Lean Quote: Making Better Decisions

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.

"Making good decisions is a crucial skill at every level." — Peter Drucker

Decision making is an essential part of business in all organizations. In traditional companies this power is typically held by few managers at the top of the organizational ladder. Lean companies however strive to empower their employees to make decisions at all levels through access to data, knowledge of evaluation methods, and defined standard processes. Nevertheless, decisions are necessary in all organizations and the following these guidelines can be beneficial.

1. Timing. Neither making snap decisions nor always having to “sleep on it” is the best approach to the time factor involved in making decisions. Make your decisions based upon the circumstance and the time available. Within the realm of practicality, give yourself enough time to take the following decision-making steps.

2. Define the problem. Be careful not to confuse symptoms of the problem with the real problem.

3. Identify the options. Try to get at least four alternatives. Since you may be too close to the situation, seek others’ input.

4. Gather the facts. In order to evaluate your options, you must gather the facts about the ramifications of choosing each option. List both the pros and cons of each option.

5. Evaluate the options. Usually this will include a comparison of costs, time required to implement and the expected end result of each option.

6. Choose and put into effect. Key, and often neglected, aspects of implementing decisions are to communicate the decision to the affected parties, outline why the decision was made, why the particular option was picked, what actions are required on their part and what beneficial results are expected.

Not every decision will be right but if you follow these six guidelines you will find you have many more right decisions than wrong decisions. Remember, the only thing worse than a wrong decision is no decision.

Debunking Six Common Misconceptions of Standardized Work

Last week I featured a guest post on standard work as a mechanism for facilitating and empowering improvement. By documenting the current best practice, standardized work forms the baseline for kaizen or continuous improvement. As the standard is improved, the new standard becomes the baseline for further improvements, and so on. Improving standardized work is a never-ending process. Standardized work is one of the most powerful but least used lean tools.

Unfortunately, there are many myths regarding standardized work that if followed create a flawed system. To prevent you from failing into this trap I will attempt to debunk several of these myths.

A common misconception is that ‘standardized’ is assumed to be permanent. This is not the case. It’s just the best way we know how to do the work today. Continuous improvement is always encouraged, once the current best method is understood and practiced in order to establish a stable foundation for further improvement.

Some think employees develop their own standardized work. The initial work standard should be developed by engineers (process owners) working with operators who are part of a team. Group leaders and team leaders then have responsibility for training employees on the standard work and soliciting their input. Once the process is operating at some level of stability, employees are challenged to develop better methods, but the methods are always reviewed by others, including management.

Another common myth about standardized work is that many think of a rigid work environment where workers aren’t required to think. This is totally the opposite as I said above. Operators are part of the creation of the work standard and then are challenged to improve these methods. The standard creates a baseline by which improvement can be measured. Ideas should be discussed with group leaders and considered depending upon the consensus and buy-in from other members and shifts. Once consensus is reached then experimentation can be done to determine the effectiveness of the improvement. If it is deemed an effective change then the standardized work can modified and everyone trained in the new method.

It is also believed that with standard work you will know everything about the job and therefore be able to train anyone to do the job. Standardized work is the process used by operators to define their work method through documentation and visual postings. This is often misinterpreted as a fully detailed description of the work and associated standards. Anyone who has read the standard work sheets would see that the work description explains the work elements in basic terms - not nearly enough information to read and fully understand the job. Job Instruction Training (JIT) is the method commonly used in Lean to transfer complete knowledge of a job to a team member. In my experience anyone who believes that a job is simple enough to distill down to a few sheets of paper underestimates the competency level necessary of their employees.

Another myth is that with standard work and visual postings employees will not deviate from the standard. This couldn’t be further from the truth. There is nothing in standardized work that will prevent deviation by the operator except the visual awareness of others. The visual reference is utilized by management for monitoring adherence to the standard which is done through periodic and regular audits of the standardized work. To ensure compliance to the standard, it’s necessary to poka-yoke or mistake proof the process to prevent deviation and make excursions highly visible.

Lastly, there are those that believe standard work is only for the shop floor. Standard work has been proven effective in many industries from the military to healthcare and everything in between. In particular, I think this is a technique that management teams must adopt. How we run the business should not be any different than how we do business. In my experience, those organizations that use standard work at the management level are more productive and effective.

Standardizing the work adds discipline to the culture, an element that is frequently neglected but essential for Lean to take root. Standardized work is also a learning tool that supports audits, promotes problem solving, and involves team members in developing poka-yokes. While standard work can be an effective foundation for continuous improvement it is important to recognize that it is not a one-stop shop for all that ails you.

New Sponsor - LeanKit Kanban

I am pleased to announce a new sponsor on A Lean Journey Blog - LeanKit Kanban.

LeanKit Kanban is tool that was originally conceived for managing software development that has come to be used in lots of other business areas, construction, manufacturing, logistics, fleet vehicle maintenance, etc., for teams from one to hundreds. I have been using this product for several years now. 

LeanKit Kanban was first highlighted by me in my personal kanban series of posts. I showed how LeanKit Kanban allows you to create a virtual kanban system online. Their software makes it easy to customize your own kanban board, add color, dates, and more like this one. 

I recommend you explore the use of a personal kanban system for improving your productivity and that of your team.  LeanKit Kanban gives you an easy way to convey a tremendous amount of information for the entire organization.


If you are interested in advertising your business on A Lean Journey you can find more information about that here.

Daily Lean Tips Edition #28

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 #406 - Clearly specify all Activities

Standardize work

• Content (what is being done?)
• Sequence (in what order?)
• Timing (how long should it take?)
• Outcome (what clearly defined measurable results are expected?)

Lean Tip #407 - Clearly define all Connections to every customer and supplier

No ambiguity

• Direct (no intermediary between)
• Yes or No answers (no maybe)

Lean Tip #408 - Clearly define all Pathways

Organize for uninterrupted flow

• Simple (with as few steps and people as possible)
• Direct steps to deliver the requested product or service

Lean Tip #409 - Continuously improve by applying the scientific method

Develop leaders who can apply the scientific method to improve anything

• Direct response to any problem that arises
• By those doing the work - as close to the problem as possible
• Whenever possible, start as an experiment
• Supported by a coach

Lean Tip #410 – Build in self-diagnostics into your systems.

Create a workplace that is:
     Self-ordering
     Self-improving
     Self-regulating
     Self-explaining

What is supposed to happen, does happen, on time, every time and when it doesn’t you immediately know and can intervene timely.

Lean Tip #411 – Devise strategies for mitigating risk.

Wherever there is investment, there is risk. So a key ability in management is to assess risk, and to devise strategies for mitigating or hedging against it. There are several stages to risk management:

• Prevention aimed at lowering the odds of the risk occurring.
• Control which reduces the damage if it does occur.
• Transfer via insurance where you pay someone else to take on your risk.
• Diversification keeps you from putting all your money on one card.
• Hedging is used to lock up a contract for future prices.

Lean Tip #412 – There are two rules to follow to control risk based on the signal.

Overall risk mitigation follows two rules of forecasting:
Postponement increases quality of the demand signal
Reduction of leadtime increases the quality of the signal

Risk strategies are most effective when the uncertainty with total demand is much less than the uncertainty with any individual item.

Lean Tip #413 – Reduce the bullwhip effect with actual demand not forecasts.

A centralized information system, with actual demand provided to all players in the supply chain is an effective method of reducing the bullwhip effect. A system of target inventory levels is not quite as good.

Lean Tip #414 – Start with a reliable and capable process for a stable supply chain.

Any kind of uncertainty in supply needs to be covered with inventory. Unreliable processes cause unreliable delivery, and ultimately uncertainty at the receiving end. The starting point needs to be a reliable and capable process.

Lean Tip #415 – Avoid hand-offs and decision points to smooth the demand signal.

Every hand-off or tier in the system brings the danger of distorting the demand signal. The more people who interfere with the demand flow, the worse the swings generally become. Be aware of “double guessing” by creating a forecast on someone’s forecast.

Lean Tip #416 – Measure lead time to encourage Lean improvement.

Measuring lead time encourages inventory reduction, one-piece flow, reduction of flow length, and waste reduction. Lead time is best measured from end-to-end from receiving dock to finished goods.

Lean Tip #417 – Monitoring customer satisfaction is where the value is.

Following the first lean principle, monitoring customers is a basic requirement. If failure is indicated here, this has to be the first priority. Get this measure directly from customers, not internally from shipments.

Lean Tip #418 – Consistency comes from measuring schedule attainment.

An internal measure of consistency is schedule attainment. Schedule attainment is the ability to hit the target for quantity and quality on a day-to-day basis lin-by-line not weekly for the plant.

Lean Tip #419 – Track the distribution of your measures.

Build up the distribution – do not just measure the average. You really want to get the shape of the distribution narrower. This is an indication of tighter process control from reducing sources of variation.

Lean Tip #420 – When measuring inventory turns split into three measures.

Inventory turns is an established measure. It is useful to turn this measure into three measures – one for each of raw material, work in progress, and finished goods. Because WIP is fully under your own control where as raw materials and finished goods are not fully under your own control.

Lean Quote: Adversity is an Opportunity for Growth

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.

"That which does not kill us makes us stronger." — Friedrich Nietzsche, German philosopher

We've all heard the old saying, "If it doesn't kill you, it will make you stronger," in some form or another. Most likely from our parents, or teachers, or someone else trying to toughen us up.

A new study published in the December issue of Current Directions in Psychological Science, has found that although we all hope for a life free and clear of stress, the happiest and healthiest people are those who have had at least some early exposure to tough experiences.

Problems, large and small, present themselves to us throughout our existence. Regardless of how sharp, clever, or happy-go-lucky we are, we will encounter struggle, challenges, difficulties and at times, heart wrenching moments.

Learning to deal with, and overcoming adversity, is what makes us who we are. Every challenge, every difficulty we successfully confront in life serves to strengthen our will, confidence and ability to conquer future obstacles.

Business adversity is like a fire. It’s from the inferno where culture is born. Mature cultures know how to deal with the blaze so it doesn’t burn out of control. Without adversity, your culture is nothing more than the potential for greatness. The company’s culture wouldn’t be as strong and mutually supportive as it is. It wouldn’t be as prepared for the next conflagration as it is.

Are you resilient? The possibilities for setbacks are endless. Adversity can make you stronger when you make the choice to grow from it.

Guest Post: Standard Work Enables and Facilitates Improvment

Today, I am happy to be contributing a guest post on Matt Wrye's Beyond Lean Blog. Matt posed the question to his readers last month asking what topic they would like to see a series on.  In this series he would ask 4-5 people to write about the chosen topic posting an article a day for the week.  This is a great idea as you can get various view points on the subject to thoroughly understand it.  Standardized work received 33% of the votes resulting in the chosen theme.

Here is a short introduction to my post:

Standard work is a written description of how a process should be done. It guides consistent execution. At its best, it documents a current "best practice" and ensures that it is implemented throughout a company. At a minimum, it provides a baseline from which a better approach can be developed.

The definition of standard work is "the most effective combination of manpower, materials and machinery". Standard work is the method, and thereby you have the four Ms of manufacturing (manpower, material, machinery, methods). Standard Work is only "the most effective" until the standard is improved.

Standards to a company are like scales and sheet music to a musician. Our team members help develop and maintain standards, which are not static. Standards change as we get better, just as a good band will incorporate chord and melodic variations if they sound good. Thus, standards do not constrain creativity – they enable it, by providing a basis for comparison, and by providing stability, so we have the time and energy to improve.

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To learn more how standard work can enable and facilitate improvement continue reading here. Be sure to check out the other posts on Beyond Lean about Standard Work as well.

Supply and Quality Go Hand In Hand

Most companies who want to improve the efficiency of their supply chain focus efforts only on the supply chain process itself. Few realize the impact that quality can have an on the efficiency and speed of the supply chain. Ensuring the quality of incoming raw materials, in-process work, and final product before it is shipped increases the responsiveness throughout the supply chain.

With more than 60 percent of the cost of manufactured goods coming from the supply chain, supply chain performance is a core competence that must be mastered. No matter how tightly we manage our processes to proactively control quality, we can still face a series of challenges if the components that we are receiving from our suppliers aren’t meeting specifications. Managing the performance of the supply chain helps eliminate cost and improve quality.

The quality management policies and practices of suppliers must be aligned with the standards of the company and the product. Companies are increasingly setting standards of quality management systems and worker treatment for their suppliers to avoid problems. This is because failures in the supply chain are passed down the line to the companies ultimately marketing the products to consumers. Such failures can result in consumer dissatisfaction, regulatory noncompliance and, in some cases, public criticism of the corporate management practices.

It’s becoming more and more critical for manufacturers to work with suppliers to ensure the quality of the materials that they are producing. Instead of threatening to use another supplier if the quality is unacceptable, manufacturers are trying to work more collaboratively with their select suppliers to ensure that they are meeting requirements and the product is usable. More specifically, the best value supply chains target high quality performance. In this case quality refers to the relative reliability of chain activities.

Perhaps it is easy to see how quality improves the supply chain efficiency compared to the converse. But the effectiveness of the supply chain can directly impact your quality due to the linkage of the chain itself. Therefore I say supply and quality go hand in hand. You really can’t have one without the other.