What does success look like?
Issue 11 July/August 2011 www.leanmj.com
As more and more companies progress with their lean implementations the harvest of low hanging fruit is now over for many and gaining a longer term vision for success is not always easy. This issue investigates what the fundamental features of sucess might be.
In this issue: What does success look like?: Barry Evans and Robert Mason, Cardiff Business School, respond to the question we ask ourselves in this issue by analysing recent lean research. The devil is in the execution: Paul Docherty, CEO of i-nexus, talks about his idea of lean and his 10-year experience with business execution software. Start slow and small: Tom Goodwin, director of lean-6 sigma at Motorola Mobile Devices, provides his tips on what makes a lean-6 sigma programme successful. TPM, a history: Jonathan Tidd, managing consultant at OEE, guides you through the origins and evolution of Total Productive Maintainance, explaining why it is so important to lean thinking today.
The Lean Management Journal is supported by the Lean Enterprise Research Centre, Cardiff Business School
Dear reader, To say we are seeing challenging times for business management is a vast understatement. The last couple of months have seen a whirlwind of strike action across Europe as the eurozone struggles with a debt crisis which is crippling businesses and, here in the UK, public sector pay disputes and pension concerns have come to a head. In such an environment employment and management surveys are showing that workforce engagement and sensitive performance management are becoming ever more important – indeed they are now rated the top concerns of HR professionals, a change from the focus on cost control seen during the recession. Managing a workforce effectively is no easy task but it can bring huge benefits in terms of productivity and effectiveness. In a recent visit to the Toyota factory at Burnaston in the UK, I was struck by the practice of referring to all employees as ‘members’ rather than ‘colleagues’. This is not mere semantics for Toyota. The face to face communication and readiness to leap on imperfection with enthusiasm is at the core of the company’s enduring success. Of course this lesson has been learnt and learnt well beyond Toyota. Roland Thompson tells us on p14 about his experiences of the same culture at Nissan (a current productivity star) and how he is now helping others to apply the principles. Not all success can be attributed to lean culture building however. Execution of business strategy is difficult to keep in perspective and to communicate in the right language at different levels. While the use of technology to support lean implementations is a controversial concept in many quarters, Paul Docherty of i-nexus makes a convincing argument for its benefits in visualizing policy deployment and tracking benefits on p17. The inclusion of such diverse perspectives on lean in this issue is a reflection of just how difficult it is to answer our theme; ‘What does success look like’. Of course, it will look different for every organisation, but the need for both soft and hard skills as well as investment in enabling technologies will always be features and will need a steady hand to keep them in balance. This is the challenge for lean leaders. Sadly, I must announce that this is the last editor’s letter I will write for LMJ. It has been a great pleasure to see the journal grow over the last two years and to have met such a range of dynamic contributors from the lean practitioner community. I look forward to meeting more from the manufacturing sector in my new role as editor of The Manufacturer magazine. Happy reading,
Editorial
Commissioning editor – Jane Gray j.gray@sayonemedia.com
Design
Art Editor – Martin Mitchell m.mitchell@sayonemedia.com
Designers – Viicky Carlin, Alex Cole
www.leanmj.com
studio@sayonemedia.com
Jane Gray Commissioning Editor Email: j.gray@sayonemedia.com Tel: 0207 202 4890
2
In order to receive your bi-monthly copy of the Lean Management Journal kindly email b.walsh@sayonemedia.com, telephone 0207 4016033 or write to the address below. Neither the Lean Management Journal or SayOne Media 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.
J U L Y / A U G U S T 2 0 1 1 c ontents
04 Introducing the editors 05 Lean News 06 Managing performance to succeed
Zoe Radnor, professor of operations management at Cardiff Business School, introduces this issue of the Lean Management Journal, which focuses on identifying success and how to manage performance to achieve it.
07 What does success look like?
Barry Evans and Robert Mason, Cardiff Business School, analyse recent lean research to find out what is the nature of lean success.
14 Managing management
Poor management can be far more dangerous than the misapplication of lean tools. Jane Gray interviews Roland Thompson, of Sora Group.
24 The evolution of TPM
Jonathan Tidd, managing consultant at OEE, provides another chapter in LMJ’s review of the history and transformation of the lean toolset. He explains the origins of Total Productive Maintainance, how it has changed over time and why it is so important in today’s lean environment.
28 Letters and comment
Contributions for this issue come from Kevin Eyre, S A Partners LLP; Keivan Zokaei, S A Partners LLP and professor at the University of Buckingham; and Jeff McGowan, Johnson&Johnson LifeScan,
34 Book review
John Bicheno reviews Greg Gordon’s Lean Labor
35 Events
17 The devil is in the execution
Jane Gray talks to Paul Docherty, CEO of i-nexus, to discover his idea of lean and how i-nexus’ innovations in the field of business execution software came into being.
19 Start slow and small
Lean-6 sigma best practice according to a lean-6 sigma success story. Helen Winsor, of LMJ’s media partner PEX Network, IQPC, inteviews Tom Goodwin.
21 LMJ in conference
Britannia House, 45-53 Prince of Wales Road, Norwich, NR1 1BL T +44 (0)1603 671300 F + 44 (0)1603 618758 www.sayonemedia.com. Lean management journal: ISSN 2040-493X. Copyright © SayOne Media 2011.
3
www.leanmj.com
We are told lean learning comes with direct observation, but conferences can be just as valuable. Jane Gray looks back at the events she recently attended.
Introducing your editors Articles for LMJ are reviewed and audited by our experienced editorial board. They collaborate on comment against articles and guide the coverage of subject matter.
Jacob Austad
LeanTeam, Denmark
Professor Zoe Radnor
Cardiff Business School
Bill Bellows
Ebly Sanchez
John Bicheno
Peter Watkins
Norman Bodek
Wendy Wilson
Brenton Harder
Dr Keivan Zokaei
Pratt & Whitney Rocketdyne
Lean Enterprise Research Centre, Cardiff Business School
PCS Press
www.leanmj.com
Credit Suisse
Volvo Group
GKN
Warwick Manufacturing Group, University of Warwick
SA Partners
More information on our editorial board, their experience, and views on lean is available on the LMJ website: www.leanmj.com 4
CMI finds ‘competence gap’ thwarts performance in UK workplaces Figures released by the Chartered Management Institute suggest that productivity levels within Britain’s workplaces are being hindered by a ‘competence gap’, with 38% of managers believing they are good at what they do and 56% of employees
questioning their bosses’ ability to do ‘the job’. A third of workers also report they no longer enjoy their job and 39% claim that stress levels are too high – all because of their boss’ attitude and approach. Patrick Woodman, policy and research manager at
CMI, commented: “Managers need to take the time to meet their team’s needs, engaging with them and offering support. They should be focusing on what makes people tick and what helps them deliver rather than a refusal to look beyond the edge of their desk.”
LMJ founding editorial member accepts professorship at Buckingham Dr. Keivan Zokaei, currently head of research at S A Partners Global Lean Consultancy has accepted an honorary Visiting Professorship at The University of Buckingham. Zokaei will collaborate with the faculty of Buckingham Business School to develop teaching and research opportunities especially in the area of service operations management. He has worked with many service, retail and manufacturing
organisations in both private and public sectors and has had numerous publications in practitioner and academic journals. At Cardiff University he directed an executive MSc degree in lean service operations. Through his work with S A Partners, Zokaei has advised many companies on how to improve their performance by focusing on effectiveness rather than efficiency.
More effective methods needed to engage UK employees A recent study by GfK has showed that only 12% of UK workers aged 18 to 29 are highly engaged with their employer. This is just one of the alarming data the survey found, and makes the debate on workforce engagement ever more timely. The GfK International
Employee Engagement Study also suggested that, in the next year, as many as 6.5 million of the nation’s employees will be quite keen to move jobs. The right methods of employee engagement should be used if employers want to be able to retain and energise their
staff. According to Ashley Ward, director at European Leaders, a specialist in the creation of an optimal performance environment, efforts to liberate staff, by creating a workplace which can be enjoyed seven days a week, might prove useful to UK employers.
S A Partners launches on-line community sponsor of the Lean Business System Annual Conference, which will take place on 11th October 2011 in Birmingham, with Professor Peter Hines, Professor Bob Emiliani and Marcel Schabos, CEO of Inalfa (featured in the Staying Lean publication), as headline guests. For further information please contact donna.hopkins@sapartners.com +44 7989 432334
If you have any news that you think would interest and benefit the lean community please let us know. Send submissions to the commissioning editor Jane Gray: j.gray@sayonemedia.com
5
www.leanmj.com
S A Partners has announced its partnership with a new on-line community ‘LeanBusinessSystem.com’. This site will contain a wealth of learning resources and practitioner insights, with content provided by a panel of Leading Lean experts, including Professors Peter Hines and Professor Keivan Zokai. In conjunction with this and to bring the on-line community together, S A Partners are premium
Managing performance to succeed Zoe Radnor, professor of operations management at Cardiff Business School, introduces this issue of the Lean Management Journal, which focuses on identifying success and how to manage performance to achieve it. What should success look like? First, considering this for a Lean organisation is an interesting concept as many would argue that success can look and feel very different for the various stakeholders in the organisation. It reminds me of the time when I was implementing cells onto a factory floor and a staff member, who had worked quietly there for over 20 years, suddenly became very vocal about his displeasure of the new layout and working arrangements. It became apparent that the gentleman was a Chess Master and whilst working on the production line he spent the time working through chess moves in his head. Although there was now job enrichment through teamwork, multiskilling and planning, as far as he was concerned the new working conditions meant a reduction in job satisfaction! So, may the implementation of cellular manufacturing, considered successful for the flow, not be as successful for the individual? The issue of culture or behavioural engagement is one element which is often cited as a barrier to Lean implementation. Although it is well understood that focusing on the tools alone will not create a Lean organisation, all too often that is what occurs. Success is about ensuring that both technical and organisational development takes place and a critical component to achieve this is the use of visual management, particularly performance boards, together with daily meetings and, most importantly, problem solving. Visiting many organisations, I see ‘performance boards’ which have become ‘notice boards’. Performance data and information is only relevant and worthwhile if it is dynamic i.e. reported, analysed and acted upon on a regular basis (ideally daily) and that information is used to drive continuous improvement. Too many organisations train their staff in the problem solving or quality management techniques (such as brainstorming, fishbone, process mapping, 5 whys etc..) and have areas on the performance board to log issues and concerns, but, when asked how much time is given to address the concerns and is there an physical area to go to work in teams to carry out problem solving, the answer is often “none” and “nowhere”.
www.leanmj.com
If organisations are serious about implementing Lean then success is about developing the organisation culture and structure to engage with the tools and change behaviours and investing in resource and time (lots of it) to support continuous improvement. To achieve this, leadership engagement and support through communication about the acceptable behaviours and actions is required at all levels. In some recent research I asked ‘how do you know when you are in a Lean organisation?’ The answers were that you would see tangible elements, such as an ordered environment with visual management, performance boards and clear desks, as well as intangible ones, as the place would ‘feel’ calm, focused and organised. Maybe that is what success is.
6
W hat does su c c ess look like ?
success What does
look like?
T
LMJ ran advertising for its Lean Directors’ event, Leading Transformation in Complex Environments in September 2010 with a headline stating: “With only 5 - 10% of lean business transformations actually achieving sustainable success,those who take on the mantle of leading change programmes must be either hugely confident, naively optimistic or simply crazy”.
P r inciples and
We know that the history of Western business is littered with numerous examples of companies which, despite huge commitments of money, resource, programme leaders, project managers and so on, have undertaken major change initiatives only to find that any benefit arising has disappeared within one or two years. In contrast
pu r pose
Our next question is, why, despite the time, effort and resources being devoted to changing organisations, do 90-95% fail? They appear to achieve marginal, transient benefits at best and often there is no improvement, or things actually get worse.
7
www.leanmj.com
Einstein defined lunacy as “doing the same thing that we’ve done hundreds of times in the past and expecting a different outcome!” Barry Evans and Robert Mason, Cardiff Business School, review recent lean research to establish what is understood about the nature of lean success.
he flavour of the moment in many companies and most public sector organisations is to manage for more austere times ahead. But the instinctive response to blindly seek efficiency savings ahead of improved effectiveness would be a mistake!
some organisations clearly and decisively manage to make change stick. They build on improvement to gain yet more improvement. So how do they manage this? What are the capabilities that give them this desirable outcome? Why do they consistently achieve their goals? Organisations can be classified as either being one of the transient many or one of the sustaining few. Which profile best suits your company? Most organisations have by now undertaken a multitude of strategic improvement projects. If the original savings estimates from all these initiatives are summed together, does the total exceed current actual profitability? If this is so in your organisation, ask yourself why? Perhaps you were not dealing with root cause problem elimination and therefore your solutions made no difference. Or perhaps the improvements you made have not been supported after their initial application. Whatever the case, significant changes in personal and organisational thinking will need to be made to allow your company the transition from transience to sustainability. Fortunately, indicators of corporate behaviour that are associated with the ability to sustain improvement have been the subject of two recent surveys and using publications like these can give you an understanding of where to start making these changes. The surveys we refer to here are: The Manufacturer magazine’s Lean Report 2010: available to download at www.themanufacturer.com/uk/reports.html The Annual Manufacturing Report 2010: available to download at www.themanufacturer.com/pdf/AMR_2010.pdf While the former garnered the experiences of lean practitioners in implementing lean programmes with a range of UK businesses, the AMR survey involved a broader scope of business issues in UK manufacturing companies. Cardiff Business School undertook the analysis for both of these surveys. Depressingly both pieces of research demonstrate the accuracy of Einstein’s definition of lunacy: “doing the same thing that we’ve done 100’s of times in the past and expecting a different outcome”. If a company’s past change efforts have not been sustained, why would approaching change in the same way give sustainable results this time?
Survey Findings
www.leanmj.com
Both surveys show:
a. How companies are approaching change; b. The high incidence of moderate and unsustained improvement; c. Clues as to the type of behaviour to adopt to develop the capability to sustain improvement.
8
W hat does su c c ess look like ?
Lean Report 2010
The findings are summarised in the figures 1-4. The survey shows that nearly all the organisations responding are focused on internal efficiency improvement hoping to achieve cost reduction: cost reduction and efficiency improvement consistently emerge as the priorities. Internally-focused boundaries are the norm. This re-affirms the prevalence of conventional thinking that leads to failure in achieving sustainable success. It is interesting to note in figure 4 that the reported success after five years of a lean implementation declines.
Figure 1:
Lean Report 2010 responses to the question “Which of the following were key motivators for your business in the implementation of lean? (Respondents marked all applicable)
Figure 2:
Lean Report 2010 responses to the question “In what areas of your organisation have you implemented lean initiatives?� (Respondents marked all applicable)
www.leanmj.com
P r inciples and
pu r pose
9
Figure 3:
Lean Report 2010 responses to the question “For each of these potential benefits of lean manufacturing, how much improvement has there been [in your company]?”
Figure 4:
Results from the Lean Report 2010 showing “Length of programme / success of programme” How long have you been implementing lean?
Success achieved Poor
Moderate
Successful
Very successful
less than 12 months
0%
5%
5%
1%
1 - 2 years
2%
3%
11%
5%
2 - 5 years
2%
7%
15%
4%
5 - 10 years
2%
16%
6%
6%
over 10 years
1%
2%
5%
2%
Totals
7%
33%
42%
18%
Annual Manufacturing Report 2010
The Annual Manufacturing Report 2010 survey provides a similar message. The key results are shown in figure 5 and figure 6.
www.leanmj.com
In figure 5 these business drivers are all outcomes of actions taken. Therefore, it is disappointing to see that both “customer satisfaction” and “quality reputation” declined in importance between the 2009 and 2010 surveys. Successful and sustainable improvement has very strong links to a focus on these two aspects. In figure 6, the top-spot again goes to ’efficiency’ improvements (87% agree or strongly agree). This has been an obsession for many years. However, has it as yet delivered sustainable competitive advantage?
10
W hat does su c c ess look like ?
Figure 5:
AMR 2010 responses to the question “What are the main ‘business drivers’ for your company? That is to say which of the following do you regard as ‘important performance measures’ to gauge company success?” 2009 survey
2010 survey
Customer satisfaction / retention
93%
92%
Operational Efficiencies and cost control
87%
87%
Quality Reputation
89%
81%
Profits growth
80%
75%
Revenue growth
48%
45%
Market share
34%
43%
Figure 6:
AMR 2010 responses to the instruction “Please rate the following statements on a scale from 1 to 5 where 5 is strongly agree and 1 is strongly disagree.” Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
The company is trying to achieve improvements in speed and efficiency
2%
4%
8%
56%
31%
Lean manufacturing techniques are being actively applied
2%
17%
23%
30%
28%
All business parts act as an integrated business with one agenda
0%
8%
34%
28%
30%
Too much time is spent reacting to events rather than pursuing plans
6%
15%
36%
40%
4%
Survey Analysis
What these two surveys show is: a. The focus steadfastly remains on cost reduction and efficiency improvement b. The improvements achieved are marginal and transient
11
www.leanmj.com
Understand what customers value - understanding exactly what customers’ value and designing effective mechanisms to deliver it is at the root of sustainable success; Create value streams – end-to-end including your suppliers and customers; Create flow and pull in the value streams; Strive for perfection.
P r inciples and
So what does effective delivery look like? Of course, it is rooted in the Womack and Jones lean principles:
pu r pose
Bucking these trends, organisations (such as Toyota and Tesco) know that cost reduction and efficiency improvement are outcomes rather than objectives and should ALWAYS take second place in their improvement hierarchy. Effective delivery of customer value has primacy.
Therefore, the sustaining few develop capabilities and adopt behaviour focused on: Improving quality Improving customer service Professional development of staff and gemba-based improvement AND continue again and again in the spirit of continuous improvement (the world of “one-off” improvement initiatives is not adopted – improvement is everyone’s job). Cost reduction and efficiency improvement does not appear in this approach – but the benefits of cost reduction and efficiency improvement are delivered nonetheless. The irony is that organisations characterised by transient improvement activity continue to do the same as they have always done – focus on cost reduction and efficiency improvement – yet they expect that this time they will achieve a different outcome. Toyota and Tesco have achieved sustained improvement over many years through an absolute focus on their customers and are primarily driven by the first lean principle – understanding and providing customer value. This is to say they are totally focused on effectiveness first, in the knowledge that efficiency will follow. In our interpretation ‘effectiveness’ equates to ‘doing the right thing’ while ‘efficiency’ is defined as ‘doing things right’.
The remedy to Einstein’s charge of lunacy?
www.leanmj.com
The solution is simple, but not easy.
Companies must follow the approach visualised in the ‘House of Lean’, but do so completely rather than picking and choosing as has tended to be the case in the past. Essentially what Toyota, Tesco and other lean exemplars understand about achieving sustainable improvement is that a business, with its wider supply chain (suppliers, customers and connecting mechanisms) is a complex system. Improvement to that system has to be systemic. In other words it has to address the whole rather than tinkering with parts in isolation. Tinkering aimed at efficiency improvement runs exactly the same dangers as Deming’s “tampering”. Thus it risks worsened efficiency, unintended consequences and transient improvement at best. The ‘House of Lean’ has two pillars – JIT and Jidoka – improvement must address both. Figure 7 provides a schematic of the constituents of sustainable improvement and this shows that the starting point is focused on value and value adding steps, which are the ingredients of delivering system purpose or effectiveness. However, efficiency improvement is a relative measure aimed at making an output/input ratio larger. If the particular ratio being targeted is based on either non-value adding
12
W hat does su c c ess look like ?
Figure 7:
Authors’ schematic suggesting how to achieve focus on system purpose to deliver sustained improvement Little written
Value stream
Lots written
Flow
Lots written
Pull
Lots written
Perfection
Lots written
? Why are most people obsessed with JIT and don’t see the symbiosis with Jidoka – both are needed for sustainable change
System Boundary Input
SIMPLE SYSTEM Output
Process
+ -
Purpose Effective 1st
Check against Purpose
Feedback Control
These 2 are “special cause” variation
NB Ackoff’s advice to - Do the right thing righter than -Do the wrong thing right, but it’s still wrong!
UCL - Upper Control Limit All the readings between UCL & LCL are “common cause” variation and are to be expected
activity (waste), or necessary but nonvalue adding activity (future waste) then the risks of transient improvement and unintended consequences are obvious. Start by addressing system purpose to avoid this and create a compelling
Efficiency focus BUT “the wrong thing”
Necessary but Non Value Adding
Efficiency focus BUT definitely “the wrong thing”
None Value Adding “Waste”
Why change is mostly not sustained – Root Cause: a focus on “the wrong thing”
counter approach to the quick win mentality favoured by so many. This means expecting to invest in advance of sustained improvement, for example, by raising workforce capability, providing better leaders and general skills training – both generic and technical. E N D
P r inciples and
Time Series – taking action in response to a “common cause” event is “tampering” (ie “waste”)
Value Adding
pu r pose
LCL - Lower Control Limit
Efficient 2nd
13
www.leanmj.com
Value
Managing
management It is an old adage that a bad workman will blame his tools. Jane Gray talks to Roland Thompson, a management coach with Sora Group, to find out why he believes flawed management qualities are a far more serious failing than misapplication of lean tools.
depressing failure rates that so many improvement initiatives encounter (see p7 for Cardiff University’s research into this). What he found, is that technical understanding is not the core problem. It is the understanding of what the role of a manager entails which is lacking.
oland Thompson has worked in Quality Assurance for over 35 years. After 21 years with Nissan there can be few people more convinced of the value of lean principles than Thompson. After all, the company’s thorough understanding of how to support lean thinking and leverage the tools has underlined an impressive improvement trajectory in recent years.
R
In essence Thompson says this is because: “People are promoted on the merit of how effective they are at performing a specific job. The trouble with this is that being able to do a good job as an engineer does not equate to being able to do a good jobs as a manager. The traditional approach misses out the necessary abilities in a manager to be able to plan, organise, delegate and manage resource.” Furthermore, says Thompson, there is a difference between the theoretical knowledge of these management skills and an appreciation of management and leadership attributes. These attributes include: motivation, drive, perception and assertiveness.
After leaving Nissan, Thompson has gone on to help other companies embed the same understanding and avoid the
Companies go to great pains to try and instill these qualities in employees as management skills. Sora Group however,
Context
Thompson’s and Sora’s concerns with the way in which management skills are supported and management attributes are nurtured by organisations does not exist in a vacuum.
www.leanmj.com
Research from the Chartered Management Institute identified that 58% of surveyed managers identified management skills as the major blocking factor in achieving objectives while 44% identified lack of leadership. In addition 45% identified the related concern of low employee morale. For the full research report Future Forecast: Expectations for 2011 go to: www.managers.org.uk
14
M anaging management J ane G ray
Fig 1.
NB: Meeting attendance is mandatory. Start /End of shift meetings 4.00 – 4.15pm:
Key supervisors from appropriate departments meet at the end of every shift and review the following: Daily performance against daily targets and concerns. Performance should be clearly displayed in graph format and all concerns are listed, for example those relating to: quality, volume, breakdowns, parts shortages Responsibility for the resolution of concerns is allocated and a target for resolution e.g. within 24hrs, is agreed Any other relevant business information is shared
4.30 – 4.45pm:
Supervisors report back to their respective managers to review the above information, findings and action points with a focus on their own departmental/functional concerns. Manager and supervisor identify specific resource and skills within their remit that will be needed for concern resolution within the next shift.
7.30 – 7.45am:
Departmental managers hold a start of shift meeting with supervisors to review: People (e.g. accidents or absenteeism) Status of the previous day’s concerns Priorities, targets, and key actions for the day AOB
7.55 – 8.00am:
Supervisors holds a start of shift meeting with his staff covering the points from above relevant to their work
Beyond these shift meetings the most important meeting in the QRQC structure is the daily meeting:
P r inciples and
pu r pose
Departmental managers meet for a daily confirmation of performance from the previous 24hrs in relation to targets. They also confirm that appropriate actions have been taken and implemented to bridge target shortfalls, while other concerns have effective countermeasures in place. Key tools used during this meeting are: 5 why (root cause analysis) 5W and 1H (Asking what, why, when, where and how to identify actions and resource) Visual management ( for transparency of performance and concern details) 8D report (to investigate concern and countermeasure details) Lateral deployment (to establish the impact of concerns and countermeasures on other areas of the business) Recurrence prevention (to embed robust countermeasures)
15
www.leanmj.com
8.30 – 8.45am:
meaningful improvement against measurable targets.
has taken the stand point that it is impossible to manage skills from this perspective. Instead the emphasis should be on managing attitudes and behaviours. This approach from Sora has been formed in response to seeing repeated efforts to push staff through management qualifications, with little thought for how to measure the impact of these on the performance of the organisation. Very often the qualifications are not aligned with real requirements and, in addition, management find that they are so busy ‘fire fighting’ within unstructured work systems that effective management of daily concerns becomes impossible.
www.leanmj.com
QRQC
During his time at Nissan Thompson became familiar with an approach to daily management and the development of management qualities which made a deep impact on him. Quick response quality control (QRQC) provides a structure for improvement which supports managers in performing their responsibilities. It prompts the leadership behaviours which are so hard to establish and it does so in a way which delivers
16
QRQC can be used in any organisational or functional environment. It uses face to face meetings to manage the daily accountability of managers against target achievement and concern resolution. Such resolutions are achieved through fact based information sharing (San-Gen-Shugi) which incorporates real place, real product and real people data. The strength of the QRQC approach lies in the central role of face to face communication between management and workforce to ensure transparency and the effective utilisation of skills and resources. See fig 1 for an example structure for a set of QRQC daily meetings. E N D
Do we need to realign our Leadership and Management focus? According to Thompson a ‘can do’ culture where managers at all levels pull together in a coherent direction to achieve shared goals is at the core of world class organisations. When used correctly, QRQC helps play a major part in supporting a culture of continuous improvement alongside intelligent recruitment and development strategies. Sora Group are a training and coaching organisation based in the North East. Having successfully disseminated best practice across a number of sectors and management levels, Sora’s key focus is to deliver what a client needs, not necessarily what they want – As the two are often very different. Roland Thompson can be contacted at roland.thompson@sora-group.co.uk www.sora-group.co.uk
The devil is in the execution Jane Gray
The devil is in
the execution Jane Gray interviews Paul Docherty, CEO of i-nexus, to discover what has shaped his perception of lean and his innovations in the field of business execution software.
Jane Gray: How do you define lean? Paul Docherty: “I see lean as part of a larger overall business improvement system in the sense that I see three ways in which you can acheive improvement. You can reduce waste, you can reduce variation and you can reduce complexity.
“I would say lean focuses on the reduction of waste - and obviously the improvement of flow. Lean impacts on variation and complexity but on the whole I would say that 6 sigma, design for 6 sigma and other redesign methodologies more predominantly adresses the issues of complexity and variation. So, I look at lean as part of an overall approach which helps to address the three major constraints on businesses. This is a view of lean formed in reaction to multiple experiences but its foundation lies in my first encounter with lean before I recognised it by that name. JG: How have you come to form this view of the methodology? PD: “In the 1990s I worked with a company called Marconi implementing MRP2. Reduction of time and the implementation of kanban were part of our overall production management approach. “This gave me an initially narrow view but I soon started to learn about the concepts of the wider Toyota Production System and I became responsible for implementing something similar at Marconi.
17
www.leanmj.com
P r inciples and
“At Marconi I subsequently went on the become head of operational excellence and it was this role that I really firmed up my view of how all of these [methodologies and tools] fit together. The project I drove was very 6 sigma focused and large in scale – in the order of hundreds of belts. I wish I knew then what I know now – that no one methodology in isolation will be effective. It took me a year before I realised that our 6 sigma approach needed to be combined with lean
pu r pose
This growing impression of the bigger picture of enterprise lean taught me about the interdependency between concepts for daily management, like Demming’s PDCA cycle, and longer range ideas for objective realisation and policy deployment, like Hoshin planning.
What is business execution software?
A way of closing up the planning and execution cycle A platform which brings together existing disparate technologies for the measurement and automation of processes (e.g. business intelligence) with technologies for the management of projects and performance management. A way of translating CEO level, bullet point strategy into employee level actions with defined measures at every level A way of forecasting the impact of planned actions of KPIs and overall objective achievement It is not specific to one methodology or tool set
Who is business execution software for?
i-nexus’ business execution offering is aimed at global 1000 companies with upwards of 5000 employees (such companies often have tens of thousands of actions linked to strategic objectives – for example, cost reductions in terms of billions of dollars - which are currently being measures across thousands of spreadsheets) i-nexus is being used in a range of sectors including pharmaceuticals, fast moving consumer goods, telecommunications, apparel and retail.
www.leanmj.com
and that then further methodologies need to be built in to create complete alignment. JG: How has your experience influenced the way i-nexus has evolved and what it tries to achieve? PD: “Ultimately, all of what I have said so far is what prompted me to found i-nexus and over the last 10 years I have been working to create an infrastructure that supports companies in executing their goals which I see as a missing link. This infrastructure needs to recognise
18
the importance of cascading goals through Hoshin, of driving projects at different levels, of interpreting progress and of forecasting success. “I have worked with over 100 global companies over the past ten years and this has caused my view to evolve further. Really I now think organisations need to know how to link policy deployment with project execution methodologies like 6 sigma, and operational improvement processes like lean, with measurement frameworks, like the balanced score card to create an integrated cycle for business execution. “To make an analogy, I believe that i-nexus business execution software is doing for strategy and objective realisation what MRP2 did for the automation of the production cycle. Ten years ago no one would have considered using ERP to close the loop in the production cycle. Now they could not imagine doing without it. “I will be bold and say the same thing will be true for business execution. Today people are managing the deployment of strategy and the management of goals through spreadsheets and individual strategic planning and appraisal cascade documents as well as using all sorts of different methods to capture KPIs. There is a lot of heavy lifting involved in trying to understand all the information and everything is completely fragmented which means people have no way of knowing whether work throughout the organisation is actually driving and delivering against the set objectives.” E N D To find out more about i-nexus software, read case studies and see thought leadership pieces by Paul Docherty visit www.i-nexus.com
Start Slow and Small H elen Winsor
Helen Winsor of LMJ’s media event partner, PEX Network, IQPC, interviews Tom Goodwin, director of lean-6 sigma at Motorola Mobile Devices, to hear his tips laying the foundations for lean-6 sigma success.
Start slow and small Helen Winsor: To start, Motorola obviously have a renowned history in 6 sigma, but how has the focus of your process improvement changed over the past five years? Tom Goodwin: It’s a great benefit having been at the forefront in developing the application of 6 sigma and making it work. We’ve gone through different phases and even a reinvention. About five years ago we decided to put more emphasis on digitising our solutions in making sure they stayed safe. So that was leveraging our computer systems and controls and tools to remove the old habits. The only way we could do stuff was to do it systematically and we found our efforts very effective.
simply less people doing more activity. I think that’s what keeps things going and puts an emphasis on lean. We can’t do the things the way we used to, we can’t keep working harder.
In this reinvention period we also tried to reinvigorate the campaign mode and, from that, we’ve done such a great job of restoking the fire that now a top-down push for improvement and use of tools is hardly necessary. People are doing it because they know it works.
HW: In your view, is the Motorola approach transferable to organisations without the same depth and range in 6 sigma, or do you think that they’ll struggle? TG: I think it depends. I certainly think having a culture in place helps a great deal, but you have to start it slow and grow. Show your successes; prove that your approach works. I think sometimes people get a little over zealous and try to apply 6 sigma in all places, and that can be a downfall. The important thing is to establish a very measured and deliberate approach which keeps things simple and keeps to the true voice of the customer.
19
www.leanmj.com
P r inciples and
pu r pose
HW: How do you keep people in your organisation enthusiastic about improvement when it starts to fall down the priority list? TG: I think in today’s times things are very challenging. Everyone’s gone through their headcount reductions and there’re
So how do we work smarter? How do we identify value-adding procedures, look to reduce errors and re-work, so people are really enthused by the idea of making their own work easier to handle? There is a way, I’ll call it even a quality of life and quality of business. At Motorola we’re all out to be a successful company and everyone’s very motivated to get through these times. I think those two things together keep people enthralled.
The reason we’re here is to deliver for our customers, and for our stakeholders. I think that is always a transferable idea. HW: What would you call your biggest personal success in lean-6 sigma since working at Motorola? TG: Personally, I would say we were at a real crossroads when our company went through our public separation in January and there was a lot of work leading up to that and a lot of discussions: do we still need this? Is this still viable? Do people want this? The answer, resolutely, under what we call now Motorola Mobility was: yes we do! And I was able to keep the programme running; our enrolment in it and tool usage has been constant among a sea of change. I am very proud that we’ve kept the programme going and that the interest is still very high. HW: You’ve recently gone through a major organisational change at Motorola. How have you leveraged this state of flux to support lean-6 sigma transformation? TG: I think the key, and I touched on it a little bit earlier, is to be careful not to oversell it. I think sometimes people see it as a superpower trying to do things that are just too large. This will bring failure. I would say, set expectations appropriately and talk about what’s really at heart of the change initiative. You’ll quickly get a sense that there’s common agreement that things need to be done faster and more accurately. In my experience this is coupled with a realisation that we need to better understand what our customers are asking for.
www.leanmj.com
With these points in mind, you can scope your projects, pick efforts that align to the biggest business needs, and then find people that truly see this as a way to learn more for themselves. Marry those things, and I think you’ll come through times like these and find that lean-6 sigma principles are at the heart of the way your organisation approaches strategy and change. E N D
Taking place in Aberdeen 27-28 September, 2011, Energy Process Excellence Summit will bring together leading minds in process excellence from across Europe. This event will feature case studies from Shell, BP, Hess and Centrica to help you improve your processes and measure performance improvement excellence and position you for the challenges ahead.
20
L M J
Lean learning is all about “go see” and on the job experience, or so we are told. What is then the value add in attending lean leader and practitioner conferences? Jane Gray looks back on her attendance at recent events to try and identify learnings which would not have been gained through in-house observation.
T
he proliferation of conferences for lean leaders seems to have ballooned post recession. As more and more companies seek to take advantage of recovery through leveraging lean principles, the events industry has capitalised on the demand for knowledge sharing. But is this really what lean practitioners need? Within organisational learning structures for lean the message for some time has emphatically been “no”; gemba learning should always be the priority while classroom based theory is kept to a minimum. What then is the business case for sending lean professionals away from the workplace to ponder their methodology at events – sometimes with simply astronomical price tags attached to them?
in
conference
LMJ
in conference While the price tags may remain in contention, the answer to the core question above is that managers and leaders in organisations rarely get the opportunity to step back from day to day fire fighting and truly consider how they might make their companies better for the long term. This situation is a symptom of failing organisational systems which require fundamental review or even rebuild and this is not work which should be undertaken lightly or without the opportunity to benchmark your position against peers. A thoughtfully presented workshop day or conference should provide this opportunity. Looking back over recent events where LMJ has been in attendance, there have been some genuine ‘lightbulb moments’ for even the most experience practitioners:
SA Partners’ Lean Business Systems Workshop June 7, Manchester
21
www.leanmj.com
Another key learning from this event centred on the ambiguity of the lean practitioners own language. As Hines
P r inciples and
Such a diverse delegate list promised an interesting day and indeed insights into the differences between work environments highlighted the critical importance of ensuring that your lean culture is uniquely devised for your own company and not lifted from any so
called exemplar. A moment when this became particularly clear was during a brief exchange between Iain Summers, CI engineer at Estee Lauder, and Dawood Dassu, director of lean operations at AstraZeneca. Both men had worked on lean product development in their respective organisations but when the former remarked on the pressure to launch several new products a week the latter looked rather ashen faced – AstraZeneca are working to improve a situation where they launch one new product every few years to a point where they might conceivably support three annual launches.
pu r pose
This event, hosted by Peter Hines, founder of SA Partner and formerly chairman of Lean Enterprise Research Centre, Cardiff Business School, comprised a select gathering of lean practitioners from an unusually varied range of companies. Rolls Royce was in evidence as was AstraZeneca but there was also representation from financial services organisations like RBS and Barclays as well as logistics firms like shipping company Maersk Line.
progressed through his insightful presentations it became clear that many of the recognised challenges to sustaining lean improvement were bound to lack of definition or consistent meaning in terms like ‘management’, ‘culture’ and ‘engagement’. What exactly do lean practitioners envisage when they use these words? The interview with Roland Thompson of Sora Group on p14 make it abundantly clear that expectations around the first of this
terms is by no mean as intuitive as many assume. Likewise, Hines demonstrated through a series of insightful presentations that the assumption that lean is primarily defined by activities pursuing the elimination of waste undermines the potential of the methodology. Hines suggested that a far better psychological footing for lean was the concept of “muri thinking” whereby the premise of lean is to reduce burden on employees; a simple mental switch which could transform a lean journey.
Xonitek and PPC Consulting’s A frictionless world conference June 9, Milan In the current economic climate a role in the events business will soon turn your hair grey. For every well attended conference you may grace with your presence you can be sure there are 10 on the same theme that only muster a paltry gathering of delegates or simply abandon ship as target audiences fail to find the budget or time out of the office. When attendance at a conference disappoints organisers however it is important to remember as a delegate that this may be your best opportunity to benefit. We all know that small school classes tend to outperform crowded classrooms, likewise conference rooms. A recent case in point was A frictionless world, an event which was lost to the many delegates who failed to show on the day leaving a handful of slightly disconcerted delegates rattling around in a room meant for a hundred. Once an initial feeling of embarrassment was overcome however and the expectations
of representatives from US style corporate institution were cast aside in favour of a more ad hoc Italian approach to schedules, this event engaged with its attendees for genuine enrichment and presentations were able to spend time focusing on the concerns of individuals in a meaningful way. Setting the tone for discussion over a distinctly Mediterranean networking lunch (why don’t we serve wine at more conferences?), David Bovis challenged attendees to consider whether they really understood the so called ‘people side’ of lean or whether they simply paid lip service to its importance. As Bovis illuminated attendees on the relevance of developments in neuroscience to understanding the behaviour of employees in the workplace it was made starkly clear that the very same lean leaders who are so keen to apply ‘scientific method’ in the improvement of processes were missing a major opportunity not leveraging science for the improvement of culture.
(See LMJ issue 11 for more on PCC’s approach to supporting sustainable culture change for meaningful strategic results. Go to www.leanmmj.com or contact Benn Walsh (b.walsh@ sayonemedia.com) on 0207 401 6033 for to subscribe or sample a trial issue.) Another insightful presentation at this event was delivered by the vibrant Carey Lohrenz of The Corps Group who showed how her experience in the pursuit of operational excellence with the US air force might give inspiration to others. Staggeringly Lohrenz revealed that a zero accidents, high performance environment was maintained on board F-14 air craft carriers in spite of an average age across the crew of just 19 and a complete staff change every 6 months. Her lessons in how to create a structure which makes clear how the contribution of every crew member is critical to the overall organisational purpose were extremely powerful.
Lean Management Journal’s Annual Conference June 16, Birmingham
www.leanmj.com
This was the second annual conference for LMJ since the journal’s launch on 2009 and it was a milestone which celebrated its increasing readership and engagement with the practitioner
22
community. This event set itself apart in the way it truly represented a balanced view of the need for both soft and hard skills in the application of lean principles. While speakers acknowledged the
L M J
Zoe Radnor, recently appointed Professor of Operations Management at Cardiff Business School, opened the LMJ conference with a robust and challenging presentation which put the knowledge of delegates to the test. Ms Radnor showed that understanding the history of lean principles can, in itself, safeguard against the most obvious fit falls of a bad implementation. Her question of delegates on their historical knowledge of lean laid bare some embarrassing gaps in the collective knowledge base but gave her the opportunity to highlight some telling points. Foremost among these was the information around the elements of lean that were lost in translation as the methodology moved westward and the perceptions which were laid on top of the approach before it was even marginally understood. Ms Radnor told delegates of the original labelling of lean as ‘fragile’ manufacturing, in comparison to ‘robust manufacturing’ along the lines of the Ford production system. Of course, this view point was quickly disproved.
These notes were taken off delegates at the end of the session and are being mailed back to the writers at unspecified times over the coming couple of months. The arrival of the letter is supposed to act as a reminder of the perspective gained during the delegate’s day out of the office. It is a stated complaint that too often the inspiration gained when attending conferences and seminars is lost the moment individuals are re-immersed in the dayto-day of business. Dr Bamford small innovation should mitigate this for LMJ conference attendees. Do not be fooled from my references so far into thinking that this LMJ event was dominated by purely academic insight. Although the day aimed to expose thought leadership, this exposure was achieved primarily through experienced practitioner contributions. GKN, the Department of Work and Pensions, Power Panel and the Royal Mint were all represented and their lean practitioner gave an invaluable breadth of insight into the concerns and opportunities to be grasped when implementing lean. This latter point was particularly refreshing to see expressed so strongly. As one delegate commented after the conference, “Listening to Peter [Watkins] and seeing the way GKN have empowered their workforce reminded me of the buzz you get when things go well. It reminded me of why I love running a lean programme.” Surely such a statement should stave off the doubts cast at the beginning of this article about the value of networking, conferencing, knowledge sharing. The events industry can heave a sigh of relief!
P r inciples and
Perhaps the most impressive interactive session was led by Dr David Bamford of Manchester Business School. His extended session included open debate and workshop activities designed to help delegates take the maximum possible value back to their organisations. In a quirky, but hopefully effective exercise, Dr Bamford instructed delegates to write down three bullet points detailing: what had most inspired them during
LMJ conference presentations, what had been re-affirmed within their knowledge base and finally what they had made note to avoid doing in their work place.
pu r pose
Throughout the LMJ conference speakers proved their ability to connect with their audience, showcasing exactly the kind of approachable leadership which they advocate in the lean workplace. Using all kinds of media to keep delegate attention, lessons were learnt through videos, discussions groups, music and more.
conference
23
www.leanmj.com
fundamental importance of culture in gaining lean success they made it clear that a sound knowledge of tools and techniques is also critical. Some recent commentary on lean implementation has seemed to vilify the application of tools in a way that would deny this.
in
The evolution of TPM How it swapped a spanner and oily rag for an iPhone
www.leanmj.com
LMJ has been investigating a series of lean tools and techniques, tracing them back to their origins, investigating reasons why their use may have changed over the years and how they might develop in the future. This month Jonathan Tidd, managing consultant at OEE, uncovers the history of TPM and its relevance to lean thinking in today’s environment
M
any readers of LMJ brought up in the world of manufacturing will remember Total Productive Maintenance (TPM) as the set of maintenance tools and techniques developed for the mass production monoliths of the past. Introduced in Japan back in 1971 it had a significant, and often misunderstood role in improving the performance of machines in high volume highly repetitive operations - such as those found in process industries or car factories. A TPM practitioner would be found in the depths of a multi stage press in the middle of a sprawling factory with a spanner, a rag and some lube oil. The UK of 2011 is a very different place to that of 1971. Then manufacturing was 31% of GDP, now it’s less than 12%. Lean service has become dominant and mass customisation, variety, and short lead times have become the norm. On the whole, high volume manufacturing now arrives by ship from the Far East. How does TPM have relevance in the UK today? The truth is that rather than being a throwback to a different world, TPM already shares elements of its DNA with Lean Service and can be found supporting new lean service offerings in ways that would seem quite alien to the world of 1971. This article traces TPM’s evolution from a slightly esoteric mass production tool to an integral part of slick service delivery.
24
The evolution of TPM Jonathan Tidd
The first stirrings
After World War II the Japanese realised that the quality and cost of their products needed to improve if their industries were going to successfully compete in the world. To do this they adopted American management techniques introduced by new thinkers during post war reconstruction. They particularly
appreciated the sense of human involvement and development that were embedded within the teachings of gurus such as Deming. Japanese industrialists quickly adapted this new thinking to their own culture and circumstances. This approach was successful and Japanese products achieved world beating quality and prices.
Fig 1.
The 8 pillars – TPM’s DNA
25
www.leanmj.com
P r inciples and
pu r pose
1. 5S (which stands for the steps of Sort, Set-in order, Shine, Standardise and Sustain) is a disciplined approach to organising the work place so that everything is in its right place. 2. Autonomous Maintenance – where operators maintain their own equipment. This, for many, is the traditional oily rag picture of TPM - the operator cleans the equipment, applies lubricating oil and tightens loose bolts. 3. Focused continuous improvement - using the OEE measure to focus team based problem solving. The critical element here is the use of front line not just experts. 4. Planned and predictive maintenance - preventing unplanned stoppages due to failure. The technology associated with predictive maintenance has developed significantly over the last 40 years and this area eventually gave birth to Reliability Centred Maintenance. 5. Maintenance prevention and early equipment management - how to make the equipment maintenance free - or at least maintenance ‘easy’. 6. Training to increase operator and maintenance skills. Aiming to “know why” as well as “know how”. 7. TPM for support departments - using TPM disciplines to improve the collection, processing and distribution of data. 8. Improvement of health, safety and environmental emissions.
Case study 1: Print on demand The internet has generated a wide range of new products and businesses. One new service is the ability to publish a book as a one-off. Parents can affordably personalise classic children’s stories with their child’s name. An electronic link to a digital printer ensures customised books are printed as an order is received. Though the customer sees a batch of just one, the printer can produce high volumes, high variety and tiny batch sizes to keep costs low. This requires a high degree of equipment capability - a requirement that is amply met by TPM.
Case study 2: A customer service centre An office based operation typically has little equipment outside of its IT, call management system, photocopiers and printers. The predictive maintenance pillar of TPM is not so relevant. The application of 5S to organise the flow in the office, the involvement of people to solve problems and the use of TPM measures such as Quality, Cost , Delivery, Safety and Morale all apply. There is rudimentary equipment management – printers and copiers can be managed better - and colleagues can detect issues with their systems and act before they fail. One early development to address the problem of unstable equipment was the import of preventative maintenance (PM) from the United States in the early 1950s. Maintenance functions were established to carry out periodic servicing and overhaul of equipment. In the mid-1950s, 20 Japanese companies grouped together to form a PM research group - a group that eventually became the venerable Japan Institute of Plan Maintenance or JIPM.
www.leanmj.com
By the 1960s, Preventative Maintenance had become Productive maintenance incorporating Maintenance prevention (i.e. making the equipment as maintenance friendly as possible), Reliability engineering and Maintainability engineering. Nippondenso, a major Toyota supplier, was an early adopter in 1961. In 1969 the firm implemented “productive maintenance with total employee participation” involving people through small group activities. Rather than the traditional “I operate – you fix” division of labour, all employees were involved with equipment improvement. Operators performed basic maintenance on their own equipment - keeping them in good running order and detecting problems before they broke down. Nippondenso’s initiative was surprisingly successful. The term “Total Productive Maintenance” (TPM) was coined in 1971 and Nippondenso was awarded the first of the coveted TPM prizes by JIPM.
26
The evolution of TPM Jonathan Tidd
The link here between Nippondenso and Toyota is no coincidence. Taichi Ohno and Shigeo Shingo were at the same time developing the Toyota Production system - a process that took from 1948 to 1975. It was their Toyota production system that was the major precursor to the Lean manufacturing philosophy subsequently identified as ‘lean’ in the 1990s. The main objectives of their system were to design out ‘overburden’ and ‘unevenness’, and so to eliminate all forms of waste. A key outcome was their famous Just-in-Time production which operated with extremely low levels of inventory. As many Western firms repeatedly found to their cost, implementing Just-in-time without first ensuring a stable production environment (machines that don’t break down) is a recipe for stress. In striving for zero breakdowns, TPM promoted stable defect free production. Without TPM, the Toyota production system would probably not have functioned. TPM and Lean started as co-travellers on the road to improvement sharing many of the same principles - respect, involvement of all employees from top management to shop floor workers, motivation management through autonomous small group activities, a long term philosophy and a faith that the right process will produce the right results. Today, JIPM continues to award the coveted TPM prize to manufacturing businesses - the 2010 TPM prize winner was a Unilever factory in Argentina.
Evolving to maturity
The TPM goals are achieved through the 8 ‘pillars’ or disciplines summarised in fig 1. Progress is measured through the Overall Equipment Effectiveness (OEE) measure.
Finding wings - taking its place in Lean Service
The work of JIPM today continues to focus on the organisation of the production base in manufacturing industries. How relevant are these disciplines in a lean service operation?
27
www.leanmj.com
In the future, technology used to deliver Lean Service will become more sophisticated. As this happens, TPM will further adapt its technology management disciplines to support these changes. This will be another significant step in its metamorphosis from old world manufacturing technique to an integral part of Lean Service swapping its oily rag for a smart new iPhone. E N D
P r inciples and
Where next on the evolutionary path?
pu r pose
Though service operations don’t feature major manufacturing facilities, they often do contain flexible productive capacity to help solve their customer’s problems. In practice, TPM’s focus on people involvement, development and problem solving has helped it to make the jump from manufacturing into services. The case studies in the box illustrate how this transition has been made.
etters
and
c omment
The Enemy Within – A reply “I agree with Bill Bellows” – ‘people consciously resent being changed’. “I agree with David Bovis” – ‘…change leaders (need to) understand the importance of making organisational transformation a challenging but not a stressful experience’.
Kevin Eyre, head of consulting at S A Partners LLP, responds to David Bovis’ article on the links between sensory and emotional experience and structural changes in the brain.
Bill’s retort to David is pragmatic: ‘would workers be opposed to change if they could initiate it themselves, with appreciation of the impact of change on peers?’ David’s argument in ‘The Enemy Within’ is theoretical; that by connecting with new insights from modern neuroscience (neurogenesis in particular) we can change our approach to change and make change sustainable. I like theory, but I’m not persuaded by David’s. I wouldn’t always rely on experience, but I find substance in Bill’s. Where can our thinking converge? Whilst I am rather taken with the idea that my brain might regenerate at the rate of 12% per month (what opportunity might this pose for my capacity to learn, for example?), I am rather disappointed that this process of neurogenesis might strengthen and confirm existing structures of the brain making them harder to change, also, at a rate of about 12% per month, unless, of course, the change I experience is ‘consistent’. I am not sure what ‘consistent change’ might be – I’ve not seen a lot of it around, unless of course, David means buy this ‘challenging’ as opposed to ‘stressful’ change, in which case I imagine that Bill, David and I are all in agreement, even if our being in agreement begs the question, ‘just what is challenging change?’
www.leanmj.com
I am however convinced by David’s assertion (as indeed is Bill) that we often fail to appreciate knowledge that is ‘out there’ (I will now check out Margaret Hoffernan) and this failure is likely to limit, in this case, our understanding of change. By contrast, I am less convinced by a number of David’s other assertions – that we can contemplate the people process with a 6 sigma level of detail through understanding neurogenesis; that psychological studies into challenge and stress typically focus on the effects of trauma and severe experience; that we
28
Let’s go back to some points of agreement, to the ideas of ‘challenging as opposed to stressful change’ to our ‘Wilful Blindness’ and, in the interests of Bill, David and I talking further, consider – from experience and from research – what’s ‘out there’ that might help.
By themselves, these few examples do not provide an answer, but they do provide clues as to what might change work better. Or perhaps, we should talk rather less of change and observe the insight of one front line colleague – “There’s been plenty of change round here, but not much improvement!” E N D
lette r s and
Secondly, people like challenge (but not stress) and there are everyday observations and domain related research to support this assertion. The question is, what is the nature of challenge that people like? Ellen Langer’s work on the ‘entity’ and the ‘incremental’ mindset tells us that where school children are praised foremost for their effort rather than for their results, these children will self-select (please note!) more difficult assignments because of the thrill of the challenge; more importantly, they will also persist in trying to resolve the problems that comprise the challenge if there is an expectation that this persistence will also be recognised; Mike Rother’s recent research on coaching for improvement within Toyota provides a detailed exposition of how leaders allow their people to lead the process of making changes, free from the antagonism of being corrected but not free from the dynamic of being challenged to think again and in better and different ways. More broadly again, Daniel Pink – who is also convinced of the elasticity of the brain – highlights, in examples of sporting excellence, the role of control, effort (practice) and persistence in perfecting athletic routines.
comment
Firstly, there is a useful and underexplored literature on alternative approaches to change implementation. This literature describes change methods which are not expert-led; which assume that the solution is best derived from within the client system; which are not based on a process of reverse engineering someone else’s solution (‘we must become the Toyota of the bubblegum processing industry’); which offer control of the process to the participants within the areas attempting to change; and which might best be described as emergent. Two such examples worthy of serious attention are ‘Positive Deviance’ and ‘Appreciative Inquiry’. Details can be found across a spectrum of sources ranging from Wikipedia to The Harvard Business Review; and don’t be put off by ‘New World’ nomenclature. The practitioners of these methods evidence many good examples of sustainable improvement across many types of organisation. Perhaps, if variants of
these change methods were designed to better enable the application of Lean, our change results would improve.
29
www.leanmj.com
can influence the way change occurs if we are aware of the neurogenesis process; that the information coming from the studies of new neurons replacing old ones will allow us to consider ‘the root cause issues that underpin the changes we make in business’. I am unconvinced, because there is no supporting evidence presented to back up these assertions; but perhaps it exists.
Toyota’s Gaman: Resilience to get through Crisis
T
www.leanmj.com
Keivan Zokaei, head of consulting at S A Partners LLP and professor at the University of Buckingham, talks about Toyota never abandoning its core principles and culture of respect and continuous improvement, not even in its darkest time.
30
oyota under fire, by Jeffrey K. Liker and Timothy N. Ogden, is an elaborate account of what went on inside Toyota between 2008 and 2011 in the wake of the economic crisis and various quality issues leading to the recall of more than 10 million vehicles globally. Toyota - arguably the world’s most acclaimed company - showed remarkable perseverance during this time by going back to its core principles of ‘respecting people’ and ‘continuous improvement’ as well as adhering to a core Japanese virtue: the principle of Gaman. Gaman refers to the ability to endure something unpleasant that one has no control over. While Gaman refers to patience and endurance carrying a passive connotation, Kaizen refers to active engagement in continuously improving work around us. The two go hand in hand. Liker and Ogden get it right concluding their book by stating that “turning crisis into opportunity is all about culture” (p. 200). Toyota’s actions (and patience) during the crisis best signify its adherence to the Toyota culture and the five core values of the Toyota Way published by the company in 2001: Genchi Genbutsu, Kaizen, Challenge, Teamwork and Respect for everyone. There were stark contrasts between BP’s finger pointing attitude during the Gulf of Mexico oil spill and Toyota’s responsibility assuming approach during the recession and the quality and recall problems, even though Toyota’s issues were minuscule compared to the destruction of the Gulf of Mexico. The timing of the recall crisis could not have been any worse for Toyota. Just as it was recovering from the recession in August 2009, the Saylor family accident happened on 28th August. This tragic accident, found to be the result of the dealer improperly installing an oversized all-weather floor mat, quickly snowballed into numerous claims about runaway cars due to electronic problems, huge safety allegations and mounting pressures from the media almost exclusively in the US. ‘Toyota bashing’ had simply become fashionable. The allegations were - by and large - unfounded and Toyota was officially exonerated when NASA published its verdict ruling out electronic technical faults causing Sudden Unintended Acceleration in Toyota vehicles in February 2011. Yet, Toyota never resorted to evading the issues or blaming others (even
letters and c omment
hinting at the likely fact that plaintiff lawyers suing Toyota were actively feeding the frenzy). Akio Toyoda, chairman and grandson of the founder of the company, went in front of a Congressional committee and apologised for any ‘potential damage’ to customers while making a pledge to continue to improve quality and work vigorously to restore customer trust. Toyota under fire is a perfect account of how and why, at no point Toyota attempted to point fingers and showed respect to everyone; and I mean everyone. Not just Toyota customers, Toyota employees and Toyota suppliers but even those who had a clear stake in taking Toyota down. Through intensive self-reflection, Toyota found many opportunities for improvement, problems that did not necessarily cause the recalls. Arguably as Toyota grew rapidly it did not find a way to make sure every employee was intimately familiar with its core principles. Moreover, the recall crisis showed how the ‘sales, after sales and quality’ functions needed to rethink how they worked together to adhere to the principle of Genchi Genbutsu. In this case Toyota decision making was too centralised in Japan and they needed to give more influence to those closer to the customers and get their concerns directly to the point where someone could take action even if it was a matter of customer perception and not objectively a quality control or safety issue.
31
www.leanmj.com
lette r s and
comment
Furthermore, I may add an additional point to Liker and Ogden’s account of how culture drove Toyota’s decisions. Toyota is not only the exemplar company in creating a culture of scientific continuous improvement and respect for people, but the holy grail of systems thinkers too. Between 2008 and 2011, Toyota demonstrated that it truly understands the interconnectedness of unevenness (Mura), over burden (Muri) and waste (Muda) at a macro level as well as in daily operation of its manufacturing plants. Prudent spending during the heydays and keeping generous cash reserves – for which it had often been criticised if not penalised by the financial community – meant that Toyota could cope with reductions in sales and plant idle time without great financial difficulties and without laying off regular team members. Also, its ability to quickly up-skill employees and its agility in end-to-end operations meant that it could flex resources and adapt to changes in demand with remarkable speed and at minimum cost. Toyota’s systemic thinking underpins the principles of the Toyota Way, such as Gaman and Kaizen, which in turn breed systems thinkers at all levels of leadership within Toyota. E N D
A balanced equation I
t only takes three elements to bring about sustainable change. In his bestseller Seven habits of highly effective people, Stephen Covey defines the creation of a habit as the intersection of knowledge, skill and desire, and indeed it is these three elements that come together to create powerful change.
www.leanmj.com
Jeff McGowan, sourcing manager at Johnson & Johnson LifeScan, responds to John Bicheno’s King of equations article in issue 11 of LMJ with some observations on the need for strong technical knowledge in achieving sustainable change and the balance to be struck with other key factors.
What happens when they are out of balance? With knowledge and no desire to change, there will be no results. With desire and no knowledge, there will be lots of willing people with no direction. With knowledge, desire and no skill, there will be willing people with direction but no-one to implement. To work on one element alone is of limited benefit and thus there is no shortcut other than to build on all three elements. When it comes to lean, there needs to be both knowledge and practical use of methods such as theory of constraints, scheduling systems and lean tools coupled with an incentive for change. To develop skills requires a go and do it approach, work out what you want and make the change on a small scale, if possible get a lean coach who can guide individuals through the process, not someone who will implement for you. As a result you will build knowledge based on what you learn, build skills as you do it and create desire as you see success. This is how we create culture; culture is an output of this, not an input. Spinning off this issue there is an added consideration of the way we in the West view capability building. I think there is a tendency to put a lot of emphasis on qualifications gained outside the workplace – for instance MScs and MBAs. Many MScs and MBAs can reinforce the wrong behaviours driving short term thinking. There are others, however, that are positive such as the Lean MSc with Cardiff. An MSc or MBA helps individuals to get to grips with how to manage much of the complexity they will have to deal with and importantly it is an essential ‘qualifier’ for individuals being able to influence the policies within organisations which create complexity. I think that in the West we have created such complex organisational systems that senior people often need these qualifications to help them make sense of their environment. However if lean is our goal, our main focus should be on the thinking of the whole organisation, not a select few. E N D
32
BOOK NOW Limited delegate places
www.iomnet.org.uk
Subscribe to LMJ today! IOM Operational Excellence Conference 2011
SubscriptionsUnconventionally are priced at ÂŁ200pa Operating
Business School student discounts available 11th May benefits 2011 – Studley West delegate Midlands Subscriber includeCastle discounted rates at LMJ and partner events
Event code: IOM082
Ref: LMJ 03/11
Ref: LMJ03/11
33
www.leanmj.com
Contact Benn Walsh Contact: (b.walsh@sayonemedia.com) Membership Services T: 01536 740105for E: members@iomnet.org.uk on 0207 401 6033 further details
B O O K R E V I E W J ohn B icheno
John Bicheno reviews Greg Gordon’s Lean Labor, Kronos, 2011
G
reg Gordon’s book is probably the most depressing book I have read in the Lean area. Having said that, it opened up a whole new area of waste – that of employee unproductive time and money lost through poor timekeeping, absenteeism, payment systems, and downright fraud. So, for example, as a result of errors and loosely enforced rules, ‘150 employees, (each having) two paid but not earned hours per week at an hourly wage of $20 results in a company overpaying those employees by almost $300,000 annually’. You get the flavour of the book from this.
www.leanmj.com
The book contains advice on, for example, ‘sweetheart scheduling’, deliberate mis-interpretation of pay rules, ‘buddy (timeclock) punching’, and the use and abuse of overtime pay. All good practical stuff, aimed at achieving ‘the perfect paycheck’. Perhaps. One chapter discusses the challenges that going Lean introduces for supervisors and HR staff. More changeovers, more staff reallocation and rotation, and more complex scheduling lead to opportunities for errors and abuse. Lost time often increases. One interesting solution to these problems is using Shingo-type SMED analysis, but for operator time rather than machine time. Internal wasted time is time that an employee could be working but is not because of waiting for instructions, allocations, and so forth. So, shift time from ‘internal’ to ‘external’ by
34
forecasting, and then preparation - enlisting the help of HR. This is good, but, depressingly for the reviewer, Greg favours employee monitoring by electronic means. Another chapter discusses ‘OLE’ or Overall Labour Effectiveness. This is a variant on OEE but applied to people rather than machines, using the ‘six big losses’. This concept is not new, having been used and written up under ‘Overall Professional Effectiveness’ by both Peter Willmott and the reviewer. It has potential. What is sad about the book is that there seems to be an underlying assumption that employees will take advantage and cannot be trusted. In short, Theory X. If this is your type of organisation, then you will find the book particularly useful. For the Theory Y manager, whom I hope would include most Lean-oriented managers, having to check would be a counterproductive waste in itself. Perhaps it is significant that the book is printed in China. This short book (120 pages) can be read comfortably in three hours. But surely not everyone concerned with Lean implementation would want to. Annoyingly, there is a story that runs throughout the book – but one that lacks the plot of the late Eli Goldratt’s ‘The Goal’. Perhaps it is an attempt to enliven a depressing topic. It fails. One copy as a reference may be useful. E N D
EVENTS There are currently an expanding pool of events available for the development of the lean community which offer both general and sector specific opportunities to renew your enthusiasm and gain new perspectives through communicating with lean contemporaries. Forthcoming events from LMJ include:
Lean Management Connect
Energy Process Excellence Europe
The Lean Management Journal and The Manufacturer magazine invite all lean and operational excellence professionals to a unique one day event of lean networking and learning. Whether you are well advanced on your lean journey or just starting out this event will challenge the way you think about lean best practice and organisational change.
The Energy Process Excellence Summit, organised by IQPC, will bring together Europe’s leading minds in process excellence. This niche industry event will feature instructional case studies from Shell, BP, Hess, Centrica and more that will help you improve your processes now, measurably heighten performance excellence and position your company for the challenges ahead. On November 14-16, the Energy Process Excellence Network will take place in Houston, Texas.
December 1, London
September, 26-28, Ardoe House Hotel, Aberdeen, Scotland
Other forthcoming events include:
The business case for Training Within Industry September 28-29, Cardiff
The TWI Institute and LERC are holding a two-day seminar aimed at giving an overview of Training Within Industry, with a detailed look at various methods of TWI application in industry (including the benefits gained from such actions). The two days will help provide an insight into TWI implementation and help delegates build a business case for adoption within their own organisation. TWI is focused on three essential skills that every supervisor should have. These are Job Instruction (JI), Job Methods (JM), and Job Relations (JR). TWI methods were adopted by Ohno in 1951 and became the foundation of the Toyota Production System.
Week commencing on October 10, Cardiff
This five-day course examines the application of lean thinking in service organisations, covering the lean principles, systems thinking, key techniques for lean practice and the framework required for effective strategic integration and sustainability. Suitable for those in service organisations who are considering how they should implement lean related approaches or for those who want to understand the difference between lean manufacturing and lean service.
Lean Business System Annual Conference October 11, Birmingham
The one-day conference, organised by S A Partners, will be an opportunity to hear from leading lean experts, including Professor Peter Hines, chairman of the Lean Enterprise Research Centre at Cardiff Business School, Marcel Schabos, CEO of Inalfa, and Bob Emiliani, a prolific author and expert on Lean leadership and Lean management, from the United States. In conjunction with the event, S A Partner is launching an on-line community, LeanBusinessSystem.com, a platform where resources and insight will be available from a panel of experts.
For more information or booking details at all LMJ’s partner events please visit:
www.leanmj.com
35
www.leanmj.com
LERC short course: Lean thinking in services
www.leanmj.com