Category: Eliminate Waste

Understand the real contributors to waste in all facets of your operation.

OEE: The Means to an End – Differentiation Where It Matters Most

A pit stop at the Autrodomo Nazionale of Monza...
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Does your organization focus on results or the means to achieve them?  Do you know when you’re having a good day?  Are your processes improving?

The reality is that too many opportunities are missed by simply focusing on results alone.  As we have discussed in many of our posts on problem solving and continuous improvement, the actions you take now will determine the results you achieve today and in the future. Focus on the means of making the product and the results are sure to follow.

Does it not make sense to measure the progress of actions and events in real-time that will affect the end result? Would it not make more sense to monitor our processes similar to the way we use Statistical Process Control techniques to measure current quality levels?  Is it possible to establish certain “conditions” that are indicative of success or failure at prescribed intervals as opposed to waiting for the run to finish?

By way of analogy, consider a team competing in a championship race.  While the objective is to win the race, we can be certain that each lap is timed to the fraction of a second and each pit stop is scrutinized for opportunities to reduce time off the track.  We can also be sure that fine tuning of the process and other small corrections are being made as the race progresses.  If performed correctly and faster than the competition, the actions taken will ultimately lead to victory.

Similarly, does it not make sense to monitor OEE in realtime? If it is not possible or feasible to monitor OEE itself , is it possible to measure the components – Availability, Performance, and Quality – in real-time?  I would suggest that we can.

Performance metrics may include production and quality targets based on lapsed production time. If the targets are hit at the prescribed intervals, then the desired OEE should also be realized.  If certain targets are missed, an escalation process can be initiated to involve the appropriate levels of support to immediately and effectively resolve the concerns.

A higher reporting frequency or shorter time interval provides the opportunity to make smaller (minor) corrections in real-time and to capture relevant information for events that negatively affect OEE.

Improving OEE in real-time requires a skilled team that is capable of trouble shooting and solving problems in real-time. So, resolving concerns and making effective corrective actions in real-time is as important to improving OEE than the data collection process itself.

A lot of time, energy, and resources are expended to collect and analyze data. Unfortunately, when the result is finalized, the opportunity to change it is lost to history.  The absence of event-driven data collection and after the fact analysis leads to greater speculation regarding the events that “may have” occurred versus those events that actually did.

Clearly, an end of run pathology is more meaningful when the data supporting the run represents the events as they are recorded in real-time when they actually occurred.  This data affords a greater opportunity to dissect the events themselves and delve into a deeper analysis that may yield opportunities for long-term improvements.

Set yourself apart from the competition.  Focus on the process while it is running and make improvements in real-time.  The results will speak for themselves.

Your feedback matters

If you have any comments, questions, or topics you would like us to address, please feel free to leave your comment in the space below or email us at feedback@leanexecution.ca or feedback@versalytics.com.  We look forward to hearing from you and thank you for visiting.

Until Next Time – STAY lean

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Versalytics Analytics
 

OEE: Planned Downtime and Availability

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As a core metric, Overall Equipment Effectiveness or OEE has been adopted by many companies to improve operations and optimize the capacity of existing equipment.  Having completed several on site assessments over the past few months we have learned that almost all organizations are measuring performance and quality in real-time, however, the availability component of OEE is still a mystery and often misunderstood – specifically with regard to Set Up or Tool Changes.

We encourage you to review the detailed discussion of down time in our original posts “Calculating OEE – The Real OEE Formula With Examples” and “OEE, Down time, and TEEP” where we also present methods to calculate both OEE and TEEP.  The formula for Overall Equipment Effectiveness is simply stated as the product of three (3) elements:  Availability, Performance, and Quality.  Of these elements, availability presents the greatest opportunity for improvement.  This is certainly true for processes such as metal stamping, tube forming, and injection molding, to name a few, where tool changes are required to switch from one product or process to another.

Switch Time

Set up or change over time is defined as the amount of time required to change over the process from the last part produced to the first good part off the next process.  We have learned that confusion exists as to whether this is actually planned down time as it is an event that is known to occur and is absolutely required if we are going to make more than one product in a given machine.

Planned down time is not included in the Availability calculation.  As such, if change over time is considered as a planned event, the perceived availability would inherently improve as it would be excluded from the calculation.  Of course, the higher availability is just an illusion as the lost time was still incurred and the machine was not available to run production.

If we could change a process at the flip of a switch, set up time would be a non-issue and we could spend our time focusing on other improvement initiatives.  While some processes do require extensive change over time, there is always room for improvements.  This is best exemplified by the metal stamping industry where die changes literally went from Hours to Minutes.

To remain competitive and to increase the available capacity, many companies quickly adopted SMED (Single Minute Exchange of Dies) initiatives after recognizing that significant production capacity is being lost due to extensive change over times.  Overtime through extended shifts and capital for new equipment is also reduced as capacity utilization improves.

Significantly reduced inventories can also be realized as product change overs become less of a concern and also provide greater flexibility to accommodate changes in customer demand in real-time.  Significantly increased Inventory Turns will also be realized in conjunction with net available cash from operations.

Redefining Down Time

The return on investment for Quick Tool Change technologies is relatively short and the benefits are real and tangible as demonstrated through the metrics mentioned above.  Rather than attempt to categorize down time as either planned or unplanned, consider whether the activity being performed is impeding the normal production process or can be considered as an activity required for continuing production.

We prefer to classify down time as either direct or indirect.  Any down time such as Set Up, Material Changes, Equipment Breakdowns, Tooling Adjustments, or other activity that impedes production is considered DIRECT down time.  Indirect down time applies to events such as Preventive Maintenance, Company Meetings, or Scheduled IDLE Time.  These events are indeed PLANNED events where the machine or process is NOT scheduled to run.

Redefine the Objective

Set up or change over time is often the subject of much heated debate and tends to create more discussion than is necessary.  The reason for this is simple.  Corporate objectives are driven by metrics that measure performance to achieve a specific goal.

Unfortunately, in the latter case, the objectives are translated into personal performance concerns for those involved in the improvement process.  Rather than making real improvements, the tendency is to rationalize the current performance levels and to look for ways to revise the definition that creates the perception of poor performance. Since availability does not include planned down time, many attempts are made to exclude certain down time events, such as set up time, to create a better OEE result than was actually achieved.

Attempts to rationalize poor performance inhibits our ability to identify opportunities for improvement.  From a similar perspective, we should also be prudent with. and cognizant of, the time allotted for “planned” events.

It is for this reason that some companies have resorted to measuring TEEP based on a 24 hour day.  In many respects, TEEP eliminates all uncertainty with regard to availability since you are measured on the ability to produce a quality part at rate.  As such, our mission is simple – “To Safely Produce a Quality Part At Rate, Delivered On Time and In Full”.  Any activity that detracts from achieving or exceeding this mission is waste.

Remember to get your OEE spreadsheets at no charge from our Free Downloads Page or Free Downloads Box in the sidebar.  They can be easily and readily customized for your specific process or application.

Please feel free to send your comments, suggestions, or questions to Support@VergenceAnalytics.com

Until Next Time – STAY lean!

Vergence AnalyticsVergence Analytics

The High-Velocity Edge Is Here!

Update:  Steven J. Spear has been awarded the Philip Crosby Medal for his book “The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition” according to a Press release from ASQ—the world’s largest network of quality resources and experts (Milwaukee, WI March 2, 2011).

We have raved about the book “Chasing the Rabbit” written by Steven J. Spear and have just learned that the book has been re-released under a new a title, The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition.  Recognizing that your time is a valuable commodity, we aim to provide information that is relevant to our readers and visitors.  This book provides much more information on certain topics than one could ever hope to achieve through a website or blog – hence our recommendation.

This is perhaps an unprecedented marketing strategy for what was an already very successful book.  In one respect this reflects the wisdom of Peter Drucker who suggested that there is a time to abandon the old (even if it is considered an award winning success) in lieu of the fresh and new.  The following are excerpts from the e-mail we received from Steve that explain the reasons for this change:

Dear Friends and Colleagues,

The High Velocity Edge shows the particular skills and capabilities that lead to broad-based, high-speed, non-stop improvement and innovation.  Master these and you achieve exceptional, rival-beating performance, even if facing intense competition. If you don’t, you watch as someone else wins

The book (and the website supporting it) are replete with examples of how these capabilities are developed and deployed in high tech and heavy industry, in design and production, in services like health care and in manufacturing.

There is Pratt and Whitney’s compression in time and cost of jet engine design, the Navy’s creation of nuclear propulsion  with breath taking speed, Alcoa’s achieving near perfect workplace safety, and the exceptional improvement of care in medical institutions.

Toyota features prominently as an example, both in showing how  successfully cultivating the capabilities introduced and illustrated in The High Velocity Edgeare the source of  tremendous competitive strength and also in showing how the capacity to develop such capabilities can be overburdened.

With the release of The High Velocity Edge, I’m testing new media approaches, being released on its website, to bring the book’s ideas into broader practice more quickly than traditional means alone allow.

Here’s a closer look at what is new.

New Title and Cover: Why a  new name and cover after three awards, versions in four languages, and flattering reviews?  Well, people do judge a book by its cover, and those who didn’t read the reviews or learn of the awards were too often left  wondering what was inside.  Not so with the new.

New material:  You’ll find a new preface and epilogue, drawing lessons about leadership, innovation, and operational excellence from  Toyota’s recent  struggles.

New media: I’m testing ways to  help  people master more quickly and reliably the skills that allow individuals and organizations to achieve broad-based, high-speed improvement and innovation.

On the way are an interactive web-based case study, an ‘open school’ course for those in health care professions, and a series of short tutorials to help people review what they’ve read and to help them teach what they’ve learned to their own students and colleagues. The results will be introduced on the book’s website.

Of course, there will still be postings, applying the principles of leadership, innovation, and operational excellence to current topics.

I certainly hope you find the new look, content, and format useful in pursuing perfection.

Please share your feedback, and let’s talk about how I can help you put these ideas  to use in your own organization.

Thanks!

Steve Spear

A high velocity organization is, in our opinion, a step above and beyond the traditional lean principles that are typical of most text books and seminars on this topic.  The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition will prove to be a worthwhile read and we highly recommend this to any company seriously seeking to take their organization to the next level.  We have also added this book to our recommended reading list.

Until Next Time – STAY lean!

Vergence Business Analytics

Pure Genius: Teach, Build, Model

At first I thought this approach seemed to be a little too simplistic as an execution strategy.  On second thought, however, it seemed to be very appropriate to most situations that we may encounter.  It has certainly been a very practical superview for our current project.

Teach: Teach the concepts, systems, processes, and procedures that are required to achieve a given goal or objective.

Build: Interactive training sessions should provide for feedback and further development of the elements presented.  At this stage, personnel become engaged and help to further develop the systems, processes, and procedures.

Model: Leadership, executive management, and personnel must model the behavior or activities that are required to successfully achieve the desired goal or objective.  Deviations to the planned activities must be discussed and reviewed in real-time with the team.  Revise as necessary but enact or communicate changes in real time.

How far do we go in our pursuit of better systems and data analysis? The true goal is not to build systems that collect data for later analysis, but to build systems that analyze data based on collected data in real-time.  Ideally, the analysis would lead to future projections based on past history and current performance in real-time.  How far we want to go with the analysis is driven by the vision and goals we are seeking to achieve.

For added inspiration as to what can be accomplished with data that is available, we found this video featuring Stephen Wolfram, creator of Mathematica, where he talks about his quest to make all knowledge computational — as able to be searched, processed and manipulated. His new search engine, Wolfram Alpha, has no lesser goal than to model and explain the physics underlying the universe.

This is an amazing video (unfortunately, we can’t embed the video directly into our page) and the WolframAlpha Website is equally impressive to demonstrate what can be done with the right tools and data engines. Click here to visit WolframAlpha. While you’re at the site, you may wish to subscribe to TED. There are many motivating and inspirational videos / talks that cover a diverse range of topics and areas of interest.

We are currently developing a business operating system for a client where informal, undocumented, methods exist.  Our task is to streamline these “methods” into a cohesive system to provide for real-time analysis and reporting for a variety of functional areas in the business.  Essentially, we are creating a bridge from the present day activities to a more rigorous, systems driven, process.  From this perspective, the above three (3) step process has proven to be a very practical means of strategizing the approach as new initiatives are introduced.

Until Next Time – STAY lean!

Flawless Execution – “This Is It” – Practice Makes Perfect

We are often encouraged to look beyond our own business models to expand our horizons or to simply gain a different perspective.  Music is one of my personal areas of interest in the outside world and I have learned to appreciate and value the many genres of music that exist today.  As a lead guitar player for a number of bands over the years and a little recording in my studio, I can only imagine the level of commitment required to perform and record professionally.

I was inspired to write this post after watching Michael Jackson’s DVD, “This is it“.  It is impressive to see how everyone is engaged and intimately involved with every nuance of the performance – from the performers themselves to the people working behind the scenes.  Even more amazing was Michael Jackson’s recall of every note and step of the choreography.  Michael provided extensive direction and leadership to assure a world-class performance could be delivered.

What does this have to do with Lean?

At its core, playing music can simply be described as playing the right notes at the right time.  In many respects, music is analogous to many of our manufacturing processes.  Music has a known process rate (beats per minute).  The standardized work or method is the music score that shows what notes to play and when to play them.  Similarly, the choreography serves as standardized work to document each and every step or movement for each performer.  It can be very obvious (and painful) when someone plays the wrong note, sounds a note at the wrong time, or mis-steps.

Knowing that “This is it” was produced from film during the development of the production also exemplifies how video can be used to not only capture the moment but to improve the process along the way.  The film provides the opportunity to review the performance objectively even if you happen to be in it.  You will note that people are much more engaged and become “self-aware” in a radically different way.

Communication + Practice makes Perfect

It is also readily apparent that many hours of rehearsal are required to produce a world-class performance.  Imagine working for days, weeks, months, or even years to produce a two-hour show for all of the world to see.  How much can one person do to refine and perfect the performance?  How much effort would you be willing to expend knowing that literally billions of people may someday be watching you!

As professionals, individual performers are expected to know their respective roles thoroughly.  They are paid for their expertise and ability to perform with high expectations and demanding circumstances.  The purpose of the rehearsal is not to necessarily practice your part as an individual, but rather to exercise your expertise as part of the team.  Each performer must learn their cues from other performers and determine how they relate and fit in to the overall production process.  Rehearsals provide the basis of the team’s communication strategy to assure everyone is on the same page all the time, every time.

Effective Training

Finally, “This is it” demonstrates the importance of training the whole team.  Although individual training may be required, eventually the team must be brought together in its entirety.  A downfall of many business training programs is that often only a select few people from various departments are permitted to attend with the expectation that they will bring what they learned “back to the team”.  One of the most overlooked elements of training is the communication and coordination of activities between team members.  Group breakout sessions attempt to improve interaction among team members, but this can’t replace the reality of working with the team on home turf.  It seems that some companies expect trained professionals to intuitively know how to communicate and interact with each other.  Nothing could be further from the truth if you are looking to develop a high performance team.

Last Words

Imagine what it would be like if we rehearsed our process and material changes with the same persistence and raw determination that performers and athletes in the entertainment and sports world exhibit.  Overall Equipment Efficiency and more specifically Availability may improve beyond our expectations.  Imagine applying the same degree of standardization to tasks that we perform everyday!  As we strive for excellence, our tolerance for anything less diminishes as well.

Flawless execution requires comprehensive planning, communication, training, practice, measurement, reflection, leadership, commitment, and dedication.

It’s time to play some riffs!

Until Next Time – STAY lean!

Lean, OEE, and How to beat the “Law of Diminishing Returns”

Are your lean initiatives falling prey to the Law of Diminishing Returns?  Waning returns may soon be followed by apathy as the “new” initiative gets old.  For those who have not studied economics or are not familiar with the term, it is defined by Wikepedia as follows:

The law states “that we will get less and less extra output when we add additional doses of an input while holding other inputs fixed. In other words, the marginal product of each unit of input will decline as the amount of that input increases holding all other inputs constant.

In simple terms, continued application of time and effort to improve a process will eventually yield reduced or smaller returns.  The low hanging fruit that once was easy to see and resolve has all but disappeared.  Some companies would claim that they have finally “arrived”.  We contend that these same companies have simply hit their first plateau.

Methods and Objectives

Is it inevitable that a process has been refined to the point where additional investment can no longer be justified financially?  The short answer is “Yes and No”.  As the Olympics are well under way, we are quick to observe the fractions of seconds that may be shaved from current world records.  If you’re going for Olympic Gold, you will need every advancement or enhancement that technology has to offer to gain the competitive edge.  These advances in technology are refinements for existing processes that are governed by strict rules.  Clearly, there are much faster ways to get from point A to point B.  However, the objective of the Olympics is to demonstrate how these feats can be accomplished through the physical skills and abilities of the athletes.

In business our objectives are defined differently.  We want to provide (and our customers expect) the highest quality products at the lowest cost delivered in the shortest amount of time.  How we do that is up to us.  Lean initiatives and tools such as overall equipment effectiveness (OEE) can help us to refine current processes but are they enough to stimulate the development of new products and processes?  Or, are they limited to simply help us to recognize when optimum levels have been achieved?

Radical change versus refinement

Objectives are used to determine and align the methods that are used to achieve a successful outcome.  This is certainly the case in the automotive industry as environmental concerns and availability of non-renewable resources, specifically oil and gas, continue to gain global attention and focus.  The objectives of our “transportation” systems are being redefined almost dynamically as new technologies are beginning to emerge.  At some point, the automotive industry leaders must have realized that continuing to refine existing technologies simply will not satisfy future expectations.  With this realization it is now inevitable that a radical powertrain technology change is required.  Hybrid vehicles continue to evolve and electric cars are not too far behind.

How to Beat the Law of Diminishing Returns

Overcoming the law of diminishing returns requires another look at the vision, goals, and objectives of the company and to develop a new, different, or fresh perspective on what it is you are trying to achieve.  The lean initiatives introduced by Toyota, Walmart, Southwest and many others were driven by the need to find a competitive edge.  They recognized that they couldn’t simply be a “me too” company to gain the recognition and successes they now enjoy.

The question you may want to ask yourself and your team is, “If we started from scratch today, is this the result we would be looking for?”  The answer should be a unanimous and resounding “NO”.  Get out your whiteboard, pens, paper, and start writing down what you would be doing differently.  In other words, it’s time to re-energize the team and refocus your goals and objectives.  Vision and mission statements are not tombstones for the living.  5S these documents and take the time to re-invigorate your team.

Turning a company around may require some new radical changes and we need to be mindful of the new upstarts with the latest and greatest technology.  They may have an edge that we have may just haven’t taken the time to consider.  We are not suggesting that you need to replace all the equipment in your plant in order to compete.  Proven technologies have their place in industry and the competitive pricing isn’t always about speed.  The question you may need to consider is, “Can our technology be used to produce different products that have been traditionally manufactured using other methods?”

While many companies pursue a growth strategy based on their current product offerings and derivatives, we would strongly suggest that manufacturers consider a growth strategy based on their process technology offerings.  What else can we make with process or machine XYZ?  We anticipate that manufacturing sectors will soon start to blend as manufacturers pursue products beyond the scope of their current industry applications.

Be the Leader

Leading companies create and define the environment where their products and services will thrive.  Apple’s “iProducts” have redefined how electronics are used in everyday life.  As these tools are developed and evolve, so too can the systems and processes used throughout manufacturing.  The collective human mind is forever considering the possibilities of the next generation of products or services.

There was a time when manned space flight and walking on the moon were considered unlikely probabilities.  Today we find ourselves discovering and considering galaxies beyond our own and we don’t give it a second thought.  How far can we go and how do we get there?  The answer to that question is …

Until Next Time – STAY lean!

Lean Resources On Demand

On Demand

As people we have grown accustomed to service on demand.  The internet, fast food, service stations, 24 hour convenience shopping, medical services, video on demand, and so much more are available almost instantly.  Of course much of this is made possible by the latest technologies and electronic gadgets that bring the world to our finger tips at the push of a button.

Imagine if your business could experience the same level of accessibility to resources as we seem to have with the outside world in our personal lives.  Perhaps 2010 is the year to redefine how the systems and processes in your organization can emulate the “on demand” level of performance we have become accustomed to in our private lives.

Lean Resources

We predict that the year 2010 will see more specialization of service providers as companies continue to review their essential functions and resource requirements.  Although outsourcing has been a topic of discussion over the past few years, it is now becoming more prevalent as companies continue to review their organizational structures in light of declining sales and diminished profits.

The economic downturn did not limit its impact to the manufacturing sector or, more specifically, the automotive industry.  An article was recently published in our local news papers announcing the layoff of several news anchors and support staff from various television and radio broadcast stations.  Of the reasons mentioned for the restructuring, reduced advertising revenue was among them.

The Next Step

What are these people going to do?  Where will they find gainful employment in a declining market?  Are these skills no longer required?  The short answer is that their services are still required.  The problem is that one single company cannot afford to retain their services on a full-time basis.

As people affected by restructuring efforts, the best solution may be to start your own company and market your specialized skills or services.  While your former company may become one of your clients, it is possible that other companies are also in a place where they simply cannot afford to keep full-time staff to support their current needs.  Companies typically do not share resources with other companies; however, they do contract services to common service providers.  Syndication is widely used in broadcasting.

Using our personal lives as an example, we do not have our own full-time doctors, lawyers, real estate agents, auto mechanics, electricians, plumbers, and so on.  We simply hire these services on demand – only when we need them.  The focus of re-organization strategies today is to decide what services are essential to protect the proprietary nature of the business and those that could be outsourced as an on demand resource.

For the entrepreneur, as an individual entity serving multiple companies, your area of specialization can be developed and refined beyond the limits that may have been imposed by your former employer.  To explore this further, we will discuss several examples to develop the application of this concept.

The Possibilities – Examples

We all use computers in our daily lives just as you are while reading this article.  Clearly, someone was responsible for creating this wonderful technology and is presently working on the next generation computer or software program – whether we think we need it or not.  As individuals, we are immune to the multitude of tasks that this may entail.  We simply continue to enjoy the results.

Microsoft and Apple are continually developing new software capabilities and applications.  It’s common to hear, “There’s an APP for that.”  Even as these new products are released, areas of specialization evolve.  The next time you are browsing your way through a book store, look at the number of books written on Excel alone.  Books are available to teach you how to perform a variety of tasks including Dashboards, Business Applications, Charting, Pivot Tables, and even customization and advanced applications using Visual Basic for Applications (VBA).  The specialization model is further supported by the number of applications that have been developed using Excel as evidenced by the thousands of products and services available on the internet alone.

Although most companies may have a self-proclaimed Excel expert, most do not keep a full-time Excel specialist on staff.  It would not be uncommon to hire an Excel specialist to develop an application for your company.  As an independent solution provider, the Excel expert can continue to develop and hone their programming and development skills above and beyond what any person or company may need.  This in turn will result in more efficient and advanced functionality than any one company would be willing to afford.  Click here to visit our trusted Excel Web Resources.

One of the concerns at Research In Motion (RIM), creators of the BlackBerry, is finding the talent required to support their current technology.  The advancements and specialization required is beyond that taught in our universities and colleges.  This area of specialization has reached such a level, that only RIM is able to manage their product line.  It is expected that these essential services must be developed and retained internally and further enforced through their hiring contracts that are most certainly rife with non-competition and confidentiality clauses.

The medical field presents another excellent example of how increased specialization has evolved over the years to offer solutions, or cures, that otherwise would not be available today.  Today, the family doctor may just as readily refer you to a specialist and not fully diagnose your condition personally.  Even the field of dentistry has an evolved hierarchy of skills and specialization as do many legal practices.

Affordability

While we continue to enjoy ever-increasing enhancements and benefits to the products and services available to us, innovative ideas continue to surface into unique niche markets.  Because of the mass market appeal, products and services that are available to us as individuals could not be afforded otherwise.  Naturally, the same can be said for business.

We also recognize that one of the impediments to change is the significant investment that is already committed to support the processes and systems that define the current infrastructure.  Secondly, the funds to upgrade to an entirely new process or system are likely not available, especially in today’s economy.  Lastly, not all business need advanced levels of support or services and in some cases could never afford the level of performance they provide.

The price of upgrading is clear even in the simplest of operating environments.  Even today we continue to find older versions of Microsoft Office products such Excel 2000 or Excel 2003.  Although it took a while to adapt to the Microsoft 2007 environment, the enhancements and added capabilities were well worth the effort to upgrade.  Legacy software versions actually complicate the process of software development due to the programming overhead required for version specific compatibility.

As areas of specialization increase, products and services are becoming more affordable.  Companies that offer these services are creating unique venues to deliver their products or services with continually improved capabilities and options.  Even companies that could never afford an in-house ERP system may find a cost-effective solution using on-line services.  Some of the latest versions of major ERP systems provide all the amenities of real-time reporting, telecommuting, remote access, supply chain management, purchasing, on-line support, and so much more.

Summary

Clearly, using outside services that specialize in a complementary area of ability to your business can only result in a win-win outcome.  The specialist provides more knowledge and experience than your company could ever afford to learn and, as a company, you are able to focus on your own areas of expertise that in turn can only improve the products and services you provide.

As individuals – professional, skilled or otherwise – you may find that your talents are required and still very much in demand.  While companies must keep essential resources to protect the proprietary nature of their business (intellectual property and tangible assets), they are still able to use external resources to support their efforts.

From this perspective, we can learn a lot from small businesses that do not have the luxury of hiring full-time staff.  They may never afford to support traditional infrastructure often found in larger companies.  Small business entrepreneurs focus on their core areas of expertise, their essential products and services, and retain the services of outside specialists on demand.

Companies will continue to look for opportunities to embrace outside services – on demand resources – allowing them to focus on their core business activities.  While this may seem contrary to the traditional lean tenets, we would argue to the contrary.  Professional and skilled resources can save your company a significant amount of time and energy and will substantially reduce the learning curve required to integrate system and technology solutions into your organization.  Their experience is priceless.

Until Next Time – STAY lean!

22 Seconds to Burn – Excel VBA Teaches Lean Execution

Cover of "Excel 2003 Power Programming wi...
Cover via Amazon

Background:

VBA for Excel has once again provided the opportunity to demonstrate some basic lean tenets.  The methods used to produce the required product or solution can yield significant savings in time and ultimately money.  The current practice is not necessarily the best practice in your industry.  In manufacturing, trivial or minute differences in methods deployed become more apparent during mass production or as volume and demand increases.  The same is true for software solutions and both are subject to continual improvement and the relentless pursuit to eliminate waste.

Using Excel to demonstrate certain aspects of Lean is ideal.  Numbers are the raw materials and formulas represent the processes or methods to produce the final solution (or product).  Secondly, most businesses are using Excel to manage many of their daily tasks.  Any extended learning can only help users to better understand the Excel environment.

The Model:

We recently created a perpetual Holiday calendar for one of our applications and needed an algorithm or procedure to calculate the date for Easter Sunday and Good Friday.  We adopted an algorithm found on Wikipedia at http://en.wikipedia.org/wiki/Computus that produces the correct date for Easter Sunday.

In our search for the Easter Algorithm, we found another algorithm that uses a different method of calculation and provides the correct results too.  Pleased to have two working solutions, we initially did not spend too much time thinking about the differences between them.  If both routines produce the same results then we should choose the one with the faster execution time.  We performed a simple time study to determine the most efficient formula.  For a single calculation, or iteration, the time differences are virtually negligible; however, when subjected to 5,000,000 iterations the time differences were significant.

This number of cycles may seem grossly overstated, however, when we consider how many automobiles and components are produced each year then 5,000,000 approaches only a fraction of the total volume.  Taken further, Excel performs thousands of calculations a day and perhaps even as many more times this rate as numbers or data are entered on a spreadsheet.  When we consider the number “calculations” performed at any given moment, the number quickly grows beyond comprehension.

Testing:

As a relatively new student to John Walkenbach’s book, “Excel 2003 Power Programming with VBA“, speed of execution, efficiency, and “Declaring your Variables” have entered into our world of Lean.  We originally created two (2) routines called EasterDay and EasterDate.  We then created a simple procedure to run each function through 5,000,000 cycles.  Again, this may sound like a lot of iterations but computers work at remarkable speeds and we wanted enough resolution to discern any time differences between the routines.

The difference in the time required to execute 5,000,000 cycles by each of the routines was surprising.  We recorded the test times (measured in seconds) for three separate studies as follows:

  • Original EasterDay:  31.34,  32.69,  30.94
  • Original EasterDate:  22.17,  22.28,  22.25

The differences between the two methods ranged from 9.17 seconds to 8.69 seconds.  Expressed in different terms, the duration of the EasterDay routine is 1.39 to 1.46 times longer than EasterDate.  Clearly the original EasterDate function has the better execution speed.  What we perceive as virtually identical systems or processes at low volumes can yield significant differences that are often only revealed or discovered by increased volume or the passage of time.

In the Canadian automotive industry there are at least 5 major OEM manufacturers (Toyota, Honda, Ford, GM, and Chrysler), each producing millions of vehicles a year.  All appear to produce similar products and perform similar tasks; however, the performance ratios for each of these companies are starkly different.  We recognize Toyota as the high velocity, lean, front running company.  We contend that Toyota’s success is partly driven by the inherent attention to detail of processes and product lines at all levels of the company.

Improvements

We decided to revisit the Easter Day calculations or procedures to see what could be done to improve the execution speed.  We created a new procedure called “EasterSunday” using the original EasterDay procedure as our base line.  Note that the original Wikipedia code was only slightly modified to work in VBA for Excel.  To adapt the original Wikipedia procedure to Excel, we replaced the FLOOR function with the INT function in VBA.  Otherwise, the procedure is presented without further revision.

To create the final EasterSunday procedure, we made two revisions to the original code without changing the algorithm structure or the essence of the formulas themselves.  The changes resulted in significant performance improvements as summarized as follows:

  1. For integer division, we replaced the INT (n / d) statements with a less commonly used (or known) “\” integer division operator.  In other words, we used “n \ d” in place of “INT( n / d)” wherever an integer result is required.  This change alone resulted in a gain of 11 seconds.  One word of caution if you plan to use the “\” division operator:  The “n” and “d”  are converted to integers before doing the division.
  2. We declared each of the variables used in the subsequent formulas and gained yet another remarkable 11 seconds.  Although John Walkenbach and certainly many other authors stress declaring variables, it is surprising to see very few published VBA procedures that actually put this to practice.

Results:

The results of our Time Tests appear in the table below.  Note that we ran several timed iterations for each change knowing that some variations in process time can occur.

EasterDay = 31.34375 Original Code uses INT( n / d ) to convert Division Results
EasterSunday = 20.828125 1.  Replaced INT ( n / d) with (n \ d)
EasterDate = 22.28125 Original Code – Alternate Calculation Method
Re-Test to Confirm Timing
EasterDay = 30.9375 Original Code uses INT( n / d ) to convert Division Results
EasterSunday = 20.921875 1.  Replaced INT ( n / d) with (n \ d)
EasterDate = 22.25 Original Code – Alternate Calculation Method
Re-Test to Confirm Timing
EasterDay = 30.90625 Original Code uses INT( n / d ) to convert Division Results
EasterSunday = 21.265625 1.  Replaced INT ( n / d) with (n \ d)
EasterDate = 22.25 Original Code – Alternate Calculation Method
Re-Test to Confirm Timing
EasterDay = 31.078125 Original Code uses INT( n / d ) to convert Division Results
EasterSunday = 9.171875 2.  Variables DECLARED!
EasterDate = 22.1875 Original Code – Alternate Calculation Method
Re-Test to Confirm Timing
EasterDay = 31.109375 Original Code uses INT( n / d ) to convert Division Results
EasterSunday = 9.171875 2.  Variables DECLARED!
EasterDate = 22.171875 Original Code – Alternate Calculation Method

The EasterSunday procedure contains the changes described above.  We achieved a total savings of approximately 22 seconds.  The integer division methods used both yield the same result, however, one is clearly faster than the other.

The gains made by declaring variables were just as significant.  In VBA, undeclared variables default to a “variant” type.  Although variant types are more flexible by definition, performance diminishes significantly. We saved at least an additional 11 seconds simply by declaring variables.  Variable declarations are to VBA as policies are to your company, they define the “size and scope” of the working environment.  Undefined policies or vague specifications create ambiguity and generate waste.

Lessons Learned:

In manufacturing, a 70% improvement is significant; worthy of awards, accolades, and public recognition.  The lessons learned from this example are eight-fold:

  1. For manufacturing, do not assume the current working process is the “best practice”.  There is always room for improvement.  Make time to understand and learn from your existing processes.  Look for solutions outside of your current business or industry.
  2. Benchmarking a current practice against another existing practice is just the incentive required to make changes.  Why is one method better than another?  What can we do to improve?
  3. Policy statements can influence the work environment and execution of procedures or methods.  Ambiguity and lack of clarity create waste by expending resources that are not required.
  4. Improvements to an existing process are possible with results that out perform the nearest known competitor.  We anticipated at least being able to have the two routines run at the similar speeds.  We did not anticipate the final EasterSunday routine to run more than 50% faster than our simulated competitive benchmark (EasterDate).
  5. The greatest opportunities are found where you least expect them.  Learning to see problems is one of the greatest challenges that most companies face.  The example presented in this simple analogy completely shatters the expression, “If it ain’t broke, don’t fix it.”
  6. Current practices are not necessarily best practices and best practices can always be improved.  Focusing on the weaknesses of your current systems or processes can result in a significant competitive edge.
  7. Accelerated modeling can highlight opportunities for improvement that would otherwise not be revealed until full high volume production occurs.  Many companies are already using process simulation software to emulate accelerated production to identify opportunities for improvement.
  8. The most important lesson of all is this:

Speed of Execution is Important >> Thoughtful Speed of Execution is CRITICAL.

We wish you all the best of this holiday season!

Until Next Time – STAY Lean!

Vergence Analytics

At the onset of the Holiday project, the task seemed relatively simple until we discovered that the rules for Easter Sunday did not follow the simple rules that applied to other holidays throughout the year.  As a result we learned more about history, astronomy, and the tracking of time than we ever would have thought possible.

We also learned that Excel’s spreadsheet MOD formula is subject to precision errors and the VBA version of MOD can yield a different result than the spreadsheet version.

We also rediscovered Excel’s Leap Year bug (29-Feb-1900).   1900 was not a leap year.  The leap year bug resides in the spreadsheet version of the date functions.  The VBA date function recognizes that 29-Feb-1900 is not a valid date.

Agility Through Problem Solving: a Model for Training and Thinking

We tend to use analogies when we are discussing certain topics, introducing new concepts, or simply presenting an abstract idea.  Analogies are intended to serve as a model that people understand, can relate to or identify with, and, more importantly, remember.  Our challenge is to identify a simple model that can be used to teach people to identify and solve problems – a core competency requirement for lean.

We have learned that teaching people to see problems is just as important as teaching them to solve problems.  Our education system taught us how to use the scientific method to solve problems that were already conveniently packaged in the form of a question or modeled in a case study.  Using case studies for teaching is typically more effective than traditional “information only” or “just the facts” methods.  (The government of Ontario is presently considering a complete overhaul of the education system using case studies as a core instruction method.)

The effectiveness of any training people receive is compromised by time – the retention span.  Our school systems are challenged by this at the start of every school year.  Teachers must re-engage students with materials covered in the last semester or topics covered prior to the break.  In business we may be too eager to provide training at a time when current business activities are not aligned for the new skills to be practiced or exercised.  A commitment to training also requires  a commitment to develop and routinely exercise these skills to stay sharp.

One of the fundamental rules of engagement for lean is to eliminate waste, where value added activities are optimized and non-value added activities are reduced or eliminated.  Although it may appear that we have identified the problem to be solved, in reality we have only framed the objective to be achieved.  We understand that the real solution to achieving this objective is by solving many other smaller problems.

The Sudoku Analogy – A Model for Finding and Solving Problems

A favourite past time is solving Sudoku puzzles, the seemingly simple 9 x 9 matrix of numbers just waiting for someone to enter the solution.  The reasons for selecting and recommending Sudoku as an introductory model for training are as follows:

  1. Familiarity:  Sudoku puzzles are published in all daily newspapers and numerous magazines and they have become as popular as cross-word puzzles.  Most people have either attempted to solve a puzzle or know someone who has.
  2. Rules of Engagement:  the rules of the game are simple.  Each standard Sudoku puzzle has 9 rows and 9 columns that form a grid of 81 squares.  This grid is further divided into nine 3 x 3 sub-sections.  The challenge is to enter the digits 1 through 9 into the blank spaces on the grid.  Every row, column, and 3 x 3 sub-section of the grid must contain one and only one of each digit.  We refer to these as “rules of engagement” as opposed to “framing the problem”.
  3. Degrees of Difficulty:   Sudoku puzzles are typically published in sets of 3 puzzles each having varying degrees or levels of difficulty.  Each level typically requires more time to complete and requires the player to use more complex reasoning or logic skills.  The claim is that all puzzles can be solved.
  4. Incremental or Progressive Solutions:  Sudoku solutions are achieved incrementally by solving instances of smaller problems.  In other words, the solution builds as correctly deduced numbers are added to the grid.  New “problems” are discovered as part of the search for the final solution.
  5. Variety:  every Sudoku game is different.  While some of the search and solve techniques may be similar, the problems and challenges presented by each game are uniquely different.  Although the rules of engagement are constant, the player must search for and find the first problem to be solved.
  6. Single Solution:  a multiple number of solutions may appear to satisfy the rules of the game, however, only one solution exists.  Learning to solve Sudoku puzzles may be a challenge for some players, however, even seasoned Sudoku players can be stumped by some of the more advanced level puzzles.  To this end, they are ever and always challenging.
  7. Skill Level:  Sudoku puzzles do not require any math skills.  Numbers are naturally easier to remember and universal.  Letters are language dependent and the game would lose international appeal.
  8. Logical:  deductive reasoning is used to determine potential solutions for each empty square in the grid.  As the game is played, a player may identify a number of potential solutions for a single square.  These final solution will eventually be resolved as the game is played.

In practice

We recommend introducing the team to Sudoku using an example to demonstrate how the game is played.  It is best to discuss some of the strategies that can be used to find solutions that eventually lead to solving the complete puzzle.  The Sudoku model will allow you to demonstrate the following ten objectives:

  1. Look for Options:  The solution for the problem to be solved may consist many other smaller problems of varying degrees of difficulty.
  2. Break down the problem:  There may be more than one problem that needs to be solved.  Every Sudoku puzzle represents many different problem instances that need to be resolved before arriving at the final solution.  Each incremental solution to a problem instance is used to discover new problems to solve that also become part of the overall solution.  This may also be termed as progressive problem solving.
  3. Multiple solutions – One Ideal:  There may be times where more than one solution seems possible.  Continue to solve other problems on the grid that will eventually reveal the ideal single solution.
  4. Prioritizing:  more than one problem instance may be solvable at the same time, however, you can only focus on one at a time.
  5. Focus:  Problem solving involves varying states of focus:
    • Divergence:  Expand the focus and perform a top-level search for a problem from the many to be solved
    • Convergence:  Narrow the focus on the specific problem instance and determine the specific solution.
  6. Test and Validate:  Every problem instance that is solved is immediately verified or validated against the other squares on the grid.  In other words the solution must comply with the rules of engagement.
  7. Incubation:  some puzzles can be quite difficult to solve.  Sometimes you need to take a break and return later with a fresh eyes approach.
  8. Action:  There is no defined or “correct” starting point.  The first problem instance to be resolved will be as unique as the number of players participating.  No matter where you start, the finished solution will be exactly the same.
  9. Tangents:  when entering a solution into a square, you may notice other potential problems or solutions that suddenly seemed to appear.  It is very easy to digress from the original problem / solution.  This is also true in the real world where “side projects” somehow appear to be the main focus.
  10. Method:  There is no pre-defined method or approach to determine what problem to solve first.  The only guiding principles for discovering the problem instance to be solved are the rules of engagement.

Lean companies train their teams to see problems and break them down into smaller problems with solvable steps.  Sudoku demonstrates the process of incremental or progressive problem solving.  Even with this technique it is possible to enjoy major break through events.  There are times when even seasoned Sudoku players will recognize the “break through point” when solving a puzzle.

Solve time is another element of the Sudoku puzzle that may be used to add another level of complexity to the problem solving process.  Our objective was not to create a competitive environment or to single out any individual skill levels whether good or bad.  Lean is a TEAM sport.

In Summary:

Sudoku solvers are able to hone their skills every day.  Perhaps Sudoku Masters even exist.  Imagine someone coming to work with the same simple focus to eliminate waste every day.  Although there is no preset solution, we are able to identify and consider any number of potential problems and solve them as quickly as we can.  The smaller problems solved are a critical part of the overall solution to achieve the goal.

Most professional athletes and musicians understand that skills are developed through consistent practice and exercise.  Repetition develops technique and speed.  Imagine a culture where discovering new opportunities or problems and implementing solutions  is just a normal part of the average working day.  This is one of the defining traits that characterize high velocity companies around the world.

Truly agile companies are experts at seeing and solving problems quickly.  They discover new opportunities in every day events that in turn become opportunities to exercise their problem seeing and solving skills.  Crisis situations are circumvented early and disruptions are managed with relative ease – all in a days work. 

The next time you see a Sudoku puzzle you may:

  • be inclined to pick up a pencil and play or
  • be reminded of the time you were inspired by the game to solve problems and reach new goals or
  • simply reflect on this post and ponder your next break through.

Until Next Time – STAY Lean!