LMJ May 2015

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M a y 2 0 15 w w w . l e a n m j . c o m

LEARNING NEW TRICKS Assessing the role of lean in re-balancing the economy.

Organisations and interviews featured in this edition include: AMRC, EEF, Duggan Associates, Radiant Law, Tier Link Limited, Morrison Bowmore, TM Lean Conference, Evoke People Development.

IN THIS ISSUE: Lean apprenticeships A valuable asset to continuous improvement?

Distilling lean LMJ goes north of the border to explore how Glaswegian Morrison Bowmore Distillery is taking on lean.

Issue 4 Volume 5

Lean and law Exploring the values of contract process mapping as a way to run a more lean business.

editor ’ s letter

Dear reader, You may have noticed some changes occurring in the LMJ over the past couple of months: It’s all in our efforts to continuously improve. We thought the old look was getting a little outdated and distracting from the content. So we’ve lightened, brightened and streamlined things a little.

It’s all in an effort to make LMJ the best it can be. We hope you like the look as it continues to change, and be tweaked a little here and there.

E ditorial

Commissioning editor Andrew Putwain

a.putwain@hennikgroup.com

Managing editor Victoria Fitzgerald

v.fitzgeral@hennikgroup.com

Editorial director Callum Bentley

c.bentley@hennikgroup.com

D esign

Art editor Martin Mitchell

m.mitchell@hennikgroup.com

Designers 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.

In other news the Lean Management Journal Annual Conference is rapidly approaching. This year we’re heading off to Amsterdam to show some love to our lean readers on the European continent. The event will take place over July 8-9 and will showcase a variety of discussions, panel debates, ideas exchange cafes, networking opportunities and special presentations.

And if you read last month’s magazine you’ll see we’re launching our debut Lean Top 25, which will be presented there. We hope you’ll be able to join us for that – and if you have anyone you think has done amazing work in lean, don’t forget that you can nominate them at a.putwain@hennikgroup.com.

Back to the magazine: this month we look at apprentices with a host of interviews with several of those involved in the training of the next generation’s future lean managers and implementers.

Jon Radford, engineering trainer and skills assessor at the Advanced Manufacturing Research Centre talks to us about how much he believes lean teaches the students and how it’ll help them in their future careers. It seems to be the case with the students too, several of them also spoke to us, and give their ideas on the benefits they believe lean will teach them.

We also speak to Ian King, from the EEF’s lean academy, designed to spread the word of lean to companies not normally able to afford in-depth training schemes or consultants. The academy goes on the road to teach great ideas, but its base in Birmingham is also the home to many apprentices who are taught there.

Andrew Hemmings, of Tier Link Limited, presents his views on how to achieve lean in your supply chain. What’s necessary and what’s not - and how to get the results quickly.

Radiant Law’s head of managed services Jason McQuillen returns to LMJ to teach us about effective ways to bringing process mapping to the world of high volume commercial contracts.

This month’s case study sees LMJ go north of the border to Glasgow and visit whisky distillers Morrison Bowmore and see how this firm is taking lean to its heart.

And Bill Bellows joins us with the third and final part of his encyclopaedic take on the brief history of quality in his latest Lessons from Deming.

Aside from this we have our usual social media and events page to get you further involved with your lean cohorts. We hope you enjoy it and happy reading.

Andrew Putwain, Commissioning Editor.

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contents M A Y 2015

contents

04 Introducing the editors 06 Lean News 08 LMJ top 25

Read all about LMJAC and the Lean Top 25.

09 Introduction

Brenton Harder leads us in with this month’s introduction on apprentices.

P rinciples & purpose 10 Optimising engineering changes

Tim Healey from Duggan Associates, presents how to implement a lean value stream in the office, focusing on engineering change notifications (ECNs).

14 Lean and law

Radiant Law’s Jason McQuillen returns to LMJ with an article expounding the virtues and values of contract process mapping as a way to run a more lean business.

18 Partnership development: the route to lean supply chains, part one

Andrew Hemmings, managing director of Tier Link Limited, presents the first of a two-parter on the path to the leanest supply chain out there.

22 Apprenticeships: beyond the technical

Director of training provider Evoke People Development Joe Bell makes the case for immediate investment in apprentices, above and beyond the departmental rotation and technical upskilling usually offered.

2 5 S ector F ocus Lean apprenticeships: A valuable asset to continuous improvement?

LMJ interviews Jon Radford from the Advanced Manufacturing Research Centre and Ian King from the EEF Lean Academy on the benefits of lean being taught to apprenticeships and their views on encouraging young people to learn about continuous improvement.

3 2 L ean online

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

C ase S tudy 3 4 Morrison Bowmore: Distilling lean

LMJ goes north of the border to explore how Glaswegian Morrison Bowmore Distillery, learnt how to make whisky with lean ideals.

3 7 S pecial F eature Lean Manufacturing Conference review Reviewing the lean manufacturing conference that provided plenty of food for thought on lean and how to keep staff engagement levels up.

4 0 L essons from D eming A brief history of quality, part three

Bill Bellows shares part three of Deming’s ideas on quality in his latest column.

4 2 E vents

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

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 © Hennik Group 2015.

www.leanmj.com | May 2015

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I ntroducing

your

editors

4

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

René Aagaard Telenor, 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 GKN, 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

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$65 – £45 – €50

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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.

Register your interest now: Exploring a scientific approach to lean management

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.

Follow us at @LeanMJournal #LMJAC For all the latest news and to subscribe visit L e a n m j . c o m

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 The training course shows productivity can be improved. “We attach high importance to practical examples at our model warehouse,” Christoph Kunert, a trainer, reports. “About 180 products are stored at the model warehouse and are to be taken from the shelves and compiled in client packages by the participants using packing lists. After every training round, the proceeding and success are analysed and the processes are evaluated. Every workings step is checked for its function in creating values added and adapted accordingly,” Kunert explains.

Transports, stocks, waiting times, and handling times are reduced to optimum values.

Germany: lean warehouse training course opens A training course at Karlsruhe Institute of Technology (KIT), in conjunction with McKinsey consulting company, teaches analysis and lean improvement processes of warehouses.

“Warehousing often is neglected by the company management,” says Katharina Dörr, trainer at the KIT model warehouse. “While production, marketing or sales are optimised, warehousing is often considered an annoying accessory of the core business, where efficiency cannot be enhanced anyway.”

The theoretical part of the training was developed KIT in cooperation with the McKinsey consulting company and methods of lean management are transferred to warehousing. Knut Alicke, head of the European supply chain management practice of McKinsey says: “Transfer of lean management concepts to warehousing is associated with an average cost reduction potential of 20%. The learning-by-doing approach of the model warehouse supports companies in sustainably developing the capacity to use these potentials.”

The training also addresses leadership issues and personnel management at a lean enterprise.

USA: Food giants go ‘zero-based budgeting’ Brazilian private equity firm 3G, which owns Heinz and Kraft, now merged, plans to introduce a new business management style.

At Kraft, as it has elsewhere, 3G plans to implement zero-based budgeting, an austerity measure requiring managers to justify spending plans from scratch every year. The technique has triggered sweeping cost cuts at 3G-related companies including Heinz; from eliminating hundreds of management jobs, banning corporate jets and requiring employees to get permission to make colour photocopies.

Investors have grown increasingly aggressive about second-guessing management’s operations and use of capital. Several activist investors have praised the firm’s cost-cutting methods.

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Photo courtesy of Erik Söderström via Flickr

Other food and beverage companies are embracing 3G’s financial tool, in fear they, too, could become targets of activist investors or stronger rivals. Big packaged-food companies have been particularly appealing targets for zerobased budgeting.

as a business tool by a former Texas Instruments Inc. manager. The effects of this change are improved shareholder returns and dividends. But on the flip side, it has made the work for employees more rigorous and, some would argue, more ruthless.

“Every board needs to be on notice that they have to take very similar lessons, from 3G’s cost-cutting or risk being outmanoeuvred by leaner rivals”, said Bruce Cohen, analyst with consulting firm Kurt Salmon.

At Heinz, 3G made rapid changes: Redundancies at its Pittsburgh headquarters, slashing Heinz’s overall head count by about 1,480, or 4% of the world-wide workforce and shutting several factories.

Zero-based budgeting requires managers to plan each year’s budget as if no money existed the previous year, rather than using the typical method of adjusting prior-year spending. Forcing them to justify the costs and benefits every 12 months. The system was pioneered

Zero-based budgeting can go deeper than lean but shares many similarities.

Long term success of 3G’s tactics has yet to be proven. The approach risks souring morale and some companies have tweaked the terminology because of negative perceptions.

Canada: lean taught to public sector

India: Europe experts teach lean to SMEs

Alpen Path Solutions Inc. has developed a series of lean for government training workshops specifically tailored to help public sector employees continuously improve the delivery of services faster, better and cheaper.

Experts from Europe are on a mission to introduce green and lean initiatives in Indian SMEs. As part of a project funded by Kolkata’s Jadavpur University and the UK’s Aston University, experts are sharing best practices in the supply and value chain.

Governments around the world have been struggling to find ways of delivering quality services to citizens in spite of budget restrictions. Many governments have turned to lean management as a proven approach to continuously improve services by focusing on what has value for citizens while reducing cost and bureaucracy. In support of government organisations engaged on their lean journey, Alpen Path Solutions Inc. has launched a training series designed for public sector employees: Lean for Government Training Workshops.

The training workshops will be held in Ottawa from April to August 2015. Workshops build on some 60 years of lean management transformations worldwide (starting with Toyota) and on extensive academic research, especially by UK-based researchers. The lean training is delivered by a facilitator with experience implementing lean in the Canadian federal government.

“The idea is to improve SMEs performance by implementing a green supply chain management model which is based on sustainability. This will reduce wastes and costs, improve performance with minimal or no damage to the environment.

“We are not imparting some ground-breaking technology but just sharing ideas on how to do it,” Professor Prasanta K Dey of Aston Business School in Birmingham told PTI there.

He said their efforts are aimed at elimination of wastes, reducing cycle time, re-engineering the manufacturing process, improving supply chains, enhancing competence of process and manpower by training, energy saving, incorporating reverse logistics systems, reducing consumption and green productivity.

UK: Daniel Jones awarded honorary title Daniel T Jones was made an honorary graduate by the University of Buckingham at a ceremony on Thursday 19th March.

It is the first time a senior lean figure has received such academic recognition from a university. He was one of seven honorary graduates which included Sir Roger Bannister, Sir Magdi Yacoub, Sir Graeme Catto, Sir Oliver Popplewell, Professor Barbara Cannon and Bernie Marsden.

University orator John Clarke said: “Buckingham recently launched an MSc in Lean Enterprise; indeed, the first cohort of students is graduating today. The programme owes much to Daniel Jones,

who set up the first such programme in the world at the Cardiff Business School in 1999.

“Our honorand is also the founder and chairman of the Lean Enterprise Academy in the UK, a senior advisor to the Lean Enterprise Institute and mentor on applying lean process thinking to every type of business. Together with James Womack, he is the author of influential books that describe the principles and practice of lean thinking. Professor Daniel T Jones said: “This is the first time that lean has been recognised in this way with the awarding of an honorary doctorate by a university. Buckingham is developing its lean capabilities and this is very welcome.”

Professor Daniel T Jones carried out pioneering research which uncovered Toyota’s lean management system. His

academic research at the National Institute for Economics and Social Research and the University of Sussex led to the founding of the Lean Enterprise Research Centre at Cardiff Business School. He went on to establish the non-profit Lean Enterprise Academy in the UK.

If you have any news that you think would interest and benefit the lean community please let us know. Send submissions to the commissioning editor Andrew Putwain: a.putwain@hennikgroup.com

www.leanmj.com | May 2015

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T he L ean T op 2 5

The Lean Top 25 The LMJ presents the Lean Top 25. The inaugural celebration of the lean and continuous improvement community.

T

he Lean Top 25 aims to promote and encourage those involved in lean in all industries and sectors.

As lean advances, we aim to encourage those who have shown diligence, passion and professionalism to reducing waste, engaging their staff and colleagues and encouraging a better and more productive workplace.

With thousands around Europe engaged in lean at all levels there are multiple people who are doing their best every day, but we want to highlight those shining stars who are taking it to the next level.

The nominations are open to anyone involved in lean as a practioner in Europe-no consultants or academics –

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primarily those involved with any of the following three criteria:

to get involved and nominate who they think has done outstanding work.

Involvement and waste reduction: someone who is passionate about lean and has created or managed a lean implementation or continuous improvement change that has seen a significant rise in profit margins or increase in production.

We’ve already had a great list of nominations and are still looking for more. Those who are selected to be part of the top 25, are invited to attend the networking dinner at the Lean Management Journal Annual Conference in Amsterdam, July 8-9, where the list will be revealed, with interviews and biographies in the next edition of the LMJ.

Championing: a person publicising lean and helping its reach grow.

Someone who is driving more knowledge of lean and creating awareness of continuous improvement.

Innovation: a lean practioner whose ideas and enthusiasm have led them on a new path of lean, whether it be a minor tweak to the existing way of implementation or a revolutionary idea that has been a game changer.

LMJ has contacted over two dozen industry experts including academics, senior managers, consultants, business insiders, teachers and educators, and those with a genuine passion for lean

The LMJAC will be a fantastic event for networking and learning best practice with fellow lean practioners.

Some of the speakers lined up to deliver fascinating presentations are: Bill Ulyett, lean global director, Astrazeneca Howard Bettany, divisional lean manager, Parker Hannifin Bernard Auton, director of European operations, National Instruments Tom Slate, continuous improvement director, Clifford Chance.

We hope to see you there.

INTRODUCTION WRITTEN

BY

B renton

H arder

Learning lean H

aving spent nearly 30 years implementing lean programmes across a variety of companies and industries – from large organisations such as the US Marine Corps, General Electric and HSBC to small start-up companies – I’ve found sustained success comes from a deliberate balance between generating new capacity and developing internal capability.

Failure usually follows training too many people without tangible results, or simply driving cost efficiencies with little regard to developing the skills and mindset for sustained improvement. True and lasting cultural change comes back to the old adage of teaching versus fishing: first show the business what good looks like, then teach the business how to deliver before getting out of the way to let them go fishing.

successful apprenticeship programmes essentially link leadership with continuous improvement – the two things that seem to be fundamentally missing from most training programmes

At the Commonwealth Bank of Australia (CBA), it’s time for our central productivity team to get out of the way. We’ve spent the last three years diligently applying and instilling four simple habits that have literally become part of the way we work across 50,000 employees. It’s now impossible to take a morning stroll through any CBA building or branch without bumping into a team huddling in front of their visual management board discussing how to continually improve their customer service or lock in behaviours through their SOPs - four simple habits that have led to new ways of thinking and a sustained lean culture.

It’s time for us to get out of the way and let the business go fishing for itself. For the past three years, the CBA has carefully managed a programme of productivity

practitioners – apprentices – designed to eventually take the lead from their teachers to sustain our new mindset of continuous improvement. Similar to the early GE model, our practitioners are a mix of promising young talent and a few very senior managers nominated by the business to take two years away from their career track to learn and apply lean six sigma tools and techniques. We’ve applied a 1:3:9 model to our apprenticeship programme that has one certified professional coaching and training three apprentices, followed by each of them coaching and training three more apprentices. Going into our fourth year, we have patiently arrived at a tipping point of internally available talent ready to embed and empower.

As highlighted in the interviews with Ian King and Jon Radford in this month’s edition, successful apprenticeship programmes essentially link leadership with continuous improvement – the two things that seem to be fundamentally missing from most training programmes.

Exposing our young talent to leadership in the early days of their professional development gives them the confidence they need to be innovative and dynamic managers in the future, by giving them the skills and techniques to challenge the status quo and continually seek a better way.

In the end, sustained lean success can only come from within an organisation where programme authorship equals ownership.

What better way to ensure the ongoing growth of our organisations than through the ongoing growth and development of our people?

www.leanmj.com | May 2015

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Optimising engineering changes with value stream flow Tim Healey from Duggan Associates shows the benefits of bringing change in an organisation with value stream flow and a how to guide on implementing these valuable steps.

READ ABOUT: Engineering the perfect lean office Takt capability modes and process families The process of Engineering Change Notifications

V

ariation is inherent in engineering. Each job has different requirements, demands different skill sets, and requires different approaches. Traditional lean techniques aim to create stability by removing the variation, creating one-piece flow, and using kanban to pull.

However, that approach won’t work in engineering since removing the variation will probably exclude the customer as well. Moreover, traditional flow and pull in the office is hard to do when each job is unique and each engineer is a shared resource. So how can engineering offices manage such high variation and complexity?

The answer is not removing the variation, but accepting it and designing

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value streams in the office that are capable of responding it.

T he challenges of change

The process of engineering change notifications (ECNs), common in most engineering departments, is a good example for illustrating how to design value stream flow in engineering that can adapt to high variation.

ECNs are requests for a change to a product design or manufacturing process. They can be minor (a label change on package) or major (redesign with performance analysis). And they can come from within the organisation or from the customer. Changes from the customer often involve a customer-facing employee such as a programme manager, who receives or interprets the request for a change then passes it through engineering for the necessary design input, purchasing, finance to cost and price the changes, and then management for sign-off.

T he T ransformation P rocess

To redesign a complex office value stream such as ECNs within a large business, there is a five-step process:

1

Model sites. Identify a small number (one to three) of model sites where model ECN value streams will be designed and rapidly implemented. The key to selecting these locations is the energy of the local team, its willingness to learn and adapt to new ideas and processes, and the commitment to making real change to the existing value stream by participating in educational sessions and experimenting

Like so many challenges in engineering offices, accounting for variability in mix and volume are keys to success

principles & purpose

with and supporting new tools that will be deployed. Once the implementation is complete within the model sites, the methodology can be rolled out to other sites around the company.

2

Process families. A common source of frustration among ECN stakeholders globally is the volume, mix, and unpredictability of work coming in via ECNs. Since teams never know how many they are likely to get from one week to the next and can never be sure what they will contain, this high variability makes it difficult to plan resource availability, often leads to long lead times, and typically contributes to long work hours for employees.

The key to dealing with these issues is designing a future state ECN flow that accounts for and accommodates both the volume and the mix. The first step in this design is to create a detailed service family matrix. Using Microsoft Excel, project teams enter a meaningful sample of recent ECNs (at least 100) into a spreadsheet to analyse both process steps and process times and determine which path different ECNs take through the business and the total work content of each ECN. With this data, organisations can then group ECNs into families based on path and total work content, which will identify similar jobs that could effectively flow through the same value stream. It is important to note each family must be treated as a separate value stream.

A common source of frustration among ECN stakeholders globally is the volume, mix, and unpredictability of work coming in via ECNs

Another benefit to clearly identifying service families is it enables a team to understand its capability and when it has been exceeded. A high volume of ECNs may not be an issue if they are all simple, but how many complex ECNs will it take to exceed the capability of the value stream? By funnelling ECNs into a family based on some early indicator of complexity (identified by the service family matrix), teams will get an immediate indication as to whether they are within their normal capability (based on both volume and mix), or whether they need to change gears (takt capability modes) to get the work done.

If a company neglects to create these families, it may miss the opportunity to understand when its capability has been exceeded. Careful analysis of service families is a key step which should not be skipped or rushed.

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Value stream mapping. Next, detailed current state maps should be developed for each family, showing accurate process times, wait times, inventory piles, delays with customers and suppliers and, very importantly, rework generated by unclear inputs or bad handoffs.

With detailed current state maps in hand, the team can then apply the nine lean guidelines for business process flow to create end-to-end, self-healing flow throughout the entire value stream. This step-by-step method of transformation

Figure one: Screen shot of detailed service family matrix for design engineering.

Light blue, aqua, and purple shading represent design families to be mapped together.

www.leanmj.com | May 2015

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O ptimising engineering changes T im H ealey

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is key to success since it ensures flow is designed throughout the entire value stream, provides a clear future state design to which implementation results can be compared, and is teachable and repeatable throughout one site or all.

Standard work – Activity-level standard work is the documentation of the best method for performing each task. Flow-level standard work describes how each activity is connected to the next.

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The nine lean guidelines for business process flow are:

1

Takt capability – The designed output of the service family in terms of volume and mix.

2 3

Continuous flow – Completing work in a process one, move one fashion.

FIFO flow – Used when continuous flow is not viable, FIFO (first in, first out) is a form of flow in which work moves forward in sequence without priority changes, re-routes, or management decisions.

4

Workflow cycles – The rate at which work moves or flows within or between different work areas or departments along a fixed pathway.

5

Integration events – A formal handoff of information from one area of the company to another (this is not a meeting).

Figure two: Detailed current state mapping.

Another common issue with ECNs mitigated by the approach outlined here is difficulty in dealing with customers, suppliers, or other external stakeholders

Designated sequencing points – Specific processes or processing cells at which work can be re-sequenced due to external factors.

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Pitch – A preset timeframe that lets everyone who works in the flow know whether it is on time in a visual manner.

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Changes in demand – Establishing multiple takt capabilities and creating the ability to toggle between them in order to respond to increases or decreases in customer demand.

After applying the nine guidelines, the next step is to create the future state showing how each of the guidelines was applied. It is crucial future state value stream maps in the office are designed using these nine guidelines rather than kaizen events and brainstorming With ECNs, it’s best to start with the most complex family since the simpler families may be a less complicated subset of them, which then makes future state mapping of the less complex families more efficient.

Then, work through the guidelines. The maps should only take a few days to create for each model.

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Implementation. Implementation should be short and intensive (aim for completion within two months to maintain momentum).

Each model site should use a detailed implementation plan showing each task required to make the future state a reality, task owners, and due dates.

As a general rule, wherever there is a difference between a current state value stream map and a future state map, there must be at least one action item on the implementation plan to make the full future state flow a reality.

A good approach is to work by implementation loop by breaking the implementation plan into logical groups

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principles & purpose

of activities and then moving through them one by one.

Each map should have approximately two to four loops.

The order of loop implementation should factor in metric impact, effects on downstream or upstream processes (the wrong order could flood or starve processes in the value stream), team capabilities, and the need for outside support such as IT or customer engagement.

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Global deployment. Most large companies need to have several different value streams for processing ECNs at various sites based on differences in customer needs, issues specific to local operations, supplier availability, or differing product types. For example, there may be more service families at certain sites due to a larger range of work content. While the approach outlined here allows for customisation by site, it will also reduce the variability by region/division by demanding enough homogeneity to maintain common value streams around the world.

Moreover, while there may be differences in some process steps, teams should work to develop and implement global standards for visual management, lead times, and quality so any employee or manager can move from site to site and easily understand the status of ECN flow simply by looking at the common visual tools in place.

W hat to e x pect from the process

One of the underlying benefits of this five-step process for designing an ECN value stream is reduced rework.

Rework can mean redoing tasks multiple times on one ECN. But it also encompasses any time a clarification is needed via phone, email or text in order to complete or move work along to the next activity in the flow.

Rework is a common theme with most office projects, regardless of department. And if rework occurs at a majority of steps in the value stream, it will be a drag on productivity, drive up costs, and increase the lead time of the value stream.

Often, rework results from unclear or unclean inputs from the customer or other requester. Since lead times are usually already too long, companies try to move the ECN forward as quickly as possible to give themselves the best chance of meeting a deadline. That means a customer may often send in a change after the ECN has already progressed, requiring even more rework to be undertaken. Reducing lead times can help significantly reduce rework. For example, shortening an ECN’s lead time from three months to six weeks would give the customer more time up front to clarify its specific needs.

As a result, the team would not have to start ECNs that are not well-defined.

Another driver of rework are unclean handoffs between the customer and supplier, or between internal people and departments, which is common in many office value

streams. Creating standard work for handoffs, meaning work should not move forward in the value stream if it doesn’t meet all the standard requirements of the next process, will result in cleaner handoffs. Less lead time pressure combined with regular intervals for flow will offer employees more time to get the work complete and accurate before moving it on.

Another common issue with ECNs mitigated by the approach outlined here is difficulty in dealing with customers, suppliers, or other external stakeholders.

Whether customers take a long time to review and comment on changes or change specifications, or quote times from suppliers are too long or their response times are unpredictable, every time outside input is needed, lead times are impacted. However, it’s possible to influence customer and supplier lead times both directly and indirectly.

Directly influencing stakeholders can be done through extended value stream mapping and design activities in which companies work together with the customer or supplier to develop a future state flow that meets both organisations’ needs. Using the nine lean guidelines for office flow is a helpful tool by providing a teachable method for transformation and flow design and a common language to describe changes.

It’s also possible to indirectly influence the behaviour of customers and suppliers by communicating with them on a regular and predictable cadence using the fourth lean guideline, workflow cycles. For example, if a customer always receives information on Tuesday and Thursday mornings at 10 a.m., it will learn it needs to do that work on those days and will adjust to that cadence.

If rework occurs at a majority of steps in the value stream, it will be a drag on productivity, drive up costs, and increase the lead time of the value stream

S ummary

Like so many challenges in engineering offices, accounting for variability in mix and volume are keys to success. By following the approach of developing process families, preparing current state value stream maps, applying the nine lean guidelines for office flow, future state mapping, then implementation planning, organisations can successfully create flow through complex office value streams.

www.leanmj.com | May 2015

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Lean and law: a map for process and progress READ ABOUT: The mapping of process flows The world of law and lean

Jason McQuillen is head of managed legal services at Radiant Law, and a commercial law specialist. Here, with Martin Brenig-Jones, of Catalyst Consulting, he presents this article on how to manage contracts. An essential business transaction, all too often a time-consuming and protracted process that could easily be leaned.

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ot many lawyers would consider themselves masters of process. When lawyers talk about their work, they typically focus on high-value activities such as advocacy and counselling. But the truth is process is a significant part of what lawyers actually do on a day-to-day basis.

Process in the practice of law, stated simply, comprises collating information, packaging it (applying judgement) and delivering it to the client as a legal product. It seems

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principles & purpose

Historically, lawyers have been known as resistant to change and being slow to adopt initiatives and ideas from outside the profession

obvious that good process is critical to the effective practice of law – it’s just that lawyers don’t think about it so much.

objectives), a middle (exchange of contract drafts) and an end (finalisation and sign-off).

Historically, lawyers have been known as resistant to change and being slow to adopt initiatives and ideas from outside the profession. Efficiency and standardisation is looked upon with suspicion, many holding a perception that there is some kind of trade-off between efficiency and quality, and that the law is somehow too complicated to be standardised. Hardly fertile ground for introducing LSS one might think.

B enefits of process mapping

However, a deeper consideration of the principles and motivations behind LSS demonstrates that it has a natural synergy with law and, applied with thought, can deliver significant benefits to clients. In this article we consider the application of one particular technique, process mapping, in the context of the production and review of commercial contracts.

T he relevance of L S S and process mapping

LSS is the coming together of two methodologies with a combined focus on: Understanding the customer’s perception of value; Improving process flow to reduce defects and waste; Using data to fuel continuous improvement in a systematic way.

It can be said lean is about identifying and removing unnecessary process steps and reducing delays and six sigma is about consistently getting products and services right for the customer.

It provides a toolkit for analysing and improving any process, whether that be production of automobiles, financial transactions, customer service centres, sales and marketing campaigns, HR processes such as recruitment – or production and review of a contract.

Process mapping is one tool for understanding how work actually gets done. It provides a visual representation of every step, task, input and resource used to complete a business process.

Production and review of a contract is just a process with a beginning (taking instructions and understanding

One of the key benefits of process mapping is better resource management through: Identifying duplication and wasted effort; Providing opportunities for disaggregation of tasks to ensure the right level of legal resource is used at each stage; Better understanding of business relationships and the handoffs and dependencies.

Lawyers are commonly criticised for over-resourcing matters, usually leading to higher fees. Clients can be left wondering whether it was really necessary for the highly paid (and expensive) partner to complete a given task, or whether a more junior lawyer could have achieved the same result. Pursuing that line of argument further, a client may well question whether a lawyer was actually needed at all? Or whether the task even needed to be done?

The opportunities for legal departments and law firms to gain efficiencies through a more transparent process are clear.

The elephant in the room, however, is that in the case of law firms, they are often incentivised to duplicate effort (eg. have multiple lawyers attend a meeting) or aggregate tasks (have the lawyers proof-read) as they charge their clients by the hour.

Process improvements in contracting also leads to more consistent outputs by taking the art out of contract reviews. This in turn reduces risks as process becomes standardised with clarity of steps.

William Edwards Deming, the father of quality evolution, placed enormous emphasis on the importance of process to minimise defects. He said: “Eightyfive percent of the reasons for failure to meet customer expectations are related to deficiencies in the systems and process… rather than the employee.

The role of management is to change the process rather than badgering individuals to do better.”

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L ean and L aw J ason M c Q uillen A N D M artin B renig - J ones

Finally, mapping assists in identifying where the value lies in a given process.

Typically only 10-15% of the steps in a process add value, and usually these steps represent as little as 1% of the total process time (taking into account delays and the time where the product or service is static).

by mapping the current contract process, warts and all. As tempting as it is to sketch out the ideal state, it is vital to understand the current state and set the baseline to get the most out of the exercise.

LSS provides the following definition of a value-added step: The customer would be interested and care about the step; The step must change the product or service in some way, or be an essential pre-requisite (more generously, does it move the matter forward?); The step must be actioned right first time and is not being carried out as a result of an earlier failure.

One popular method used by LSS practitioners to get off a blank page and start to understand the current state is called process stapling. To do this, simply imagine yourself being stapled to the thing that goes through the process and follow it each step all the way through to the end.

W hen to process map

It is not the case that every step in a process that does not add value should be automatically deemed to be waste and discarded

Process mapping will challenge the status quo, and the way we’ve always done it. When done well, it will illustrate new and innovative ways of working.

It is ideal for long-term relationships, both with legal departments and external lawyers.

According to Deming: “The result of long-term relationships is better and better quality, and lower and lower costs.� If you add faster turnaround to that, you get closer to the holy trinity of products and services delivered at the right quality, time and price. For legal departments, mapping facilitates onboarding of new staff more quickly as they can see and understand how work gets done. For law firms, it also assist in pricing matters more accurately due to the certainty it provides.

H ow to process map Process maps can take a number of different forms and, depending on complexity, involve numerous subprocesses. Commonly used forms include swimlane diagrams, value stream maps, organisational process structures and the more comprehensive SIPOC models (which details the interplay between suppliers, inputs, process steps, outputs and customers).

Regardless of the type of map deployed (and it is usually beneficial to deploy more than one), it is important to start

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G etting off a blank page

In the context of producing and reviewing commercial contracts, the first major step in the process is likely to be intake; how, and by whom, is the legal team instructed? For many legal departments, the form of instructions varies wildly depending on who is leading the deal for the company, which may be a contract from the sales, procurement or other business team.

Does the legal team receive all of the instructions it needs to begin the process in one fell swoop, or are the background and business requirements relayed over a series of disjointed calls and emails attaching out-dated or incomplete documentation? After the matter has landed in the legal department, how is the work triaged so it is undertaken by the right level of resource?

Next, examine how the work gets done.

Likely sub-processes include: selecting the correct contract template / playbook and completing the first draft; marking-up and negotiating the terms (multiple drafts); capturing and escalating outstanding issues; proofing the final wording and tidying the contract.

When the content and wording or the contract are settled, there will likely by further sub-processes including: internal approvals, signature and exchange of executed versions; extraction of contract data for management reporting; uploading the contract to contract management system and related

principles & purpose

Will the customer care (or even notice) if a step is undertaken by a different resource, is automated, or is removed altogether?

administrative efforts (such as filing related emails).

Each of these steps must be documented.

G etting the most from your map

F ocusing on value

Once you have mapped out the steps in your current process, turn your focus to the qualitative aspects of those steps.

Which actually add value? As stated earlier, this is typically only 10-15% of steps, and these may represent as little as 1% of the total process time (taking into account delays and the time where the product or service is static).

LSS practitioners use various acronyms to remember the categories of waste in a process, such as TIM WOODS or DOWNTIME. In the context of production and review of contracts, waste may commonly include: Transport: movement of contract parts between stakeholders (eg for input or approval); Inventory: WIP and completing contract parts ahead of time; Motion: looking for information (eg due to a poor contract management system or contract template library); Waiting: waiting for stakeholder inputs and approvals; Over-production: too much volume and detail beyond that required; Over-processing: too many turns of the contract and double checking; Defects: use of inappropriate contract template, unclear drafting or invalid sign-off; Skills: using senior lawyers when talented juniors (or non-lawyers) could deliver to requirements.

It is not the case that every step in a process that does not add value should be automatically deemed to be waste and discarded. There will be some steps which, although not value add according to the strict LSS definition, are nevertheless essential. This may be for regulatory, policy, health and safety, or similar reasons. For these steps, consider if they can be moved to a separate process, or at least how to complete them in the most efficient way.

Remember that it is the customer’s perception of value that is important.

Process mapping will often draw out areas of ambiguity and misunderstandings around handoffs and dependencies between various business functions and stakeholders.

For example: When is the legal team involved in drafting the services description and service levels?

Is it the responsibility of the legal team or the business team to obtain necessary approvals from the IT security team?

Who is accountable for getting the contract signed?

Process mapping will often draw out areas of ambiguity and misunderstandings around handoffs and dependencies between various business functions and stakeholders

Use your better understanding of the process to not only remove waste, but also to build more transparent and sustainable working relationships. It may be useful to develop a RACI chart to sit alongside the new process.

The process map can also serve as a data point for making investment decisions aimed at minimising defects and improving overall quality. For example, should the legal department be spending more on its contract template library, both in terms of content and accessibility?

F inal word

Process mapping is one tool in the LSS toolkit for process improvement. Its power lies in the benefit for the user in having a visual depiction of a process, end to end. Whilst individual steps may seem sensible on their own, this holistic view quickly demonstrates how waste, rework and unnecessary movement can so easily creep into any process over time, resulting in inefficiency and unnecessary cost as well as increasing the likelihood of defects.

In the production and review of commercial contracts, a process in which quality of output and quick turnaround are at the heart of client needs, it seems only too right LSS methodologies and process mapping is now on the map.

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READ ABOUT: How to implement a lean supply chain Warehousing, stocktaking, classifications: the best way to do it

Partnership development: the route to lean supply chains, part one.

Andrew Hemmings, managing director of Tier Link Limited, a supply chain management company primarily operating in the automotive and aerospace sectors, teaches us supply chains and the best to drive efficiency.

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he current economic climate, with tighter controls on cash flow and credit limits, puts even greater emphasis on supply chains to reduce costs, inventory and throughput times. Whilst many companies have applied lean principles to great effect to address these challenges within their own facilities, their application across the supply chain boundaries is far less established Supply chain cost reduction strategies typically focus on high value inventory identified using ABC classification.

Increasing delivery frequency, kanban or sequencing usually, requires some level of investment in process flexibility so the levelled mix of product can be produced within the required takt time.

Consignment stocking simply passes the stock holding costs on to the supplier, who will invariably recover them through some other means.

Transferring production overseas to low cost manufacturing bases can generate significant cost benefits. However maintaining price competitiveness requires cheap transport, usually in the form of container ships, which is off-set by longer lead times. Invariably overseas orders are based on forecast requirements, which will increase exposure to product mix changes.

principles & purpose

Figure 1: Supply chain concept

The common but somewhat oversimplified concept of supply chains is of a structured pyramid

Clearly, the longer the lead time, the greater the exposure, unless there are local stock consolidation arrangements, from which product can be pulled.

Procuring materials from approved sources adds further complication and potential lead time implications as does managing returns in the event of rejects, particularly if there is any dispute over standards or liability. The approach is generally best suited to stable products having a predictable demand with ready access to raw materials and manufactured through processes having high process capability.

Purchasing agreements that incorporate year on year cost down targets leave achievement in the hands of the suppliers, who can find themselves financially squeezed between agreed customer targets and raw material price increases imposed by large conglomerates, over which they have little influence.

The effectiveness of these common strategies is often limited by each supply chain member acting as a separate entity. Furthermore, whilst cost minimisation is always high on the agenda of any supply chain manager, the priority is always protecting the customer, closely followed by protecting internal manufacturing processes. This invariably takes the form of inventory, either as raw material to safeguard against supplier delivery or finished

stock as protection against processing failures and demand changes that fall inside manufacturing lead times.

The reality for many companies is cost reduction of inbound materials (including transportation) is driven by purchasing functions measured by cost saving KPIs, whilst management over inbound materials delivery is driven by a material planning and logistics function, measured primarily by outbound delivery KPIs followed by stock holding KPIs. For many, whilst there is a functional link between purchasing and MP&L, purchasing is a centralised function, whilst MP&L is site based and often reporting into operations.

The focus on driving inefficiency and waste from the combination of processes that manage the supply pipeline, particularly across company transaction boundaries, is greatly overlooked, yet it presents what is probably the most significant opportunity for improvement and cost saving. However, it will require the supply chain functions to re-think the way in which they interact, which is often the result of the complex interdependent supplier network in which they operate.

S upply chain architecture

The common but somewhat oversimplified concept of supply chains

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P artnership development A ndrew H emmings

Figure 2: Supply chain reality

Diagnostics built on APICS supply chain best practice assess supply chain management performance against five key attributes:

1 . L ean implementation

Effective implementation of lean within the four walls of any business requires structured deployment, having future state goals linked to business objectives.

Because the supply chain crosses the company boundaries, it becomes even more critical to develop a documented policy for implementation in order to both support active cooperation as well as drive improvement across boundary transaction points.

End-to-end processes need to be understood by all supply chain partners to enable collaboration in eliminating nonvalue-added activities. The focus should be on waste elimination and not cost reduction as a pre-occupation of reducing costs may lead to oversight of waste activities, as not all have direct financial cost. Cost reduction will be an inevitable consequence of waste elimination.

is of a structured pyramid, having a primary contractor or OEM at the top, linked to an increasing number of smaller suppliers sitting in sub-tiers. Influence can be exerted over the tier beneath because of buying power.

Whilst this may be the case for the OEM and some Tier 1 suppliers, below this the number of suppliers can reduce significantly, along with influence from the level above.

The reality is a pentagon within which there are transactions in multiple directions and across tiers. The complexity of this network means whilst some issues may be exposed, the underlying causes remain hidden.

Furthermore, tackling issues in isolation presents the danger of following a sub-optimisation route such that problems solved in one area will often emerge elsewhere in another form. Effectively improving the situation therefore requires examination of the overall process in sufficient detail, in order to fully understand the implications to the supply pipeline.

L ean supply chain

The concept of lean supply chain aims to address these issues and can be summarised as supply chain optimisation combined with the elimination of waste by the collaborative application of lean principles and supply chain best practice. This is supported by jointly developed standards, measures and disciplines, achieved by viewing the supply chain as a single system or value stream.

Amongst the potential benefits of collaboration between the supply chain functions is end-to-end visibility of the supply pipeline, enabling control over location and size of buffer stocks. Joint analysis and planning has the potential to eliminate demand amplification generated through poor signal control and incompatible MRP lot sizing, as well as improve overall system responsiveness.

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Effective control over the demand signal requires supply chain members to jointly understand demand as well as its impact on the supply pipeline

2 . P artnership and integration

Supply chain partnership is the vehicle by which overall results are achieved.

Without collaboration and thorough understanding of the supply pipeline, partners cannot maximise the added value to the customer. The supply chain therefore needs to have a documented vision supported by common KPIs and objectives, underpinned by a structured improvement strategy, having plans and objectives which are ultimately aligned to the objectives of the customer base.

Improvement becomes crossenterprise and collaborative with activities at site level contributing to the bigger picture. Team members become supply chain focused as opposed to organisation focused.

3 . D emand management

Pull is one of the five principles of lean, and managing system demand so that product replacement is only triggered by point of use consumption downstream is always the objective. Ultimately the

principles & purpose

driver is point of sale demand, which when conveyed electronically upstream in real time to all members of the supply chain, should trigger replenishment without volume change. The reality of transport economics and pallet factorisation may however result in shipping quantities being larger than point of use demand, in which case shipping loads should be levelled.

Figure two: Lean supply chain diagnostic - transition from poor to objective performance

Effective control over the demand signal requires supply chain members to jointly understand demand as well as its impact on the supply pipeline. Operations planning, if also collaborative, can utilise shared plans and sales data to form a coherent strategy that meets the supply pipe line requirements.

Demand amplification is a welldocumented consequence of poor demand management or signal control and is a measurable that impacts on cash flow.

4 . F low

Continuous flow applies equally to data transfer as well as manufacturing operations. Transfer processes should allow the free flow of demand information and avoid large timescale batching. Standard processes for production planning and inventory control should be defined across the supply chain in order that data transfer can be quickly assimilated. Functionally managed structures enclosed within company boundaries need to shift to horizontal thinking, where system efficiency overrides functional performance.

Interruptions to product flow, created by individual supply chain members holding unnecessary safety stocks are eliminated by creating strategic buffer stocks, the size and location of which are set to maximise system efficiency. Toyota uses the term standard inventory to define the minimum required to support customers in a value stream at any given time. With the buffer stock size and location set, processes can be developed for reducing inventory holding costs, lead time. Internally, set-up and change-over time is seen as a key performance driver, with incremental reductions in set-up time generating corresponding reductions in batch size.

5 . S tandardisation

Cost reduction will be an inevitable consequence of waste elimination

Data exchange should use global and/or industry standard formats as conversion interrupts flow, is a cost and can lead to costly errors through misinterpretation.

The relative ease by which large volumes of data can be transferred also presents the danger of information excess, which can both congest systems and potentially cloud decision making. Information should only relate to supporting the defined objectives, and any excess to that needed can be classed as waste.

The incorporation of industry standards into new product design and development processes leads to standardisation and sharing of components, both of which impact on manufacturing costs, inventory holding costs and throughput time. Raw materials can also be classed as components to which standardisation can be applied.

The implications of added complexity and its impact on, stock holding costs, part numbers, set-up costs, transactions and fixturing costs are rarely measured.

www.leanmj.com | May 2015

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READ ABOUT: The renaissance of apprenticeships The benefits getting in touch with emotional intelligence The thoughts of industry leaders in staff development

Apprenticeships: beyond the technical

Director of training provider Evoke People Development Joe Bell, makes the case for immediate investment in apprentices, above and beyond the departmental rotation and technical upskilling usually offered.

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pprenticeships are big news at the moment. Ed Miliband looks to secure votes by guaranteeing apprenticeships (if grades are achieved), whilst the coalition government pledges to fund three million apprenticeships through additional benefit capping.

in my experience I have witnessed many apprentice schemes being one-dimensional and overly-focused on mechanical and electrical up-skilling. I contend that if we are to get the best out of our apprentice workforce a more far-reaching and holistic view is required from day one.

Apprentices can form an essential part of an organisation’s talent pipeline, however

Any organisation that is on its lean journey and looking to plug apprentices

into this needs to therefore take note. An over-riding criticism of lean is that tools and methodologies (5S, shadow-boards, kaizen workshops) take precedence over philosophy and culture. So perhaps the lesson to be taken here is this. A high-performance engine is great, but if the driver behind the wheel is not empowered to change gear as and when they deem it necessary, they might travel everywhere in first gear. This is where behavioural flexibility and emotional selfawareness becomes just as important as technical nous.

Daniel Goleman – crediting in popularising the concept of emotional intelligence – famously contended that any professional (such as an engineer) required an IQ of 115 to be able to function successfully within their role. Studies and research back this up. Goleman went on to conclude that no research exists that indicates having an IQ

principles & purpose

above this level predicts success in life or work. In short, 115 is a necessary level of IQ-however it is not sufficient to guarantee success beyond this. So individuals displaying an IQ of 116 are on par with those at 160.

When we bring to mind the most effective leaders in the organisation it is rarely those with the biggest brains. It is those who can communicate their ideas effectively

EQ-i 2.0 Model

Success beyond the 115 mark, Goleman contends, is then down to an individual’s emotional intelligence. EI becomes the key differentiator.

Once more, research corroborates this. When we bring to mind the most effective leaders in the organisation it is rarely those with the biggest brains. It is those who can communicate their ideas effectively, empathise situationally, be assertive when appropriate, involve others in problemsolving and provide timely feedback.

Organisations are starting to wake up to this and are looking to use this information intelligently. This means trying to find ways to shape behaviours early on in an employee’s career and developing the human side of the individual. With the apprentice population this means taking into account the modern working world and helping them become effective as early as possible.

Louise Edwards, principal consultant of Liberty Learning Solutions, captures this well. “Traditional firms can struggle with the mindset of Generation Z: apprentices are linked, instant and demanding.

They are ultra-responsive and used to getting information immediately. Helping them connect with the organisation’s thinking is almost as important as taskaccomplishment, so using tools that generate insights to promote personal accountability and stretch are vital.

Emotional intelligence is a good starting point for action.”

Working closely with a progressive manufacturer some way on in its lean

journey, we looked to move beyond the traditional fixation on attraction and recruitment of apprentices. We knew that to create a growth mindset – and for lean to work – leaders at all levels must be empowered to contribute and ensure they are influencing others to contribute also. It was essential that all team-members had a clear understanding of their contribution beyond implementing the system. Formal education was ineffectual in influencing hearts and minds. We knew that investment was required to help individuals understand how they contributed to the system and what may be holding them back. EI was the key to unlocking this.

We found that profiling an individual’s EI had multiple benefits.

Firstly, it gave individual’s personal accountability by providing a framework to understand how our individual contributions were more or less effective.

It also reassured team-members that the organisation was not trying to brainwash everyone into a way of behaving. Culture is created by a mass of individuals choosing to work in a certain way. It is a collection of explicit and implicit norms formed top-down, sideways and bottom-up. An organisational culture is fragile and simply cannot be safeguarded by applying pressure from the top down. To be effective and sustainable it needs to be built upon free-thinking, shared beliefs

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APPRENTICESHIPS JOE BELL

relate to others? How do I emotionally self-regulate? EI is developable (versus IQ, or personality), so displaying different behaviours can impact others and in turn impact our EI.

and perhaps the strongest motivator is our belief that we are valued in our contribution. This includes deciding whether the current system is the most effective way of operating. In effect, applying EI encouraged freedom of thought and action within the lean collective system. This is where an insight into an individual’s EI was able to pay dividends.

Emotional intelligence indicates the level of functioning at a social and emotional level. It is able to measure – through a self-perception diagnosis – how we index in composites such as self-regard, emotional self-awareness, empathy, assertiveness and emotional expression.

How can this help? When we applied it to 50 manufacturing team-leaders (TLs) we found some similarities in profiles that were telling. Emotional expression was very low, as was empathy. Both dimensions under-indexed considerably versus the norm (when compared to professionals within UK/Ireland). In contrast, assertiveness and independence scored very highly, similarly over-indexing.

This may seem unremarkable when viewed in isolation but when viewed as a contributor to organisational culture the results take on new meaning. Consider the subscale interaction between these scores. Low levels of empathy – understanding and appreciating others – coupled with high levels of assertiveness – stating views in a forthright manner. We found that coaching was low down on team-leaders to-do lists; influencing and persuasion were also of a lower priority.

Developing others was unnatural to this group who were energetic, task-focussed and strong-willed.

The EI profiling allowed a dialogue and understanding to emerge with TL’s.

Different ways of behaving were discussed.

It allowed a framework of discussion as well as training and development to equip TLs’ with tools to help them get the best from their team. Infact the lessons were so powerful it convinced the organisation this would be beneficial earlier in the employee lifecycle. Hence applying this to apprentices who could have their awareness raised and appreciate that it is the engagement/interpersonal dimension with others that bears results. How do I

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Apprentices can often traditionally be subjected to a single track of development; the development of their technical competence and skills. This is not sufficient in 2015

Applying the same EI profiling to apprentices we found a difference.

Emotional expression (constructively stating emotions) scored highly as did interpersonal relationships (creating mutually satisfying relationships). The lowscoring dimensions were independence (working freely away from others) and self-regard (assuredness, feelings of confidence). This information allowed us to understand that working collaboratively was a driver for this group, as was feeling connected socially to others and belonging to a meaningful institution. Lower levels of self-confidence are predictable given the age/experience of the group’s profile; however the emotional expression interaction allowed the organisation to find forums for the group to share their ideas and contribute at an early stage.

In summary, apprentices can often traditionally be subjected to a single track of development; the development of their technical competence and skills. This is necessary, but not sufficient in 2015. Equal consideration to the emotional intelligence dimension of their contribution is required.

Not only does this provide the individual with education and information on how they prefer to communicate and interact, it also gives the organisation data on how best such a group can be managed.

Progressive companies understand that they cannot wait until the individual has formulated mature views on the business before investment in personal effectiveness and style is given. A dualtrack strategy is required immediately: technical and behavioural.

Mark Davies, HR director for companies such as Unilever, SCA and Nufarm captured this well: “Forward thinking companies understand apprentices schemes are a long-term investment.

It isn’t just the recruitment, it is the programme they follow and the formation of a developmental mindset that determines their impact. It is the insights, mentoring and coaching that strengthens the talent pipeline and helps them realise their potential”.

SECTOR FOCUS APPRENTICES

SECTOR FOCUS

Lean apprenticeships: lean for the next generation Manufacturing has suffered a lot of bad press over the years, and here in the UK our politicians in all their infinite wisdom decided making things was too cost inefficient to have any place in a modern economy, and instead looked to banking and service sectors to supply our GDP.

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ith the great recession, the emperor turned out to be naked and many discovered that finance wasn’t all it cracked up to be.

Now the UK government is hurriedly trying to rectify the wrongs of the past.

Look to Germany, where manufacturing has been the backbone of the economy since modern Europe came into being. It’s the largest economy in the EU, and seems to be having to hold the Eurozone together all on its own.

One thing Germany takes seriously which the UK is far behind in, and it must do better at, if it hopes to ‘rebalance the economy’ (the current government

buzzterm) is apprenticeships.

Apprentices are an ingrained cultural institution in Germany, like they were once upon a time in Britain.

They’re slowly returning, but the process is painful.

As national apprenticeship week took place recently, LMJ went on an investigation to explore how apprentices’ resurgence was going, and how lean was helping in this. With nearly two million apprentices in the UK, they seem to be taking off, but with endless pressure from low-wage economies and emerging powers in the east, it is important for the industries to be as efficient as possible.

READ ABOUT: Lean apprenticeship courses offered The benefits of training at the beginning of a career instead of filling in the gaps later on The plans for future incorporation

One way of doing this is to teach the young people embarking on their careers all about lean from day one.

Instead of teaching an old dog new tricks, why not teach them as they learn, the benefits of continuous improvement and LSS so they can help to make their industries as profitable and streamlined as they can.

This article includes interviews with apprentice scheme trainers at two different UK organisations, determined to help young people, as well as several apprentices at AMRC’s academy.

www.leanmj.com | May 2015

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SECTOR FOCUS APPRENTICES

Lean in the works: Manufacturing growth lead at EEF, Ian King, discusses with the LMJ his thoughts on the organisation’s lean training academy, based at Aston, Birmingham.

The academy works at giving a rounded lean education to not just young people, but also manufacturers of all levels and ages, so they can learn about change and continuous improvement.

READ ABOUT: Teaching lean to the next generation Incorporating lean into a wellrounded education on business, management and the basics of economics The EEF’s training scheme in Aston

Ian, what’s your background and how did you go into coaching lean?

Ian King: I’ve worked on the academy since 2012, and before that I was freelance, working for many large companies, including healthcare and mining corporations in Australia, setting up lean academies and working with their employees. I have also worked with Airbus, BAE Systems, Triumph, Williams Formula 1, Bisley, Terex, Rockwell, Dunlop as well as many SME’s helping to implement lean organisations.

How long has the programme been running and how long have you been involved with it?

IK: EEF have had an improvement service since 2012. And I was the first recruit.

Before this they ran the Manufacturing Advisory Service in the South East for a number of years.

Run me through the layout of the programme.

What do students learn about?

IK: The lean academy is designed to be run from different client’s request as well as my past experiences in what has worked best. These type of schemes

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were first rolled out in North America by Ford originally.

The academy has been adopted by JLR, Airbus, BAE and JCB. A number of organisations are now using this approach.

The teaching covers a basic introduction to lean and techniques and culture and

We’re trying to encourage people to engage in lean and continuous improvement and change programmes

the way we learn and change behaviours.

We use a blend of academic materials, such as case studies from the Harvard School of Business on companies like Toyota, Herman Miller. From there we move on to the cultural side of lean.

How important do you think properly educating apprentices are to the future of manufacturing?

IK: It’s not just our apprenticeships, but other organisations to teach about lean. In fact, a conversation I was having recently was about this very topic: the

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before. Which has convinced me that I don’t think we educate our apprentices and future leaders enough. We see the need for engineers and toolmakers but we don’t give them other skills. As they progress they have no managerial skills or leaderships skill. So for me the future looks like we need a greater rounded awareness.

We need at least an awareness in some of the most commonly used lean tools/ techniques

reason I was training at this organisation is because the current leaders sees their apprentices as the future leaders. And yet they know very little about business improvement- one of the students couldn’t relate to the fact that if something in the factory can be made more efficient it can be made more profitable.

Considering the UK/Europe has been on a continuous improvement path for over 30 years, it is quite worrying that our future leaders are not being taught about continuous improvement at even a basic level.

That’s why we are teaching our apprenticeships about leadership and improvement- the two things fundamentally missing from most training programmes.

Most Further Education schemes do not have these and apprentices are not taught how to improve the business.

In terms of whether I think teaching apprentices basic book-keeping or managerial skills as a more urgent need in teaching continuous improvement? They’re both vital.

Fundamental is the cost side of a business to be taught.

These days, trying to find an engineer under the age of 50 who understands costing is difficult.

And when you look at companies (that I work with) they don’t understand the basic costing of the product of their manufacturing. One client I work with produces £75k per week worth of goods and they’re lucky if they make £250 profit. It’s nothing to do with 5S or kanban it’s just poor organisation modelling and product costing.

The majority of my clients are people who have done CI programmes. It’s not the operations, it’s the other areas of the business such as technical, sales, marketing, materials and the way accountants choose to costing things. For example a client I work with may cost a product to achieve 45% contribution and sales will sell at that price however when you understand the operation that contribution can be some 20% diminished due to the people in accounts and sales not understanding the operations side of the business.

What are the plans for the training scheme in the future?

IK: The future lies in my own career path and my own apprenticeship -I gained no business acumen while I was being trained. I was taught nothing other than the manufacturing skill I was employed to do.

I was mentored as I progressed with my career and grew to understand the way things operated, I then went on and did a Beng in Management which taught me some business and how a full organisation works, doing modules that gave me the basics in all areas of business not just operations and engineering.

This exposed me to quality, purchasing, managing and a range of other topics which I’d never encountered

The lean academy is designed to be run from different client’s request as well as my past experiences in what has worked best

So we aim the course at everyone. The old way of recruiting a manger was by recruiting someone form the lower levels of the company and promoting up as a reward. That doesn’t always work. We often see capable engineers don’t make the best managers, so we’re trying to encourage people to engage in lean and continuous improvement and change programmes and hopefully improve their skills as a leader.

What other aspects do you think you could add to improve lean education?

IK: What we’re trying to do with the academy is target change leaders, and the biggest aspect for me is the mentoring and coaching one.

Retention is a massive problem. Getting to them a few hours a week so it stays in their mind. If we look at the Japanese and how they do things, their change programmes are often not just training but also coaching/mentoring in the workplace.

They receive refreshed courses and new training throughout their working life.

Whereas we tend to undervalue this and focus merely on the initial course and then let maintaining these new skills fall by the way side.

Have you seen a marked difference?

IK: The more we talk about lean and do around Aston the more we’ve definitely had a marked improvement around the apprentices’ confidence and abilities. You can discuss 5S with them and they can show you examples and talk about you with it. A massive improvement from their skills when they first arrive.

This is a great difference to other places where the apprentice will have no lean skills and no vision for their or the business’s future.

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SECTOR FOCUS APPRENTICES

Educating apprenticeships READ ABOUT: Getting and keeping apprentices engaged with lean The benefits of getting ‘em young How the scheme works and the plans for the future

Jon Radford, AMRC

The Advance Manufacturing Research Centre (AMRC) is a government catapult centre based in the north of England, associated with the University of Sheffield. The AMRC specialises in advanced machining and materials research for aerospace and other high-value manufacturing sectors.

J

on Radford is an engineering trainer and skills assessor at the Sheffield AMRC Training Centre.

He chats to LMJ about the training scheme in place at the centre to teach the apprentices the benefits of lean.

Since introducing business improvement techniques (BIT) in April 2014, 77 apprentices have received the training with a further 40 scheduled onto BIT by the beginning of summer 2015.

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How long has AMRC had a lean training scheme?

John Radford: We first started delivering lean training in 2014 as National Vocational Qualification (NVQ) Unit 64: conducting business improvement activities, as a bolt on for technical support apprentices. They have to cover three units so we thought that would be good for this pathway.

Since then, we have now changed the units around, after my line manager, Roger Davis-Green, decided every apprentice that comes into the building should have a week’s training with me, for which they receive a certificate.

Depending on the company they work for, each apprentice at the AMRC Training Centre spends either 24 or 48 weeks learning all aspects of their trade, and the idea is they should spend at least one week with me getting the basics of lean.

What’s your background?

JR: I started as an apprentice many years ago and spent 18 years in the aerospace industry, working for Doncasters Machined Airfoils.

I went through the ranks culminating in my becoming continuous improvement manager. The company put 10 of us from around the world through a kaizen black belt course with TBM Consultants in Derby in around 2000, so I’ve had 15 years of lean experience.

Then the company moved and I decided not to relocate with them. I moved into the automotive industry, joining a high

pressure magnesium die casting company Meridian Lightweight Technologies Ltd. With my previous experience, it wasn’t long before I moved from being a supervisor to leading continuous improvement activities, providing statistical analysis and encouraging change and engagement. After the recession I decided to change careers and moved into training full time, which is how I am able to work on developing this programme for the apprentices.

What benefits do you see to lean involved with apprentices and what does the course teach?

JR: The benefit for us is we get a chance to introduce lean and best practices before the apprentices go into their working environment, where it may not currently exist. On the other hand, if their employer has implemented lean and best practices, it won’t pose any surprises when the apprentice arrives at work on the first day and sees a 5S audit board.

The major benefit is the chance to heavily promote team working towards a common goal at an early stage. The majority of our apprentices are on machining pathways such as manual turning and milling, we also have electrical/electronic, tech support and fab & weld apprentices.

All engineers are heavily involved with measurement. I start the week off with a measurement system capability and calibration project, culminating in a gauge R&R exercise using five separate measuring devices. By plotting graphical

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by splitting the group into two teams normally four or five per team. They have a competitive streak so we find this a really good way of keeping things engaging and stimulating especially as the final challenge is to build three kits simultaneously in the factories they have designed. The best visual controls and lean assembly lines in place always achieve the best results. Our current record stands at 79 seconds for all three planes using four operators, not bad considering there’s 85 pieces in each kit.

variation then eliminating unreliable equipment, I can easily demonstrate the importance of equipment selection and ultimately how to best achieve repeatable accuracy between operators.

We run a number of experiments where they’re encouraged to think about vernier scales, often when reading the measurement debates between operators can get quite heated.

The subjects we currently include in BIT are measurement system capability, 5S, The 8 wastes, which obviously includes a little history on Henry Ford and Taiichi Ohno, The five lean principles and, finally, a practical exercise that normally lasts for two days, where the apprentices can put the methodologies into practice. Along the journey I introduce them to basic lean tools for making improvements to processes and operations such as kanban systems and visual control so they get an overview and a basic academic knowledge.

5S helps form the basics of working in a more organised environment with everything required to hand. Eight wastes is an overview of what they are, where they are found and how we reduce them using lean tools and control measures.

The 5 lean principles help them understand on a higher level how a lean business operates. When I set them off on the practical exercise they receive relevant statistics relating to costs for running a factory and assembling the products, such as cost of purchasing the kits, energy price and usage, build time and orders for TAKT, staff costs etc. As build times are reduced profits increase but never losing sight of a safe operating environment and quality products for the customer.

We do the practical hands on using models; it’s basically a Lego seaplane kit, which they try to build to TAKT Time.

Customer orders are set by me and often change depending on how well the group is progressing. Using 5S principles and lean methods they run trials then implement changes to improve their process efficiencies, learning about flow and push/ pull systems along the way.

Most of the apprentices are between 16-20 years old, I run the practical

The five lean principles help them understand on a higher level how a lean business operates

On the last day of training we go for a tour of all current AMRC facilities, these being The Factory of the Future, Integrated Manufacturing Group, Nuclear AMRC, Composite Centre and The Design Prototype and Test Centre.

The apprentices get to see best practices within a practical environment at firsthand. Innovative ways of manufacture combined with the very best technology is what the AMRC is about.

What skills do you see the apprentices learning from the scheme?

JR: It’s great to see the lightbulb come on in their eyes. By learning about lean in a fun way, they’re really able to see the benefits; linking the industrial side to the lean framework and the more academic, classroom sided elements, and the connection comes when I take them on to the factory floors around the AMRC sites.

It’s a good start for them to learn to work in a tidy manner and keep what they need at hand. You can see, before they’ve done the course, they have everything out of the workbench drawers, because they haven’t thought about what they need.

Whereas I operate a two tool rule - only two tools allowed out of the box at any one time, to minimise clutter and mess.

There are lots of other examples: linking modular builds. They don’t realise they don’t need to build the whole thing.

The kits really help set them off on the right foot in a fun way. The scheme is in its infancy and I’d like to see how these apprentices have developed in the workplace. I’ve collected feedback forms from them, and it’s all positive so far and all have said they enjoy it but I want to see how they carry on with it once

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SECTOR FOCUS APPRENTICES

they’re back in their workshops and factories. It’s all about encouraging them.

Do you think there are other or more things to be done to teach lean?

JR: Interestingly, I’ve trialled a practical exercise on our factory floor. We were going to supply aluminium dice to Las Vegas. It got them thinking about orientations, there are so many permutations, different combinations and ways of doing things, and it really had them engaged in the planning aspects. It was very much geared towards an industrial environment using workshop tools and machinery during production and they were learning from the mistakes they made.

over time by expanding on what works best to gain the understanding. We’ve also got a professional development side based at the Training Centre and they are working hard currently on introducing a lean manufacturing course for fully qualified engineers and tradespeople.

We’d also like to reintroduce Unit 64 so they get a NVQ in this and a certificate to give lean a solidified place in their view. The course is a work in progress and I introduce new ideas and tweak elements and try my best to keep them focussed and interested.

We culminated with a poka-yoke box style fixture the dice slid into, with the holes pre-positioned all we did was drill through to a fixed depth stop, and that seemed to be the most valuable aspect demonstrating how a simple idea worked consistently every time: By encouraging them to think for themselves and a hands on trial and error approach they come up with half the ideas themselves.

What benefits to manufacturing as a whole do you see this giving?

JR: UK manufacturing has to keep moving forward. In my mind the sooner apprentices are exposed to these principles the better. Obviously, lean tools and techniques are by no means new but you still see a lot of waste opportunities that only require simple fixes. We have small company apprentices’ right through to Rolls–Royce apprentices, no matter who they are working for waste is still evident and waste reduction is key to success.

Where would you like to see the scheme go?

JR: I really enjoy working with the apprentices at grass roots level and our course itself, is continually improving

Manufacturing methods are fast changing and companies have got to move forward. You don’t necessarily have to change an entire process, just look at how you’re doing it and change elements. This is not rocket science.

The students’ perspective: Rowan Easter-Robinson is an apprentice from Darron SBO, a steel manufacturing and engineering based in Sheffield, Matt Creswick is from Toolroom Engineering Ltd, a precision engineering firm also in Sheffield and Jack Smith is an apprentice at Rolls Royce. They all underwent the training at AMRC and discuss the benefits from the training he received. Even though the firm doesn’t have a lean programme.

READ ABOUT: What the apprentices learn (in their own words) The confidence and skills it gives them

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What was your knowledge of lean beforehand?

Rowan Easter-Robinson: I didn’t know anything about lean manufacturing before the course, I’ve never had any experience with it.

Jack Smith: My own personal knowledge was limited to the very basics of not wasting time. However, it was easy for me to understand and apply lean manufacturing after previously working in industry. I was able to relate the wastes and methods to my own personal

experiences. I also found it interesting to learn the origins of lean manufacturing and how it helped to transform Japan into one of the most economically developed countries to date.

Matt Creswick: Before undertaking the training I had no prior experience of lean.

What were the main goals you were hoping to learn from the training?

RER: I first started the course with an open mind, as I had never done any work

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on continuous improvement or lean before, let alone being able to apply those concepts to a working environment.

This meant I decided to try to get a basic knowledge of the theory but also try to put emphasis on applying these concepts to a working environment so I could understand how to work them into my experience at my own workplace.

People my age have had very limited, if not nonexistent, exposure to production/ engineering environments I never find myself searching for missing tools and equipment. I will continue to retain the skills I have learnt as find myself using them every day.

JS: Our goals were: to understand how the seven wastes can impact on the profitability of an industry, how to identify and overcome the seven wastes by using the 5S’s.

MC: I believe that I learnt very useful skills from the training that I will hopefully be able to implement when I’m back with my company.

MC: I was hoping to gain a greater understanding of what it meant to be lean in industry.

Do you think you learnt practical skills from the training that will help you in your career?

RER: I certainly tried to learn practical skills, mainly so I could make my own life easier while I’m working at my company; concepts such as the 5Ss, the eight wastes and how to reduce them, along with the five principles of lean to ensure continuous flow. We learnt these skills with a challenge in which we were given a set of Lego airplanes and told to assemble them in as quick a time as possible. We also had to devise the profit/loss of the factory while taking into consideration the overheads, worker wages and demand for the planes. Then we sorted out each part and placed them onto shadow boards, delegated tasks to each member to keep lead times down, and inputted all our data into an excel to optimise our times for maximum profit and number of planes produced per week.

JS: I am definitely more aware of waste in the workplace; the 5S method is something I now find myself regularly referring to going about day to day tasks, for example I can’t help but to return equipment immediately after use in an attempt to keep my workspace clear, it has other positive effects such as my co-workers no longer bother me for tools they are missing as they are always in their place.

In regards to practical skills I have learnt, I maintain a level of order to my tools and work in a tidy and well organised manner with only the tools I need.

This hands-on approach to lean was much more interesting and engaging than a detached presentation ever could be

Do you feel engaged and confident enough to begin implementing lean?

RER: I’d have to research more how these concepts would be more applicable to the workshop in my company, but I’d definitely feel confident discussing issues and possible solutions with the leader in my company.

JS: I do, and I already apply lean to myself and my own work.

MC: I feel that I now have the knowledge required to start implementing lean back in company however I feel it could be a difficult task as due to the fact that the company I work for has no prior experience of lean and I feel they could be rather set in there ways.

Do you think projects like this are a good way to encourage people to learn about lean?

RER: Yes, definitely; this hands-on approach to lean was much more interesting and engaging than a detached presentation ever could be, all the concepts we learnt in theory were turned into reality with the practical, and we made sure we knew exactly what we were doing to make sure we beat the other team’s manufacturing techniques.

I managed to cram in a lot of information which I’ll be able to recall in each small step we took as a team in reducing our manufacturing times for the Lego planes.

JS: Without a doubt, people my age have had very limited, if not non-existent, exposure to production/ engineering environments, the tasks we carried out enable people to understand what not to do and what to look out for and understanding the reasons why.

This will stop people from developing skills with bad habits such as working in untidy areas and not properly storing and sorting equipment, this will of course save themselves time and effort.

MC: I believe projects like this are a great way for people to get a basic understanding of lean even if it only affects the way that individual works.

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lean online M A Y 2 0 1 5

LeaN nline LMJ’s social media pages are a great place to go for lots of networking opportunities and information on all things lean from around the web.

Find industry experts and exciting discussions on our LinkedIn page, and follow @LeanMJournal and @AndrewPutwain for news on upcoming events and ways to get involved with the LMJ.

ROUNDING UP THE MONTH’S DIGITAL COMMUNICATIONS ON LEAN TM Events Team @TM_EventsTeam Hayward Tyler give us an in-depth look into their witness simulation model and the metrics it offers #TMLean

Here’s the best tweets and mentions of lean from the recent #TMLean manufacturing conference in Birmingham, where several alumni of LMJ gave their best ideas.

DAVINDER LOTAY @DavinderLotay Great problem solving exercise on engaging a “Passenger” on the Lean journey #TMLean

Howard Bettany @howardbettany1 @agataxch I was listening @TheManufacturer @AndrewPutwain great day

@agataxch @AndrewPutwain in full flow at the Lean Man conference today

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LEAN ONLINE

TM Events Team @TM_EventsTeam ...while in our other room Rob Armstrong from @SelexES gets delegates talking about employee disengagement! #TMLean

Charles Bamford @charlybamf Thought provoking presentation from @ParkerHannifin. I feel many in the room will be taking this further over lunch. #TMLean

Duncan Riley @duncanriley101 Understanding the needs of manufacturing businesses deploying lean @TheManufacturer @peratraining #TMLean

Cimlogic @Cimlogic @CimlogicFraser Speaking @TheManufacturer #TMLean Conference this morning!

Maximising #ROI on #ITSystems for #CI

Remember to follow the LMJ on LinkedIn and join the discussions there: http://linkd.in/1vIt528

www.leanmj.com | May 2015

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C A S E S T U D Y D istilling lean

Distilling lean LMJ’s editor Andrew Putwain visits a Scotch whisky producer where a wee dram of modernity is mixing with centuries of tradition in the leanest of fashions.

READ ABOUT: Bringing lean into a process steeped in history and pride The changes that come with multi-nationals, mergers and how Morrison Bowmore (MBD) is adapting How HARFORD data systems are helping the firm increase its efficiency

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B

owmore whisky has been produced on the Scottish island of Islay since 1779, and is one of the world’s most recognisable alcohol brands.

Its superior standards have seen it become an icon of Scottish industry in terms of luxury products.

The firm’s main blending and bottling site is in the Springburn area of Glasgow, just north of the bustle of the city centre.

MBD has been in situ since 1985, and has expanded to fill the site completely; needing to constantly re-jig its layout to fit an ever increasingly diverse and complex range of products. From miniatures to a premium luxury range catering to the super wealthy, made with hand-blown glass, and processed in a special, locked department only accessible with express permission.

case study

The company’s six key areas of operational excellence: safety, productivity, cost, delivery, quality and morale

Craig Mochrie, a 30-plus year veteran of the company and bottling manager at Springburn, showed us around and highlighted lean’s benefit to the company.

“People are one of our top priorities,” Craig said. “If you look around you’ll see morale is high and that’s what we strive for.”

Scottish and Irish (Whiskey with an E is across the Irish Sea. A touchy subject in this most hallowed of Scottish grounds) operations director Mick Ord agreed, stating the company’s six key areas of operational excellence: safety, productivity, cost, delivery, quality and morale. “But priority number one is definitely people,” he said. And when it comes to lean they are part of a global team and are all committed to learning. Ord added, “We share best practices with our sister sites all over the world. So if our colleagues in Spain, for example, have something to teach us, we’ll go there, and vice versa.”

Mochrie backs this up, showing how seriously Bowmore takes its lean journey that it started in 2006: “If you don’t have the culture, if you haven’t been through the challenges of transition, then you don’t have lean.”

Morrison Bowmore recently became part of the newly formed Beam Suntory, the world’s third-largest premium spirits company owned by Japan’s multi-national Suntory Holdings. There’s about to be an influx of new people as it merges with the Glasgow central office, adding to the 130 or so employees, around half of whom are on production

on the floor. Impressively, nearly half are women, showing how fully the organisation takes its commitment to the future and a highly engaged workforce.

Q uick facts about M orrison B owmore :

A rise in sales of 12% to £55.6m for the year to December 2013 Reported a 7% hike in profits to £9.1m in 2013.

Produces high-end Bowmore, Auchentoshan, Glen Garioch and McClelland’s single-malt whiskies.

MBD bottling operations have achieved in excess of 98% in customer service performance over the last 3 years

Beam Suntory itself is lean and has used the expertise of the CCI framework. Ord is positive about the recent transitions though, and is looking to the future: “We are going through a transition rather than an integration. The tools and techniques we use and have been taught are not new,” but they have given good results.

Despite recent changes, one thing they are

www.leanmj.com | May 2015

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C A S E S T U D Y D istilling lean

all focused on is that lean is not possible without total engagement. Mentions of morale and people as priority are not just lip service. “You build from the bottom up,” Ord continues. “You have to get the foundations right.”

There is however plenty more to be done; they’re in a transitional period and want to increase additional volume capacity and incorporate more lean technology.

Down on the floor it’s an impressively streamed process; casks come in from a range of distilleries across Scotland and are ‘dumped’ of their contents. The most iconic aspect of whisky making and a

One thing they are all focused on is that lean is not possible without total engagement. Mentions of morale and people as priority are not just lip service

rich part of the heritage and something that is too precious to the history of the industry (and indeed to Scotland) to allow a machine to take over. It’s lean, with a quick turnaround time and where are all the problems are accounted for-but it’s still the century’s old tradition with a man, a funnel and cask full of charcoal and strong booze (LMJ was given a taster and had no complaints).

more effective asset care, improving flexibility and maintenance, and is now apparent all over the work floor with touch screens everywhere showing data of the lines.

Once that section is over it’s off to where the real action is, and Morrison Bowmore’s system controller for bottling, Jim Donaldson, is keen to show the system has been data-mined to make it as efficient as possible. The factory has increased from 746k cases in 2006 to just over 1.2m cases in 2014, with a lot of help from HARFORD total product maintenance system.

The computers also give a host of statistical process control information, which show the breakdowns, hold ups and completion of orders. All valuable information to make sure all root cause analysis is available at the touch of a button.

HARFORD data capturing was part of the first stage launched in 2006, alongside

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The hold ups and breakdowns are presented in real time, and the staff all follow the monitors around the factory with diligence. The monitors showcase the percentage of orders completed, with section by section analysis of the line and the timings that each segment of completion takes.

Morrison Bowmore’s recent changes have proved challenging, but the company is easily manoeuvring its way through the times with gusto and plans for more lean rollouts and developments. Mochrie is adamant they will achieve further growth; “Our target is to be the number one single malt specialists in the world.”

EVENT REVIEW

TM Lean Manufacturing Conference LMJ’s sister publication organised its annual Lean Manufacturing conference at the end of March, as part of its Future Factory series.

Attended by a diverse range of speakers and delegates, eager to share their ideas on best practice and strengthening corporate and staff engagement in continuous improvement.

T

he theme of the conference was how to start or re-inspire lean in the workforce and re-engage with lean. This is one of the biggest challenges in the industry. Everyone has so much passion and enthusiasm in the beginning but within weeks-if not daysit can all evaporate as the true nature of lean takesshape. You have to make a commitment; attitudes will be have to be modified and schedules, costs and hard work all have to be committed to.

Often, there’s a lot more work than what is first considered.

The opening presentation was Trevor Stacey, operations manager from Coca Cola Enterprise’s Sidcup factory, in South East London. His presentation was on the use of production routines to drive continuous improvement. And if there’s one thing we all learned about CCE it was this: they are really good at meetings.

The meetings are strictly adhered to and are audited by staff to make sure they

are regular, productive and enforced.

They are the primary source of employee engagement and provide instant feedback and handover information for the operators at this site which runs 24/7.

The company has not actually named its systems of improvement as lean but is the same in almost every way.

Second up was Bernard Auton, director of European operations for National Instruments. His snappily titled presentation “CI @ NI” showcased the simple and effective ways this billion dollar company operates lean at its three sites (Hungary, Malaysia and Texas) making precise components for measuring equipment used in some of the world’s most technologically advanced scientific spaces.

One of the first struggles for CI at NI was simple: convincing the board to put any money into the operations.

As part of its ideas on lean and CI they went the opposite way of CCE: instead of embracing scheduled timed and regimented meetings, NI tried to ditch meetings as much as possible as they were unproductive and time wasting.

One of the main ways NI made improvements was one of the most simple: using small boxes to put on forms for potential customers expressing interest in a deal. Thousands were being lost in possible business connections as sales and marketing teams were simply unable to read the handwriting of those wanting

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T M L ean M anufacturing C onference

their services. The solution? Installing small square boxes on the forms which lead to better handwriting even when they were allowed to write free form on later questions.

have found Fraser Thomson from Cimlogic helpful. How was it going to use IT and MES systems to better lean?

So seven years into lean, NI have made great gains through a simple series of tweaks. Embracing coaching in house, and on two-four hour sessions as opposed to a whole day for staff, which they found tiring and boring. It proved that lean can be about combining ideas and small practical details.

“Everyone wants to improve,” stated Thomson, “And 71% of manufacturers spent more on IT in 2013 than they did in 2014.” It’s big business and in today’s modern workplace you have to have IT systems that are functional and quick.

The generational excuse, or “that’s the way we’ve always done it.” Doesn’t cut it anymore.

One of the day’s most lively presenters was Stuart Wood, of Oxford Instruments, a company based in High Wycombe, just outside of London. Stuart, head of operational excellence at the scientific manufacturer, was the keynote speaker and was engaging in his presentation on deploying and sustaining your lean transformation programme.

His ideas were all about behaviour. “Measure drive behaviours, not performance. Measure pain not performance.”

The change entailed cultural architecture. Wood continued, saying, “You cannot ask staff what their issues are and then ignore it.” One of the first things Oxford Instruments did in the beginning of the year and half long LSS project was give its employees a survey on how engaged and happy they felt about their work place. The results showed that less than 30% were satisfied with their workplace. In the most recent survey, that’s gone up to over 70%-and more people now fill in and return the forms too!

The change team are all volunteers from the workforce who saw the possibilities for improving their daily worklife. The programme teaches managers their primary job is to remove the barriers that stop the staff from doing their job.

“They come to work to do a job,” commented Wood, “and all we do is put those barriers in front of them.”

One of the keys is positive reinforcement; simple kaizens, JBI problems that you know you can fix.

“People want to know they’re getting better, they want to measure their success.”

The firm uses three Ms: What does it mean to ME? What does it mean to my MATES? What does it mean in terms of MONEY? If the staff see the benefits they will engage. If the managers see the staff are more productive they’ll feel the benefits in the bank balance. “Basically,” concluded Wood, “we never want to see a problem come back.”

Using IT to maximise the ROI (return of investment) of your manufacturing investment to drive CI? Then you will

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The main reason for lack of investment however, is cost and lack of confidence in ROI. “We need to bring systems together and share data.”

The theme of the conference was how to start or reinspire lean in the workforce and re-engage with lean.

This is one of the biggest challenges in the industry

And then it was time for the day’s most interactive session. Howard Bettany and Agata Choma, lean mangers from Parker Hannifin, asked why do we need a culture of CI? The first thing they wanted was to put themselves out of a job: lean managers and directors are a waste of time. It should all be about the staff self-managing and self-motivating. They want the programme to build up and inspire value steams and loyalty. And had one thing to say: it’s all about the coaching. “You cannot master something without routine,” Bettany stated, “It’s the routine to create a culture of problem solving.”

They believed that lean change was a body, and without all the requisite parts it couldn’t work. The key learning points is the coaching loop is critical, barrier removal through the layers and “it’s all about those teachable moments”.

Bettany raised eyebrows with one simple, effective statement. “We all do lean to make money.” So should it be customer focused or capability focused? Choma concluded, that whichever way you look at it, “Everything we do is linked. The more productive we are the better value we are for our customers.”

Paul Gore, operational excellence specialist, from ThermoFisher Scientific, took the company’s work as the processor of DNA kits for police, to heart with his presentation; the DNA of leadership of and its opposition to lean thinking.

EVENT REVIEW

The Warrington-based firm of 110 employees had revenue problems and provided fodder for anecdotes of how people don’t understand the issues of taking on lean. “There’s a difficulty of being a conduit between employees and leadership,” he mentioned as the plight of those in lean. Bosses who aren’t interested in lean, don’t understand the problems, the processes or how or why it should cost money. They want it done now.

Gore commented, “Lean is about changing not maintaining the current status,” and needs to fight these bosses and educate them. Because, “lean leadership is different from conventional practise”.

In the afternoon the room split into two sessions for problem solving. The first was about ditching the middle man. Rob Armstrong, industrial engineering manager of Selex ES, talked about “The passenger”

and distrust and problems followed, even though, “the market was there. We just had to deliver on time.”

They turned around to save the company and created a winning mentality through staff engagement, “The only way to get there is hard work.”

Clocherty pushed home. “We worked hard, worked fast, engaged people and removed road blocks.”

Better communication, a more forward thinking and long term outlook and simply pulling themselves up by their laurels to do better. The routines everyone had got into weren’t working, so they had to go. As Clocherty reiterated: it was all about the hard work.

Jason Bridger, GlaxoSmithKline LSS champion, approached problem solving in a different way. The company hadn’t been in financial strife but has over 100,000 employees spread around the globe and had to create a new department called core business services to implement its system of accelerated delivery processes.

We all do lean to make money.” So should it be customer focused or capability focused?

and how to employ the unengaged employee. Rob Atkinson, manufacturing operations manager, of Donaldson EMEA embraced this theme with leadership and challenging the sceptics.

Hayward Tyler’s manufacturing systems director Martin Clocherty and colleague Oliver Buhlinger, showcased the firm’s re-planning events. They had a £1m revamp of their plant; simple things like cleaning out scrap material, repainting, cleaning the machines, all showed how it reinvigorated a staff who had been nothing but doom and gloom as the company was on the rocks.

The firm’s ailments were easy to point out: “We never used the scheduling part of our ERP systems.” And orders were always late. The departments blamed each other

The firm’s aim was to create and embed a performance driven culture. It was able to do this by not using lean tools- an often derided and discussed concept through the day.

Multiple people discussed if they were necessary. Howard Bettany told us they were all you needed and with them you could achieve gains even when all else was missing. Bridger disagreed, insisting they achieved change through mindset.

Back in the main room the day’s second to last presentation was Brian Dickinson from battery pad manufacturer Entek.

“You can have all the best plans for your business, but if you haven’t got the culture, you won’t be successful.”

Dickinson’s presentation also focused on employee engagement. He had a surprisingly controversial idea: rewards and prizes for the staff. Often very generous. Many thought this incentivisation was misguided.

Dickinson’s story that his old company used to reward suggestions proved a warning. “We don’t reward suggestions anymore. Only suggestions that are completed and effective after implementation.”

“Respect, integrity, commitment and innovation”, are the keys to Entek’s change. “Our lean vision applies to everyone throughout the organisation.

TPM didn’t quite encapsulate what we wanted so we created our own system.

We wanted to be environmentally conscious and have health and safety at the forefront. We wanted to define what good looks like.” They also linked engagement of lean to bonuses.

He further suggested a good lean journey needs to define the boundaries and encourage and supporting teams to work on removing barriers. His guaranteed ways of achieving lean success: good leadership, good training, rewards and recognition.

The last presenter of the day was Kevin Thomas, the manufacturing manager of Carter Environmental Engineering and Franklin Hodge Industries who faced terrible staff engagement when he was brought on board. He looked at it through an SME lens; which has its own challenges. “A large chunk of the business community are SMEs which have nothing else in common.”

The firm had 10% absences. But was able to turn its staff around by managing the negatives, creating and demonstrating proof of lean, promoting the positives, having a concrete strategy for implementation educating. As he finished up for the day, Thomas provided the ethos of the day in a nutshell: “nothing worthwhile is easy”.

The points raised through the day were varied. The importance of PDCA was clear, but toolkits were often discussed.

A necessary step or something to be avoided? ERP systems-essential to providing a modern, data-driven process map and an easy way to see where you’re going wrong. Or a waste of time with limited ROI? And is incentivisation a poisoned chalice as a way of encouraging lean?

SPECIAL FEATURE LESSONS FROM DEMMING

Lessons from Deming: a brief history of quality- part three Bill Bellows presents the final part of his epic trilogy on the brief history of quality. Look out for a new column replacing Lessons from Deming in coming issues.

T

his brief history of quality, would not be complete without sharing a passage from Prophets in the dark, by David Kearns, the former CEO of Xerox: In the late 1960s, Frank Pipp, an assembly plant manager for a Ford Motor Company factory, 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 in Ford, if two connecting parts could be assembled without the use of a handy rubber mallet, then these parts were known as “snap fit”. 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 that the Toyota pick-up truck 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 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, yeah, that’s right” and they all trotted off happy.”

40

With the earlier account by Larry Sullivan as a second reference point, consider what happens when a craftsman works on the design of a product at home, where the customer and producer are often one in the same. One person designs the product, procures the raw material, fabricates the corresponding parts, and then assembles them into the final product for personal use. The producer-as-customer is quick to judge the product quality and adjust the design-procurement-fabrication-assembly process, as needed, should the resultant product quality fall short of expectations.

While the DIYer in the garage is not necessarily a master craftsman, the connection to the model of a single person engaged in most of the designprocurement-fabrication-assembly tasks is relevant to the topic of quality and an appreciation of the TPS and how it differs from a mass production system.

As a personal example of craftsmanship, let’s return again to the example of

the DIYer in the garage, this time doing home repair.

Imagine a piece of wood moulding is needed to replace a damaged length of wood in between two existing pieces. We begin with a piece of moulding which is too long and needs to be cut to length.

In rapid order, the required length is measured, and the piece is marked for cutting. As a next step, a saw is readied.

Consider how many lines one typically would draw across the top face of the wood before making the cut. That is, instead of using short marks to indicate where to place the saw, how many lines would be drawn across the top face to guide the placement of the saw blade during the cut? Most often the solution is to use a single line and subsequently cut close to this line. Why is the habit not two lines, as in the standard industry use of manufacturing tolerances with an acceptable range, in keeping with the practice of interchangeable parts?

The single line answer implies a belief

SPECIAL FEATURE

there is a target length for this piece of moulding and indicates a strong intuitive sense of knowing the piece of wood is “part of” something rather than merely a “part”. A “part of” perspective is likely when engaged in a home improvement project where connections are visible and immediate. In the moulding example, the lesser quality of the fit if the piece is longer or shorter than desired will be obvious.

Any effort required to adapt the moulding piece, because of variation in its length – a little too long or too short - represents quality loss, a concept introduced and developed in Japan by Taguchi.

As shown in the figure, Taguchi’s quality loss function model increases continuously as the piece of moulding length misses the target by larger and larger amounts in both directions – shorter or longer than the desired target dimension. In either case, the extra effort (loss to the DIYer) is both finite and real, just as the use of hammers to assemble parts at the Ford plant were finite and real to Frank Pipp and his assembly team. Could it be such losses are accounted for and then reduced through routine efforts within the TPS to better align the organisation’s resources? That is, the resources of time and effort would be invested to produce a given dimension closer to its target value, but only if this effort was less than the corresponding reduction in loss, thereby making the effort a worthwhile investment of resources. According to personal conversations with Taguchi, Toyota has been a world-wide leader in the use of his quality loss function concept to direct efforts to move from the traditional part quality model of mass production to one in which a greater emphasis is placed on what craftsman know as relationship quality, as in how far from the target value is a given parameter?

According to Taguchi, Toyota’s efforts with the quality loss function date back to his consultation role in the early 1950s.

Within 10 years, he was honoured in Japan with a Deming Prize in Literature for his contributions to a new definition of quality. Specifically, he defined quality as “the minimum of loss imparted to the society by a product after its shipment to a customer.” By contrast to the mass production system’s conformance to requirements model of quality, Taguchi

Figure: Taguchi’s quality loss model reflects a continuous model of part quality.

Histograms one and two are examples of possible results for two suppliers of parts.

Taguchi’s model

2

Quality loss

(to a greater system)

Stepfunction model

1

Lower specification limit

Target

(desired value of parameter)

suggested a model that looks at quality from the vantage point of the relationship of a producer to its customer. In doing so, Taguchi acknowledged the existence of a never-ending connection (and impact) between the provider of the part and what it is part of. The technical aspects of this holistic model are shown in the figure, where the horizontal axis represents the specific value of a part dimension on a continuum and the vertical axis represents the associated quality loss for a corresponding part dimension. If one considers the quality loss to be the extra effort required for installing a part of a given dimension, the distribution (quality loss function) theorised by Taguchi - a simple parabola centred on the target dimension (with minimum loss at target), accounts for the loss associated with dimensions that are not produced to target dimensions.

Taguchi’s model brings in to question the mass production belief all parts within the range of the specification limits are equally good, and, therefore, absolutely interchangeable. The degree to which variation from a target dimension produces harmful effects downstream in the organisation and society is a function of the steepness of the quality loss function, which, in turn depends on the specifics, or context, of the system which the part is actually a part of. Of foremost importance, Taguchi’s model suggests interchangeability be modelled as something relative and not absolute.

By comparison to Taguchi’s model of continuous quality loss, the mathematical model associated with the mass production concept of zero defects is a step-function, as referenced in the fizzy drink exercise, earlier in this series. The

Upper specification limit

figure offers a side-by-side comparison of these models. In keeping with a step-function model, all parts within the specification limits are good and equally good. No change in quality is perceived across this range and the only changes in quality that do occur happen instantaneously at the transition across either of the specification limits. Inspired

by Taguchi, and influenced by Deming, Toyota has long modelled quality as a continuous feature, rather than discrete, with a preferred value (target) that provides for minimal loss. Such a view leads to the conclusion any deviation from a target dimension results in some degree of loss being imparted downstream by the part after its shipment to the customer.

Let me close with a strong promotion for the use of tolerances when the accumulated expense of the added efforts to manage variation around a target value is not off-set by greater savings from reducing losses to others, either within an organisation, or to external customers. In these situations, we will continue to focus on the good parts and the bad parts. For situations where the financial impact of quality losses are significantly more than the effort to manage variation around a target value, we should either strive to achieve the beautiful prospects of lower loss (snap-fit) operations, or overlook this option and fall victim to the ugly prospects of higher loss (rubber mallets) that inspired Frank Pipp into action upon discovering Toyota’s early progress in managing variation as a system, as would a craftsman. Could it be possible that Toyota has married the quality insights of Deming and Taguchi and created a system of production which is being viewed by many through the lens of mass production using interchangeable parts?

www.leanmj.com | May 2015

41

events 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.

U P C O M I N G L E A N events include :

DA TE FO RY OU RD IAR Y: LMJAC 2015

L ean H ealthcare T ransformation S ummit

I nternational L ean S ummit

The Lean Management Journal Annual Conference is rapidly approaching.

The Lean Healthcare Transformation Summit is designed to help transform the healthcare industry through collaboration, education, and experiments. The Summit is presented annually by the ThedaCare Center for Healthcare Value in partnership with the Lean Enterprise Institute. These organisations work together to provide participants a unique combination of actionable ideas and networking connections in order to accelerate their own lean transformation. They also present innovative examples of care delivery redesign supported by results, examples of payment systems that reward patient value creation, and examples of transparency of performance.

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

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

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

July 8-9, 2015, Amsterdam, The Netherlands

This year’s European-based conference will widen the boundaries of lean to all sectors; including legal, banking, finance, insurance and accounting, manufacturing, healthcare and public sectors.

LMJAC will include presentations on How do you create a culture of lean advocates? And Running a project in-house Vs engaging outside expertise Contact events@hennikgroup. com for more information on the essential lean event of 2015.

June 3-4, Dallas, Texas, USA The lean healthcare community gathers again in 2015 for two days of learning, sharing and connecting. Dallas, Texas has been selected as the host city for this year’s Lean Healthcare Transformation Summit.

June 10- 11, 2015, Budapest, Hungary Lean Enterprise Institute Hungary is organising its International Lean Summit for the fourth time since its foundation. Dave Brunt and Tilo Schwartz will be the keynote speaker at the event in June.

I nternational L ean M anagement C onference

June 16-18, 2015, Wroclaw, Poland The Lean Institute Polska presents this year’s International Lean Management Conference.

This year will have more than 400 participants and some of the world’s best lean practitioners and experts, inspiring case studies, workshops and factory visits.

Speakers include John Shook, Chris Vogel, Mike Orzen, Samuel Obara and José Ferro.

A M E / C M E C anadian L ean C onference 2 0 1 5 June 1- 4, Winnipeg, Manitoba, Canada The Association for Manufacturing Excellence (AME) is the premier organisation for education and networking in the manufacturing profession.

Members come together to explore lean thinking, enterprise improvement methods, exchange best practices and network. AME has partnered with Canadian Manufacturers & Exporters (CME), Canada’s leading trade and industry association, to deliver a world-class national lean conference Conference attendees will experience six highly acclaimed lean experts and motivational keynote speakers, they can choose from 36 best practice practitioner presentations organised around four value streams.

There will also be over 18 tours to see hands-on application of lean techniques in action and 15 highly interactive workshops.

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

42

Photo courtesy of Sebastiaan ter Burg on flickr

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