July August LMJ

Digitally Lean How data and the digital revolution has changed the way we think about and implement lean

Organisations and interviews in this issue include: National Grid, Forcam, NestlĂŠ, ProTech, Suiko, Turner & Townsend

In this issue: 7 Values to the Customer What is value and the seven different ways to see it in your organisation?

Introduction to National Grid and Why Performance Excellence A personal insight in to how Performance Excellence works.

Using Data to Drive Improvement and Build a Lean Culture How real time data can transform your organisation,

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EDITOR’S LETTER

Dear Reader...

If you go to a factory now the processes are almost unrecognisable from 20 years ago. The modern day factory is covered in digital representations of data that enables employees to be more agile in terms of what they produce, when and in what quantities. Factories aren’t the only work place that have been completely revolutionised by the digital takeover, law firms, health care and financial services have taken digital to their core.

Editor

Fred Tongue

f.tongue@hennikgroup.com

Managing Editor Victoria Fitzgerald

v.fitzgerald@hennikgroup.com

Creative director Jamie Rector

j.rector@hennikgroup.com

With Summer now well and truly underway (supposedly) a lot of us will be jetting off on holiday and taking some well earned time away from the daily grind.

To book your time away you probably used the internet to find you flight, book your bed and trawl through travel tips.

You might have booked it through a website that shows you all the data and savings that you can make, and have a digital version of your booking on your phone or tablet. Digital has changed everything, especially industry.

The birth of the digital revolution has taken lean, operational excellence and continuous improvement to a whole new level. Data can now be mined to let you know where bottlenecks in your processes are, digital means that processes can be overhauled with a system update and not a costly and lengthy physical update of machinery.

That is why, in this issue we have some fantastic content about how data and the digital revolution has led to huge organisational change.

Andrew Steele has written a piece about how to use data to drive a lean culture in your organisation and how it can help to sustain it as well.

On a similar note we look at how the implementation of change has been impacted by the digital revolution, with an article by Audra Proctor.

We also look at how the 3rd sector can implement lean to get the most of the, often limited resources that they have.

With digital strategy now at the forefront of most organisations it is more important than ever to make sure that your organisation is employing it in the leanest way possible.

One of the places that has seen the use of data and digital sky rocket lately is the supply chain and logistics space. At the start of the century being able to track stock remotely was huge, now the possibilities are seemingly endless for the uses in supply chain. Digital has helped to reimagine the industry and completely overhaul the sector.

Wastes that used to be seen as engrained in supply chain have now been completely cut out. Losing stock is no longer an option thanks to global tracking. Bottlenecks can be addressed and solved, leading to huge cuts in waste and giving greater value to the customer.

The doors that are opened by utilising data and digital properly are endless, with the possibility to completely change the face of certain sectors.

I hope this issue prompts some serious discussion about the best ways for your organisation to leverage data and digital.

Happy reading,

Fred Tongue Editor

In order to receive your copy of The LMJ kindly email lmj@hennikgroup.com or telephone 0207 401 6033. Neither The LMJ nor Hennik Group can accept responsibilty for omissions or errors.

Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.

CONTENTS

4 - - - - - - -

MEET THE EDITORS

5 - - - - - - -

NEWS PRINCIPLES AND PURPOSE

8- - - - - - -

7 Values to the Customer

James Sandfield looks at what value is, the seven different ways it can be discerned and how to see it in your organisation.

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Lean for the 3rd Sector: How to Get More Out of Not-For-Profits Jenny McTiernan discusses techniques to transform customer service, staff engagement and deliver cost savings.

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Introduction to National Grid and Why Performance Excellence

Working for National Grid, Adam Lloyd share his experiences of how to achieve performance excellence and what it means to him.

Using Data to Drive Improvement and Build a Lean Culture

How real time data can transform your organisation, by Andrew Steele.

23- - - - - - -

Impact of Digital on How We Implement Change

How digital can change your organisation, by Audra Proctor.

INDUSTRY INSIGHT 26- - - - - - -

Building Partnerships: How Construction can Learn from Lean

After the merger of Turner and Townsend and Suiko, we talk to both companies to see how lean can change the face of construction.

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LEAN ONLINE

30- - - - - - -

LEAN EVENTS

31- - - - - - -

SUBSCRIPTION FORM

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MEET THE EDITORS

Our experienced editorial board members contribute to the journal providing comment against articles and guiding the coverage of subject matter.

Jacob Austad

Novo Nordisk, Denmark

LeanTeam, Denamrk

Lean Enterprise Research Centre, Cardiff Business School

Bill Bellows

Brenton Harder

David Ben-Tovim

President, In2:InThinking Network

Commonwealth Bank of Australia

Flinders Medical Centre, Australia

Gwendolyn Galsworth

Joseph Paris

Sarah Lethbridge

Visual Thinking Inc., USA

Operational Excellence Society

Cardiff Business School. UK

Malcolm Jones

Torbjorn Netland

Dr Nick Rich

Industry Forum, UK

Nowegian University of Science and Technology, Norway

Steve Yorkstone Edinburgh Napier University, UK

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John Bicheno

Rene Aagaard

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Swansea University, UK

More information about our editorial board. their experience, and views on lean is available on the LMJ website:

the-lmj.com

NEWS

Cloud-based systems help manufacturers reach a new level of lean A key trend boosting market growth is the fact that process industries are moving towards cloud-based MES deployments.

Cloud-based MES-as-a-service is likely to be the next logical step in the evolution of automation technology in process industries.

End-users are becoming more comfortable with the concept of service-based technology architecture such as cloud.

End-user industries can significantly reduce costs, achieve greater flexibility, and enhance

functionality by shifting toward cloud-based environment. SMEs operating in process industries face budget constraints and cuts, which make it difficult for them to afford the initial investment for an MES. A key growth driver is the shift towards paperless production.

The emergence of information technology in manufacturing processes has significantly helped process-oriented companies to improve their operations, leading to sustainable development.

The MES market is experiencing

continuous demand from manufacturing companies owing to the shift in their preference for lean manufacturing.

Among all the highlighted benefits of MES, reduction in cost in terms of wastage, rework, and defects is highly prominent. The overall manufacturing system becomes highly efficient when MES is integrated with Warehouse Management System (WMS), facilitating lean manufacturing to a large extent.

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NEWS

The University of Tennessee welcomes record numbers for lean training The International Lean Summer Program has grown steadily since it began in 2011 as a way to bring international students to Knoxville and showcase some of the industrial engineering programs UT could offer.

Having seen its enrollment grow tenfold from that first class of twenty-six students, the program is now so successful that the Institute of International Education asked that it be expanded from one month to two.

“We have 250-plus students here this summer from all over the world,” said program director Rupy Sawhney, the Heath Fellow in Business and Engineering and a professor in the Department of Industrial and Systems Engineering. “Monterrey Tech in Mexico told us before that this is the most popular program abroad for their students, and I think you can see that in our growth.”

Participants this year hail from Brazil, China, Ghana, Nepal, and Mexico.

OpEx specialist, Suiko acquired by construction firm Global construction and programme management consultancy, Turner & Townsend, has acquired operational excellence specialist, Suiko in a move that paves the way for it to extend the benefits of lean thinking to companies in the construction sector.

According to the company, the acquisition will enable Turner & Townsend to broaden its leading programme management expertise, and help its clients to embed lean thinking and operational excellence (OpEx) in both the delivery of their capital projects and their ongoing activities.

For nearly two decades, the Bath-based Suiko has been at the forefront of applying lean management techniques across a range of industries.

Founded in 1997, the company takes its name from a Japanese

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word for ‘performance’ and specialises in fostering OpEx by helping its clients to increase performance and profitability.

Its innovative approach has seen it deliver efficiencies for a string of global manufacturers and household-name retail brands, as well as several leading construction contractors.

CEO of Turner & Townsend, Vincent Clancy explained: “The acquisition of Suiko is a step change for both Turner & Townsend and the construction industry.

“The integration of lean expertise into our business strengthens and differentiates our offering, and will also drive progress in how capital programmes are delivered.

“With UK government figures revealing in April that levels of productivity in construction have improved by just 1.4% in the past

two decades, best practice has taken the industry only so far. We believe now is the time to embed lean techniques into the way things are done in construction.

Clancy continued: “Suiko’s track record in implementing lean, coupled with its reputation for helping its clients build their internal capability to drive sustainable results, makes it a perfect cultural fit with Turner & Townsend.”

Andy Marsh, managing director of Suiko, added: “Suiko built its reputation through the delivery of sustainable efficiency improvements in manufacturing and diversified into a range of sectors including construction.

“While we will continue to work with our current clients, we believe construction is now ripe for the benefits of lean.”

NEWS

New ERP system helps American plastic manufacturer to automate processes and cut waste Custom injection moulder Vision Plastics, Inc. has selected IQMS to optimize its operations with a new manufacturing execution system (MES). The company is implementing IQMS software, which combines enterprise resource planning (ERP) and MES functionality into one comprehensive system. The migration to IQMS from its current system supports Vision Plastics’ initiative to automate its inventory control and scheduling of work centers, as well as improve overall operational efficiency in its ISO 9001:2008 quality-certified manufacturing facilities.

Since 1997, Wisconsin-based Vision Plastics applies a continuous improvement methodology and kanban system for lean, just-intime manufacturing. Additionally,

Vision Plastics has implemented a production part approval process (PPAP) procedure for communicating and approving production designs and processes before, during, and after manufacture.

For years, Vision Plastics relied on E2 shop system by Shop Tech as its ERP solution. However, much of the inventory management remained a manual process. As a result, the manufacturer would end up either running out of the materials needed to maintain its production schedule or overordering subcomponents and raw materials for open orders. To support the continued growth of its business, Vision Plastics realized that it needed to find ERP software with materials requirement planning (MRP) functionality that

would automate most if not all of the inventory process and provide a more accurate view of available inventory.

“Our main objectives for implementing an ERP/MRP system are to improve our inventory accuracies, so that we can reduce the need for physical counts and reduce our on-hand inventory levels of raw materials and subcomponents,” explains Laura Popelier, business development coordinator at Vision Plastics, Inc. “We also want to improve visibility into our production tracking with accurate inputs, enhance our operational efficiencies throughout the organization, and increase our overall moulding equipment utilization.”

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7 Values for the Customer Head of Lean for Nestlé in Europe, James Sandfield, writes about the importance of defining value and the different ways we can look at value as an organisation.

Lean literature discusses 7 wastes but rarely proposes a list of customer values. This omission is curious, is it because value is too hard to define or is it because the lean community is obsessed with waste and thinks value is just a consequence of having less waste than the competitor? I would like to propose a list, as value is something you should build into your process, during standardized work activities. This would ensure you deliver something which is valued by customers.

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These 7 values are not the opposite of the wastes. They are just part of the same metaphorical lean strategy coin.

Like the 7 wastes they overlap and contribute to each other; there is no absolute separation.

This overlap happens when you deliver the right product at the right price with the right service with the minimum waste. You will need to use the Joy of Standards to minimize waste whilst you maximize value.

James Sandfield Head of Lean in Europe, Nestlé CORRECT PRICE is the first value defined, as without the correct price you will not have customers.

You can have the best product in the world, but, if it is too expensive then customers will select competitor’s products and if it is

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DIAGRAM 1: The 7 values enhanced by lean thinking (and standards)

too cheap then competitors will get higher margins and investors will abandon you.

TIMELY RESPONSE is also important and can determine what your customers are willing to pay. They will pay a premium or praise your organization (sometimes) for a fast service. Conversely customers do not always value a service which is too fast (or too slow) and conflicts with their expectations.

The trick with timely response is to understand which response time will delight your customers.

Empower your people, with standardized work, to make justin-time reliably happen without stress, waste and defects.

VALUED PRODUCTS and services need to be provided. If your customers find features or aspects of your product or service which are consistently and obviously better than your competitors then they will choose you more often. Make sure you make these features clear and recognizable. The Microsoft Windows 7 computer (made by HP) I am typing on today has many differences to my wife’s

Macbook Pro (made by Apple) and the difference a potential consumer will value are the hardware, software, aesthetic and ergonomic features these computers contain (not just the $1,000 price differential that is charged in the local store).

If you believe that the market determines the prices, then lean agrees. Lean says profit is not cost plus margin, lean has a different equation for price; it is a counterintuitive calculation to guide an organization.

Profit = a fair price to the consumer less costs Organizations should therefore use the Joy of Standards to increase value / reduce cost and increased profit will be the consequence. This is how lean organizations avoid the risk that their desired margin puts their product above the market price; they also avoid a shrinking market share as there is continuously more value within their products (at a price that market forces dictate).

FLEXIBLE SOLUTIONS are also a balancing act; too much or too little is a problem, like Goldilocks (in the fairy-tale) you will have to find something that is just right. This is because flexible solutions create complexity in your organization but can also create new or happier customers. You will have to choose the level of flexibility suitable for your organization.

This selection will boil down to one double-barrelled statement: how much growth will you get from this complexity and how will you remain competitive on costs and service when delivering this complexity? If your answers are not clear, then your flexibility decision should lead you away from tailored solutions until these answers do become clear.

These flexible solutions do not need to be restricted to a single proposition. Different market opportunities exist: Highly flexible, tailored solutions which you are in a unique position to provide, command a high market price.

Inflexible, mass production solutions which competitors can make, command a low market price.

The trick with flexibility is to ensure you do not have the costs of the former when you are providing products of the latter. The trick with lean thinking and standardized work is to start offering the former with the costs of the latter and watch your profit margins and market share grow.

RELIABLE SUPPLY is a basic requirement of your customers, in 10 years of lean, I have seen this as the most commonly missed item of an organization when providing products and services to customers. Lean reduces inventory of finished goods and July/August 2016 | the-lmj.com

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reduces work-in-progress within your office, distribution centers and manufacturing facilities, counterintuitively, this will actually make your supply more reliable.

You will be able to predictably and reliably provide what your customers want.

Reliable supply is not limited to reducing inventory, it also relates to how your organization plans and sells its products and services.

All three of the factors in DIAGRAM 2 interact and need to be optimized to ensure reliable supply.

ETHICAL SUPPLY is not just a new and trendy word. Ford doubled people’s wages, Unilever built Port Sunlight and Tata is majority owned by charities. This corporate social responsibility is not new; it is part of ethical supply.

you not only sell and provide appropriately but you also sell and provide better than you did yesterday, only the Joy of Standards (with standardized work and continuously improving standards) can guarantee this.

If your organization is leading in its industry, on the ethical perspectives that matter, then you will not experience the negative fallout from boycotting, strikes and social media attacks. It is a simple win-win situation in today’s interconnected world. Promote

The alternative to trusted quality is to stay stuck in the 1980s with a rule book to throw at suppliers and / or failing employees. This may save a few directorial nose bleeds, but over the long term it will not save your organization.

This is an exerpt from James’ book The Joy of Standards, which can be found on amazon at: http://amzn.to/28Y4sbn

DIAGRAM 2: Factors which ensure reliable supply

PLAN THE CAPACITY: how much can your organization reliably provide in the market place, find the number, communicate to sales and prepare to deliver that capacity.

SELL THE CAPACITY: not a single item more or you will have an organization which is overstretched, any less and you will have an organization with excessive costs.

DELIVER THE PLAN: have standards which will be constantly managed to continuously improve. See costs, quality and delivery that becomes more and more reliable.

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optimization in your organization, through lean thinking, which makes you environmentally conscious, community orientated and accountable for your supply chain; your competitors will be green with envy, ruthlessly costcutting, cutting corners and left without customers or investors.

TRUSTED QUALITY is part of the DNA in all respected organizations. Your reputation for recalls, fraud and market manipulation is expensive to repair and inconsistent with your organization’s articles of association. You must ensure that

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Lean for the 3rd Sector: How to Get More Out of Not-For-Profits ProTech COO, Jenny McTiernan, discusses its Lean3S a proven methodology designed for the 3rd Sector, which combines Lean, Systems Thinking and Neuro-Linguistic Programming (NLP) techniques to transform customer service, staff engagement and efficiency and deliver major cost savings through reduced operating costs.

The article below is based on the content of a presentation Jenny gave highlighting the benefits of ProTech’s Lean3S to over 300 professionals from the ‘Not for Profit’ sector, attending the MemberWise (the leading free Membership and Association Professional Network) Membership Excellence Conference in April of this year.

For over 20 years ProTech has been supporting clients in the ‘Not for Profit’ (NFP) sector by enabling them to transform their people, processes and technology capability by deploying its Lean3S methodology.

Lean3S is a methodology ProTech has developed that brings together our change management experience with our knowledge of the NFP sector and blends this with proven business transformation methods based on Lean and Systems Thinking and NLP techniques. Using this methodology, NFP’s can transform their organisation by reducing operating costs, transforming member and staff satisfaction and driving up revenue.

An important element of Lean Systems Thinking is how it enables organisations to achieve the elusive ‘3 Wins’: how to generate value for the organisation, its

Jenny McTiernan Chief Operating Officer, ProTech

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customers and its staff and I will discuss this a little later.

The 2016 MemberWise Harnessing the Web Report (published in February 2016) identified that the expectations around member value are rising and hence customer perception of the improvements, already made by NFP’s, may have been cancelled out. So how are NFPs to avoid this situation of running just to stand still? If money is no object then you can just keep spending more and more. The reality is however, that the sector and doubtless organisations across other sectors, do not generally have limitless funds available to ensure they can keep up with increasing customer expectations and demands.

I believe that to respond to this challenge, the NFP sector can lead the way in demonstrating to organisations within other sectors the need to transform the way they think.

Lean Systems Thinking helps NFP’s to change the way they think about the customer, and hand in hand with this, to change the way that they work and the way people are managed. It is actually about culture change, transforming the organisation by engaging its people in a new way of thinking and working.

Many of you reading this will already have heard of the term ‘Lean’ or even have used it within your organisation. For those of you who may be new to Lean as a concept, it was developed as a continuous improvement methodology within manufacturing. The term ‘Lean’ was first used to describe Toyota Cars world famous ‘just in time’ (JIT) manufacturing approach in a book entitled ‘The Machine that Changed the World’ written in 1990. Toyota itself describe this Lean method as the TPS – the Toyota Production System.

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“Introducing the Toyota Production System can be a trying experience. The system exposes waste mercilessly. People must be prepared to abandon familia r and longstanding practices.

Top management must take part directly in clearing away obstacles and in implementing and maintaining the system.

Middle-level managers, meanwhile, must provide worksite leadership in putting the concepts of the Toyota Production System into practice”.

The Toyota Production System- Operations Management Consulting Division Toyota Motor Corporation 1998

Statistician and Mathematician Dr. W Edwards Deming arguably laid the foundations for the TPS. He is recognised through his work with Ohno and Shingo at Toyota and other Japanese businesses in the post World War II period to have made a significant contribution to Japan’s reputation for innovative, high-quality products, and for its economic power. Deming is regarded as having had more impact on Japanese manufacturing and business than any individual not of Japanese heritage.

system. The aim for any system should be that everybody gains, not one part of the system at the expense of any other.” I refer to this as ‘Systems Thinking’.

In the TPS, there is a second fundamental principle that does not feature in typical Lean projects – Respect for People. It is this which has enabled Toyota to embed and spread its continuous improvement approach; to make it part of the organisation’s ‘DNA’.

Lean principles have been applied with varying degrees of success in a variety of sectors in the UK, from retail operations such as Tesco’s to healthcare, financial services and local government.

However many of these organisations have found they have one thing in common - the problem of sustainability.

Respect for People comprises of engaging with all stakeholders, building trust and developing individuals through Team Based Problem Solving. Respect for People goes to the very heart of Dr. Deming’s management philosophy. Deming believed that all businesses need to see themselves as ‘Systems’ and defined a system as ‘a network of interdependent components that work together to try to accomplish the aim of the

It is Dr Deming’s teachings on ‘Systems Thinking’ that ProTech has been inspired by in developing Lean3S. This is because Deming understood that to achieve transformation and to sustain this transformation, it is essential to engage peoples’ hearts as well as their minds.

Lean practitioners say that the most common reason for failure of Lean projects is ‘middle management resistance’. We should not however seek to blame managers for their resistance to change. As Deming told us “it’s not the people that are the problem, it’s the ‘System’” and in particular, what he referred to as ‘System Conditions’. These are conditions which influence how a

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person thinks, works and behaves within an organisation. Examples of ‘System Conditions’ may include:

• • •

Staff focused on hitting targets rather than delivering what matters to customers.

Inconsistent behaviours and working practises across the organisation and even within teams.

IT systems that are not designed to aid the worker in completing a seamless process.

Research shows that managers have a 70% impact on the performance of their staff and this in turn has a 30% impact on bottom line performance.

It makes sense therefore that engaging with and developing managers is key to achieving sustainable transformation.

It isn’t hard to imagine that life as a manager across all business sectors is going to get tougher over the next few years. Perhaps the most worrying trend from an NFP perspective is due to rising member expectations, that see no signs of reducing, which in fact are likely to increase still further in the future, is the need for membership organisations to keep running just to stand still!

According to the MemberWise Report and consistent with our observations, many NFP’s are also struggling with a broad range of operational challenges, some of which are highlighted here and include technology and process issues as well as people issues

You may already be experiencing pressure to do more and more for your customers at the same time as absorbing the associated costs. You have probably already made the easier efficiency gains by tackling the low hanging fruit. It is going to be difficult to innovate to do more with less.

Good old internal restructuring will not cut it in achieving the required business transformation.

The temptation has traditionally been to use technology to solve the efficiency problem but given that the cost to the UK taxpayer of failed government IT projects reached £100m in a single year (2013-14), it is clear that technology alone is not the answer.

As I have already said, we should hardly expect managers not to resist change when they believe that the way in which they have always managed their teams is the ‘right way’. Asking managers to ‘get it’ simply by imposing new ways of working is hardly likely to motivate them to join you along the Lean Systems Thinking road, let alone to encourage and support the people in their teams to do the same – after all, no one wants to think that they are wrong.

As the Philosopher Albert Schweitzer said: “Example is not the main thing in influencing others, it’s the only thing.” Lean Systems Thinking is designed to provide a method through which managers and staff can work together to transform the organisation. ProTech achieves this by working with them to transform the way they think using NLP techniques – challenging embedded beliefs and re-defining the role of manager as ‘coach’.

This change in thinking results in the transformation of culture, capability and methods.

around staffing and skills: Given the complexity of these challenges and the real risk that in meeting customer expectations operating costs could spiral out of control, it is plain that improving the efficiency of your organisation – doing more for customers with less or the same amount of resource – is an absolute pre-requisite.

The question is how?

How do we get more efficient is no longer the whole story. If the organisation is to thrive over the long term and not just survive in the short term, it must think about how it can overcome the challenge of achieving the elusive ‘3 Wins’ namely: 1. How to create only value for customers and be as efficient as possible?

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“Lean practitioners say that the most common reason for failure of Lean projects is ‘middle management resistance’.”

2. How to stimulate, retain and attract the best people?

3. How to create a successful organisation with a ‘culture’ of improvement so that getting better at what it does is a virtuous circle that never ends?

Undoubtedly the third ‘Win’ is the hardest to achieve.

The answer is to deploy Lean Systems Thinking to turn the way that change programmes are historically delivered ‘on its head’!

The norm is to deliver change programmes from the ‘top down’, but this approach simply will not work when meeting the challenge of achieving the 3 Wins.

Organisations need to harness the time and talents at every single level of the organisation, and those of its partners, suppliers and customers.

The key thing to remember is that your employees nearly always share customers’ frustrations and know the answer as to how to make things more efficient and improve the service delivered.

“Why don’t they then?” is a reasonable question. The answer lies in three truths: 1. Beliefs - that change is always done ‘top down’ so employees believe they are not allowed to make changes – even if they are for the better.

2. Behaviour – we treat our people as if they do not know the answers to key customer issues.

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3. Capability – employees know what needs to be done but often don’t have a method for making it happen, so when they do make change it may not be fully thought through, tested and measured, leading to problems which reinforce 1 and 2 above.

We would not expect improvement in science or technology without investing in experiments and testing a hypothesis, observing the results to determine whether to proceed with the change. Yet in business, we often make reactive changes based on minimal or unreliable data, which in itself leads to sub optimisation.

Instead, productivity improvements should be trialled and measured and only the most effective changes should be fully adopted. The answer lies in learning and teaching others to see your organisation as a System. Dr. Deming realised that a system is complex. It is made

up of interrelated components of people and processes with a clearly defined, shared destination or goal. He said that everyone must share a distinct understanding and commitment to the aim or purpose of the system. Applying ‘Systems Thinking’ helps to accomplish this and will enable organisations across all sectors to achieve the elusive 3 Wins – happy staff, happy customers and a successful organisation.

Lean Systems Thinking offers NFP’s a systemic approach to achieving business transformation. ProTech supports clients in adopting this methodology through a structured programme of training and coaching, supported by a range of tools and techniques that consist of three continuous cycles: 1. Connect – learning to see your organisation as a ‘system’ 2.Reflect – team based problem solving and designing ‘perfect’ 3. Progress – building great people, processes and performance Lean Systems Thinking makes achieving the elusive 3 Wins doable!

For more info visit www.protech. co.uk

“It isn’t hard to imagine that life as a manager across all business sectors is going to get tougher over the next few years. Perhaps the most worrying trend from an NFP perspective is due to rising member expectations, that see no signs of reducing.”

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Introduction to National Grid and why Performance Excellence Adam Lloyd writes about the tactics he has used in his career at National Grid to try and achieve high levels of performance excellence.

Introduction National Grid is an international electricity and gas company based in the UK and northeastern US. We play a vital role in connecting millions of people safely, reliably and efficiently to the energy they use.

In 2012 our businesses within the UK faced the introduction of a new regulatory framework, RIIO-T1 with a greater focus and rewards for focusing on delivering what our customers and stakeholders want and driving innovation.

At the same time the focus on decarbonising the energy market, greater integration with EU energy

markets and increasing renewable generation and interconnection is changing the energy market, the technology and market participants we engage with as suppliers and customers.

To respond to these challenges, across National Grid we have embarked on a cultural transformation with the deployment of performance excellence throughout both our UK and US operations. As with my presentation at the recent LMJ Operational Excellence conference this short article focuses on the journey of the System Operator, one of our UK businesses sharing our experience of the first three years of our journey towards continuous improvement.

Adam Lloyd Process Performance Manager, National Grid

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The System Operator The System Operator plays a key role within the energy market. We keep the energy flowing so that it’s there when you need it. We are trusted to innovate and meet the demands of a changing world.

We transport Britain’s energy from where it’s produced to where it’s consumed. We make sure that supply and demand are balanced in real time. This means our control rooms work day and night, 24/7 to provide a reliable and cost effective service for our customers.

We do our job minute by minute so that you can do yours. When you need energy, it is there.

Outside of the control room, we engage with our customers and stakeholders about the energy future. We provide analysis to understand the impact of decarbonisation on energy and networks, we facilitate code changes to accommodate market and technology change, and we connect new assets.

Our teams are made up of highly experienced individuals with a range of skills and backgrounds from fields as diverse as engineering, economics, strategy, regulation, commercial, change

management, customer and stakeholder management, legal and contractual. Our culture has been built on our expertise, with a strong focus on safety and a strong sense of pride in the important role we play within the energy market, keeping the lights on and the gas flowing every day.

The Journey So Far Recognizing the need to change and refocus elements of our culture to become more innovative and customer centric, whilst maintaining our world class safety standards and levels of reliability in 2012 across the business we began our journey towards performance excellence.

Our journey is outlined in Figure 1, each step has moved us on our journey to continuous improvement, we have had lots of successes and many challenges.

The remaining segments share this journey and our key learnings.

Shaping the Journey In late 2012, working with our Centre of Excellence, who support best practice and a consistent approach across the organization we developed a standard

approach and vision for what we wanted to achieve with a focus on delivering great outcomes for our customers and stakeholders.

Figure 2 outlines the shared journey for National Grid with four major stages moving from awareness and understanding our current state, to establishing control of key end to end processes with initial problem solving before focusing on routinely improving and driving step change in performance and finally achieving excellence with external recognition of best practice.

Performance Excellence Deployments Following initial pilots we commenced our performance excellence deployment, a three year programme covering all teams within the System Operator. Each team is supported by a performance excellence practitioner to build capability in a number of core tools covering standard work, visual management, team hubs, problem solving and work place review. Each team goes through a defined programme based on a typical improvement cycle, initially focused on training in the core tools and building

Figure 1: Summary of SO performance excellence journey

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Initial End to End Process Alongside the deployment of performance excellence we have also focused on creating a clearer focus on our end-to-end processes and how we deliver value to our customers and stakeholders across the System Operator. Initially based on the development of high level process maps, we began to measure the performance of the organisation in terms of key processes.

Figure 2: Our shared vision and standard approach

awareness, before diagnosing the current state of the teams understanding of customers and performance, identifying an improvement and delivering an improvement project during a 20 to 30 week deployment. The approach is designed to leave each team with the capability to keep measuring performance, identifying and solving problems following deployment.

To date we have deployed to 60 teams (~80% of our teams), with some great successes, reducing lead times within one planning team from 128 days to 7 days, deploying to two controls rooms operating on a 24/7 basis, across multiple shift teams in a highly complex real time environment as teams balance the gas and electricity networks. We have delivered some great benefits to the organisation both in terms of capacity released and financial, however this hasn’t been without challenges.

In a number of instances, we found our standard approach

had to be redesigned to meet the needs of different teams. We often underestimated the effort required for communications, to build engagement with teams who question how a concept assumed to be for manufacturing can work within the varied range and often highly complex activities our teams undertake. The scale of the deployment, with a clear framework and approach to tools whilst beneficial to maintain a standard and build capability of practitioners has occasionally been viewed as overly bureaucratic with too much focus on applying the tools, rather than supporting the teams to solve their problems. Finally, with a strong focus on individual teams initially, we faced lots of questions as to how everything fits together. This has provided great learning and enabled us to evolve and adapt our approach throughout the deployment as we recognised the need to adapt to meet the needs of our teams.

This proved significantly more challenging than anticipated, with significant variation in activities undertaken, limited recognition or buy-in to the concept of end to end process and limited alignment between the goals of different functions within the System Operator our progress was slow. We made some progress in developing critical measures in some areas of the business, and ran a number of improvement projects improving the processes utilised to produce key publications and improving information flows between teams.

Whilst beneficial to the business, as a team we reflected that this wasn’t progressing us towards our ideal state or building a culture of continuous improvement, with limited alignment and tactical projects we needed a more focused and strategic approach.

First Attempt to Implement Policy Deployment/ Hoshin Kanri Having built our capability and wider understanding we recognised the need to create a clearer linkage from our 3 year ambitions to the end to end process, and

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the performance excellence deployments undertaken by teams.

To truly drive a cultural change we had to shift the focus from tools and tactical projects to people, coaching and setting clear goals to drive plan do check act cycles at all levels of the organisation.

We began by building our understanding of Policy Deployment / Hoshin Kanri, engaging with an expert for a couple of hours teaching, reading about the concept and guides to implementation, going and seeing examples with other organisations.

We then started to plan our approach, communicating significantly with senior leaders to articulate why we should try policy deployment, running town halls to build awareness across the System Operator. We then ran a series of workshops and sessions across the business to develop our PDMs and to challenge alignment of teams to deliver our SO ambition.

The PDM tool itself is great to create a clear, visual, one page overview of the goals and priorities for the business and the teams within it. However, the main benefits we found are

from the process of building and agreeing the PDM, the structure and challenge it brings to business planning and the engagement it drives through including people at multiple levels to identify ideas to achieve our ambition.

Furthermore, following a significant catch ball event with 80 leaders from across the System Operator we utilised the event in January to test alignment and ensure teams knew what they needed to deliver for themselves and to support others, triggering discussions to resolve issues prior to the beginning of the performance year.

Two years in to our journey utilising PDMs as a strategic planning tool, we have learnt a lot, the tool itself appears straight forward which is deceptive. The art is in the process of developing the PDMs, driving the right level of conversation and alignment across the business and prioritising strictly to stop projects that aren’t required before they commence to avoid wasted effort that won’t help achieve our ambition.

Whilst we have made a lot of progress with PDMs, we still have a lot to learn in terms of the rigour of using it to maximum effect. The first

two years of implementation have driven significant alignment and focus on our key goals, however we have more to do to drive rigorous prioritisation as we still have a cultural tendency to take on more than we can realistically deliver. We are learning this but it takes time.

Moving from the initial end to end process to value streams As highlighted above whilst we had a defined end to end process, this was driving limited focus on our customers and stakeholders with principally tactical improvements.

We began to review and consider alternatives in late 2014/15 and in 2015/16 realigned the System Operator to our core value streams with a clear focus on how we flow value to our customers and stakeholders.

We started this really informally, engaging with stakeholders to highlight the benefits of a value stream approach testing with them our ideas regarding different product families and services to agree the principal themes.

Building people’s awareness of value streams as an initial concept with the intent to start trying to measure the performance of the value streams identified rather pursuing measurements of our initial process map which had limited traction or buy-in.

We began linking what teams had developed during performance excellence deployments, capturing a summary of each activity and starting to build it out on walls around the office.

Figure 3: Example of PDM comms

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Bit by bit our 6 key value streams started to emerge and then following an internal operating model review we re-aligned teams across the System Operator to each value stream with senior

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leaders becoming accountable for each value stream. This required significant engagement with senior leaders, building their understanding and engagement with the value streams to ensure they are the advocates of the new operating model and communicating the new way of working with their teams. Based on our previous experience with the end to end process we needed the leadership team to fully own and embrace the new approach.

We now have six value streams, three for gas and three for our electricity covering; Deliver Energy, Network Capability and Market Change and 3 supporting activities in SO Strategy, Business Change and Customer & Stakeholder as outlined in figure 4.

This has represented a significant change vs our previous functional silos and as with any change programme of this scale required significant communications, but in addition required explanation and teaching on why value streams, what it means to work within a value stream and how

it aligns with our performance excellence deployment.

Whilst still early in our journey following implementation late last year, with a lot of work to do this year to improve the flow of information and work within each value stream, alongside our PDMs and performance excellence deployments we have put in place the platforms to enable a continuous improvement culture and significantly aligned our improvement efforts to delivering our ambition.

The Next Step Our focus this year is on supporting our value stream leads, building capability through coaching support and running rapid improvement events or projects to create flow within critical areas of the value streams and continuing to create a clear linkage so every team understands their role within the value streams and their importance in delivering the services required by our customers and stakeholders.

As we look forwards our effort and focus is transitioning from deploying performance excellence, to creating a culture of continuous improvement, where every process is improved every day. We are beginning to focus more on ideal behaviours, systems and tools and how each helps drive the results we need to achieve to realise our ambition.

For me and my team this is a transition to becoming coaches to help the teams across the System Operator resolve their problems, providing expertise in the tools and major improvement projects, but as importantly if not more so coaching teams and our leadership to build the performance excellence capability of the business as we progress towards our SO ambition, to achieve our goals this year and build confidence in setting more challenging goals in the future.

Figure 4: National Grid’s Value Streams

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Using Data To Drive Improvement and Build a Lean Culture Andrew Steele, UK MD of Forcam, discusses how real-time data can transform the traditional model of lean m anufacturing and turn the theory into a philosophy that the whole work group can embrace.

We start with an Elegant Concept As we all know, lean manufacturing today is a concept derived from the Japanese automotive industry. Lean focuses on process improvement and reduction of waste. Lean requires the current situation to be benchmarked and goals set towards improvement – hence

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it implies a process that strives to continuously improve.

Lean is a set of tools and methods, such as total productive maintenance (TPM) or Kanban, but it is also a philosophy – lean thinking. What do we need to be successful at lean manufacturing, or to be a success as lean thinkers? Surely engineering knowledge is the starting point, so we understand the process flow and where value is added to the

Andrew Steele Managing Director, FORCAM

product. We also need a change in mindset too, as the entire team needs to become sensitive to new goals and to new concepts of continuous improvement.

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We need to set key performance indicators (KPIs) so we know what we are measuring and what to benchmark against. We need to set parameters and identify specific sources of wastage that we want to tackle. This is fairly easy, as lean already defines these typical sources of waste: transport, inventory, motion, waiting, overproduction, over-processing and defects.

Lean manufacturing focuses on what needs to be changed and we know that we need key performance indicators or metrics. However, there is something missing in the equation. The data that we use as a basis for lean manufacturing and to fill our important metrics is of critical importance. Accuracy, timeliness and relevance of data are key factors.

The Human Dimension We could of course use our workers to collect data. We can monitor production cycles with a stop watch and make notes in a spreadsheet. We can regularly take samples and do spot tests on quality and record data on a continuous improvement board in the production office. Later on, we can file the findings on a server somewhere, and hope that the employees will find the data when they need it.

Although as a first step towards lean this may seem appealing, we are opening the doors to much human interaction and potential for errors or subjectivity.

Of course, it is also human nature to tweak the odds slightly and manipulate data to look better in an end-of-shift meeting.

This all lacks objectivity, the data stream is intermittent and the process, is not just inefficient, but also time-consuming.

Applying lean principles to this

process there is massive wastage because of manual collection and distribution of data (transport), manual processing of data (waiting), and manual analysis of data with different parameters or non-standard metrics definitions.

Making Data Objective This is where a manufacturing execution system (MES) comes into play. Its function is the automated collection of different types of data, networking of machines in real-time, process planning and performance monitoring.

An MES is able to collect data from machines and processes directly that you need for standard defined metrics such as OEE – Overall Equipment Effectiveness.

OEE is a commonly used KPI in many branches of manufacturing – particularly capital intensive plants where the physical assets must be as productive as possible.

In some companies, maintaining a high OEE figure is even a job target in the contracts of plant managers. OEE consists of three factors: an availability factor, a performance factor and a quality factor.

Availability is the number of potential hours that a machine is capable of undertaking manufacturing. In any real-life situation no machine will be fully productive for 100 per cent of the time. The available time will be eroded by maintenance – both planned and unplanned, tool changes and resets, waiting for material, manpower availability and many other factors.

Likewise, performance is a theoretical rate of output.

Factors such as machine speed, limitations on tooling, specification requirements regarding quality or finish and a variety of other factors

can affect performance.

Quality is the final measure. All output that is sub-specification and produces either scrap, re-work or sometimes the wrong product at the wrong time is a drain on quality and thus OEE. An MES can supply accurate information to populate the OEE metric because real-time data collection is taken directly from the machine controls with additional information from the human machine interface (HMI) at the workstation. This data is processed in real-time to give an immediate comparison of planned verses actual order data plus accurate cycle-time monitoring to determine the performance factor, together with yield, scrap and rework quantities to create a quality figure.

An effective MES will stream a package production data such as CNC programs, material specification and metrics for assessing quality direct to the workstation as a digital production folder. This can be controlled and archived centrally, so specification updates are fully documented, manufacturing instructions are up-to-date and the possibility of manufacturing to an obsolete specification is prevented.

When looking at reducing wastage in processes it is critical to collect all downtime reasons and undefined stoppages. The machines can offer information to some extent, but even the smartest machines can’t know if the worker is in a meeting or a similar stoppage. This is the point where manual input is needed, however, it is input into an IT system and database where it can be recovered everywhere in very little time, not recorded on work dockets, time sheets or other manual systems where later data entry and analysis result in further delays.

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We need to look at sensible reports and analysis that deliver understandable data suiting each team member’s information needs. A well-executed MES will generate customised reports highlighting relevant data for the operator, supervisor and plant manager. This can be analysed and presented in many formats but could include, in addition to immediate production data, summaries from a single shift, a day, to cross-plant OEE comparisons in different countries over a one-year period. This provides the foundation data for a continuous improvement process (CIP).

Accumulating Small Gains to Make Big Savings Many think that collecting data from longer downtimes makes the most difference, so they only look at 15 minute stoppages upwards.

Prioritising in this way could make sense, especially with manual data collection and analysis. But with automated data collection and instant analysis it is also feasible to drill deeper to see the impact that short-terms stoppages can make.

For example, if waiting for material at one machine is cumulated over a day, you may be looking at perhaps 30 minutes. Over a week with a 24/7 production that is already 3.5 hours, 14 hours per month, or in a year 168 hours.

With an hourly machine rate of let’s say £30 we are losing £5,040 a year on one machine alone. A manufacturer with a machine park of 200 machines, would be losing over one million pounds.

As one of the goals of lean manufacturing is reducing total costs, this would seem like a source of wastage that it is possible to eliminate or at least drastically reduce by reshaping work

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processes. In practice, the solution may be as simple as buying an additional forklift truck to deliver material on demand, on time.

Automated data capture and realtime analysis makes these events visible, quantifiable and actionable.

Information Led Teams Lean thinking means constantly looking for ways to improve.

We need to adopt the principle that there is always room for improvement. A central concept of lean is CIP and this has to be actively lived by everyone in the manufacturing organization. The management have to act as rolemodels, only then can the concept be successfully implemented.

Everyone should be enabled to work with the metrics that MES delivers. The plant manager needs to lead his shop floor by using metrics such as OEE to monitor real time performance.

The maintenance department needs to closely monitor stoppage reasons such as tool breakage and unplanned maintenance and find ways to combat these.

Questions to ask include: Am I using the correct tools for a specific material? Can we arrange maintenance when there are no orders on the machine?

Where are there pressure points in the workshop? Where is there underused capacity?

The planning department should also monitor and verify cycle times from the ERP (Enterprise Resource Planning) system and identify if these times need to be updated – reducing the wait for new orders or allowing for more time if the planned times aren’t accurate.

Every machine operator should be encouraged to give feedback on the real situation on their machines.

Working with a PDCA cycle – plan, do, check, act – helps to test process optimisations and verify if they are beneficial. For example, say the NC program used to mill a part is not working to specification. The worker should test alternate procedures that suit the operation and these in turn should be verified by manufacturing engineers: Plan, Do, Check. If they help to keep the part in spec, the altered NC program should then be updated in the digital production folder and distributed amongst the work stations – the “Act” of PDCA.

Conclusion Every company has to decide for itself how lean thinking can help them towards operational excellence. What measures they adopt, what processes they change, which waste sources they eliminate first, can vary from company to company.

But every lean-thinker should have one thing in common: the quest for automated, realtime, objective data as a basis for lean manufacturing. And MES software, with a return on investment of under nine months, is surely a massive step towards becoming truly lean and building a CIP culture.

The Author Andrew Steele is an aerospace engineer with previous experience at Rolls Royce, Megitt and Smiths Aerospace. He joined Forcam in 2014 and has been a leading light in pioneering the Smart Factory concept, introducing Forcam’s software and system to major companies in aerospace, automotive and medical device manufacturing in the UK, Europe and USA.

PRINCIPLES AND PURPOSE

Impact of Digital on How We Implement Change The director of Changefirst Limited, Audra Proctor, writes about how digital can change your organisation, and the ways that it it can help your organisation adapt to change.

No one doubts the effectiveness of face-to-face workshops for organisational change implementation. But the practicality of things, such as, avail-ability, time, expense and choice of venue, to name a few, makes running training workshops a challenge for many organisations. In this article Audra Proctor of Changefirst unveils how advancement in digital technology and digital delivery methods has brought many organisations alternative, equally effective and cost-effective solutions.

I was quite taken by a recent article in the September (2015) issue of People Management, CIPD. The article was really about the power of video to transform L&D efforts, but it also provided an interesting insight into the impact of digital in the world of organisational change implementation.

The article kicked off with an interesting snippet from the British builders’ merchant and home improvement retailer - Travis Perkins. Based in middle England

Audra Proctor Director, ChangeFirst Limited

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(Northampton), it operates 1,900 outlets across the United Kingdom & Ireland. Around 12 month ago, the organisation created a YouTube account and from that time period to now, more than 570 videos have been uploaded to the account. It transpires that when Travis Perkins first receive a new product line, employees can be seen capturing immediate Intel and experiences on their smartphones; from the unpacking, to assembling and testing new products, which is then up-loaded to YouTube in a matter of minutes and avail-able to colleagues far and wide.

With over 26,000 employees spread over large warehouses in different locations, getting people into a classroom to learn and try out for themselves had been increasingly difficult and therefore it had to be ‘pushed’ out to staff. However, these short, user-generated video clips were not only creating a ‘pull’ for justin-time learning, but resulted in an estimated £1m saving in product training over the time period.

This is very reminiscent of change implementation across the global organisations we support. For years, our clients had wrestled with the inconvenience, lack of availability, time, and expense of face-to-face workshops. No one doubted their effective-ness, but travel expenses and venue fees alone quickly added up – not to mention the cost of creating and running the programmes, and the loss of work time for participants.

Even just a two-day offsite training programme could cost over £50,000, and in 2014, we were able to help a client slash a £400,000 organisational training expense to a £50,000 one – while training four times more people – with an e-learning programme created in Articulate Storyline.

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This is just one of the impacts of digital on how we implement major organisational change – being able to build employee capabilities to manage and adapt to change quickly and cost effectively, without geographical limitations. Yet, some organisations seem to be struggling with embracing new approaches to learning. Deloitte’s recent 2015 Global Human Capital Trends survey reported that only 40% of organisations rated their organisations as ‘ready’ or ‘very ready’ in learning and development. In the report the authors make a very important observation: “Faced with gaps in talent and skills, CEOs are turning to CHROs and CLOs to ask for more and better learning platforms and products. Just when the need is most urgent HR organisations face a massive digital transformation in the learning and training industry, plus new expectations by employees for on-demand learning opportunities.”

In other words, we are in the midst of a transformation and some people and organisations are struggling to keep apace. The challenge is substantial. But what is driving this requirement for more digital support? We have been developing online training and tools for almost 15 years, but have never seen the level of interest that there is right now in digital learning combined with application tools, roadmaps, virtual help etc. I see five main drivers.

1. The technology that powers all of this is cheaper, more reliable and simply much better.

The advent of open-source platforms, mobile, video and increased computing power have all contributed to making this possible. As a layman, it just all feels much easier to develop and use.

2. Suddenly there are online offerings everywhere! For example, Massive Open Online Courses (MOOC) are being offered by over 400 universities now. To show the potential, over $400 million was invested in providers such as Khan Academy and Coursera. Plus the learning technology market has grown by over 27%.

3. The population called the ‘digital natives’ are moving into key management positions.

Digital natives are people who were born into an age where technology was ubiquitous. They inhabit a world where personalised digital experiences are the norm.

YouTube, Amazon and Netflix set their expectations, not a 10-year-old LMS system. They want corporate learning to feel like this.

4. Digital gives organisations the opportunity to support projects on a ‘just-in-time’ basis. For example, when organisations launch a strategic initiative they can ensure people have had the right training and are equipped with a set of tools to help them plan, analyse and deliver change much more effectively.

5. A ‘sea-change’ has happened in organisations in the last decade. Multiple trends are making organisations focus on digital delivery methods contributing to this. To give you a couple of examples:

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People believe that they are overwhelmed by work and time away from the desk will only increase the load, not help with it.

Fierce and relentless focus on cost reduction means that organisations see the cost of people travelling to and attending workshops and meetings is no longer affordable.

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All of this creates an environment where enterprises and employees believe that time is a very precious resource and the possibility of being over-whelmed by work is always just around the corner.

In fact, in some cases it is here right now. Solutions that can offer convenient help when and where people need it are likely to be prized over more fixed offerings that involve travel and days away from work and family.

A few years ago, I was talking to a senior manager at a global client of ours, headquartered in the US. She told me she had been asked to attend a leadership development programme that was for the first time being delivered solely online. It involved some upfront learning, completing a set of personal assessments and receiving both expert and peergroup coaching. She told me that she hadn’t been looking forward to it very much. She said: “At the end of the day I learned what I needed to know.

Sure I missed meeting up and socializing with my colleagues. But you know, when I thought about it I didn’t have all the hassle of travelling to the workshop. I was able to spread the learning over a few weeks to fit my schedule, I didn’t have to work in the evening while attending the programme to catch up with emails and I didn’t have to be away from my young family. All in all it was the best use of my time and one that worked very well for my employer and myself.”

This senior manager’s explanation is a lot less evangelical than many of the articles you will read and the speeches you will listen to about how digital is transforming the world. But what struck me so forcibly when I listened to her was that whenever technology can simultaneously solve both personal and organisational problems then it is going to get used.

These trends are combining to bring digital solutions to the fore.

Somehow there is a trade-off

emerging here where digital is not only the most effective delivery method but also one that meets the needs of many organisations and their employees.

It was summer 2009 when we began to envision a very different type of support than we had offered to enterprises in the previous 15 years. In addition to needing to get quality change knowledge and tools to impacted groups just-in-time and cost effectively, there were a few other deployment challenges which our clients were facing, such as:

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How to help a global project team to better prepare to receive change with geographically dispersed user groups?

How to deploy a set of change tools to help with building and deploying change management plans in a consistent fashion?

How to track the progress of change plans being deployed in different local areas?

So, in response to this we developed our digital and cloud based platform - e-change®, delivering an end-to-end change management solution for business around the globe and giving them the tools and training to implement change; leader and employee education, diagnostics, planning templates, reporting tools as well as a social learning functionality all instantly accessible no matter where or when. We based our platform on our proven and industry-leading People-Centred Implementation methodology, so to enable companies to create an environment of sustained change themselves and to help them implement change more successfully. But what’s the real impact of digital?

In just a few clicks:

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Change and project managers could be working on any number of change projects simultaneously, with information stored all in one place Change managers could feel more confident to lead the Programme Board with a visible evidence base of segment and benchmarked decision-making data Senior change agents could work together with global peers, assigning specific change plans / sections to colleagues and then be able to consolidate their feedback into one single plan Project managers could be effectively analysing risks on projects and acting quickly and efficiently on high risk issues Users would be able to benefit from just-in-time coaching, practical hints and tips from a virtual coach to help fast track their application Users would improve their change productivity, working quickly because of the 24/7 availability of tools, status indicators and embedded work flows Change and project managers could increase their credibility as a result of trustworthy data and processes at their finger tips

Incidentally, our learning has been that all this technology has to be supported by processes that build leadership support and create a core team of internal experts (people that can consult, teach and coach). Nevertheless, having a strong basis for conversing with, and engaging, key stakeholders – on demand, on the iPad or tablet and on the move, can help people feel more confident about the difference they can make and that’s why digital platforms will be increasingly important to organisations over the coming decade.

Building Partnerships: How Construction can Learn from Lean With the recent acquisition of Suiko by Turner & Townsend, The LMJ spoke to managing director of Suiko, Andy Marsh and Managing Director of Turner & Townsend UK, Jon White to see what lean can do for construction.

Suiko was founded back in 1997 and initially focused on continuous improvement by putting an emphasis on people in production environments. The firm now focuses more on the broader topic of operational excellence and has a wealth of knowledge in Japanese manufacturing techniques, the word Suiko actually means ‘polish’ in Japanese.

Turner & Townsend is a project management firm that provide advice and help to safeguard clients embarking on investment

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programmes in real estate, infrastructure and natural resources. The firm started out as a single quantity surveyor in the UK back in 1946 and now has over 90 offices across the world.

So how did the two come to join forces?

As anyone with any involvement in business improvement, lean or operational excellence will tell you, culture is one of the defining factors in any change project.

An acquisition is no different;

T&T and Suiko ensured that the culture was in place before the takeover happened.

Speaking about the cultural from T&Ts point of view, Jon said, “It’s about identifying an organisation that you feel has the right cultural fit with your organisation. I met with the senior team and could see the way they manage the business and the relationships they have with their clients and we felt there was a good cultural fit there.”

From a Suiko point of view, Andy feels that, “it’s all cultural fit.

There is a deep realisation that this thing [lean] is current, hot in manufacturing and there is a real desire to embed it and make the most of it at the moment. That was music to our ears really; it was a great fit and the timing worked out.”

“We think that lean, collaboration and technology are the key areas for us where we believe the industry can derive more value for clients.”

Andy goes on to say, “What we’ve seen firstly is that, culturally construction is slightly lagging behind what we have experienced in manufacturing.“ “In manufacturing there has been a shift to a more collaborative and open way of working, a more joined up supply chain with an end to end approach, applying lean principles etc. I think in construction they are absolutely trying that, but there is still a way to go.”

Construction faces some very unique problems when it comes to implementing lean methodologies. One of the first issues can simply be getting tools, material and personnel to site.

If it is a project that is short on space, then getting materials to site and storing them can be a massive headache and lead to large amounts of inefficiencies and waste.

Jon gave us a bit more of an insight in to what he thinks are the areas in construction that have the most to gain from lean thinking. “The way we use design information is one example. Typically on a construction project we can rework design through the supply chain one of the areas that I see opportunities is to become more efficient using technology as well.”

He goes on to explain, “In the construction industry we have a new technique, which is rolling through the industry called BIM, building information modelling.

This is essentially modelling in three, four of five dimensions and that can allow you to be a lot more efficient in the way you

manage your design information, so certainly there’s an area focus on lean in terms of looking at the movement of design information and how that is used throughout the supply chain.”

So the areas that lean and operational excellence can influence construction covers almost all the difference facets of a construction project. This then prompts the question, which tools will be the most useful for the industry?

“For us it starts with really great measurement, transparency, truly understanding what’s going on and what standard work is because without that you can’t understand variation,” Andy tells us, going on to say.

“Then it’s about looking at variation to standard and trying to get control. Then it’s about getting a culture of improvement, challenging issues. Also starting to look forward and not back, getting people to problem solve and look at issues that are occurring or going to occur.”

Off-site manufacturing is a technique that is often employed in the construction industry.

With sites frequently cluttered

with equipment, resources and personnel, there isn’t always enough room or space to build a structure on site. With construction in built up cities this requires more of a reliance on off-site manufacturing.

“The industry has been very aware of the benefits of off-site manufacturing, the challenge that we have is that sites are congested there’s probably more we can do with off-site,” according to Jon. “A lot of that actually feeds back in to the design stage it’s not just about construction, I would certainly see that off-site manufacture will become more prevalent.”

The accessibility of a site can pose a problem, as can the culture of a site or project. If one aspect runs over time or cost, it can have a huge knock on for the rest of the project and can have a huge impact on the harmony of a site.

The classic example that everyone knows is a site full of builders who don’t look to be doing a lot.

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people are synchronising on-site, almost as it goes so the plans are changing and then you get that knock on effect that creates more waste,” “There is quite a bit of debate and activity around our area, I think again, some of the construction firms are trying this but I don’t think anyone has truly cracked it and I think they try offsite, which is almost a factory, you don’t necessarily have the skills to run their offsite production or how to optimise this end to end process to make the most of the idea.”

After agreeing which areas the two firms could collaborate on to bring improvement to the industry, there was a ‘courtship’ process, as Jon put it.

It is a huge time of change in the construction industry in the UK, the government recently announced that smart technologies and green construction needed to be implemented and improved for 2025. The government has also set a goal of achieving 33%

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costs savings as well as releasing a report that showed areas in the supply chain where there savings can be achieved.

Jon thinks that Suiko’s expertise in lean and operational excellence can help find those savings that the industry needs, “only so much can be delivered through traditional measures so we need to be more expansive in the industry in terms of driving change to achieve those types of savings.

“We think that lean, collaboration and technology are the key areas for us where we believe the industry can derive more value for clients.”

Lean has always found a way to adapt and make itself relevant in other sectors and industries.

Whether it is healthcare, law or some other industry, lean has now been adapted so that it can be incorporated in to these industries.

The construction industry could be the next industry to take the plunge and embed the tool

sets in the culture of the sector.

Everywhere lean is applied it is added to and altered.

This merger between Turner & Townsend and Suiko could herald a new era for lean and possibly bring new techniques to the construction industry.

“In manufacturing there has been a shift to a more collaborative and open way of working, I think in construction they are absolutely trying that, but there is still a way to go.”

LEAN ONLINE

Lean Online We stumbled across an article from a website called Shmula which looks at what the queueing theory is and takes an in depth look at output: http://bit.ly/292Frfi

This is just some of the wonderful reaction we had from delegates that came to The LMJ OpEx Conference. Lots of positive feedback and some great interactions. @TheLeanMJ

The Make48 team over in the US have written a piece recapping the latest event that happened recently. Lean Top 25 member Christopher Guerrera was one of those who took part, read more to find out how he did: http://bit.ly/28Zg7XX

July/August 2016 | the-lmj.com

29

LEAN EVENTS

Lean Lauch Pad: Two Day Event

Change Leadership Course

Agile Summit Greece

13th-14th September, Blackpool, UK

8th-12th August, Denver, Colorado

16th September, Athens, Greece

This course is part of the Growth Support Programme, which is designed to equip organisations with the tools, techniques and knowledge to launch a successful enterprise and accelerate growth.

This course lasts for 5 days and consist of 31 hours of instruction.

The course aims at making better leaders by providing all the knowledge, tools, skills and coaching necessary to lead change.

This is the 2nd annual summit and you’ll have the opportunity to attend talks from thought leaders and experts in the worldwide agile community, network and connect with like-minded people.

The event will have bespoke, innovative workshops tailored to your business model. There will be a range of tools available to minimise the risk of starting a business as well as one to one coaching with a range of specialist coaches.

The course focuses on the specific actions and behaviours you’ll need to perform as you lead or participate in change initiatives in your organisation. There’ll be workshops, evaluations and practice sessions.

Our programme covers experiences reports, agile management, agile release planning, continuous delivery, test driven development, lean start-up, gamification for change management, continuous improvement and other similar topics.

To find out more or book: http://bit.ly/1UaZGgG

To find out more visit: http://bit.ly/1Xnr63k

More information can be found at: http://agilesummit.gr/

Lean Kanban India 9th-10th September, Bangalore, India This conference draws from real life kanban experiences of hundred of organisations worldwide, as well as state of the art thinking. Lean kanban India 2016 is part of the global lean kanban conference series of events providing pragmatic, actionable guidance you can apply immediately to your knowledge work or service work.

30

July/August 2016 | the-lmj.com

At this event you will have the opportunity to connect with coaches and practitioners, hear from organisations that are at the forefront of kanban and see how to apply kanban to gain sustainable results and imporvements.

For more info and booking information please visit: www.leankanbanindia.com

For information about our own events visit our website at: the-lmj.com/ category/event/

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€50

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