.
• Then, DO adhere to the plan, and take corrective action when necessary.
• Next, analyze and STUDY discrepancies to identify the root causes of obstacles.
• Finally, take appropriate ACTion. If the outcome matches expectations, then standardize the process to maintain the gains. If the results were disappointing, then modify the process to eliminate the root cause of remaining problems. In either case, repeat the process starting again with PLAN.

While these steps appear in a linear sequence, when implemented the phases are best thought of as concurrent processes that can continually be improved.

The hoshin kanri process is sometimes described as the SA/PDSA (Study-Act/Plan-Do-Study-Act) cycle. In the face of changing goals and moving targets, the SA/PDSA cycle reminds members of the organization not only to review pas performance, but also to conduct a qualitative assessment of the next important direction. As the environment changes, the organization can modify it strategic priorities to ensure a dominant position in the eye of the customer.

Hoshin Kanri is the system for setting management’s compass toward True North. It is a tool to align people, activities, and performance metrics with strategic priorities. It can be used to communicate direction, coordinate activity, and monitor progress. It enables members of the organization to work together in the most creative way to define and achieve the strategic intent.



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Lean Quote: Safety Culture and Leadership Behavior

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 desire for safety stands against every great and noble enterprise." — Tacitus, Publius Cornelius

One of the key predictors of an organizations safety culture is perceived management value of safety, often expressed by the behavior of managers within the organization. It is the leadership behavior therefore of managers that often can be the key to influencing risk taking occurring within organizations.

Leadership behavior and safety culture is related to safety performance in two ways:

1. Organization’s safety culture affects safety performance.
2. Leadership behavior affects safety culture and indirectly affects safety performance.

Leadership is more than just management, and refers to not to just what, but how a person influences and motivates others. For example if a manger walks by an employee not wearing the correct PPE for the job, because they do not notice it is not being worn, the employee can be left with impression that managers do not mind if safety rules are not followed. It is these subtle things or soft signals that can play a major role in safety across the board.

As a leader your behavior affects the safety culture of your organization. Focus on three strategies to achieve world-class leadership in safety and operational discipline:

• Change Culture and Behavior - Build and lead a culture of personal accountability for safety and operational discipline.
• Provide Staff with Knowledge and Tools - Establish, and continue to improve, communicate, and maintain well-defined standards, requirements, and tools that integrate safety into processes and operations.
• Create Safer Workspaces – Through direct observation reduce/eliminate hazards to prevent near miss injuries.

In order to connect safety objectives to safety performance, leaders perform critical behaviors, such as challenging assumptions, describing a safety vision, and providing feedback to other leaders on performance.

As the business climate continues to change, it is critical that we think beyond traditional safety management paradigms that limit leadership activities to detached “prescribe and allocate” roles. Successful organizations are demonstrating that active safety leadership is not only definable, it is also effective. Leaders who harness this knowledge stand to gain significant improvements in safety and at the same time build a foundation for other kinds of organizational excellence.



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Everything in it's Shadow

In 5S there is a saying  "A place for everything and everything in it's place." 5S is a technique that results in a well-organized workplace complete with visual controls and order. 5S produces an environment that’s clean, uncluttered, safe and organized. People become empowered, engaged and spirited.

A shadow board is a device used in the straightening phase of 5S to organize tools and materials. It contains outlines of designated tools to show where they should be stored. Here is an example of the shadow boarding technique from FastCap.




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