LMJ June 2015 by Lean Management Journal

$65 – £45 – €50

J u n e 2 0 15

ARE WE BETTER OFF ALONE? The ideologies and ‘isms’ competing with lean; better with or against them? Organisations and interviews featured in this edition include: National Instruments, Umicore Autocat, Tier Link Limited, Metcam, Valeocon Management Consulting, Lincoln Financial Group, Tecla Consulting and University of Buckingham. IN THIS ISSUE: From lean to operational excellence: studies in success: How lean has transformed over the years and spawned its shoot-offs. Are they greater than their predecessor or do they lend themselves to the improvement of all? 12 common mistakes that minimise project impact and how to protect against them: Those niggling errors all businesses make that can seriously harm the bottom line and lead a successful lean implementation to fail. Applying LSS to save the planet: Can lean save humanity from the disaster of its own making?

| www.leanmj.com

EDITOR’S LETTER

Dear reader, Welcome to our summer issue of the Lean Management Journal. This month’s we’ve taken a look at how lean co-operates with other methodologies, ideologies and - those things my history lecturers lovingly referred to as - ‘isms’. But we’re not discussing 18th century political discourse, but how lean can interact with everything from other business efficiency methodologies such as operational excellence, to sustainability and green issues; a subject we covered briefly last year, but needs to be discussed in more depth. Aside from lean being used to save the planet we have an exciting array of other articles for you in this issue. Andrew Hemmings rejoins us for part two of his take on the lean supply chain.

EDITORIAL

Commissioning editor Andrew Putwain

a.putwain@hennikgroup.com

Managing editor Victoria Fitzgerald

v.fitzgeral@hennikgroup.com

Editorial director Callum Bentley

c.bentley@hennikgroup.com

DESIGN

Art editor Martin Mitchell

m.mitchell@hennikgroup.com

Designer Alex Cole

design@hennikgroup.com In order to receive your copy of the Lean Management Journal kindly email lmj@hennikgroup.com or telephone 0207 401 6033. Neither the Lean Management Journal 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.

Thomas Bertels and Rizwan Khan comes to LMJ with a 12 point plan to fixing business processes while Balasaheb Albhar, comes in from India to see how lean and sustainability can interact. Should lean be fighting its corner in this area more vociferously? If the world needs to use less resources and care for itself more then surely waste reduction should be at the forefront of the fight against climate change? In other articles, we are joined by Bruce Hagenau from Georgia, USA, who teaches us about how kaizen techniques helped steel fabricators Metcam to improve their bottom line and progress with new goals. As well this month we have our next instalment of the lean diary with Joseph Ricciardelli from Tecla Consulting. Joseph goes after how to balance your chakras, engage with a healthy aura and generally look after yourself. You need to be healthy, invigorated, with a positive outlook to take on a cultural change in your organisation and here you can learn how to undertake those things without jeopardising your performance to do so. This month we also have a review of National Instruments’ facility in Hungary, which I had the pleasure of touring. The factory is a benchmark in lean ingenuity and in this review we look at where they manage to get lean so right. We hope you enjoy this issue released just in time for our annual conference in Amsterdam in early July. The conference is a fantastic way of networking and learning best practice through communication and resource sharing. The industries and sectors presenting attending this year is larger than ever before and we hope you’ll be in attendance to continue to learn and contribute to the discussions. It’s all about spreading the word on lean, spreading the knowledge and spreading ideas. Have a great summer (or a cosy winter for our southern hemisphere readers) and we hope to see you there.

Andrew Putwain, Commissioning Editor.

C ONTE NTS JUNE 2015

C O N T E N T S

04 Introducing the editors 06 Lean News 08 Introduction

Joseph Paris presents this issue.

PRINCIPLES & PURPOSE 09 Applying LSS to save the planet Balasaheb Bhau Albhar, is the head of quality and LSS MBB at Umicore Autocat, and tackles the thorny issue of lean sustainability.

13 Overcoming barriers to adoption; the route to lean supply chain, part two

Andrew Hemmings, of Tier Link Limited brings us the second part of his ideas on the most effective way to undertake a lean supply chain.

16 12 common mistakes that minimise project impact and how to protect against them

Thomas Bertels and Rizwan Khan join us to analyse the mistakes all businesses make that can seriously harm the bottom line and lead a successful lean implementation to fail.

18 Continuous improvement capability: Has the training worked?

Rhian Hamer and Owen Jones from University of Buckingham, return to LMJ for the follow up to the article feature in April 2014, presented at the 5th LMJAC.

21 LEAN DIARY the leader of the future - in connection with oneself and others

24 CASE STUDY Finding lean in good change

Bruce Hagenau, president of fabricators Metcam, shows how the firm was able to benefit from kaizen techniques.

28 SPECIAL FEATURE From lean to operational excellence: studies in success

Kevin Duggan discusses how lean has transformed over the years and spawned its shoot-offs. Are they greater than their predecessor or do they lend themselves to the improvement of all?

31 FACTORY VISIT Measuring quality

LMJ editor Andrew Putwain visits National Instrumentsâ&#x20AC;&#x2122; site in Hungary to see how they are taking lean to a whole new level of expertise.

34 OUT OF THE BLUE In search of excellence

Bill Bellows launches his new column with reviews and discussions of all things lean.

36 LEAN ONLINE

We bring you all the latest lean news and discussion from the world of social media.

38 EVENTS

Find out about the latest lean events from all over the world.

Joseph Ricciardelli returns with the new edition of the lean diary, exploring the one, leadership and why you should probably look after yourself a bit better.

Elizabeth House, Block 2, Part 5th Floor, 39 York Road, London, SE1 7NQ T +44 (0)207 401 6033 F 0844 854 1010 www.hennikgroup.com. Lean management journal: ISSN 2040-493X. Copyright ÂŠ Hennik Group 2015.

www.leanmj.com | June 2015

I N T R O D U C I N G

Y O U R

EDITOR S

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

RENÉ AAGAARD Novo Nordisk, Denmark

BRENTON HARDER Commonwealth Bank of Australia, Australia

ZOE RADNOR Loughborough University, United Kingdom

RENÉ AERNOUDTS Lean Management Instituut, The Netherlands

PAUL HARDIMAN Industry Forum, United Kingdom

NICK RICH Swansea University, United Kingdom

JACOB AUSTAD LeanTeam, Denmark

ALICE LEE Beth Israel Deaconess Medical Center, USA

EBLY SANCHEZ Volvo Group, Sweden

BILL BELLOWS President, In2:InThinking Network

SARAH LETHBRIDGE Cardiff Business School, United Kingdom

PETER WALSH Lean Enterprise, Australia

DAVID BEN-TOVIM Flinders Medical Centre, Australia

JEFFREY K. LIKER University of Michigan, USA

PETER WATKINS Delphi Automotive, United Kingdom

JOHN BICHENO University of Buckingham, United Kingdom

TORBJØRN NETLAND Norwegian University of Science and Technology (NTNU), Norway

WENDY WILSON Warwick Manufacturing Group, University of Warwick, United Kingdom

GWENDOLYN GALSWORTH Visual Thinking Inc., USA

JOSEPH PARIS Operational Excellence Society

STEVE YORKSTONE Edinburgh Napier University, United Kingdom

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

| www.Leanmj.com

S A V E

T H E

D A T E !

6th Annual LMJ European Conference

8/9 JULY 2015 AMSTERDAM

Issue

m 3 Volu

e 5

| Apr

i l 2 0 14

| www

.leanm

j.com

f the RIse o es mAchIn

$65 – £45

– €50

le ing the ro consider in lean. y technolog

featured interviews r ons and rgh Napie e: Organisati tion includ pendieck, Edinburk Graban, in this edi Pop Ma ackard, es, Infor, tt-P tegi wle Stra He , Lean IT University s, Jelena Pantic. Bill Bellow ? nagement ttlean ma ISSUE: wle IT through st for He IN THIS transform chief technologi tion of varying Can we Verstraete, amalgama s and how Christian s how the iness interaction lore ons exp rati Packard, is changing bus ement of IT ope technology rove the manag imp lean can pment. elo urer and and dev iter, lect Wr ry a: Ma dilemm expert, The scaling re development dieck, wa Poppen lean soft ways of examines efficiency on. sustaining wing organisati gro within a rgh : Edinbu -lean tech the appeal s High techissu e lyse 4 vol ume and4how kstone ana may /jun Steve Yor it improvement ’s sity e 2014 . iver to lim ry change Napier Un , its potential d visiona ogy of technol ogy has enable the right nol to -finding good tech technologyweighs in on how . rmation l, lean info Bel and e IT and ert, Stev Lean ween ship bet Lean exp balance: monious relation foster a har

$65 – £45 – €50

Issue 6 Volume 4

| August 2014 | www.leanmj.com

| ww w.le anm j.co m

lean goes PuBlic

reflecting on in the public the application of lea n sector.

T: +44 (0)20 7401 6033 (Opt 3) E: events@hennikgroup.com

Organisations and interviews featured in this edition include: Synlait Farms, PO Construction, Bill Bellows, Michael Ballé, Jon Miller, Jeffery Liker, Mike Rother. IN THIS ISSUE: Science of lean: Jeffery Liker, professor at the University of Michigan, and leadership speaker, Mike Rother, explore whether treating lean as a practical science could improve results. Lean as folk medicine: Jon Miller, partner at the Kaizen Institute and founder of the Gemba Academy, analyses the parallels between traditional medicine and lean theories. Leannovation: Chairman of the Lean Academy, Dan Jones, discusses plan-do-check-act and the importance of blending action and theory. What makes lean a science: Author Michael Ballé shares his ideas on how lean’s emphasis on individual learning makes lean theory a unique scientific process.

organisations edition inclu and interviews featu red in this de: eaton Hyd rauli council, uk cs, the uk ministry of justice, Police forc solihull netland, john e, the Bicheno, deb British library, torb jørn H. bie simpson and joseph in tHis issu Paris. e: from capa bility to prac at the uk tice: Head ministry of of Business justice, rhia change continuous n Hamer, improvem exam ent in the balanced cont ines publ and evidence ribution of capability ic sector and how a , meaning is the key ful practice to transform going lean ing it. the pay off a budg solihull way: as the public secto in their own et deficit, many coun r tries to cils are hands by cutti savings usin ng waste and taking matters g making sens transformationlean practices. kim ible silco at solihull ck, metropolitan head of lean lean enfo discusses. rcem nottingham ent: Harry Barton, professor at his 2013 studBusiness school shar es his find ings from forces acro y of implementing lean in five ss the uk, high to reinstate police trust and conf lighting lean as a enhancin g police emp idence in policing mechanism , while loyee enga the leaning gement. library: Bud expectations get cuts and lean natio are compelling the publincreased customer nwide. Hea ic secto d of documen r to deploy services at the British library, and t delivery and custome part of the 42-year-old y appleya rd, documen r institution’s ts lean journey.

LMJ

CANADA: ISSUES OF LEAN IN EDUCATION A former deputy education minister of Saskatchewan province, Dan Florizone’s, interest in lean from his time working in the health industry, has raised anger.

INDIA: STUDENTS GET CHANCE TO LEARN LEAN The Faculty of Management Studies at Maharaja Sayajirao University of Baroda, one of India’s most prestigious business schools, organised guest lectures on ‘lean management and different ways to improve productivity in manufacturing industries’ for students to understand lean. The guest lecture was delivered by Gurpreet Singh, senior manager (operations) of Saurer Industries Limited as the firm’s resource leader. Singh, in the lecture, briefed the students about lean management. FMS students learnt about aspects like muda, kanban, SMED, poka yoke, cycle time, takt time and other Japanese terminologies and techniques and their implication in various sectors. Singh also gave insights on visual management (83% of information is remembered through this technique) and 5S system. The resource leader started his lecture with the different approaches to quality which includes quality circle, statistics process control, ISO and lean manufacturing among others. He stressed about the benefits and concepts of lean while also sharing his real life experiences and examples as to what customer needed.

Florizone has already left the government post, but his lean legacy remains, and the opposition party says that’s distracting government from funding priorities on the front line in classrooms.

Education minister Don Morgan counters that lean management has already helped trim education costs. According to the provincial government, lean principles have helped Prairie Valley School Division reduce student wait times for speech language pathologists by half and Regina Public School Division reduce the application processing time for hiring new staff by 75%.

“We know the resources for school divisions to meet student needs are already inadequate, we know classrooms are overcrowded and under-resourced, and students don’t have the supports they deserve. This lean exercise certainly isn’t going to help matters,” said education critic, Trent Wotherspoon. Lean management of the health sector, specifically the use of American lean contractor John Black, has long been a bone of contention with the opposition in the province, which LMJ has been covering for nearly a year. Wotherspoon says lean’s ideas are admirable but manufacturing ideas on effiecency are perhaps not best suited to education: “There’s a big difference between kids and cars — a car can be recalled, a kid cannot. You have one chance to get it right.”

Morgan said it’s not costing more money, because school division participation in lean events is voluntary. He also remains steadfast that government will continue using lean to pursue more savings. “We have a $C2bn budget. If there are savings available to us, that’s the right thing to do, because it frees up money for the classroom.”

USA: HANDLING MATERIALS THE LEAN WAY

SRI LANKA: HOPES FOR BETTER HEALTHCARE WITH LSS

Crown Equipment Corp., one of the world’s largest material handling companies, shared its lean manufacturing successes and best practices Wednesday as part of the Leading Through Excellence summit held by The Ohio State University Fisher College of Business Center for Operational Excellence (COE). The full-day tour of Crown’s campus sold out.

In Sri Lanka, Colombo in particular, the healthcare service is considered better than it was ten years agopossibly as a result of Apollo Hospitals setting up in 2002, which resulted in many of the local hospitals having to improve their standards as well.

As part of the summit, attendees visited two Crown manufacturing facilities, including the company’s New Knoxville, Ohio, facility. The tour showcased Crown’s lean management system and demonstrated utilisation of the four elements of lean management: leader standard work, visual controls, daily accountability and leader discipline. Crown uses these elements to help achieve the common goal of creating a superior product while exceeding customer expectations and needs regarding product quality, performance, cost and delivery. “In order to stay true to the title of our event – leading through excellence – we wanted to bring attendees to see Crown Equipment in person,” said Peg Pennington, executive director of COE. “We continue to admire the culture, capabilities and results of Crown’s lean management system and in particular the level of employee engagement the company achieves. It’s a great model for other companies to follow.” “We always enjoy sharing our best practices we’ve garnered on our lean journey,” said Kim Leopold, operational excellence manager at Crown Equipment. “This event provided a valuable opportunity for us to show how we use lean tools to engage employees to help improve business metrics, processes and sustainability efforts in ways that benefit our customers.” According to its website, the Fisher College of Business Center for Operational Excellence is a consortium of companies focused on improving processes in their organisation. It connects business leaders and educators to gain competitive advantage through excellent processes across the enterprise by providing member companies with educational If you have any news that you think would development, student projects interest and benefit the lean community and access to staff and please let us know. Send submissions to networking opportunities. the commissioning editor Andrew Putwain: a.putwain@hennikgroup.com

Apollo runs the only purpose built private hospital of its kind in Sri Lanka; Apollo Colombo revolutionised Sri Lanka’s healthcare service offer, and today, under the brand Lanka Hospitals, continues to dominate and lead the healthcare sector. It is still considered to be the best health care facility in the country. The healthcare sector in Sri Lanka has far to go in catching up. Although some hospitals recently completed and were awarded the Joint Commission International (JCI), which primarily addresses safety and care of patients, and is based along many similar lines to LSS. Hospitals in Sri Lanka still do not actively address efficiency in service delivery in terms of quality and cost. They also have a need to entrench a culture of continuous innovation and efficiency and regular incremental improvements within all hospitals, both private and government. As more look to improve, the sphere of lean will increase.

www.leanmj.com | June 2015

INTRODUCTION WRITTEN

s young children, we had an instinctive need to be close to our parents – feeling anxiety or even a sense of abandonment if they were not within our sight. As we grew older – and whether it was geographically, intellectually, or psychologically – we would become comfortable with greater distances from what we felt were our basic truths, but almost always as stepping stones and rarely great leaps. Think of early commanders of sailing ships always keeping sight of land until travelling ever greater distances was more predictable because of maps, navigation techniques and tools. From the time humans learned to sharpen stones, before gaining the wisdom to attach them to sticks to improve their hunting effectiveness, to harnessing the wind and eventually the atom to leverage the energies contained therein, we have always been seeking ways of improving our lives. The one common discipline running through all these stepping-stones of advancement is the notion of continuous improvement – the increase of velocity and predictability with less human effort. As it is with the notion of lean which, it can be argued, started with Henry Ford and the assembly line and was leveraged on a mass industrial scale during World War II. But after World War II, there was a divergence in the way companies were run in the West as compared to the East which was largely based on the cultural differences in the structure of the social fabric. In the West, the relationship between employer and employee was largely one of command and control – about the self. Whereas in the East, this relationship was inclined to be more collaborative and about the community. This difference meant the ideas of how a modern business might operate – in an increasingly global marketplace – progressed faster in the East than in the West.

JOSEPH

PARIS

Just as the central planning of communist nations proved inferior to the distributed planning of nations that practiced capitalism; the practice of command and control in business proved inferior to those who were collaborative. So it is with the stepping-stones of the journey that is lean. The real question, and challenge, is whether lean is an inclusive discipline or an exclusive discipline? For instance, do those that embrace six sigma as a means to continuous improvement run contraire to the aspirations of lean? How about those who are disciples of the theory of constraints? Are PDCA, DMAIC, and OODA incompatible with one another? How about you, personally? Do you ever find yourself arguing the merits of one approach or set of tools versus the other? Is it because you are correct or is it because you like to stay close to your parents as you did when you were a child – because it’s comfortable? What if nobody was right or wrong – yet everyone was right and wrong? We talk about creating a pull in the operations of our business. What if we tried to create a pull when it came to opportunities for improvement – with the nature of the opportunity creating the pull on the various tools, approaches, and “isms” necessary to realise the opportunity without prejudice? After all, if lean is about improvement, then as it exists today must change for tomorrow as we move forward onto the next stepping-stone. Love Joseph’s columns? Hear him speak at the LMJAC, July 8-9 in Amsterdam. Go to lmjannualconference.com for more details!

PRINCIPLES & PURPOSE

Applying LSS to save the planet

Balasaheb Bhau Albhar, is the head of quality and EHS MBB at Umicore Autocat India Pvt. and in this article explores how the basic principles of lean relate to those of sustainability. Should we be looking to lean to save the planet?

READ ABOUT: Studying lean to use in sustainability The economic benefits of sustainability A guide to helping businesses embrace these techniques

SS is an integration of two world class manufacturing improvement philosophies that help organisations improve their performance and competitiveness towards sustainability. The LSS model provides various kinds of sustainability to companies in terms of quality enhancement, zero defect level, market share enhancement, optimal production level, financial returns and social sustainability. Multinational companies are more orientated toward implementation of LSS than small scale locally held companies. Implementation of those method requires considerable cost, effort and skill in terms of human resource training and reformulation of business processes. The LSS approach was utilised as it seeks to optimise flow by using empirical methods to decide what matters, rather than uncritically accepting pre-existing ideas. Manufacturing environments vary from company to company and this necessitates differences in their purpose, design and control. As such, there is no single set of management procedures

BENEFITS BY A P P LY I N G L S S TO ACHIEVE SUSTAINABILITY:

Reducing operating costs Reduction of lead time Reduction in increase productivity Reduction in work-in-process inventory Administrative improvements Better use of raw material, energy and workforce Producing less waste which cannot get into the market Overproduction is smaller, follows the demand of the market Reduction in order processing errors, Streamlining of customer service functions Reducing work-in-process Increasing capacity, Reducing cycle-time, Improving customer satisfaction. Reducing risks Fast and dramatic results Continual improvement culture Social sustainability

www.leanmj.com | June 2015

BALASAHEB BHAU ALBHAR LEAN AND SUSTAINABILITY

that can be universally adopted to govern them.

From a sustainability perspective many, if not all, environmental impacts can be viewed as waste and must therefore be driven by poor systems thinking. It seems natural lean can be used as a powerful tool to improve environmental sustainability.

Certain LSS techniques are more compatible with certain facility layouts than others. However, lean production provides us with a starting point for viewing a company’s operating practices with the final goal of seeking operational improvement. Utilising LSS techniques not only examines how to use particular LSS tools, but how to sustain results that make companies profitable, sustainable with continual improvement.

PATH TOWARDS SUCCESSFUL IMPLEMENTATION OF LEAN FOR SUSTAINABILITY:

As more and more companies attempted to become lean and struggled with lean implementation, it became apparent applying lean as only set of tools on the production floor did not work. So below are some guide lines.

SIGNIFICANCE OF THE STUDY:

A) Following are the five steps to guide its successful implementation, 1 Specify value from the standpoint of the end customer by product family.

The study is aimed to drill down into concept of sustainability provided by LSS. It is important to learn how those tools are helping companies to improve their performance and efficiency towards sustainability. How to use the LSS methodology to make process-focused decisions that will achieve the goals of sustainability and allow organisations to gain true benefits from process improvements. It covers sustainability and metrics, lean manufacturing, six sigma tools, sustainability project management, sustainability modelling, sustainable manufacturing and operations, decision making, and sustainability logistics. These tools help sustain results while keeping organisations competitive regardless of economic conditions. While continuous improvement techniques look good on paper, the implementation of the techniques can become difficult and challenging to maintain. Without utilising LSS tools and leading the change, companies will become less and less marketable and profitable. Achieving sustainable results from high-quality improvements and making organisations competitive and first in class in their marketplace. Moreover, it is significant from six sigma companies view point by looking into possible sustainability six sigma can add to their businesses. Lean is not a set of tools, it is a corporate philosophy and culture that abhors waste and works to optimise the enterprise as a system using several tools and techniques.

2 Identify all the steps in the value stream for each product family, eliminating whenever possible those steps not creating value.

We have to manage a system. The system doesn’t manage itself William Edward Deming

3 Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer. 4 As flow is introduced, let customers pull value from the next upstream activity. 5 As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste. B) Shingo Prize Model for lean enterprise The Shingo Prize Model is an overall systems model that incorporates all aspects of business operations and processes. The model was developed to promote lean/ world-class business practices that result in ability to compete globally and demonstrates that culture is the foundation of a lean enterprise. The Shingo Prize uses business metrics as a measure of success; thus, only companies whose positive results are driven by the transformation to lean. The Shingo Model recognises “cultural enablers” as the foundation of a lean enterprise. Culture as a central lean implementation requirement. A continual improvement culture focused on identifying and eliminating waste throughout the production process. Employee involvement in continual improvement and problem-solving; operations-based focus of activity and involvement. A metrics-driven operational setting that emphasises rapid performance feedback and leading

PRINCIPLES & PURPOSE

KAIZEN

Customer orientation

Kanban

Total quality control/ six sigma

Quality improvement Just-in-time (JIT)

Robotics

Zero defects

Quality circles

Small-group activities

Suggested system

Cooperative labour/ managment relations

Automations

Sustainability requires maintaining life supporting natural capital in order for our socioeconomic goals to be met Warren Flint

Once waste is identified, solutions are developed to remove the waste from the system and a new idealised map is created to implement changes. The value stream mapping tool is used to map the processes and the six sigma’s define, measure, analyse, improve and control (DMAIC) methodology applied to attain improvements. The current state map (CSM) is drawn and using the DMAIC methodology, the future state map (FSM) is drawn.

Discipline in the workplace

Productivity improvement

Total productive maintenance (TPM)

New product development

The kaizen philosophy assumes that our way of life – be it our working life our social life, or our home life –deserves to be constantly improved Massaki Imai

indicators; supply chain investment to improve enterprise-wide performance. A whole systems view and thinking for optimising performance.

TYPES OF TOOLS AND ITS APPLICATIONS

A) Lean manufacturing: It is a value-driven approach that focuses on identifying and reducing waste to create an efficient and cost effective production system. To create the highest quality production system, lean manufacturing relies on a system of continual improvements through the application of five basic principles: 1 Understanding customer value: Only what the customers perceive as value is important. 2 Value stream analysis (VSM): Analyse business processes to determine which ones add value. A visual, collaborative exercise where employees identify each step in the production process and add them to a production tree, linking all the steps and identifying areas of waste.

The production line ultimately achieves improvements in cycle times and in value added time ratio improve significantly. Process-variance is studied using the six sigma principle that is integrated with the lean manufacturing philosophy. The aim was to attain process improvement in manufacturing. It was achieved by identifying and eliminating waste in processes and concurrently determining process variation. 3 Flow: Organise continuous flow through supply-chain and production rather than moving commodities in large batches. 4 Pull: Only produce to meet demanded to prevent the production of commodities for storage. 5 Perfection: Process of continuous improvement to eliminate nonvalue-adding elements (waste). Lean manufacturing relies on a collaborative atmosphere between all sectors of the manufacturing process to identify waste and develop solutions. There are a variety of approaches that companies use in the lean manufacturing process to identify, solve, implement, or sustain solutions. For this paper we will cover three common approaches a company can use to improve the quality and efficiency of a manufacturing process. B) Kaizen: The philosophy of kaizen is “that small, incremental changes routinely applied and sustained over a long period result in significant improvements”. The kaizen approach is quick, with employees mapping and measuring current processes, instituting solutions, testing, and improving over

www.leanmj.com | June 2015

BALASAHEB BHAU ALBHAR LEAN AND SUSTAINABILITY

TAKING THE NEXT STEP TOWARDS SUSTAINABLE MANUFACTURING

period of a few days. In short it is a lean manufacturing technique of rapid identification, problem solving, and implementation to reduce production waste.

For manufacturers already using lean manufacturing, six sigma, or TQM, the framework that is already in place for identifying and solving efficiency issues can be used for guiding workgroups in applying sustainable manufacturing principles. All three of the strategies base efficiency improvements around improving product quality, and through using sustainability assessments to address customer product quality expectations, manufacturers can use their current strategies to address sustainable issues.

C) 5S in connection with sustainability: Once a manufacturing process is in place 5S improves the process efficiency through, maintaining a clean and orderly workspace .By applying the 5S items that are needed during manufacturing are found quickly and time isn’t wasted due to obstructions. D) Pareto charts: Six sigma technique for identifying the most prominent defect by type and cost. E) Why-why analysis (Five why): Six sigma technique of asking why five times to get to the root of any problem. F) Failure mode effect analysis: Six sigma technique to estimate the severity of a process failure. G) Just-in-time inventory: Lean manufacturing and TQM function of getting materials when production demands it rather than assuming financial risks of stocking inventory.

PROS AND CONS

Lean manufacturing’s focus of improving quality through reducing process waste makes it beneficial to operational improvements and strategic improvements. These improvements are achieved through reducing work-inprocess, increasing capacity, reducing cycle-time, and improving customer satisfaction. However, lean manufacturing is susceptible to disruptions due to sudden changes to the production process. The continual improvement process strives to make the existing system high functioning, so when any change occurs in the system, the improvement process must start over. Just-in-time Production is also risky because not having materials on hand can cause supplychain congestion that leads to delays and shortages of workers. Lean manufacturing uses continual improvement to streamline efficiency, but this creates an inflexible production system.

From a sustainability perspective many environmental impacts can be viewed as waste and must therefore be driven by poor systems thinking

Some of the most common environmental issues manufacturers address includes emissions, resource use, and waste production. In an organisation that is using lean manufacturing, employees should be trained to identify and address sustainable issues throughout the manufacturing process. This parallels lean manufacturing’s focus on addressing product quality issues, but now that “product quality issue” is framed by the concept of “sustainable quality.” By training employees to identify sustainable issues in a lean manufacturing strategy, the manufacturing improvement process is helps align the entire operation with an easily understood sustainable improvement goal. To practically fuse lean manufacturing and sustainable manufacturing, the management team must fully commit to achieving sustainability goals in the manufacturing process. Opportunities for employee training on sustainable issues must be created and taught as part of lean manufacturing curricula. Once training has been completed the traditional techniques of lean manufacturing, like value stream mapping and 5S can be used to specific call identify sustainable issues and make sustainable improvements. In value stream mapping exercises, new metrics are added to the evaluation of each process step to assess the amount of hazardous waste produced, water used, and energy consumed through the lens of sustainability. Workgroups can then use these findings to gather and analyse data to implement sustainable improvements to the manufacturing process. The results from value stream mapping can help track an organisation’s improvement along sustainable goals.

PRINCIPLES & PURPOSE

Overcoming barriers to adoption Andrew Hemmings, of Tier Link Limited, brings us the second part of his ideas on the most effective way to undertake a lean supply chain.

hilst few within supply chain would argue against the concept and its potential benefits, there are barriers. Research carried out across leading manufacturing companies within the U.S.A showed that whilst 90% considered themselves as lean, only 20% extended deployment beyond the shop floor. Within the supply chain the main barriers were identified as: Perception that lean only applies to manufacturing operations. Different operating practices and standards between trading partners. Lack of commitment from all trading partners within a value stream. Lack of established measures to quantify the business value of lean and hence ROI. Resistance to change.

Most supply chain teams will have awareness of the basic principles of lean, however, for some its application beyond the shop floor will require a shift in mindset to gain acceptance in other areas of the business. If supply chain is under the operations management structure, it is likely that lean has already being practiced within the factory and can be used as a platform from which to extend.

Most businesses will operate with a single set of performance measures. However for any supplier, it is important that any standards or measures used reflect how the customer base measures performance especially if supplying different business sectors. One barrier that is always present is the independence of the supply chain members themselves. Each operates as a P&L centre, for which protecting selfinterest and maximising profits do little to promote openness or partnership. Any manager who has experienced joint customer/supplier development programmes will be familiar with protecting what is perceived as confidential data that could be used to establish manufacturing costs. The objective of lean is to eliminate waste from which cost savings are an inevitable by-product. To encourage buyâ&#x20AC;&#x201C;in from

Different operating practice and standards between partners is commonplace. It is important that relationships develop, at least with major suppliers, recognising that the mutual benefit of lowering supply chain total cost equates to increased profitability for all partners. The sharing of information as well as synchronised planning activities based on customer demand are key.

www.leanmj.com | June 2015

OVERCOMING BARRIERS TO ADOPTION ANDREW HEMMINGS

partners, objectives for the lead site are better aimed at activities that can be perceived as either non-profit eroding to the supplier or result in savings for all parties. A lack of commitment to build upon this would question the sustainability of long term partnerships. As with all change programmes that require the adoption of different working practices, the application of lean concepts involves people. The term lean will itself sound threatening to some and the prospect of change will conflict with those who have a vested interest in maintaining existing practice. This can extend from shop floor practice through to management commitment and can present an additional barrier that should not be underestimated. A further obstacle within organisations practicing lean, often for many years, is an unwillingness to extend into the supply pipeline because implementation internally has either failed to deliver the results in the expected magnitude or the gains have not been sustained. In most situations, failure can be attributed to either unstructured deployment that is primarily reactive to spikes in performance, poor ownership at management level or lacking in tactics to address both short term and long term problems.

IMPLEMENTATION

The starting point is always supply chain and product selection. High impact on the business and high probability of success are the two criteria that need to be satisfied particularly for the first project. Whilst cost and delivery lead time are most likely to be the initial selection criteria for impact, the wider aspects of costs beyond purchase price alone also need to be considered. The hidden costs of expedited inbound and outbound freight are typical and should be easy to quantify. Less obvious, but no less important, are the costs associated with manufacturing planning changes, from which downtime, line changeover time and overtime costs may be incurred. It is important to evaluate the main supply chain processes within and across enterprises in order that

performance metrics span the supply chain network and provide a measure of the returns gained from collaborative practice. Such measures are essential to linking opportunities and enabling task prioritisation. Major suppliers need to be on-board and should have the drive to improve their operations or meet customer needs as well as be able to provide the necessary resources to adequately support their participation. The next phase is to set objectives and obtaining supplier buy-in Objectives need to be measurable and preferably with some history, in order that the effects of system optimisation can be tracked and compared against past performance. To encourage supplier buy-in objectives are better aimed at issues that are seen as non-profiteroding, for example inventory reduction without taking the consignment stock option, lead time reduction, transactions and error elimination, demand amplification minimisation to stabilise cash flow. Waste elimination and system performance are always the overall objectives. Suppliers should see themselves as partners rather than just participants and equally see the benefits for themselves as well as be committed for the long haul. The concept is about partnership development where win-win is seen as the end result by all parties.

Current state evaluation and future state drafting is based on extended value stream mapping, (EVSM) about which there are numerous publications. Where lean supply chain extends beyond EVSM is in the use of the diagnostic to evaluate the supply chain management processes, in particular collaboration and integration, and should reveal both a top-down and bottom-up perspective. The diagnostic provides the metrics by which the framework for the improvement programme can be established and measured. The opportunities identified and lessons learnt during the first value stream analysis are likely to apply equally in other value streams that comprise the same supply chain members. This opens the door for rapid gains. There are numerous methodologies and routes to managing any programme implementation, but experience shows that to implement and sustain the future state - there should be: A structured deployment policy and improvement programme driven by future state goals linked to clear strategic enterprise objectives. Ownership at senior management level Tactics that combine daily problem resolution, to maintain momentum, with long term problem solving through structured high impact

PRINCIPLES & PURPOSE

Figure four: Lean supply chain implementation process

The diagnostic provides the metrics by which the framework for the improvement programme can be established and measured

Phase 1

Phase 2

Phase 3

Phase 4

Supply chain and product selection

Supplier buy-in and objectives

Evaluate current state

Draft and implement future state

Product group matrix

Define overall deliverables

Supplier VSM and IFM

Draft future state

Product group analysis

Set measures and targets

Own facility VSM and IFM

Draft diagnostic opportunities and costs

Part analysis and selection

Establish core team members

Sub-supplier VSM and IFM

Structure implementation plans and teams

Identify key subsuppliers and obtain buy-in

Combine VSM and combine IFM. LSC diagnostic

Implement plans and measures

improvement events driven throughout the whole supply chain and practiced daily using appropriate lean methodologies.

IN CONCLUSION

The limitations of commonly adopted practice for supply chain cost reduction are self-evident and do not examine the waste generated through differing management and control processes used by each of the supply chain members. The implementation of lean practice that not just targets specific products but also, when combined with supply chain best practice, evaluates the overall way in which supply chain management processes of individual members integrate, presents a clear way forward to identify waste and subsequent cost saving. The size of the financial opportunity can be easily measured in terms of materials spend, supply chain labour and overhead costs such as transport, storage pallets. The hidden costs of inventory and impact on cash flow through demand amplification are also quantifiable. Whilst there will be barriers, include protecting self-interest, task complexity as well as the normal resistance to change, they are surmountable and programmes

having a structured deployment policy based on future state business goals and objectives linked to customer requirements will achieve results. For those choosing to take this route the main features and benefits are: It targets significant opportunity â&#x20AC;&#x201C; the supply chain can account for over 65% of operating costs Waste elimination, leading to cost savings without profit erosion It encourages strategy alignment of key suppliers with own business strategy Standard performance metrics against supply chain management processes. Enhanced customer perspective â&#x20AC;&#x201C; innovative supply chain Supplier perspective â&#x20AC;&#x201C; partnership, joint improvement Focus on hidden costs that are not recovered in the selling price Competitive advantage gained from a supply chain having shared goals and objectives.

www.leanmj.com | June 2015

12 common mistakes that minimise project impact and how to protect against them Thomas Bertels, managing partner of Valeocon Management Consulting, and Rizwan Khan, vice president of continuous improvement at Lincoln Financial Group, write about those niggling errors all businesses make that can seriously harm the bottom line and lead a successful lean implementation to fail. READ ABOUT: A 12 point plan Ways to convince staff to undertake changes Tackling unproductivity from a twopronged attack of management and employee level change

rojects are critical to develop new capabilities, transform existing processes, or implement new technologies, and many companies are investing significant resources in project planning and execution. In many cases, a formal programme management office is charged with overseeing the projects, but the actual return on this investment is less than it could be. In almost every case, the causes of sub-par results are the result of poor decisions. The following list highlights the most preventable failure modes and what can be done to prevent them:

Stop and go: Frequently putting the project on hold does wonders to destroy morale and lose momentum. In almost every case it is better to allow the project to

move forward. Perceived gaps are oftentimes better addressed through subsequent projects that build on what has been accomplished with the initial project. Stop-and-go issues point to governance issues and should be addressed as soon as possible. Putting a project on hold should be a last resort.

Waiting for the subject matter expert: Lack of subject matter expertise is a real issue. How can a project team deliver if they donâ&#x20AC;&#x2122;t have access to those who know the topic best? In reality, subject matter experts are often not available, delaying important programmes. Making subject matter experts accessible is a responsibility of the governance team and a real test of the commitment to the project at an early stage. In the short run, the governance team needs

Putting the project on hold does wonders to destroy morale and lose momentum

PRINCIPLES & PURPOSE

to address the issue of how to backfill key resources; in the long run, a rotational programme where high potentials rotate through key functions on a periodic basis can help address the issue and widen the pool of those who can provide subject matter expertise.

explicit and the redundancy needs to be actively managed to minimise confusion and competition. Having the same governance team overseeing all projects and being clear about how conflicts will be resolved are critical to overcome this failure mode.

Keep changing the team: Changing at least one-third of the team members every three months should do the trick – the dual challenge of bringing new team members up to speed and transferring knowledge from those departing will frustrate even the most experienced project lead. Unless there are issues within the team, it is better to stay the course and protect the resources dedicated to the project. Accelerating the project timeline (and reducing the project scope) can also help to address the issue as well. It is easier to keep a project team intact and move forward with shorter project durations. A multi-generational approach to project scoping can help protect against this failure mode.

Too many cooks into the kitchen: In many organisations, a number of departments are chartered to help the project team. IT provides business analysis resources. The strategic programme office creates the templates and standards. The project management team supplies experienced project managers. Internal consultants help with change management or process design. Oftentimes, the roles and responsibilities of the different cooks are neither well defined nor understood. The result: turf wars that will immobilise every single project. Those charged with governance will benefit greatly from clarifying the roles and responsibilities of the various players. The project lead is ultimately the customer for the various internal groups supporting the project and should have authority to escalate issues to the governance team.

Overlapping projects: It is quite common to find a couple of projects that overlap. One project aims to redesign the existing process, while the other one has been chartered to develop the future state process, and a third one looks at outsourcing the entire thing. Sometimes overlap is unavoidable; however, the overlap needs to be

Delaying decisions: Want to to decrease team morale quickly? No better way than delaying decisions to think it through. A default to action rule that allows the project leader to make the decision if the sponsor does not respond within a given timeframe can work wonders to accelerate execution.

rationale as to how they support the overall strategy have a low likelihood of success. The governance team should be very clear about what the linkage of the project to key business outcomes is, otherwise it might be better to kill the project and instead focus the scarce resources on the projects that can help move the needle.

Focus on what to do but not on how to do it: Many companies focus too much on governance and rules and less on capability building and execution. While governance is important to ensure appropriate use of scarce

Unclear vision: Lack of clarity regarding a project’s scope and its benefits typically leads to failure. If the It is easier to keep a project key stakeholders of the team intact and move forward with project cannot articulate shorter project durations what the project is all about, take a time-out before launching the project to make sure everybody is on the same page. Every single member of the governance team resources and accountability, that in itself should be aligned to what the project is is not sufficient. Investing in capability supposed to accomplish. building through formal training and informal coaching and focusing project teams on rapid execution instead of Confusing redesign and endless analysis is critical. transformation: Is the team expected to deliver real transformation or are you looking for incremental changes? Sponsor fatigue: Sponsors Expecting transformational results but are typically very energised asking for an incremental approach is and engaged early on in a project but a recipe for disappointment. Defining lose interest over time as other issues upfront what success looks like and how demand their attention. Project teams much change is acceptable helps to should be empowered to insist on active minimise frustration and rework. sponsor engagement. Oftentimes, the typical tollgate structure needs to be complemented with frequent, No facilitation: Facilitating project informal meetings with the sponsor and governance teams is typically to maintain alignment. considered a low value activity. Many think, “We have great people, what do Good project governance is the we need facilitators for?” but that’s not underlying cause for most of these failure the case. Facilitators who are experts in modes. Investing in team building and project team facilitation and not invested training for governance teams can help in the status quo can help accelerate prevent the issues that lead to project projects significantly. Facilitators stalling or failure. In addition, using a accelerate team development, a critical facilitator with extensive experience in foundation for moving forward quickly. organisational transformation enables the governance team to provide more No clear linkage to strategy: effective guidance. Projects that do not have a clear

www.leanmj.com | June 2015

Continuous improvement capability: Has the training worked? READ ABOUT: Staff morale, engagement and the reaction to the process Capability: finding the right person, at the right time in the right place

Rhian Hamer, associate fellow, and senior lecturer Owen Jones from University of Buckingham, return to LMJ for the follow up to the article feature in May/June 2014, presented at the 5th LMJAC. Here they explore how the CI ideas established in the organisation have worked and what the situation is a year on.

ontinuous Improvement (CI) is a wellestablished concept within organisations. Many have developed elaborate CI strategies and transformation programmes. However in our opinion there is a fundamental problem that advocates of CI

PRINCIPLES & PURPOSE

Hamer and Jones, 2012

Meaningful CI practice

Capability

Evidence of positive outcomes

‘Capability’ describes an organisation’s understanding, readiness and commitment to transformation, together with its skilled resources to achieve this. A capable organisation should have the right people, in the right number, with the right skills, in the right place, at the right time. We argue that organisations are failing to develop real capability because they believe, despite the evidence, that capability is achieved by training. Training is excellent at providing delegates with facts quickly and cheaply. It is also the best way for managers to demonstrate their competence in organising activities for workers. However, real capability is about changing the normative and cognitive landscape. Normative means

It is useful to differentiate between competence and capability. If competence is the individual’s acquisition of knowledge and skills, then capability is that person’s confidence in applying these knowledge and skills. It is the extent of someone’s ability to do something and has direct effect on a person’s productivity and performance. Training alone does not equal capability. Learning facts, skills and building knowledge that are not practised is wasteful in itself – indeed this is part of the argument which the CPO model is based around. One way of building true capability may be to enable normative experiences – in other words learning by doing and experiencing, after all isn’t this the premise upon which CI is founded?

need to address. How successful have we been as a CI community in really improving organisational practice and outcomes? In an article published in LMJ last April, Hamer and Jones argued that for CI to transform organisations a balanced contribution of capability, meaningful practice and evidence of positive outcomes is required. This is the first in a series of follow-up articles aimed at exploring the model in more detail and presenting thought-provoking questions that we, as CI Practitioners, should be asking. This article specifically focuses on capability.

how people are motivated and expected to behave and how they expect others to behave. Cognitive means how people think about their work. Traditional training is nearly useless at achieving normative and cognitive transformations.

Organisations are failing to develop real capability because they believe, despite the evidence, that capability is achieved by training

So why is it then that some organisations find it difficult to just “have a go”, build a prototype or pilot an idea or concept? Maybe it’s because building this type of capability building takes courage and is often associated with failure itself. For some organisations, particularly public sector, the risk of “getting it wrong” may be too great. Without doubt, every organisation needs time to develop CI capability, which changes over time. Typically, organisations start by focusing on developing knowledge and experience across the organisation. There are different approaches to developing capability; arguably the most effective CI programmes focus on developing line managers CI capability by putting the learning into practice through problem solving those processes which the line managers are responsible for. Learning by doing and mentoring is key. To strengthen or enhance this capability and learning even further, some organisations choose to rotate their line mangers to other parts of the organisation so that they learn to apply the thinking to new areas of the business

www.leanmj.com | June 2015

1. How do we measure CI capability?

– helping to close any capability gap across the organisations

2. How do we sustain this capability to enable long-term improvements that deliver positive outcomes?

The role of leadership must not be under emphasised and is indeed a form of capability in itself. Leaders do not need to understand the CI tools and techniques in detail - but they do need to recognise where CI knowledge and experience has positively impacted the customer through effective problem solving. An important part of the leader’s role is to reward this behaviour appropriately. The true measure of CI capability should focus on developing CI knowledge and understanding of line mangers and frontline resource, which can be achieved through capturing and sharing knowledge, as well as success/failure stories. Capable line mangers and frontline workers have the ability to solve problems for themselves, in line with true business outcomes. It should not about certification in CI practice or accreditation against a certain level or belt. At an organisational level there is a need for CI capability to be distributed across teams and departments. It goes without saying that different roles require different skill sets and therefore capability building will be different at each level of the organisational hierarchy. For systemic change this capability must be distributed across the network or system, and furthermore is must be properly aligned.

Without doubt, every organisation needs time to develop CI capability, which changes over time

Technological advances, global markets and increasingly sophisticated customers have resulted in many organisations working across networks, with boundaries becoming blurred and agendas becoming more integrated that ever before. Effective, efficient supply chains require improvement at a holistic level and therefore CI capability must be developed with this in mind. Arguably CI needs to start somewhere and, as already mentioned, typically at a local level. However, the more joined-up and integrated this capability becomes across the supply network or system, then the greater the opportunity to truly transform organisations and deliver services differently. Communities of practice are a great way to build capability across networks and systems. Two questions that we encourage CI leaders and practitioners to ask themselves before building CI capability are:

The most important thing that we can say about creating capability is that training is not a solution, it is the problem

Building real CI capability is more difficult than it sounds. Training alone will not lead to capability. Learning by doing is essential, and leaders need to accept that we learn from our mistakes as well as successes. Capable CI line mangers and frontline workers have the ability to solve problems for themselves, in line with business outcomes. Put simply, you can only measure CI capability by changes in the way that people think – their cognitive attributes, which is evidenced by the way that they behave – their normative commitments. Training and accrediting tens, hundreds, or thousands of employees is irrelevant and indeed an archetypal example of waste, if there is little behavioural change. Similarly, sustaining change is a matter of commitment, and commitment is a cognitive attribute. Where organisations do not embed or sustain lean practice, it can only be because they prefer to prioritise alternative commitments, usually to the status quo or to established ways of managing that place more emphasis on control, status and identity than on eliminating waste and improving service for the benefit of customers. A virtuous circle is established between normative and cognitive change in the sense that the best way to change thinking is through the positive reinforcement of the benefits secured by changing the way that people behave within organisations. The most important thing that we can say about creating capability is that training is not a solution, it is the problem. We need to abandon training and start to think how we can design normative experiences that provide people with the opportunity to solve problems for themselves. The next, and possibly hardest step, is to recognise that if people do not start solving their problems for themselves, it is probably because the management system is actively preventing them from doing so.

LEAN D I A RY

The leader of the future In connection with oneself and the others

READ ABOUT: Putting yourself first Learning to respond to your body for wellbeing and better business ability Daniele Boido’s The Human Being of the Future: A NonSpiritual Guide to Spirituality

Joseph Ricciardelli presents the latest edition of the lean diary, this time focusing on making sure you look after yourself before the business.

n my previous article for LMJ, named 10 commandments for a leader of the future, I was setting, experience and knowledge based, essential guidelines for one to follow, on the path to becoming a successful, respected leader of a team, yielding pre-set and expected results with their designated team. The one (leader) listens to and respects their crew; the one is followed and recognised by their team; the one reaches the targets together with them; the one is assessed a good leader. On the surface it all looks smooth and impressive, and it seems the only thing that actually matters is what’s on the surface. Nobody knows nor is

concerned about what happens with(in) the one by himself during the process; nobody questions what is going on with him in busy times - with customers’ needs to meet, people to train and involve, problems to solve, objectives to meet, a myriad of emails to manage; overloading and stressful tasks piling up and confusing, hectic thoughts rushing through their mind, colliding with each other and disabling the one from focusing. Leaders think fast, act fast and so does how they choose their (fast) food; with no time left to either exercise nor genuinely relax. They work even when not at work in order to sustain the epithet of good. Are they anxious and worried? Extremely – however, all from

www.leanmj.com | June 2015

LEAN DIARY JOSEPH RICCIARDELLI

author – a person who has spent his lifetime studying and practicing various, both ancient and modern, philosophies - transfusing all the knowledge and experience into practice of helping others find their ways to balance and happiness. Nevertheless, his approach was something I was drawn to the most, for, a step-by-step method I was using for years to achieve excellence on the shopfloor he proved to be applicable and has been using with human beings.

Figure one

“All starts at one”. My decision to fly to London, and attend a half-day seminar Daniele was organising, was my one decision that would bear many other afterwards for the sake of my better self. I I and the others I and everybody

within, because from the outside they appear calm and reassured - and they must preserve this state at all times, for, they are a role model to the team. They struggle day by day to make sure they preserve their sanity and common sense through tough moments and bring fair, rational decisions and continuously pursue balance.

To be a good (leader) to others, you have to be first good leader to yourself

The three circles (figure one) show the way we connect. In the core is “I” part, meaning that the one has to be in tune with their own self - the body, mind and emotions, in order to be in harmonious connection with the people around them. So, the one has to start from the “I” circle expanding to the outer circles afterwards. The essence circle is deployed into five phases (figure two):

THIS ONE CAN BE YOU. THIS ONE WAS ME.

1. CONNECT WITH YOUR OWN BODY

In summer 2013, I came across a book The Human Being of the Future by Daniele Boido. After reading it in a single breath, I decided to meet the

“Imagine your body a house. If the walls are falling down, the pipes are rusty and electrical system faulty; until you take care of these basic problems, it is very difficult to focus on anything else”

Figure two

5 4 3 2

UNITE AND HARMONISE

Knowledge acquired and changes for inner joy and stability

ENHANCE ENERGY FLOW WITHIN YOU

Breathing techniques and deep relaxation

STRENGTHEN THE MIND

Awareness of negative emotions and transition to positive

CREATE STRONG FOUNDATION

Exercise suitable for your body

CONNECT WITH YOUR OWN BODY Cleansing, detoxication, diet

Daniele and I have been co-operating ever since – he, who knows the basis of human mind, body and spirit and how to enhance them and I, who have been working on motivating people to use their potential to the fullest for the sake of their own and their company’s. We have intertwined our methodologies and techniques, creating the following:

LEAN D I A RY

Years of precipitated (unhealthy) food within your intestines and persistent intake of processed aliments, vitamin/mineral-free foods and alcohol consumption can bring the body to respond by yelling at you with various kinds of pain, headache, weariness, drowsiness, sleepiness, lack of energy and willpower, mood swings and other forms of negative feedback. It is time to start listening to your body, be attentive to the signals it sending to us and react to its yelps. Cleansing and detoxication is the first step the one has to take on the road to long term well-being. The right choice of food at the right amount (by choice is meant the one chosen by your body, not by various experts – it is your body after all and nobody knows it better than you) is the key.

2. CREATE A STRONG FOUNDATION

The one (leader) listens to and respects their crew; the one is followed and recognised by their team; the one reaches the targets together with them; the one is assessed a good leader

“In order for our bodies to work harmoniously we have to make sure that, just like the frame of a house, our muscles are developed equally and are in equilibrium” In order to be agile and nimble, the one needs to stop making excuses and find a bit of time to devote to physical exercises, again, upon their own body’s choice to support it now and onwards. Martial arts, yoga, Pilates, running or anything else that may develop one’s muscles and align them, sustain the body’s structure shall be welcomed, rewarding and will “outweigh any previous form of satisfaction”.

3. STRENGTHEN THE MIND

“The understanding that our body needs the right foods and forms of exercise has to be combined with an understanding of our minds and emotional state” As already mentioned in the article introduction, the external stimuli, technology and imposed life and work (fast) pace is making the noise within our minds, taking us further from an inner connection. Overwhelmed by consistent forthcoming tides of thoughts, we jump from one task to another, from one thought to another, losing the grip. Past experiences influences and beliefs have created mental structures that may be trapped within you, preventing you from achieving your objectives and inner state of calmness and serenity. By understanding how the mind works, creating the state of awareness and achieving a cleansing of mind is of utmost importance for the one’s construction of an inner being, loud and clear at the same time, focused, and able to achieve its goals.

4. ENHANCE THE ENRGY FLOW WITHIN YOU - BREATHE

“ Most of us breathe just enough to keep us alive. What keeps the body in a healthy state is the flow of life energy

that goes through it and breathing brings this life energy into our lungs and throughout ” Oxygen is critical to our well-being, and any effort to increase the supply of oxygen to our body and especially to the brain will pay rich dividends. If it doesn’t get enough, the result is mental sluggishness, negative thoughts and depression. Breathing exercises are particularly important for people who have sedentary jobs and spend most of the day in offices. Their brains are oxygen starved and their bodies are just getting by. They feel tired, nervous and irritable and are not very productive. On top of that, they sleep badly at night, so they get a bad start to the next day continuing the cycle. Practising and mastering breathing techniques can help the one feed their organs with this essential nutrient, be fresh, energetic, creative and productive.

5. UNITE AND HARMONISE KNOWLEDGE ACQUIRED AND CHANGES FOR INNER JOY AND STABILITY

The fifth step is to unite, in a harmonious manner, all the knowledge gained and the changes obtained. Through meditation and unification of all the aspects of personality in strong and conscious one, you will get joy and inner stability. Now, when after these five steps, the leader’s foundation is stable and pleasant to be within and the interior calm and balanced, full of energy and stamina, it will have positive output to their people. They can share the experience and influence the people to become better selves. To be a good (leader) to others, you have to be first good leader to yourself.

FURTHER READING: The Human Being of the Future: A Non-Spiritual Guide to Spirituality, Daniele Boido.

www.leanmj.com | June 2015

CASE STUDY FINDING LEAN IN GOOD CHANGE

Finding lean in good change Bruce Hagenau, president of fabricators Metcam, discusses how the Georgia, USA firm reaped big rewards with kaizen.

READ ABOUT: The firm’s lean endeavours fabricator of sheet metal components and assemblies Bruce Hagenau, president of the corporation since 1989

n the manufacturing sector, and for that matter, in many large organisations across a variety of industries, kaizen is a well-respected approach to improvement. The methodology, whose moniker literally means good change in Japanese, has its origins after World War II. However, based upon many published studies and articles about its adoption, organisations might assume kaizen as a sweeping effort often undertaken by giant corporations with equally large budgets. When Metcam decided to tackle kaizen in 2013, we believed nothing could be farther from the truth. The beauty of kaizen is it can be applied incrementally, with small changes adding up to major benefits. It is elegant in its simplicity, and its focus on engaging employees in the improvement process was exactly what Metcam needed at the time. Adopting kaizen was a logical step in our continual quest for improvement―which includes adopting the leanest possible stance―throughout the company. Over

CASE STUDY

The restructuring, and the additional production flexibility it afforded, supported our efforts to achieve justin-time production. This achievement reduced our lead time for many products from weeks to days―and in some cases, less than a day. We began realising 15-20% higher throughput than we had seen, before.

the course of 2014, we implemented 11 kaizen initiatives that grew out of consultant recommendations, and the results were dramatic―in some instances, we reduced staff effort and/or production time and expense by as much as 30%.

THE JOURNEY FROM GOOD TO BEST

Since its founding in 1989, Metcam has always placed quality and lean principles at the heart of its operations. We have conducted numerous lean improvement projects over the years, some of which succeeded brilliantly and continue to benefit us to this day. However, in other cases, we found after a few months―or sometimes even a year or more―old habits would slip back into these processes and undo some of the benefit we had derived from an initial improvement effort. We see improvement as a continuum―a journey is never completed. Consequently, we decided to focus on making numerous small changes throughout the plant, one employee project at a time, and to continue that approach, if it succeeded, indefinitely. This decision led us to adopt kaizen. Prior to adopting this approach, we had already orchestrated numerous major lean improvements. Some of which served as the springboard for our kaizen projects. A few examples include: Around 2010, we restructured the way we stored raw materials, ensuring they were always close to the worksite where they were needed, which reduced inventory storage needs and wasted human motion. In 2011, we moved to a cellular model of production, which is often adopted by mass-producers but is much less common in small-lot fabrication shops such as Metcam. To achieve this goal, we moved our eight press brakes into closer alignment with our large punching machines and lasers to create multiple cells throughout the building. We also built into the solution the ability to move equipment and reconfigure cells as needed to adapt to the requirements of any job.

Between 2010 and 2012, we implemented video work instructions for line employees to help them follow our frequently changing production processes. This one modification helped us reduce errors by up to 86%. Around the same time, we also began creating and distributing simplified in-house versions of customer diagrams when customer-provided information was confusing or hard to follow. This addition brought us a 20%+ improvement in throughput.

The beauty of kaizen is it can be applied incrementally, with small changes adding up to major benefits

All of these changes were beneficial, but we knew we could do better. We knew wasted materials, time and motion were still being left on the shop floor. With this attitude, we tackled kaizen.

GOOD CHANGE IN SMALL BITES

In late 2013, we hired two kaizen consultants to come to Metcam and evaluate our current processes. Working with and listening to our shop personnel (who are almost always our best source of improvement ideas), the consultants recommended 11 processes that might be improved by a kaizen initiative. After they helped us implement the first two improvements, it was up to us to evaluate and follow through on the remainder. The adage “Just do it” may not be new, but in our case, it was very appropriate. The entire spirit of kaizen is to effect small changes quickly, so we didn’t expend hundreds of hours planning how we would approach or execute the effort. In essence, we applied lean concepts to our kaizen initiative and just got started. For each project, the kaizen team―led by the workers themselves― would begin by mapping and timing the production process under review and then exploring how we could make it

www.leanmj.com | June 2015

CASE STUDY FINDING LEAN IN GOOD CHANGE

KAIZEN IN ACTION: METCAM CASE EXAMPLES

Although all 11 of our kaizen projects resulted in tangible benefit, a few are particular standouts from a lean perspective. Here, we will describe two of them: the redesign of a production flow to reduce traffic congestion and the creation of a tool centre and associated management processes to foster more accurate tool storage and delivery.

REDUCING TRAFFIC O N AN ASSEMBLY CELL

For a 10-person station dedicated specifically to cabinet assembly for a major U.S. manufacturer, Metcam’s assembly process travelled across two 20-foot (6.01m) assembly lines. Although these lines were adjacent to one another, the process still resulted in some workers traveling up to four miles per week. These individuals experienced foot pain from walking so much during the day. The kaizen team repositioned two people and modified the assembly process to a single-piece flow with one 16-foot and one five-foot (4.9m) table. Making these two simple changes enabled the line to become a “zero steps” assembly cell, where workers do not walk to complete assembly tasks, at all. The modification freed up valuable floor space and increased throughput by 36%. Employees now go home much happier and in a more positive frame of mind.

CREATING A TOOL CENTRE

Metcam’s earlier realignments for raw materials staging and cellular fabrication drove big benefits, but they didn’t address the company’s tool storage and use of turret punch tools. With

the punches distributed around the shop floor, their tools were stored in open racks adjacent to each punch. This was efficient in terms of proximity, but there was no oversight for the tools, and they frequently became lost and scattered. As a result, workers couldn’t find the tools they needed and Metcam ended up with multiples of the same tools after they were reordered in error. One of Metcam’s worker suggestions was creating an organised, secured tool centre, with each tool tagged and colour-coded by category for identification. A designated team member (the worker who suggested the improvement) now manages the tool centre, keeping tools organised, maintaining a running inventory and ensuring tools are signed in and out of the centre. This change also drove the creation of a new ordering process whereby the tool centre receives a work order for the tools needed on every job and a team member pulls them in advance. Metcam has taken this improvement even further and implemented a maintenance management programme, including timely, planned replacement of ageing tools. The easily quantifiable benefit stated elsewhere in the article ($50,000 reduction in unnecessary tool purchases) is only one aspect of the lean achievements for this project. Production lines are no longer shut down waiting for a tool change and maintenance is achieved on a timely basis, so tools last longer. On the worker efficiency side, some workers had previously spent hours looking for a single tool. With the new tool centre, that occurrence is a statistical impossibility.

When we really explored our business processes, we realised we were spending a lot of time and effort shuffling paper, and the result was a work order flow not as efficient as it could be

better and leaner. We would consider even the smallest changes, such as reducing the number of steps taken by a single employee or shaving a few seconds off an assembly process. Then, the team would go to the line and actually make the changes. There was no trial and error phase, because we didn’t need one. The nature of the changes we were making made it evident if the new structure represented a theoretical improvement. We couldn’t always tell how much better it might be eventually, but we could project there should be enough improvement to merit giving the new process a chance. Many of the changes we made in the initial projects were very physical. One example was identifying where steps in an assembly process actually constituted creating a subassembly. We found in some instances, this subassembly process was slowing the line down. We extracted those processes from the main production flow and assigned one or two workers to creating just those subassemblies.

CASE STUDY

This change offered two major benefits. First, the workers could work ahead, creating subassemblies in groups of 500 or so to be ready whenever they were needed rather than starting them on demand. Second, the approach freed the workers to fill in on other tasks if production bogged down elsewhere or a particular production run didn’t require the subassembly. For each of our kaizen projects, everyone on the line trained on the new processes, on the fly. We then performed 30-day, 60-day and 90-day evaluations to see determine whether the changes were working, whether they offered enough benefit to merit continuation, and whether or not we needed to tweak them any further.

Although all 11 of our kaizen projects resulted in tangible benefit, a few are particular stand-outs from a lean perspective

In nearly every case, the benefits were even greater than we anticipated, and the results, as a whole, nothing short of amazing. In some cells, we have increased potential throughput, per cell, per year, by up to $500,000 without adding more people. We have saved $50,000 in the tool centre alone by not purchasing unnecessary tools (see the case example in this article for more detail). In a few cells, we have reduced labour by 20% or more.

A KAIZEN FUTURE

During our second year working with kaizen, we remain fully committed to the project and its benefits. Most workers are enthusiastic about kaizen, and many want to be lean on their own, with support but without the need for direction. Anyone can submit a suggestion, and our goal is to eventually have every single employee at the plant participate in a kaizen project. We have also expanded our efforts outside the production area. We are examining our business processes to see where small change can drive big improvements and increase our lean quotient. When we really explored our business processes, we realised we were spending

a lot of time and effort shuffling paper, and the result was a work order flow not as efficient as it could be. Today, we are streamlining the order process―examining how we track orders from the moment they arrive until the finished product goes out the door. One way we are improving our efforts is with a big push towards making bar coding a ubiquitous tracking mechanism. On a related note, we are also integrating our scheduling systems with ERP (enterprise resource planning) software, which automates the workflow of the scheduling and delivery processes. We have long recognised lean management―and kaizen initiatives―can bring beneficial change to business as well as product activities. Now, we are taking concrete steps to realise that potential. In the interim, we haven’t forgotten the lesson we learned with earlier improvements regarding backsliding. Our programme incorporates skill development and other resources to help employees recognise the importance of positive change and to transition them from temporarily engaging on specific projects to actively exploring how they can lead their own lean initiatives. We have discovered when plant personnel are the ones making the suggestions and implementing the changes, they are far more likely to embrace our improvement journey as part of their daily culture.

www.leanmj.com | June 2015

SPECIAL FEATURE THE EVOLUTION OF LEAN TO OPEX

The evolution of lean to OpEx: studies in success Kevin Duggan, of Duggan Associates, explores how lean has transformed over the years and spawned its shoot-offs. Are they greater than their predecessor or do they lend themselves to the improvement of all?

any manufacturers have been employing lean tools for years to increase efficiency, reduce inventory, improve on-time delivery, and more. And while their efforts yield improvements, the result is often a culture of continuous improvement and produces slow, incremental progress that plateaus over time. But in the past decade, there’s been a dramatic shift in the way some innovative companies have approached lean that has enabled them to realise top-line results in months, not years.

BREAKING THROUGH THE LEAN PLATEAU

Setting a goal of perpetual improvement doesn’t guarantee the business will grow. Instead, more progressive companies have shifted their approach by setting a destination for their lean efforts. And that destination is operational excellence, when “Each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.”

READ ABOUT: The creation of operational excellence Where it differs from lean The errors made in lean and its implementation

Instead of simply creating lean value streams and implementing flow, these organisations create self-healing value streams and implement autonomous flow that doesn’t require management intervention for seamless delivery of a product or service to the customer. When companies achieve operational excellence, management no longer needs to hold meetings to prioritise or expedite to resolve problems in the flow. Instead, they can focus on activities that grow the business – and the only meetings that take place are those focused on growth. Several companies stand out as examples of organisations evolving their approach to leverage advanced lean principles and achieve operational excellence – and business growth. Among these organisations are Dexter Magnetic Technologies, Hypertherm, and A-dec.

FROM TOOLS TO OPEX Prior to 2010, Dexter Magnetic Technologies (DMT) produced standard

magnetic components but knew it had to become more of a sub-assembly and assembly provider to deliver more value to its customers. To achieve its goal, it had to change its processes as well. That’s when Dexter decided to introduce value streams. Previously, Dexter had employed traditional lean tools like product-level kaizen events, SMED and 5S activities. “Our focus was more on attempting to implement tools,” explained Bob Brinley, president of Dexter. “But spurred by a grant from the state of Illinois aimed at employee development and growth, we decided to bring in training on operational excellence.” Once employees understood the destination of operational excellence, they knew what the company was trying to accomplish across the board, making it easier for the company to deploy value streams in both the business side of the operation and on the shop floor. Within three months of designing value streams, Dexter, had completed implementation in its Chicago manufacturing site. And now? The operation, which produces between 300 and 700 different types of products or assemblies every month, runs autonomously, without management intervention. “No one assigns work to operators anymore,” said Bob, “The concept of first in, first out for the day-today assignment of tasks is so ingrained in the people on the floor that they just do it.” “And it’s visual,” Bob added. “In any cell, anyone can tell if we’re on time or not. And that’s true in our offices as well. For example, our engineers have screens above them that show if a project is on time. And in our sales quotation department, we have a FIFO board that shows whether we’re on time.” The impact of OpEx on the organisation can be felt from the ground up. “Employees have a sense of empowerment,” shared Bob. “No one wants to have to be told what to do and now, employees have control of their day.” And even with 200 to 300 jobs flowing through manufacturing daily,

SPECIAL FEATURE

management only meets for 30 minutes a day. “We meet from 7:30-8 a.m. and, using our MRP system, value stream mapping, FIFO and work cells, we make sure product is moving through,” explained Karl Bethke, director of operations. “That’s all we spend on a dayto-basis on prioritisation.” As a result, managers have been able to migrate to higher level, more strategic roles. Five years ago, a production manager or supervisor spent 95% of their time on allocating work to employees. But today they spend just 5% on work allocation people and 95% on employee development, system improvements, and other activities that will help grow the business. With operational excellence embedded in the culture at Dexter, the company has been able to further its goal of becoming a value-added supplier. “We’ve always been a technological leader but what operational excellence has enabled us is speed to market,” said Bob. “Before we achieved operational excellence, we were at 70% on-time delivery. Now we’re at 95%. And that gives us a competitive advantage because we now have threeto four-week shorter lead times on average. Customers are bringing us their new products because we can get them done quicker from design to build.” And it’s not just existing customers coming to Dexter. The company proactively focuses on new business because it now has the processes in place – from quoting to build – to handle the influx of projects. And they’re processes customers can see. “When customers visit, they can see how our value flows to them when they walk out on factory floor, and that gives them the confidence to do business with us,” said Bob. “For us, operational excellence is a sales advantage.” Today, Dexter has a pipeline of over $US12m for defined projects, and the company expects to double its sales within the next five years. “Because we did operational excellence the way we did, it created opportunities for growth in a sustained manner,” explained Bob. Hypertherm elevates lean to compete globally

Like many organisations, Hypertherm, a manufacturer of industrial cutting solutions based in New Hampshire, applied lean tools like kaizens, setup reduction, and point-of-use tooling, as well as more advanced lean methodologies like value stream mapping. But unlike other companies who have taken similar approaches to create a journey of continuous improvement, Hypertherm’s journey was different. The company did not strive to get better each day. Instead, it set a destination for its journey: to create an operation that ran autonomously. In other words, its destination was one of operational excellence, where flow occurs without the need for management intervention, even when it breaks down.

and management becomes involved only infrequently “Operations aren’t a fundamental business problem,” said Jim Miller, the vice president of manufacturing for Hypertherm. “[It] gets time; it’s not ignored. It’s not like we don’t want to talk about it. It’s that we don’t have to talk about it.” Because Hypertherm consistently delivers product without issues, management has been able to shift from running the operation to devoting its added time to being more competitive in the marketplace. For example, team leaders in the production area are

The company began by establish¬ing cells to The company did not build product at the rate strive to get better each day. of customer demand, but Instead, it set a destination for as its business evolved and grew, it could only its journey go so far with cells, and needed to extend this thinking to its end-toend value streams. That’s when it decided to implement the principles of flow tasked with ensuring daily production through all areas of its operation, from quantities are met and orders are the receiv¬ing deck through fabrication, shipped on time. But that’s not how they assembly, and shipping. It did this spend each day now. Rather, they focus with the intent of having end-to-end on offense, or activities that grow the value streams in its operation running business, such as teaching production the same way its cells did: without associates, in training, and meeting with management interven¬tion. But it didn’t the sales department to satisfy future stop there. customer needs. Moreover, very little management in manufacturing and no Today, Hypertherm’s value streams have production control department greatly evolved to the point where they operate has greatly reduced overhead and without production control. Fabrication product costs to the customer areas operate off visual signals, with a minimal amount of management “Going forward, we’re going to keep or need for setups. Hypertherm uses pushing the envelope for how autonomous ther¬mometer boards consisting of our operations can be in terms of not green, yellow, and red zones that let relying on management for their day-tothe associates at each process know day functioning,” added Miller how the flow is progressing. The visual connections between processes also Achieving Operational excellence has authorise associ¬ates on what to work on enabled Hypertherm to shift its focus next and tell them whether a breakdown from daily operations to future growth. has occurred or is imminent. Associates And it’s succeeded. use standard responses to cor¬rect Hypertherm manufactures about breakdowns in flow if they do happen, 97% of its product in the US with

www.leanmj.com | June 2015

SPECIAL FEATURE THE EVOLUTION OF LEAN TO OPEX

a local labour force, yet sells 60% internationally The company has never had a layoff in its 40-plus-year history, even at the height of the recession with a production workforce 20% larger than needed Hypertherm built a training school offering college credits on its campus to meet the demand for associates to run its high-end machining The organisation completed construction of a new 14,685m²

20 customer service representatives and five customer service specialists were charged with processing a high volume of orders – an average of 1,200 new orders per week – as well as 150 order changes. Due to the custom nature of the company’s products, each order was complex, with as many as 100 line items.

After completing a training programme on achieving operational excellence in the office, the team responsible for applying lean to the area started by gathering data about its processes. Orders came in by fax, web, or phone, and were sorted accordingly. Some were further grouped by product or by date. A With operational excellence complicated sequence for embedded in the culture at Dexter, completing orders often the company has been able to meant a customer service further its goal of becoming a valuespecialist was missing added supplier information during order entry and had to take the order to a customer service representative, who would call the customer for details – often delaying the order up to six days. Cutting Technology Center in 2012 While customer service published an to accommodate plans for continued order-entry processing time of 24 hours for growth over the next ten years. online orders, it usually took three to five days. Faxed orders typically had a five-day A-dec advances lean to drive backlog. And change orders often had a customer satisfaction week-plus wait. A-dec, an Oregon-based manufacturer of The system in place prompted many dental chairs, cabinets, delivery systems concerns, including: and lights, is home to approximately 1,000 employees who design, built, and market Orders lacked the necessary the company’s equipment to dental information to make it through the professionals worldwide. system the first time Orders took too long to get through In 2000, A-dec embarked on a lean their system journey in its manufacturing operations. The process lacked visual indicators Five years later, the company wanted When demand spiked, there was no to expand the concepts and formed a course of action special lean team focused exclusively on Management intervention was needed applying traditional lean concepts into to control action its administrative processes. While A-dec Defects were allowed into the system, realised improvements from its efforts, creating disruptions in the flow it sought to achieve another level of performance, and decided to learn how Once the team had a grasp of the current to design lean value streams to create state, it began its transformation by using operational excellence in the company’s the nine design guidelines of operational office areas. excellence to design its future state. Now, when orders arrive, an “Evaluator” One of the first areas it decided to target immediately picks them up and sorts them was customer service. In that department, into a specific process family designed for

flow. Orders in each family are logged in, starting the processing clock, and flow through a specific FIFO lane with folders indicating the timeframe when the orders arrive. To prevent disruptions in the flow, a customer service representative that has a working knowledge of the orders reviews them for proper information before submitting them into flow. If the information is complete, it goes into another FIFO lane and flow begins. If information is missing, the Representative contacts the customer. With this method, a steady flow of processing occurs at the rate at which the customer needs the orders, or takt time And to help employees in the flow see the status of order entry, a visual system of red/yellow/green lights above the customer service specialist’s work cell is used. If volume goes beyond the normal level (yellow), the team has a pre-authorised response to the condition so no decision making is required from management. “This process has had a tremendous impact on our order entry,” said Gail Wilson, customer service specialist, “Before, we would struggle through some of the more complicated orders only to give them back for questions or call the customer and hold them at our desk. With the new process, they are screened and all questions are answered before they’re submitted to order entry. We are touching orders fewer times and they are entered more quickly with less errors.” Today, A-dec’s customer service department operates very differently: Average lead-time decreased from five to six days to less than two hours. During the final week of the company’s annual price adjustment period (before new pricing takes effect) in 2013, customer service took in the equivalent of three weeks’ worth of domestic orders and processed them in 3-1/2 days vs. more than seven business days. Customer satisfaction has soared, thanks to the improvements in order speed and accuracy. Little or no management is needed to ensure the seamless processing of customer orders.

F A C T O RY VISIT

Measuring quality N

ational Instruments (NI), the Texan based firm opened its Hungarian manufacturing site in 2001, in the country’s second largest city, Debrecen. It’s a sleepy, leafy city on the plains near the Romanian border, with a long history and a rapidly expanding pool of high-tech manufacturers coming in to take advantage of a well-educated populace. The factory is one of the modern examples of manufacturing that shocks visitors by looking more like a laboratory than a factory, with shining white floors and modern glass buildings. The entire site is referred to as a ‘campus’ by its staff, and with an American flag fluttering in the wind outside it definitely felt more like Silicon Valley than the former Soviet Union.

LMJ’s editor Andrew Putwain heads out to National Instrument’s manufacturing facility in Hungary to see how the firm has taken lean to a scientific level of precision.

READ ABOUT: The company’s strategy for implementing lean and maintaining engagement The rewards they’ve seen How American positivity and Hungarian dourness can mix with good results

National Instruments has three manufacturing sites: a small base at its HQ in Austin and two larger sites in Penang, Malaysia and here in Hungary, it’s largest. With over 110 employees, Debrecen is a key component. NI was founded in 1976 and last year had a revenue of over $1.24bn, meaning the ping pong tables and high tech facilities on offer to the staff in Debrecen are likely to be sticking around. The company works on test measurement and automation and is a leading provider of computer-based technology for scientific and automated equipment. The 35,000 worldwide employees that work in over 45 centre across the world are a base that helps to a business savvymodel of diversity and no sector makes up more than 15% of revenue. As innovation programme manager, Botond Barabás, says their “mission is to equip engineers and scientists with tools that accelerate productivity, innovation and discovery.”

www.leanmj.com | June 2015

FACTORY VISIT MEASURING QUALITY

QUICK FACTS ABOUT NIH JIT: 2014: $US2,647 of soft savings; which includes; $US1,347m hard savings (money that has not had to be spent due to lean endeavours); CI projects floated at NIH 772 closed, 271 open.

These values are apparent everywhere in NIH (and the other sites world-wide); family days, a commitment to a worklife balance and the desire to help all employees grow and change in their roles. Staff turnover is low, around 2-3% annually, and the firm sees development as key to this. All of the lean and change programme co-ordinators had several different roles and jobs in the organisation: Barabás started off a programmer, and Németh was moving to HR just days after LMJ visited. NI first began to introduce its lean programme 2006 as an exploratory measure, with only the basics. It was the first of the four phases, Debrecen sees its lean programme undertaken in. The lean programme didn’t come from management or corporate but from an engineer who was helped with support from the Austin office - who organised coaching and resources. Lean group manager for NI Hungary (NIH), Krisztián Németh tells us the history of their beginnings. This engineer began creating teams for CI and kaizens when he came back from coaching and set about organising a small but well received change programme. There was no strategy though, and the only real ideas were to help prevent the pain points with good cycle time reductions and other results. In 2009 expansion began with the Lean Maturity Matrix (LMM); 40 key points of a lean check-up which aimed to see the creation of a lean culture, stated financial systems and small team-led systems. The third phase in 2011 saw the biggest results, with continuous improvement

empowered shop floor implementation, taking the lean journey to the factory and seeing it rolled out fully across all aspects of the manufacturing process. And the fourth phase was 2012 to the present: a CI empowered departments with the back office covered. There are 12 zones, four of which include manufacturing, the other eight are all admin and business sides, including HR, finance, legal and the other essentials to business. Németh continues, stating that it’s an important that lean and change leaders are part of each individual department, rather than a specific and isolated lean department who don’t interact with departments every day. NIH, Barabás adds, has several core ideas to its philosophy three of which are covered by basic thinking, office vs production and process improvement. NIH’s basic thinking includes CI as a founding principle of the NIH vision. They even have a 100 year plan; “Whatever happens our core values and culture will stay the same.”

Németh is positive about this spread through all areas of the business: “We’re really proud lean has gone into the back office.” They learned from Robert O. Martichenko and his book Everything I know about lean I learned in the first grade, which the lean team swear by as their guide to a simple, common sense, fuss-free take on lean. The third idea is process improvement: covered with simple but necessary steps, including PDCA; “Not new, but we think about the smallest activities when we use it.”, and lots of gemba walks and check-ups- which are a biannual meeting for each of the 12 departments to discuss and share ideas, problems and solutions of the issues facing them in their departments. The staff run the check-ups themselves; the lean administrators give them support and training, but they are responsible for the strategies and targets. The checkups include what the staff have learned, what targets they have reached, and covering the challenges and the next steps, including a quality manual.

F A C T O RY VISIT

On several occasions the president of Lean Enterprise Institute Hungary has joined to give advice on feedback. Nemeth and Barabás are enthusiastic about these steps and are sure “they work because people have fun.”

CREATING NIH’S OWN CI CULTURE

NIH look to Mike Rother’s Toyota Kata, with “Toyota’s visible tool and techniques are built upon visible management training and routines.” As we enter the factory floor to view the giant, laboratory-like setting; where employees have to wear carbon lined lab coat and grounding strip on their shoes to protect the products from human high currents–the size and complexity of the manufacturing process becomes apparent. The factory creates circuit boards for measuring equipment. Extremely precise and complicated work, which involves microchips and a detailed cataloguing process from NIH’s in-house warehouse. Németh, Barabás and CI and production controlling supervisor, Atilla Till, who guides us around the factory floor, admit that senior management is lagging in terms of implementation but are very supportive and believe in the goals of lean, fully. “They need to improve though.” The processes are truly impressive, and the team are rightfully proud of their operation; incredibly fiddly, high mix-low volume work which is painstaking, and the slightest mistake could cost millions. There is also, due to the nature of technology, a problem with end of life maintenance and warranties which mean the companies require a large backlog of old discontinued items and a team is employed to come up with creative solutions. This is no made to order company like Compaq, with no inventory on site. Everything has to be here. But it can be made to order, meaning that in the long run, with good organisation, it is still possible to make this lean. One of the main areas for improvement was in the warehouse: simple things like having an A, B, C, system for most to least used parts on the shelves (C at the far top, A, at an easy to grab arm level), as well as a million dollars spent on new machines, which in the long run have improved process speed and eased the technician’s workloads. Till expounds on other differences and when they’re looking for other things to change and improve: “We are like a child asking why.” One of these differences was seen in the time for an order to be processed and delivered, which went from the worst performing process to the best; when an order came in company policy was to announce that it would be ready in 10 days. It rarely hit this, in fact it

was beginning to become a problem how often it was missing it. But with kata, gemba walks and the changes from lean, it now hits the ten days target over 90% of the time on orders. Other areas of improvement were universal test stations; instead of a product having to go through several machines to be tested for mistakes and faults it goes through one. Expensive? Yes, but worth it for the time savings and the new machines took up a lot less room – the factory floor now has spare space, whereas before they were bursting. The most obvious of improvements though come from the maintenance department. The most antagonistic department who fought and mocked lean and often refused to adhere and take part. But who had the best results. “We discovered they were already doing lean. Their policy was to fix things and make sure they would never break again. To make sure that problem would never come back.” Sounds fairly lean to us.

www.leanmj.com | June 2015

OUT OF THE BLUE BILL BELLOWS

Out of the blue: In search of excellence

Bill Bellows presents his new column, Out of the blue, which highlights concepts associated with an integration of ideas from W. Edwards Deming, Russell Ackoff, Genichi Taguchi, and Tom Johnson, amongst many other systemic leaders. With applicability to improving how individuals and organisations think together, learn together, and work together.

s a consumer, my introduction to the Toyota production system began in 1989 with the purchase of a Toyota pickup truck. After a few days of test drives of US and Japanese trucks, the decision came down to two models, one by Toyota, the other by Nissan. Although I had test-driven US trucks, my disappointing experience with US cars, not to mention my wife’s disappointment with US cars, led us to buy Japanese, not American.

The aim of these articles is to present concepts which appear to be “out of the clear blue sky,” yet could be immensely valuable to lean practitioners.

Only later did I realise our eventual first purchase of a Toyota product, to be followed by five more Toyota products, coincided with the year in which Motorola announced six sigma quality and a team from MIT, led by James Womack, Daniel Jones, and Daniel Roos, published the results of a five-year study of the future of the automobile, titled The Machine That Changed The World.

With 25 years of hindsight, I now realise I was enticed by Toyota’s selective focus on contextual excellence more so than the exclusive compliance excellence of its US competitors. After several years of driving the Toyota pick-up, I began to realise the higher reliability of the truck’s components; from the electrical system to the air conditioning system to the engine coolant system, none of which needed replacing when the truck was sold after 14 years. I wish I could say the same for the purchase of a Toyota mini-van in 1998, for which the automatic transmission suddenly failed after six months of ownership, with less than 10,000 miles of accumulated use, on Christmas morning. Worse yet, 80 miles away from home, stranded on a motorway, and in need of a tow truck. Much to my chagrin, when buying the mini-van, I declined the extended service option after reading a little known account of the snap fit assembly

OUT OF THE BLUE

of Toyota that reinforced my admiration for their production system. As explained in my 2009 LMJ article, Reflections on the fabric of the Toyota production system, the snap-fit story of Toyota was reported by David Kearns, the CEO of Xerox from 1982 to 1990, in his 1992 book, Prophets in the Dark.

With 25 years of hindsight, I now realise I was enticed by Toyota’s selective focus on contextual excellence more so than the exclusive compliance excellence of its US competitors

Frank Pipp, an assembly plant manager for a Ford Motor Company factory, routinely instructed his staff to purchase competitor’s cars. His plan was to have the final assembly team disassemble these cars and learn first-hand how they assembled. At that time frame in Ford, if two connecting parts could be assembled without the use of a handy rubber mallet, these parts were known as snap fit. The remaining parts required mallets to assemble. To Pipp’s amazement, one car purchased was 100% snap fit. He did not believe the results and instructed the team to repeat the assembly operation. They did and found again the Toyota product was 100% snap fit. The time frame of this story was the late 1960s and the discovery was not lost on Pipp. In contrast, he noted the “Dearborn people,” from Ford’s corporate offices, were invited to look over the truck themselves and witness the assembly team’s discovery. According to Pipp, everyone was very quiet, until the division general manager cleared his throat and remarked, “The customer will never notice.” And then everyone excitedly nodded assent and exclaimed, “Yeah, that’s right” and they all trotted off happy as clams.” In my first Out of the Blue column, I would like to present a down-to-earth contrast between compliance excellence and contextual excellence and offer readers insights on the significance of this distinction. In simple terms, compliance excellence is revealed by posing questions about the completion of tasks. For example, were the trash cans placed at the curb last night? Did you clean your room? Did you complete your homework? In each case, the inquiry about completion of a given task has only two answers, yes or no. The task is either complete or incomplete, pass or fail. A part or component receives the quality stamp of “good” or “bad.” There are no shades of gray when it comes to compliance excellence. Compliance excellence is also revealed through questions involving counting. By way of illustration, one might be asked about the distance to the nearest beach, airport, church, or DIY. Whatever the answer, 10, 30, or 50, measured in units of time, as is often the case in Los Angeles, or in units of length, such as kilometres, Compliance excellence infers each unit of measure is identical to the other units; all miles are the same, all seconds are identical and, therefore, absolutely interchangeable. Compliance excellence discloses detached answers; yes or no; as well as

discrete answers, 12, not 13. No matter the answer, differences (variation) in elevation along the route, kilometre to kilometre, are ignored, as readily as the differences between Valencia oranges while counting them to fill an order for a dozen. Contextual excellence provides awareness of the variation in how a task is completed, as well as awareness of the differences between items being counted. Contextual excellence reveals the infinite number of ways a task can be completed or the infinite number of ways a requirement can be met. In doing so, contextual excellence divulges shades of grey. Upon integration, these carefully accumulated differences appear in use, revealed by components that perform better, as I experienced with my Toyota pick-up truck. Another simple illustration of the difference between these modes is revealed by replies to the statement, “List five things needed to wash a table.” The most frequent answers include water, cleaning solution, bucket, sponge, a person, and, perhaps, someone to clean the table. More often than not, the replies do not include needing to know how the table will be used, once cleaned. Guided by such awareness, contextual excellence is about aligning the varying degree of cleanliness of the table with its intended use, shifting from the table is clean to how clean it should be. In reviewing the articles in this edition, I encourage readers to be ever mindful of the contrast between compliance excellence and contextual excellence. While compliance excellence offers advantages when the independence of counting is essential, contextual excellence provides utility in the ultimate use of interdependent parts, components, and tasks. From building rocket engines to operating a city government, what opportunities for snap fit integration could be revealed by shifting one’s excellence focus from compliance excellence to contextual excellence? Love Bill’s columns? Hear him speak at the LMJAC in Amsterdam, July 8-9. Go to lmjannualconference. com for more details.

www.leanmj.com | June 2015

LEAN ONLINE MARCH 2015

ROUNDING UP THE MONTH’S DIGITAL COMMUNICATIONS ON LEAN The LMJ LinkedIn page is veritable hotbed of discussions about lean, CI and other exciting posts from our members. Get involved and join the discussion. Here we bring you some of the best discussions over the past month.

Follow @LeanMJournal and LMJ editor @AndrewPutwain for news, views, and all things lean and CI on twitter as well.

be engaged and educated in lean thinking in order to prepare them for the vastly different role (of “enabler”) they will be required to perform in a new lean cultured organisation.

Gurinder Singh, continuous improvement manager at the Department of Work and Pensions posted this message on the necessity of focusing on each step in a lean transformation with equal care. Y O U W A N T T O S U C C E S S F U L LY IMPLEMENT LEAN? FORGET ABOUT THE MIDDLE AT YOUR PERIL. Much is written about the essential components to ensure a successful lean transformation. The buy-in required from senior leaders as well as the enthusiasm and culture change required from the workers on the frontline, and rightly so as both are essential in my opinion.  What you overlook at your peril though, is the importance of engaging, training, coaching and thereby preparing the middle of the organisation. These middle managers/leaders will be crucial to success. They must

The enthusiasm and goodwill of frontline staff is often palpable after receiving their initial lean awareness sessions. They are promised respect for their views and recognition that they are the experts as they are the ones that are doing the work. But too often this can quickly evaporate if nothing has changed with their immediate management chain. If they are not receiving adequate support or opportunity to investigate, experiment or resolve problems and their suggestions/ concerns/ideas are falling on deaf ears and Taylorism still reigns supreme in their section of the workplace, it won’t matter how many times the CEO mentions the importance of lean in the monthly newsletter. Their buy will be quickly lost and replaced with cynicism. Once this occurs it can be extremely difficult to come back from. It is often no fault of the middle managers; they were simply not prepared for the change in their job role. It is essential to never forget about the middle as this group is, as much, if not more important to the cultural change that is required for a organisation to transform into a lean thinking and cultured success of the future! PDCA mixed with a pinch of five why’s have been the ingredients to this post.

The enthusiasm and goodwill of frontline staff is often palpable after receiving their initial lean awareness sessions

In association with:

OPEN FOR ENTRIES ENTER ONLINE:

WWW.THEMANUFACTURER.COM/AWARDS Customer Focus

World Class Manufacturing

People & Skills

Innovation & Design

Apprentice of the Year

Sustainable Manufacturing

Through-life Engineering Services

Exporter of the Year

Young Manufacturer of the Year

Supply Chain Excellence

Manufacturing Services

Partnership with Education

Leadership & Strategy

ENTRY DEADLINE: 30 JUNE 2015 Showcase your achievements and gain valuable business improvement advice and industry-wide recognition for you, your employees and your business. Headline sponsor:

Judging day sponsor:

Coâ&#x20AC;&#x201C;sponsor:

Category sponsors:

I n d u s t r y F o r u m

Contact: Phone: +44 (0) 1603 327006 | Email: awards@hennikgroup.com | @TMMXAwards #TMMXAwards

E V E N T S There is currently an expanding pool of events available for the development of the lean community. They offer both general and sector specific opportunities to renew your enthusiasm and gain new perspectives through communicating with lean contemporaries.

UPCOMING LEAN EVENTS INCLUDE:

2015 LEAN COACHING SUMMIT July 23, 2015, Seattle, Washington, USA

EUROPEAN LEAN EDUCATOR CONFERENCE 2015 September 16-18, 2015, Stockholm, Sweden

The Lean Enterprise Institute and Lean Frontiers invite the lean community to the annual Lean Coaching Summit, now entering its third year. The summit will lay the groundwork for coaching in the lean enterprise through a collaborative and handson learning environment. The summit’s mission is to move the lean enterprise from a vision of coaching excellence to reality, resulting in everyone in your organisation being touched by persistent and patient coaching. Topics covered include: Lean as a learning system Patterns of behaviour and thinking that lead to a workforce of problem solvers How to assess your personal effectiveness as coach Questioning as a critical and learnable skill The role of servant leadership in the lean coaching model The optimal situation - coaches developing coaches TWI’s role in developing front-line supervisors Management practices that stifle lean thinking

The European Lean Educator Conference 2015 provides a platform for trainers, coaches, professors and teachers from industry, academia and government organisations to share their knowledge and experiences and learn from one another. The European Lean Educator Conference is dedicated to fostering exchange within academia as well as between education and industry, which we believe is especially important. The audience will be 50% educators and 50% lean teaching and coaching specialists from industry. All participants will take home practical lessons-learned from one another. After many successful conferences in the United States, the European conference is now in its second year and will this time take place in Södertalje, near Stockholm. Keynote speakers, coaches and lean implementers of leading organisations and companies will share their experience and knowledge.

For more information please visit: http://bit.ly/1OeKbkH

Through innovative educational approaches – ranging from simulations, case studies, learning factories and new training methods – participants will receive new ideas for teaching, practicing and coaching continuous improvement. For more information please visit: http://bit.ly/1DAJuqs

5TH EUROPEAN LEAN IT SUMMIT

and innovation. Lean hence becomes an obvious strategic choice for making your digital transformation a real success.

October 7-9, 2015, Paris, France

For more information please visit: www.lean-it-summit.com/

Confirmed Speakers for this year are: Dan Jones, Steve Bell, Mike Orzen and Michael Ballé. This year’s theme is “Lean: an obvious choice for your digital transformation”. The ingredients of a successful digital transformation are: 1) simplified customer experience 2) faster value streams 3) end-to-end collaboration, and 4) innovation through fast experimentation. Lean IT is devoted to improving customer satisfaction, time-to-market of products and services, teamwork Photo courtesy of Sebastiaan ter Burg on flickr

An annual subscription to LMJ, of 10 issues, is £295 for the print edition and only £195 for the digital edition. To subscribe, please complete all the fields below, send us this page (or a photocopy) and we will contact you within five days to process your subscription. Some of the benefits of subscribing to LMJ include: Full access to the website leanmj.com - online back catalogue of articles from January 2012 20% discount to LMJ events throughout the year, including the flagship LMJ Annual European Conference

Forename:

Title:

Surname: Position:

Company:

Email:

Phone number: Address Line 1:

Address Line 2: Town:

Country:

Post Code :

Company main activity:

Healthcare Local government Professional services Government

Retail Military Other _____________

Manufacturing Engineering Finance Construction

Company sector (Please tick ONE box)

1-50 251-500

51-100 501-1000

Employees at Site (Please tick ONE box) 5001+

101-250 1001-5000

5001+

£5m-£9m £500m-£999m

£10m-£49m £1b+

101-250 1001-5000

Employees globally (Please tick ONE box) 1-50 251-500

51-100 501-1000

Turnover (Please tick ONE box) £2m-£4m £100m-£499m

Under £2m £50m-£99m

Among the following topics, which are of most interest to you?

Academic debate Standards Assessments Lean IT

Signature:

Visual management Event reviews Case studies Research

Leadership Tools Coaching Employee engagement

Date:

I would also like to receive the Lean Management Journal’s FREE e-newsletter

FAX THIS FORM TO: +44 (0)844 854 1010 POST TO: Hennik Group Subscriptions, 5th Floor, Elizabeth House, 39 York Road, London, SE1 7NQ, UK SCAN AND EMAIL TO: lmj@hennikgroup.com www.leanmj.com | June 2015

W W W . L E A N M J . C O M