Category: Execution

Integrated Waste: Lather, Rinse, Repeat

shampoo
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Admittedly, it has been a while since I checked a shampoo bottle for directions, however, I do recall a time in my life reading:  Lather, Rinse, Repeat.  Curiously, they don’t say when or how many times the process needs to be repeated.

Perhaps someone can educate me as to why it is necessary to repeat the process at all – other than “daily”.  I also note that this is the only domestic “washing” process that requires repeating the exact same steps.  Hands, bodies, dishes, cars, laundry, floors, and even pets are typically washed only once per occasion.

The intent of this post is not to debate the effectiveness of shampoo or to determine whether this is just a marketing scheme to sell more product.  The point of the example is this:  simply following the process as defined is, in my opinion, inherently wasteful of product, water, and time – literally, money down the drain.

Some shampoo companies may have changed the final step in the process to “repeat as necessary” but that still presents a degree of uncertainty and assures that exceptions to the new standard process of “Lather, Rinse, and Repeat as Necessary” are likely to occur.

In the spirit of continuous improvement, new 2-in-1 and even 3-in-1 products are available on the market today that serve as the complete “shower solution” in one bottle.  As these are also my products of choice, I can advise that these products do not include directions for use.

Scratching the Surface

As lean practitioners, we need to position ourselves to think outside of the box and challenge the status quo.  This includes the manner in which processes and tasks are executed.  In other words, we not only need to assess what is happening, we also need to understand why and how.

One of the reasons I am concerned with process audits is that conformance to the prescribed systems, procedures, or “Standard Work” somehow suggests that operations are efficient and effective.  In my opinion, nothing could be further from the truth.

To compound matters, in cases where non-conformances are identified, often times the team is too eager to fix (“patch”) the immediate process without considering the implications to the system as a whole.  I present an example of this in the next section.

The only hint of encouragement that satisfactory audits offer is this: “People will perform the tasks as directed by the standard work – whether it is correct or not.”  Of course this assumes that procedures were based on people performing the work as designed or intended as opposed to documenting existing habits and behaviors to assure conformance.

Examining current systems and procedures at the process level only serves to scratch the surface.  First hand process reviews are an absolute necessity to identify opportunities for improvement and must consider the system or process as a whole as you will see in the following example.

Manufacturing – Another Example

On one occasion, I was facilitating a preparatory “process walk” with the management team of a parts manufacturer.  As we visited each step of the process, we observed the team members while they worked and listened intently as they described what they do.

As we were nearing the end of the walk through, I noted that one of the last process steps was “Certification”, where parts are subject to 100% inspection and rework / repair as required.  After being certified, the parts were placed into a container marked “100% Certified” then sent to the warehouse – ready for shipping to the customer.

When I asked about the certification process, I was advised that:  “We’ve always had problems with these parts and, whenever the customer complained, we had to certify them all 100% … ‘technical debate and more process intensive discussions followed here’ … so we moved the inspection into the line to make sure everything was good before it went in the box.”

Sadly, when I asked how long they’ve been running like this, the answer was no different from the ones I’ve heard so many times before:  “Years”.  So, because of past customer problems and the failure to identify true root causes and implement permanent corrective actions to resolve the issues, this manufacturer decided to absorb the “waste” into the “normal” production process and make it an integral part of the “standard operating procedure.”

To be clear, just when you thought I picked any easy one, the real problem is not the certification process.  To the contrary, the real problem is in the “… ‘technical debate and more process intensive discussions followed here’ …” portion of the response.  Simply asking about the certification requirement was scratching the surface.  We need to …

Get Below the Surface

I have always said that the quality of a product is only as good as the process that makes it.  So, as expected, the process is usually where we find the real opportunities to improve.  From the manufacturing example above, we clearly had a bigger problem to contend with than simply “sorting and certifying” parts.  On a broader scale, the problems I personally faced were two-fold:

  1. The actual manufacturing processes with their inherent quality issues and,
  2. The Team’s seemingly firm stance that the processes couldn’t be improved.

After some discussion and more debate, we agreed to develop a process improvement strategy.  Working with the team, we created a detailed process flow and Value Stream Map of the current process.  We then developed a Value Stream Map of the Ideal State process.  Although we did identify other opportunities to improve, it is important to note that the ideal state did not include “certification”.

I worked with the team to facilitate a series of problem solving workshops where we identified and confirmed root causes, conducted experiments, performed statistical analyses, developed / verified solutions, implemented permanent corrective actions, completed detailed process reviews and conducted time studies.  Over the course of 6 months, progressive / incremental process improvements were made and ultimately the “certification” step was eliminated from the process.

We continued to review and improve other aspects of the process, supporting systems, and infrastructure as well including, but not limited to:  materials planning and logistics, purchasing, scheduling, inventory controls, part storage, preventive maintenance, redefined and refined process controls, all supported by documented work instructions as required.  We also evaluated key performance indicators.  Some were eliminated while new ones, such as Overall Equipment Effectiveness, were introduced.

Summary

Some of the tooling changes to achieve the planned / desired results were extensive.  One new tool was required while major and minor changes were required on others.  The real tangible cost savings were very significant and offset the investment / expense many times over.  In this case, we were fortunate that new jobs being launched at the plant could absorb the displaced labor resulting from the improvements made.

Every aspect of the process demonstrated improved performance and ultimately increased throughput.  The final proof of success was also reflected on the bottom line.  In time, other key performance indicators reflected major improvements as well, including quality (low single digit defective parts per million, significantly reduced scrap and rework), increased Overall Equipment Effectiveness (Availability, Performance, and Quality), increased inventory turns, improved delivery performance (100% on time – in full), reduced overtime,  and more importantly – improved morale.

Conclusion

I have managed many successful turnarounds in manufacturing over the course of my career and, although the problems we face are often unique, the challenge remains the same:  to continually improve throughput by eliminating non-value added waste.  Of course, none of this is possible without the support of senior management and full cooperation of the team.

While it is great to see plants that are clean and organized, be forewarned that looks can be deceiving.  What we perceive may be far from efficient or effective.  In the end, the proof of wisdom is in the result.

Until Next Time – STAY lean!

Vergence Analytics
Twitter:  @Versalytics
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Scorecards and Dashboards

Interior of the 2008 Cadillac CTS (US model sh...
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I recently published, Urgent -> The Cost of Things Gone Wrong, where I expressed concern for dashboards that are attempting to do too much.  In this regard, they become more of a distraction instead of serving the intended purpose of helping you manage your business or processes.  To be fair, there are at least two (2) levels of data management that are perhaps best differentiated by where and how they are used:  Scorecards and Dashboards.

I prefer to think of Dashboards as working with Dynamic Data.  Data that changes in real-time and influences our behaviors similar to the way the dashboard in our cars work to communicate with us as we are driving.  The fuel gauge, odometer, two trip meters, tachometer, speedometer, digital fuel consumption (L/100 km), and km remaining are just a few examples of the instrumentation available to me in my Mazda 3.

While I appreciate the extra instrumentation, the two that matter first and foremost are the speedometer and the tachometer (since I have a 5 speed manual transmission).  The other bells and whistles do serve a purpose but they don’t necessarily cause me to change my driving behavior.  Of note here is that all of the gauges are dynamic – reporting data in real time – while I’m driving.

A Scorecard on the other hand is a periodic view of summary data and from our example may include Average Fuel Consumption, Average Speed, Maximum Speed, Average Trip, Maximum Trip, Total Miles Traveled and so on.  The scorecard may also include other items such as driving record / vehicle performance data such as Parking Tickets, Speeding Tickets, Oil Changes, Flat Tires, Emergency and Preventive Maintenance.

One of my twitter connections, Bob Champagne (@BobChampagne), published an article titled, Dashboards Versus Scorecards- Its all about the decisions it facilitates…, that provides some great insights into Scorecards and Dashboards.  This article doesn’t require any further embellishment on my part so I encourage you to click here or paste the following link into your browser:  http://wp.me/p1j0mz-6o.  I trust you will find the article both informative and engaging.

Next Steps:

Take some time to review your current metrics.  What metrics are truly influencing your behaviors and actions?  How are you using your metrics to manage your business?  Are you reacting to trends or setting them?

It’s been said that, “What gets measured gets managed.”  I would add – “to a point.”  It simply isn’t practical or even feasible to measure everything.  I say, “Measure to manage what matters most”.

Remember to get your free Excel Templates for OEE by visiting our downloads page or the orange widget in the sidebar.  You can follow us on twitter as well @Versalytics.

Until Next Time – STAY lean!

Vergence Analytics

Achieve Sustainability Through Integration

Innovation
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It’s no secret that lean is much more than a set of tools and best practices designed to eliminate waste and reduce variance in our operations.  I contend that lean is defined by a culture that embraces the principles on which lean is founded.  An engaged lean culture is evidenced by the continuing development and integration of improved systems, methods, technologies, best practices, and better practices.  When the principles of lean are clearly understood, the strategy and creative solutions that are deployed become a signature trait of the company itself.

Unfortunately, to offset the effects of the recession, many lean initiatives have either diminished or disappeared as companies downsized and restructured to reduce costs.  People who once entered data, prepared reports, or updated charts could no longer be supported and their positions were eliminated.  Eventually, other initiatives also lost momentum as further staffing cuts were made.  In my opinion, companies that adopted this approach simply attempted to implement lean by surrounding existing systems with lean tools.

Some companies have simply returned to a “back to basics” strategy that embraces the most fundamental principles of lean.  Is it enough to be driven by a mission, a few metrics, and simple policy statements or slogans such as “Zero Downtime”, “Zero Defects”, and “Eliminate Waste?”  How do we measure our ability to safely produce a quality part at rate, delivered on time and in full, at the lowest possible cost?  Regardless of what we measure internally, our stakeholders are only concerned with two simple metrics – Profit and Return on Investment.  The cold hard fact is that banks and investors really don’t care what tools you use to get the job done.  From their perspective the best thing you can do is make them money!  I agree that we are in business to make money.

What does it mean to be lean?  I ask this question on the premise that, in many cases, sustainability appears to be dependent on the resources that are available to support lean versus those who are actually running the process itself.  As such, “sustainability” is becoming a much greater concern today than perhaps most of us are likely willing to admit.  I have always encouraged companies to implement systems where events, data, and key metrics are managed in real-time at the source such that the data, events, and metrics form an integral part of the whole process.

Processing data for weekly or monthly reports may be necessary, however, they are only meaningful if they are an extension of ongoing efforts at shop floor / process level itself.  To do otherwise is simply pretending to be lean.  It is imperative that data being recorded, the metrics being measured, and the corrective actions are meaningful, effective, and influence our actions and behaviors.

To illustrate the difference between Culture and Tools consider this final thought:  A carpenter is still a carpenter with or without hammer and nails.

Until Next Time – STAY lean!

Vergence Analytics

Twitter:  @Versalytics

Discover Toyota’s Best Practice

The new headquarters of the Toyota Motor Corpo...
The new headquarters of the Toyota Motor Corporation, opened in February 2005 in Toyota City. (Photo credit: Wikipedia)

I have always been impressed by Toyota’s inherent ability to adapt, improve, and embrace change even during the harshest times.  This innate ability is a signature trait of Toyota’s culture and has been the topic of intense study and research for many years.

How is it that Toyota continues to thrive regardless of the circumstances they encounter?  While numerous authors and lean practitioners have studied Toyota’s systems and shared best practices, all too many have missed the underlying strategy behind Toyota’s ever evolving systems and processes.  As a result, we are usually provided with ready to use solutions, countermeasures, prescriptive procedures, and forms that are quickly adopted and added to our set of lean tools.

The true discovery occurs when we realize that these forms and procedures are the product or outcome of an underlying systemic thought process.  This is where the true learning and process transformations take place.  In many respects this is similar to an artist who produces a painting.  While we can enjoy the product of the artist’s talent, we can only wonder how the original painting appears in the artist’s mind.

Of the many books that have been published about Toyota, there is one book that has finally managed to capture and succinctly convey the strategy responsible for the culture that presently defines Toyota.  Written by Mike Rother, “Toyota Kata – Managing People For Improvement, Adaptiveness, and Superior Results” reveals the methodology used to develop people at all levels of the Toyota organization.

Surprisingly, the specific techniques described in the book are not new, however, the manner in which they are used does not necessarily follow conventional wisdom or industry practice.  Throughout the book, it becomes evidently clear that the current practices at Toyota are the product of a collection of improvements, each building on the results of previous steps taken toward a seemingly elusive target.

Although we have gleaned and adopted many of Toyota’s best practices into our own operations, we do not have the benefit of the lessons learned nor do we fully understand the circumstances that led to the creation of these practices as we know them today.  As such, we are only exposed to one step of possibly many more to follow that may yield yet another radical and significantly different solution.

In simpler terms, the solutions we observe in Toyota today are only a glimpse of the current level of learning.  In the spirit of the improvement kata, it stands to reason that everything is subject to change.  The one constant throughout the entire process is the improvement kata or routine that is continually practiced to yield even greater improvements and results.

If you or your company are looking for a practical, hands on, proven strategy to sustain and improve your current operations then this book, “Toyota Kata – Managing People For Improvement, Adaptiveness, and Superior Results“, is the one for you.  The improvement kata is only part of the equation.  The coaching kata is also discussed at length and reveals Toyota’s implementation and training methods to assure the whole company mindset is engaged with the process.

Why are we just learning of this practice now?  The answer is quite simple.  The method itself is practiced by every Toyota employee at such a frequency that it has become second nature to them and trained into the culture itself.  While the tools that are used to support the practice are known and widely used in industry, the system responsible for creating them has been obscure from view – until now.

You can preview the book by simply clicking on the links in our post.  Transforming the culture in your company begins by adding this book, “Toyota Kata – Managing People For Improvement, Adaptiveness, and Superior Results”, to your lean library.  I have been practicing the improvement and coaching kata for some time and the results are impressive.  The ability to engage and sustain all employees in the company is supported by the simplicity of the kata model itself. For those who are more ambitious, you may be interested in the Toyota Kata Training offered by the University of Michigan.

Learning and practicing the Toyota improvement kata is a strategy for company leadership to embrace.  To do otherwise is simply waiting to copy the competition.  I have yet to see a company vision statement where the ultimate goal is to be second best.

Until Next Time – STAY lean!

Vergence Analytics

OEE: Planned Downtime and Availability

Injection Molding Press
Image via Wikipedia

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

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!

Solving problems BEFORE they Happen!

Wouldn’t it be great if you could solve problems before they happen?  While a problem free world may be far from our present reality, I am encouraged to learn that there are steps that we can take to improve our ability to recognize and resolve problems before they happen in real-time.  The solution to developing this problem awareness mindset is presented in a book I just finished reading:  Michael A. Roberto’s book titled, “Know What You Don’t Know: How Great Leaders Prevent Problems Before They Happen“.  Michael provides a refreshing perspective to problem solving strategy that is supported by many proven examples in actual practice today.

As we are all painfully aware, not all problems can be anticipated regardless of the tools that we have at our disposal.  This does not mean that we should regard these efforts as futile, but rather we need to develop a different mindset.  As leaders in our various industries, we need to maintain an ever-increasing awareness of how our processes and products are performing long after the images have left the computer stations or drafting boards that were used to create them.

We can choose to be the hunter or the hunted – find the problem before it finds you!  The basic premise of the title, “Know What You don’t Know”, suggests that the pursuit of knowledge will perpetuate the desire to learn even more.  In the spirit of the true lean culture, we are continually learning, striving to acquire new knowledge, and in turn sharing that knowledge throughout the organization.

After reading this book, it becomes even clearer how a company, no matter how strong, can also succumb and fall prey to the pitfalls identified in this book.  More importantly, however, and perhaps the greatest take away, is that this book also shows how to recognize and overcome these pitfalls that prevent problems from surfacing before they escalate into a major crisis or catastrophe.  Toyota’s recent high profile recalls serve as a present day example of how an organization’s communication and decision making processes can fail to avert a major campaign and the unnecessary and tragic loss of life.

As we are learning through the investigations surrounding Toyota, the information required to act was “known” to the company yet they failed to acknowledge or respond to this information until it was too late.   One of the core themes in “Know What You don’t Know” is to create a culture of free flowing communication – the ability to share any news – good or bad.  Clearly this is a common frustration experienced by many organizations and one of the leading causes of infrastructure breakdowns and failure.

Well written and thoroughly researched, Michael A. Roberto’s book represents one of the better investments I have made in my personal library.  If this book isn’t on your team’s mandatory reading list, it should be.

Until Next Time – STAY lean!


Lean Sensations – A taste of reality

We are all familiar with the adage, “A picture is worth a thousand words”.  While it is easy to get caught up in data analysis and reports, this adage holds true for first hand experience as well.  It could even be said that some experiences are simply beyond description. – you have to see and “taste” it for yourself.  Words and pictures only provide a visual perspective and cannot capture the full ambiance of the moment.  Even video fails to provide a sense of the true atmosphere.  In the same sense, Lean leadership requires executives and staff at all levels to move beyond the reports and the pictures and experience things for themselves – first hand.

We are quite sure that the Olympic experience in Vancouver was radically different from the experience of watching the events on television.  Nothing can replace the actual experience of being there although technology continues to bring us closer.  Most of us can also identify with governments that do not seem to be “in touch” with our present-day reality.  As these analogies attempt to demonstrate, it is imperative for leaders and executives to directly observe and participate in the lean initiatives and activities throughout the organization.  It is equally important to maintain an active presence as part of the ongoing lean activities.

We recognize that it can be difficult to get even a small glimpse of reality especially when most executive visits are accommodated by the typical “dog and pony” show.  One successful executive was known for making unannounced visits to his facilities to get a true sense of the business – when the visits were unexpected.  This created a “Be ready any time – all the time” culture.  There was no time to prepare for “The big boss is coming today” and in reality, we shouldn’t have to.

Data gathering and analysis may actually sacrifice effectiveness for efficiency.  As an example, consider the concept of employee opinion surveys.  Employees are free to answer questions anonymously and without fear of repercussions or reprimand.  The purpose of the survey is to gather objective data from the employees regarding specific aspects of their work environment / company life.  The data is typically compiled, analyzed, and summarized into a neat power point presentation for all the employees to see “how well they did”.  The management team, in turn, is expected to prepare an action plan to address opportunities for improvement identified in the survey.

Does the report accurately reflect the real opportunities?  In many cases, the answer is, “No, not really”.  Does it provide evidence that opportunities may exist?  The answer in this case is, “Yes, highly probable.”  The report may indicate that opportunities exist, however, the source for improvement  may may be concealed by the how the question was framed.  Often times, questions are presented in such a way that a clear definitive response can’t be given.  While it is possible for people to include comments, few seldom do unless they know their concerns or opinions are truly valued by the company.

Do we really need surveys to get a pulse for what is happening inside the company?  In our opinion, the answer is, “No”.  An effective, highly engaged, management team should understand the culture of the company without having to rely on a survey to help them “manage” the facility.  People interact with each other daily.  Surveys are a snapshot in time and are usually conducted annually.  The other pitfall with surveys is the lead / lag time between the survey date and the actual presentation of the data.  In a fast paced industry, many things can change over a very short period of time.  The manufacturing sector and more specifically the North American automotive industry can attest to this.

Another reason for being “in the moment” is to fully experience that which can’t be described by words alone.  Anything other than “being there” requires us to use our creative imagination.  When someone has not been exposed to the very experience you are attempting to describe, you are forced to make reference to comparable items – yet they are not the same.  How many times have you heard, “It tastes like chicken!” as someone attempts to describe food that you haven’t tried before.  Just try to describe the taste, smell, or touch of something (heat / humidity / cold / frostbite / pain / g-Force) without making a reference to objects or things that are similar – yet different.

In summary, implementing and sustaining lean initiatives requires participation from all levels of the organization – not just to observe and review data, but to actually become an integral part of the activities.  Communication is an inextricable part of the lean culture as we have learned through our discussion regarding the Toyota recall.  We identified that Toyota’s infrastructure may have become an obstacle to effective communication in the company.

One way to keep the communication lines open is to remove the walls that separate executives and management from the front line.  The only way to do this effectively, is to be a “regular” on the front line.  You will earn the trust and respect of your team and they will communicate with you as they do with their fellow colleagues.

The culture of a company is one of the many strengths that must be supported and fostered by the executive leadership team.  Leadership participation is a prerequisite to successful lean integration.  Embrace the opportunities and seize the moment.

We can only imagine what it would be like to …

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!

The Zeigarnik Effect and Lean

Have you heard of the Zeigarnik Effect?  If you have, you’re probably among the few of us that can appreciate how the Zeigarnik effect can affect our thinking processes.  What application could this possibly have with lean?    Consider that the human brain views an unanswered question the same as an incomplete task.  The brain must satisfy it’s innate desire to answer the question.  Lean is not a solution but rather a journey that continues to identify and stimulate ideas that lead to more unresolved opportunities.

The Zeigarnik effect is easier to demonstrate by way of example.  How many times have you been in a conversation while trying to recall someone’s name?  Failing to remember, you keep asking yourself, “What was that person’s name”?  Suddenly, after a few hours or even days later, the name comes to you out of nowhere.  The “Aha, that’s it” moment arrives.  Our subconscious mind continues to work on the problem, searching for a resolution, while we’re busy doing other things.

Is it possible to harness the power of the Zeigarnik effect in lean manufacturing?  Do we attempt to resolve a condition by settling with a less than desirable solution or settling for the one that just seems to work?  With respect to lean, there are many questions that beg to be answered:

  • How can we make this process faster?
  • How can we cut the cycle time?
  • How can we reduce the number of steps to make these parts?
  • Why do we carry all this inventory?
  • Where are we most vulnerable
  • How can we improve the quality of this product?
  • What can we do to eliminate waste?
  • What would happen if …?
  • Why do we do this or that…?

We all understand the power of questions.  The news media and marketing experts are constantly confronting us with questions that need to be answered.  In the case of news media, they entice us to read the story or stay tuned.  In the case of marketing and advertising, they present their product or service solutions.  As lean practitioners, we are continually asking questions.

The evolution of lean thrives by asking the right questions.  Many of the lean tools in use today have been around for many years.  Even in organizations where lean is not a core focus, people are passively aware that lean exists.  They may also have acquired an unrealistic definition of what lean really is.  For companies that have yet to integrate lean practices, this preconceived notion of what lean is may actually hinder your efforts.  The team may be disengaged at the onset of any initiative because they think they know it already.

The prescription for maintaining momentum in your lean journey is simple:  Ask more questions than you hope to ever have answers for.  Engage your team by asking questions.  Although simply asking “Why?” can generate a lot of activity, we should be very specific with our questions.  Keep asking questions until the answers stop flowing.

As students in school, we expected the teachers to know the answers to the questions they were asking.  In a lean organization, even the teachers are students.  Are we asking the right questions?

Until Next Time – STAY lean!

A brief article that discusses the Zeigarnik Effect can be found at the following link  http://businessmindhacks.com/post/zeigarnik-effect-in-depth.