LMJ November 2014 by Lean Management Journal

$65 – £45 – €50

Issue 9 Volume 4

| November 2014 | www.leanmj.com

A LEAN, MEAN GIVING MACHINE Exploring the role of lean in the voluntary and charitable sectors and how it’s helping non-profits through troubled financial times Organisations and interviews featured in this edition include: Guide Dogs, NCVO, Chest Heart and Stroke Scotland, St. Andrew’s University, CCBRT, Luxus Ltd, Commonwealth Bank of Australia, Joseph Ricciardelli, Bill Bellows. IN THIS ISSUE: Lean leaders: developing people in the developing world: LMJ interviews Michael Grogan, the continuous improvement coach at one of the first hospitals in Africa to turn to LSS in order to deliver a better standard of care and talks of the troubles in bringing lean to the developing world. Beyond budgeting: the what and the why: Get to grips with beyond budgeting with Penelope Blackwell, head of fundraising for Chest, Heart and Stroke Scotland. She shows the similarities and divergences between lean and how the two work together for a common goal. Lean guidance: Steve Vaid, director of mobility services for Guide Dogs explains to LMJ how the organisation got behind lean, the changes it has wrought, and the difficulties involved in surviving as a donationbased charity in a recession. Clash of clans: Max Cadrew returns with the second article on his series on lean in the professional environment.

editor ’ s letter

Dear reader, As the economy begins to bounce back across the world, the euro begins to settle and finance ministers start to laud their own brilliance as budget sheets turn back from red to black, the place of giving and sharing with those less fortunate than ourselves continues to rear its head. With budget cuts and high unemployment, rising food and other costs of living expenses, things are often tough on the workers and consumers involved in the economy. But what does this have to do with lean? Can an idea that was based in factories transmute itself to the world of the voluntary sectors, charities and non-profits? In this issue of LMJ we address this idea as we seek to explore the role of lean and continuous improvement in the charitable sector: does a process built around ways of saving money fit in with the culture where ruthlessness over costs have to be tempered by humanity and the need to help? E ditorial

Commissioning editor Andrew Putwain a.putwain@sayonemedia.com

Managing editor Victoria Fitzgerald

v.fitzgeral@sayonemedia.com

Editorial director Callum Bentley

c.bentley@sayonemedia.com

D esign

Art editor Martin Mitchell

m.mitchell@sayonemedia.com

Designers Alex Cole, Katherine Robinson

design@sayonemedia.com

To explore this issue we have a variety of voices from around the world who share their ideas of why lean works in the third sector. We interview Michael Grogan, a chemical engineer and trained LSS practioner who became enamoured with the idea of using lean to help in the developing world after a visit to Tanzania, and now is the continuous improvement at a large hospital with dreams to make it the model for LSS in Africa.

Penelope Blackwell is chief of fundraising for Chest Heart and Stroke Scotland and brings us her expertise in beyond budgeting, while Steve Vaid shares how Guide Dogs have recently begun a lean journey. This month’s special feature is from Fin Miller at St. Andrew’s University, who brings his personal experience in the world of IT to LMJ and gives us his own take on the often less than well thought-out way the worlds collide.

In order to receive your copy of the Lean Management Journal kindly email a.putwain@sayonemedia.com or telephone 0207 401 6033. Neither the Lean Management Journal nor SayOne Media can accept responsibilty for omissions or errors.

Our sector focus in this issue explores the idea of how charities have begun to come around to the ideas of lean. Nigel Kippax, head of fundraising operations at the National Council for Voluntary Organisations (NCVO), explains how since the great financial crisis, many charitable organisations have turned to lean to learn how to survive after a shortfall in government funding.

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.

Max Cadrew, from the Commonwealth Bank of Australia, presents another article on lean in the corporate environment with a battle between operational risk and lean which is best and can the pair learn from each other or can only one actually prosper in the environment? In this month’s case study we hear from Luxus, a recycling firm in Lincolnshire who realised by training their staff they had enabled themselves to save a substantial amount of money due to increased efficiency and abilities to spot non-lean practices. And in the return of the lean diary, Tecla Consulting’s Joseph Ricciardelli lists his 10 commandments for being an effective leader. Correction: In September’s issue we incorrectly listed Ian Machan’s website. The URL is actually: http://machan.co.uk/reshoreservitize. We apologise for the inconvenience.

Victoria Fitzgerald, Managing Editor.

contents November 2014

contents

04 Lean News 05 Introducing the editors 06 Introduction

Torbjørn Netland discusses the role of the charity sector in today’s society, and more importantly, the economy.

P rinciples & purpose 07 Lean leaders: developing people in the developing world LMJ interviews Michael Grogan, the continuous improvement coach at CCBRT, one of the first hospitals in Africa to turn to LSS in order to deliver a better standard of care to its patients, and discusses the troubles in bringing lean to the developing world.

10 Clash of the clans: operational risk v lean

In the second of his series on the incorporation of lean into the professional world, Max Cadrew, business productivity manager at the Commonwealth Bank of Australia, explores which will lead to better results: operational risk or lean?

15 Lean guidance

Guide Dogs is one of the most famous and noted charities in the UK, here its director of mobility services, Steve Vaid discusses with LMJ the pitfalls and positives of incorporating lean into its organisational practices.

18 Beyond budgeting: the what and the why

Penelope Blackwell is director of fundraising for Chest Heart and Stroke Scotland. She writes about beyond budgeting; its uses in the charity sector and the ways it interconnects with lean and the essential differences that make it a standalone ideology worth getting behind.

2 2 L ean diary 10 Commandments for a leader of the future

Lean diary returns with Joseph Ricciardelli, the operator of Tecla Consulting, exploring the idea of how important a capable and passionate leader is to an organisation undergoing a lean transformation.

2 6 S ector F ocus : V oluntary S ector Lean in the voluntary sector

Nigel Kippax, is head of consulting and training at the National Council for Voluntary Organisations (NCVO), which is the largest umbrella group for voluntary and community sector societies in England. He explores the voluntary sectors relationship with lean and how they benefit one another.

3 0 S pecial F eature Cyber kaizen

Lean consultant at St. Andrew’s University, Fin Miller, explores the relationship between lean and the online world. Is there a way to lean the cyber-highway or is the net to become ever more complex and jammed with waste?

3 4 L essons from D eming

This month Bill Bellows discusses the notion of quality vs quantity, and explores the ideas of learning to discern.

3 7 L ean online

We bring you all the latest news and discussion from our LinkedIn and Twitter pages.

3 8 E vents

Find out about the latest lean events coming your way.

3 9 S ubs F orm 20 CASE STUDY The lean approach: lightening the workload

An educational endeavour for staff training purposes provided an interesting surprise for a Lincolnshire recycling firm, when they were able to make hefty savings and create a long lasting culture of continuous improvement.

Elizabeth House, Block 2, Part 5th Floor, 39 York Road, London, SE1 7NQ T +44 (0)207 401 6033 F 0844 854 1010 www.sayonemedia.com. Lean management journal: ISSN 2040-493X. Copyright © SayOne Media 2014.

www.leanmj.com | November 2014

LMJ AMERICAN LEAN CHAMPION WANTS HIGHER WAGES

NEW LEAN SOFTWARE RELEASED

Indiana-based manufacturer, Steve Brenneman, runs his own company building trailers and has spoken out about how the financial crisis has led to the manufacturing industry excusing itself on lowering wages and providing less support and benefits for their workers. Brenneman is a selfconfessed lean fanatic who champions the idea of living wages for his staff, and maintains that if lean policies were embraced then wages could be raised. “We have to create systems where (workers) can improve the process, not just work the process. So what we ask our workers to do is to find ways that they can improve productivity, and that’s where the wealth comes from for everyone.” Brenneman said. Brenneman is part of a network in his area that has been set up to regularly share ideas on continuous improvement and many of the other small business owners also share his passion for providing a working wage. The benefits of which include a lower staff turnover, a huge detriment to any lean transformation.

The Tower of London. Image courtesy of xiquinhosilva on Flickr

NORTH EAST HOPES FOR A LEAN VICTORY While Britain’s manufacturing heartland maybe the midlands, the North East has always had a strong link to it as well and so several companies from the region are going in with high hopes to this year’s Chamber of Commerce Awards. The Annual British Chambers of Commerce Awards attracts the best of UK business talent and in 2014 the North East is sending a kitchen manufacturer, housing association, beanbag producer and a coffin maker. Regional champion, Nobia is Europe’s largest kitchen specialists, developing, manufacturing and selling kitchens across 20 countries. Nobia also boasts three UK manufacturing plants, with its Darlington operation the company’s flagship factory, employing 600 people and securing a 24% increase in turnover last year. Factory manager, Paul Colman, said: “We have invested £8m in new equipment at the Darlington plant in the last year and we’re adhering to lean manufacturing principles that have not only upped productivity, but also helped upskill our experienced and committed workforce.” The awards take place at the Tower of London on November 27.

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@sayonemedia.com

Several companies have joined forces to deliver a new lean manufacturing based software operating system. RoseASP a Microsoft Dynamics ERP and CRM hosting provider, has partnered with mcaConnect, an expert in lean business processes and a gold certified Microsoft Dynamics AX Partner. They worked together to develop cloud-based Areteium lean manufacturing software. The partnership marks the first time Microsoft Dynamics partners are able to host their own industry specific software trials and leverage the latest goERPcloud products to help trial and nurture the product. “The opportunity to put the software in the hands of manufacturers before they make a purchase allows them to truly see the value it brings to complex manufacturing,” said Doug Bulla, mcaConnect’s vice president. “This will help empower decision making for our future clients while they assess their software options. We’re looking forward to working closely with RoseASP and goERPcloud to help improve and streamline the processes of those future customers with lean manufacturing software and Microsoft Dynamics AX.”

I ntroducing

your

editors

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 | November 2014

INTRODUCTION WRITTEN

T orbj ø rn

very single day, millions of volunteers in the charity sector make the world a better place to live in. A charity is a non-profit organisation that serves the public interest with activities such as emergency relief, education, religious guidance, and helping the poor and the sick. The sector makes up a substantial part of the economy and is as diverse as society itself. Employees who work for charity organisations gladly accept a comparably lower salary to that of other jobs. Often they are volunteers who work for free. Such kind of intrinsic motivation is rare in other industries.

Wherever there is a process, lean can be used to increase efficiency

N etland

processes. In other words, bring in the logistics experts. The focus should be on creating more resources, time and space for charity to happen. Designing efficient end-to-end value streams focused on customer needs, while eliminating waste in back-office operations would go a long way. The objective? Making it easier for volunteers at the front-office to get to the heart of the service delivery. After new lean value chains are designed, it is time to benefit from the most valuable asset of charities: an exceptionally motivated workforce.

As the charity sector now attempts to go lean, LMJ Board Member The objective? Making it Jacob Austad’s favourite easier for volunteers at the frontquestion comes to my office to get to the heart of the mind: if lean is the service delivery solution, what is the problem? In the case of charity, the problem is not obvious. In general, charities are more of a solution than a problem. Though the mantra of being all about But times are tough in the voluntary people has become a business cliché, sector. Governments are cutting back on it certainly holds true for charities. grants and private donations are getting Charities are indeed run by people, for harder to secure. Hence the charity people. Squeezing the last drop of juice sector needs to improve the efficiency out of charity workers is the most certain and effectiveness of their operations. way to fail. Instead, their high motivation That’s where lean can contribute. should be nurtured and directed towards Wherever there is a process, lean can be betterment for both customers and the used to increase efficiency. organisation. They might not turn up at work to learn about quality-at-theThrowing the full Toyota model at source, just-in-time and continuous charities may however not be the best improvement, but they will be happy to way to proceed. These organisations do so if they see that it helps them out. work under substantially different conditions, which any lean programme This issue of the LMJ features some must take into consideration. A interesting stories of how lean has been successful implementation of lean applied to charity organisations. It is all in charities could start with a reabout doing good things better. engineering approach of the business

principles

purpose

principles & purpose

Michael Grogan is a chemical engineer by trade, who has worked in the UK, he is also a LSS black belt. He has been based in Dar es Salaam, Tanzania for 18 months working for the Comprehensive Community Based Rehabilitation in Tanzania (CCBRT), introducing lean and efficiency models to an organisation striving to provide high quality healthcare in a low resource setting.

Lean leaders: developing people in the developing world READ ABOUT: Introducing lean into the developing world Bridging the cultural gap and teaching what LSS can bring to any organisation How healthcare across the whole of Africa could be transformed by LSS

CBRT is a hospital specialising in offering healthcare to those below the poverty line. CCBRT focuses on maternal health and attempting to lower the infant mortality rate amongst people living in some of the lowest living standards in the developing world. LMJ spoke to him from Tanzania to learn about how his continuous improvement attempts were working. He spoke to LMJ about his passions and ideas for the future. How did you get involved in lean? Michael Grogan: That began in 2006; for about 8 years I worked for a company, MSD Pharmaceuticals, in the UK. I started

www.leanmj.com | November 2014

L ean leaders M ichael G rogan

my career in Northumberland as a chemical engineer in manufacturing operations, and essentially MSD brought me into LSS. I quickly fell in love with continuous improvement.

satisfaction I experience was incomparable.

How did you get involved with CCBRT? MG: I came to Tanzania as a tourist in 2010 and it was a life-changing moment seeing poverty for the first time and it changed my perspective on what was important. Did you stay in Africa? MG: I went back in 2011 to volunteer and then in in 2012 for a five-week long spell as a volunteer. I wanted to make a difference, and I used my connections and managed to get in contact with the CEO of CCBRT, Erwin Telemans. He understood the benefits that LSS could bring to the organisation. He invited me for two weeks and then the next year I came back for another five weeks. Since February of 2013 I’ve been here full time. The job

You can throw another x ray machine at it but a long term solution to eradicating poverty is to develop the people

What’s the biggest challenge in implementing lean? MG: People may expect me to say resources or the people - and their limited exposure to education, or even professionalism. That was my answer a year ago. Now, my answer is me. The person I had to change the most is me. I had to learn there’s no bad students, only bad teachers. I had to adapt my take on LSS to this situation. What aspects of LSS have failed in your work? MG: The principles of continuous improvement work everywhere around the world. But some of the toolkit (six sigma) are not necessary here. This is the same for hospitals in the UK. Things that work in a factory aren’t always relevant to a medical environment. It reminds me of the saying “He who is good with a hammer thinks everything is a nail.” I was very good with the six sigma hammer but those tools might not be needed in developing world or healthcare. There are bigger problems here to focus on. I wouldn’t say that’s where lean hasn’t worked but that

I’m trying to create new habits for leaders of continuous improvement. I’m trying to coach problem solving. I’ll fail if I don’t achieve a change in habits

principles & purpose

there’s so much to lean that not all of it was applicable here. What’s been the most beneficial? MG: I’ll put this in this context: we have 460 staff and I’m the only continuous improvement coach. One word to describe here is habits. I’m trying to create new habits for leaders of continuous improvement. I’m trying to coach problem solving. I’ll fail if I don’t achieve a change in habits. The go see mindset is the most beneficial, the people I’ve worked with have learnt the most from lean with this idea. Classroom environments, which I was comfortable with, are ineffectual on their own. So what are your plans for the future of LSS at this organisation? MG: We’ve got a big dream and I want to share it: our dream is to make this hospital, which serves the poorest of the poor, the model hospital for continuous improvement in Africa. We want to problem solve, develop people, and develop leaders. We want to show people what this looks like. For example, Thedacare, in the US was one of the first hospitals to embrace lean, 10 years ago. And now they get thousands of visitors every year to learn about lean. We have a partnership with them; their CEO came to visit us recently and we want to build a network with them. As well as other organisations and individual who will help us on our journey. We want to share resources and tackle the huge problem of healthcare and use this as a centre in the region for other healthcare leaders. We believe this is the best way to help healthcare and create the best positive effect for quality of human life. What’s the reaction been from those at the hospital? MG: Essentially with continuous improvement it’s about learning new ways of thinking, and de-learning the old ways. Regardless of where you are in the world, that’s a challenge we all have to overcome.

I’ve never experiences such a hunger to learn as I heave from this team. I work with the senior management and I believe the whole, 10 member team, have far more knowledge than I did, or have ever experienced in Europe or North America. We need to develop our own people. You can throw another x-ray machine at it, but a long term solution to eradicating poverty is to develop the people. We have transformed some people in how they think. To see how they embrace it and apply it is beautiful. The permanent impact. The students are the frontline. We impact the lives of over one million people every year. How can we make their experience better? I believe everything should be linked back to them and their experience. Our long term goal is to increase the impact of this. We have one of the worst maternal mortality rates in the world and reducing these statistics is how we measure success. It’s slow but we ultimately believe we can give more value to the patient. And finally, I want the lean community reading this to know that we desperately need more continuous improvement coaches here.

Our dream is to make this hospital, which serves the poorest of the poor, the model hospital of six sigma in Africa

The job satisfaction and meaning they would get here will be nothing like they have ever experienced: to do work that makes a significant contribution to the quality of human life. An opportunity to help build something beautiful. An opportunity to leave a legacy.

F urther reading : http://www.ccbrt.or.tz http://createvalue.org

www.leanmj.com | November 2014

Clash of clans operational risk v lean six sigma In the second of his series on the incorporation of lean into the professional world, Max Cadrew, business productivity improvement manager at the Commonwealth Bank of Australia, explores which is better: operational risk or lean? READ ABOUT: Good governance or good process flow? Is it better to choose one or use both? The practical application of these ideas in the corporate world Exploring the positive and of each and the culture surrounding them

deologically, the methodologies of operational risk (OR) and lean six sigma (LSS) appear to be poles apart, with OR assuming a role around good process governance, whilst the prime LSS objective focuses on good process flow. However, when you scratch below the surface of these institutions, we find not only do they both hail from common origins, but they share similar challenges in establishing themselves within the corporate landscape. This article explores both the benefits business units can expect by leveraging these opposing forces, and the benefits OR and LSS can expect by leveraging the vast body of knowledge shared between them. Organisations have long benefited from the creativity generated through healthy tensions between seasoned institutions such as sales and marketing. However, OR and LSS, who have equally competing goals, remain in their corners. So why should we create another business arena for factional fighting when we already have so much to contend with?

principles & purpose

Contrary to LSS, which is deployed voluntarily, OR was referred to in the early Basel II consultative regulations, and then enshrined in the final 2004 version, virtually instructing financial organisations to implement an OR framework group wide.

Today customers demand faster, more complex products and processes to deliver these will either make or break us. By pitting the two parties responsible for liberating customer value, without compromising the risk threshold, against each other, we have created a forum where we can safely challenge reasoning to optimise the process’ ebbs and flows.

W hat is the source of tension ?

It is a combination of guiding principles and the maturity of the methodologies. With respect to guiding principles, we will first look at OR.

Before exploring how we can leverage these opposing ideologies, we need highlevel overviews and some background on both OR and LSS in order to better position this opportunity.

Given a charter of hope for the best but prepare for the worst, OR practitioners perfected the art of identifying what, where and how big risks may materialise – especially when contemplating new initiatives. The focus is primarily on people i.e. opportunistic behaviour, human error. The methodology is there to assist the business with managing their risks without compromising their risk appetite.

Driven by globalisation pressures, LSS is a process improvement programme resulting from a fusion of lean engineering with six sigma quality. The lean strategy is all about speed and efficiencies through waste elimination, flow, and standardisation – how do we work faster and more efficiently? The six sigma strategy is all about process variation and customer satisfaction targeting variation reduction, rework elimination and process control – how do we eliminate process variation and defects? Although both strategies had been around for decades, it wasn’t until Michael George coined the term in his 2002 book, Lean Six Sigma: Combining Six Sigma with Lean Speed, this marriage took off. OR, on the other hand, was driven through a series of crises that forced organisations to rapidly batten down their hatches and review their exposures. OR, as we know it today, is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or external events. This definition includes legal, but excludes strategic and reputational risk. Although risk has been a recognised concept for years, it wasn’t until Peter Bernstein wrote Against the Gods: The Remarkable Story of Risk, in 1998, managers started to pay closer attention. This was further cemented by the number of crises during the 1990s, which demolished some of the organisations considered indestructible at the time.

Driven by globalisation pressures, LSS is a process improvement programme resulting from a fusion of lean engineering with six sigma quality

LSS on the other hand can be guilty of being hard-wired to seek and destroy seemingly bureaucratic obstacles under the guise of voice of the customer. Process centric - any human anomalies are generally a result of process deficiencies. Views the organisation as the sum of processes. The methodology is designed to help the business see processes for what they really are and make informed decisions on how to improve them, and if doesn’t appear to add value – get rid of it. When we think of maturity, we have two components to consider; the methodologies themselves and the practitioners. Having been around for less than two decades, both methodologies are in their adolescence and seemingly forever in a state of flux. There is nothing novel when it comes to content, for both have evolved from best practices across multiple organisations, industries and disciplines. Identifying the right tools, techniques and procedures remains a constant challenge due to the complexities of each business requirement and therefore the methodologies can remain in a conceptual state, totally left to the discretion of the practitioner of how they apply it. So when formulating a convincing argument, these factors can be the source of varying degrees of uncertainty when it comes to advising the business unit leaders. Choices are often swayed by who has the loudest voice.

W hy should we encourage this ?

When there is no conflict, nothing changes. Conflict represents an opportunity to stress test processes. When these methodologies are applied in the pure sense, we get a balanced view.

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C lash of clans M A X C A D R E W

OR practitioners are masters at providing reasonable assurance when delivering a product or service. However, from a LSS perspective this conservative nature provides a source to challenge seemingly over controlled processes, riddled with stale, ineffective, redundant and duplicated controls inhibiting the process flow.

driving costs out and/or constantly concerned with ticking time-bombs (rear-view mirror management). So, it is fair to say most major financial institutes have varying degrees of OR and LSS engagement. Senior leaders are always quick to embrace initiatives that add real value to their operation, the challenge is to convince what I call the frozen middle – those managers who rightfully are protecting their BAU practices to deliver their goals and objectives (set by the senior managers) within the operating model they know. They have been bitten before from those halfcocked, failed programme deployments – programme du jour.

But LSS practitioners can sometimes be accused of being cavalier or overzealous. Often rewarded on the amount of efficiencies harvested, and in some cases, from improvements which naïvely remove key controls. OR practitioners have the best seat in the house to keep LSS teams honest to the process.

A re we that different ?

On the surface, the respective frameworks which drive these methodologies appear to be poles apart, but ironically, as soon as you lift the lid, we find some surprising commonalities. Both employ the tools and techniques found within the doctrine of decision science. These range from soft tools such as brainstorming, root cause analysis, prioritisation, codification, categorisation and scoring techniques to some of the more complex tools such as modelling, analytical hierarchy processing, as well as hard tools such as those used extensively in statistics such as central limit theorem, regression, Bayesian theorem and statistical process control. As these frameworks are designed to address issues in sub-optimal processes, they follow a similar logical order of define, measure, analyse, (improve for LSS) and control. And of course, both heavily depend on a governance structure including peer reviews, documentation and reporting. Not only are there these commonalities within respective frameworks, we have similar struggles in deploying them. To some businesses, OR and LSS initiatives are stigmatised as necessary evils. Business leaders would much prefer to focus externally – increasing profits and building the organisation, rather than the internal distractions of whipping unresponsive processes,

When there is no conflict, nothing changes. Conflict represents an opportunity to stress test processes

In addition, frameworks annex a number of tools and techniques which are, to some degree, already practised within pockets of the organisation – or at least the business units leaders believe they are. The challenge we both face is convincing business units partners of the value we bring in totality as opposed to cherry-picking components of the frameworks. Organisations are inundated with well-intended initiatives such as OR and LSS, creating a scramble and competition for share of mind within the corporate landscape. Crucial to survival is having a voice in the upper echelons to secure support, funding and ultimately, resourcing. As with all cost centres, we continually need to demonstrate worth from both a value add and cost perspectives. To achieve this, both LSS and OR experiment with different operating models to try and get the right fit to raise awareness, engage the business and deliver the optimal solutions (centralised-decentralised structures, functional-operationalmatrix management). However, it doesn’t matter how polished methodologies are or how well they are embraced within the businesses, they both heavily depend of the quality of resourcing. OR and LSS roles are typically filled from those willing to take a chance on a midcareer sea-change. It is doubtful anyone graduating from tertiary education

principles & purpose

aspired to be a LSS or OR practitioner. Therefore, when these initiatives first appear on the corporate radar, the team to deliver such an important event is either hired externally or handpicked – having previously secured the confidence of senior management. As the programme gains momentum, it quickly starts to internalise with the business units identifying the next cohort of practitioners. Often middle management does not understand the importance of the respective programmes and tends to assign these roles to those that are not their key personnel. These employees may range from workhorses to others with no prior aspiration to be a LSS or OR practitioner. To add even more complexity, the initial training material is developed and delivered by experienced consultants. These courses are usually designed for the original handpicked team – those that are well briefed and quick learners – so the content is concept rich but application poor, due to the programme immaturity and lack of reference material.

Frameworks annex a number of tools and techniques which are, to some degree, already practiced within pockets of the organisation

Therefore, when the next cohort of practitioners land in the classroom, they can be like deer in the headlights. Not only are they on a steep learning curve to try and absorb the amount of new concepts, tools and techniques of their newly adopted professions (voluntarily or involuntarily), but are also expected to apply it in the complex, politically charged business environment - a clear recipe for disaster. What frustrates the industry and practitioners even more, is the proliferation of credentials that have flooded the market with every training organisation claiming that their programme is best practice. As both methodologies have been well defined for a number of years, it is difficult to understand how they could have become so diverse.

W hat are the real synergies ?

Placing ideologies aside for now, the two methodologies have so much to learn from each other that it is only limited by one’s own imagination.

C an O R learn from L S S ?

How to harden up all their subjective analytics: LSS has spent a long time simplifying and building support structures so even the most complex statistical computations are available to the non-analytically minded practitioner in order to make more accurate, less biased decision making. How to facilitate major group workshops: sharing the suite of soft tools and techniques to gain engagement, align thinking, extract tactic knowledge, and optimise output. How to apply the customer lens: voice of the process: an end-to-end view of how the process currently performs todays and any gaps from customer expectations.

C an L S S learn from O R ?

The value of assurance: no business venture is without risk. From a lean perspective, OR are the masters of establishing the tasks within a process that add real value to the business. These checks and balances are installed allowing businesses to participate

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in the market as a profitable entity. The control environment is to first and foremost protect us from any foreseeable event which may not be obvious when conducting a process reengineering exercise. More advanced causal analysis of what drives risk to provide an alternate view when futureproofing processes. How to choose battles wisely: that is, how to deliver goods and services in an imperfect world. Not all processes in the transactional world need to be operating within six sigma (i.e. 3 or 4 defects within a million opportunities), especially if the consequences are fairly insignificant and well within a risk appetite (cost of doing business). Sometimes LSS can be guilty of using a sledgehammer to crack a walnut. Installing a simple control regime can offer the same reliability through attention to detail as a major process reengineering exercise.

T he corporate pact

Equally important, collaboratively OR and LSS have an opportunity to spearhead some of the challenges we both endure. These days, the constant wave of changes subjected on the businesses from support groups like LSS and OR, can be overwhelming – especially if there is a concentration of initiatives enforced upon single teams. By coordinating a rollout strategy, you can firstly limit the amount of distractions to the business unit and achieve a higher quality outcome, and secondly, the level of change readiness of the business units can be shared between parties to co-ordinate where best to spend the effort. Young operations such as OR and LSS will continue to compete with traditional career paths through the more recognised breeding grounds, or the tried and proven practice of hanging on to the right tailcoats. The old adage that like hires like is still alive and well when it comes time to filling vacancies. Middle management teams are often still swayed by those potential candidates who learnt the ropes just as they had to.

W ould collaboration improve the struggle to attract talent ?

As already identified, the similarity between these two professions suggests both are looking for similar competencies. Building a case based on how these competencies will be enriched during a tour of duty and lobbying HR, will not only create a new pathway to a valued leader, but also send clear messages to those that are frustrated with their career that a stint in OR or LSS is a viable alternative. One by-product of this approach would be the thawing of middle management teams with respect to embedding these programmes, as practitioners begin to lead their own functional teams.

W hat does this all mean ?

Young operations such as OR and LSS will continue to compete with traditional career paths though the more recognised breeding grounds or the tried and proven practice of hanging on to the right tailcoats

By continuingly challenging and securing the front and back office processes, LSS and OR methodologies have earned their place as a permanent contributor within the corporate landscape. Until now they have always been referred to as discrete initiatives with unique challenges. Establishing an open communication channel would elevate the co-ordinated programmes to a higher top of mind within the corporate community and expedite engagement. In addition, an understanding of the crucial roles each plays in the pursuit of the organisation’s prosperity provides opportunity for robust debate. Thus allowing these methodologies to go head to head to get their voices heard so business leaders can be smart about taking chances. Relying on business units to appoint who should and should not join the programmes will not guarantee a quality service. Establishing a progressive development path though these methodologies will have the right employees putting their hand up, as it provides an alternative route for tomorrow’s leaders.

FURTHER READING: Principles for the Sound Management of Operational Risk, Basel Committee on Banking Supervision, June 2011 Against the Gods: The Remarkable Story of Risk, Peter L. Bernstein, 1998 The Failure of Risk Management: Why It’s Broken and How to Fix It, D. Hubbard, 2009 Good to Great, J. Collins, 2001 The Wisdom of Crowds, James Surowiecki, 2004

principles & purpose

Lean guidance READ ABOUT: The implantation of lean over a large, nationwide charity The lean ideas that have helped What they look forward to doing in the future

Guide Dogs UK is one of the most famous and noted charities in the UK, here its director of mobility services, Steve Vaid, discusses with LMJ the pitfalls and positives of incorporating lean into its organisational practices.

uide Dogs are one of the most emotive and beloved of all charities and it’s well known that the costs of training a guide dog is huge (it costs upwards of £50,000 to breed, train and support the owner of a dog over its lifetime) so it’s no surprise that the organisation is looking for a way to deliver more for less. LMJ discusses the charity’s recent adoption of lean practices. What exactly does your organisation do and what specific management and process practices do you employ on a regular basis? Steve Vaid: We provide a range of mobility services for people with sight loss; adults, children and their families, but are best known for producing guide dog partnerships. We have a range of performance indicators and employ a balanced scorecard approach. This scorecard started as a top down monitoring tool for our trustee board, but it is becoming abundantly clear that its potential value as a lean management tool is huge.

Steve Vaid is part of a team to embrace lean

What drew your organisation to becoming lean? Did you attempt other continuous improvement processes first? Was there a specific problems? SV: We recognised we had experienced, knowledgeable staff but hadn’t harnessed those qualities to improve what we do for our customers.

www.leanmj.com | November 2014

L ean guidance S teve V aid

Perhaps our biggest problem is going to be harnessing and building upon the enthusiasm of those involved For some time we explored with continuous improvement. We happened upon lean through seeking advice from one of our suppliers (Peugeot) on improving production processes (Yes, we talk about dog production) and struck gold having been introduced to David Male. What training or consultancy did you undergo to prepare? Or have you gone it alone? SV: We have had guest speakers (Professor Zoe Radnor and David Male) at a manager’s conferences and introduced some structured training in lean principles, keeping it simple and practical with things like the stickle-brick game. David also came to see us and viewed our processes. He quickly determined we push everything and suggested that were we to adopt a lean approach we

could reduce our lead time and remove much of the strain on our systems and staff. We’ve also received input from PMI in looking at our production planning. Was there problems when your first began and what have you found the most easy/difficult thing about your lean transformation? SV: We’ve only just started, but perhaps our biggest problem is going to be harnessing and building upon the enthusiasm of those involved. We’ve really inspired a management group who are keen

principles & purpose

mimics the stages in our production process and demonstrates the effectiveness of systematically applying lean principles, and problem identification/solving techniques. We’ve also encouraged individual teams to experiment with visual management and are now developing a common format which can be used, and understood, across the business. As we progress we grow more confident that we can improve and that lean is absolutely relevant to us.

to press on with implementation. Beyond cultural issues, we lack true standardisation, believing, until now, that every Guide Dog partnership is unique which requires a bespoke approach throughout the training process.

We’ve started at the top and are cascading lean thinking through management groups and business functions supporting them

Yes, the finished article needs to be the right dog for the right customer at the right time, but we now realise that we can offer a customised product from a standard platform much as Dell, or Subway do. The customisation can take place towards the end of the process, allowing us to standardise and improve earlier elements. What specific issues do you think that charities and non-profits experience in implementing lean, that others sectors might not? SV: We are a service provider in a social context. That can lead to resistance when it comes to applying commercial thinking and techniques with a loyal and committed staff group. Our challenge is to blend the two and use the right language for us. What has been the most valuable element of your lean transformation? SV: We’ve started at the top and are cascading lean thinking through management groups and business functions supporting them. Our initial workshops include a stickle-brick game, which

We receive no government funding for our core service. Every penny we spend on the guide dog service is a charitable donation

Have government budget cuts effected your organisation at all and have you found lean beneficial for this? Do you believe this has/will lead to more charity/non-profit organisation adopting lean? SV: We receive no government funding for our core service. Every penny we spend on the guide dog service is a charitable donation. That means we need to be even more mindful of how we spend our money since our funders continue to support us despite, in many cases, being impacted personally since 2008. We, like all businesses, seek to do more with less and can only do that by releasing, and redeploying, capacity. What are the benefits to group cohesion/communication that you felt lean brought? SV: There seems to be a common understanding of what we’re trying to achieve and a determination to see it through. Mobility team, and other managers are fully engaged and our approach so far means we are all talking the same language. Did lean create issues that you weren’t expecting? SV: The initial enthusiasm is greater than expected and with a geographically (UK wide) spread business, keeping up with demand for help and facilitation, until such time as we develop internal resources, will be challenging and potentially costly.

www.leanmj.com | November 2014

Beyond budgeting: the what and the why Penelope Blackwell is director of fundraising for Chest Heart and Stroke Scotland. Here she writes about beyond budgeting and its uses in the charity sector.

harities are cause-motivated businesses. Often described as not-forprofits, they are better described as for-impact. Yet surprisingly, charities spend a lot of management and trustee time focusing on variance and the bottom line, rather than putting in place systems that focus on their all-important impact. Impact - which could be described as how well you deliver against your strategy - is important not only to charities, but to every lean business.

And returning strategy to centre place by releasing the time, energy and motivation of staff by abandoning command and control is one of the key themes of beyond budgeting. How then does this link with lean? As with lean, beyond budgeting is so much more than a set of tools. It is in fact a philosophy that shares with lean an antithesis to command and control through the decentralisation of decision making to front line staff. In Toyota, we see staff empowerment, staff-led design and visibility to the front line, themes that also run through beyond budgeting. It is no surprise Toyota practices both lean and beyond budgeting. With much in common, they do, however, focus on different areas. Beyond

Due to financial measurement, in many organisations the budget has taken over as the key management control, and even supplants strategic decision making

budgeting’s first radical thesis is that budgets and the budgeting process are wasteful and unnecessary. Not that there shouldn’t be controls. Just that these controls should be adaptive as well as diagnostic, and include wider controls around boundaries and belief systems. The budget is like the dials on a plane’s control panel. If budgeting is abandoned in favour of alternative controls, staff time, energy and motivation can be released to drive impact. To illustrate this, there is one bank that emerged from the 2008 financial crisis unscathed - growing, in facthaving practiced beyond budgeting since the 1970s. Handelsbanken - whose late CEO, Jan Wallander, is regarded as the father of beyond budgeting - is Sweden’s largest and most profitable bank, and is now expanding, including into the UK. Also, Norway’s StatOil, under the leadership of Bjarte Bogsnes, who chairs the beyond budgeting roundtable, and the UK’s SightSavers charity, practice beyond budgeting. SightSavers is so focused on impact; it spends 80p in every pound delivering its services across the world, despite the overheads one might expect of an international organisation. So, if Handelsbanken, StatOil and Sightsavers can make it work, what do we mean by beyond budgeting? In any organisation, there are three main control functions, strategic planning (where are we going?), operations planning (how will we get there?), and management control (are we getting there, and to time and cost?). Due to financial measurement, in many organisations the budget has taken over as the key management control, and even supplants strategic decision making. The budget becomes bad master, not good servant. Combined with being a bad master, the whole process of budgeting is complex, time-consuming and fraught with difficulties. Linear extrapolations from past events are frequently integrated into the new budget, with changed market circumstances not reflected; gaming happens as managers pad their budgets or make inappropriate business decisions to meet short-term targets not longterm needs; and office politics run rife. In Jan Wallender’s words: “traditional budgeting is a cumbersome way of reaching conclusions which are either commonplace or wrong. In the latter case the budget might even be

principles & purpose

Development of suggested links The emphasis may vary depending on whether an organisation is a defender or prospector. Strategy

Structure

Controls

Behaviours and performance

Internal feedback External impact

The traditional organisation The traditional organisation is cost focused and controls through variance: it attempts to buffer its operations from its environment. Defender strategy concentrates on operations and costs, buffering environmental effects through command-and-control budgets.

Defender strategy

Cost control focus through the budget (variance)

Command-andcontrol structure

Internal controls Dysfunctional behaviours and performance: The beyond budgeting organisation The strategy focused organisation is outward facing and uses internal feedback to adapt to its environment. Environment affects strategy, structure and behaviours (impact depends on strength of external turbulence and which adaptive controls are switched ‘on’/’off’).

Radically decentralised and customer focused structure

Strategy focused

Adaptive controls used to react to environmental changes

Internal feedback Behaviours and performance: strategically aligned by KPIs; empowered through trust

dangerous. It is dangerous because if you believe in your budget it might hinder you from adapting to new situations. If you do not believe in it, there is no point in making it.” So, what would a beyond budgeting organisation do instead? Bjarte Bogsnes has identified the five functions of a budget as: high level financial and tax planning; target setting; controlling fixed costs; prioritising and allocating investment or project resources; and the delegation of authority. His solution was instead to produce quarterly rolling financial forecasts; set targets and KPIs against a balanced scorecard; and use trend reporting and cost targets where and when needed. In making investment decisions he used trend reporting for small projects and varying hurdle rates for medium sized projects (major projects need a case by case decision and have never sat within the budget.) Finally, he used existing mandates and authority schedules to ensure good governance. The use of the balanced scorecard is a feature of beyond budgeting organisations. SightSavers has its own SIM (strategy implementation and monitoring) card, which identifies exactly where the organisation needs to focus to deliver its vision and mission. Targets and KPIs can then be set, for example, for the effectiveness of its partnerships, the quality of its programmes or the adequacy of its specialist and technical expertise. But using rolling forecasts or balanced scorecards are only a part of how beyond budgeting puts strategy and agility centre-stage to drive impact. Central to the philosophy is its focus on radical decentralisation, not command and control. Staff are empowered to make local decisions that are consistent with governance principles and the organisation’s goals, and in line with their local knowledge - for example at Toyota, where production workers are able to halt the production process to prevent a failure from causing a major problem. Front-line customer-facing teams are given responsibility for the value creation which delivers impact - for example, at Handelsbanken, 50% of branch staff have decision making authority. Whilst performance is judged by benchmarking against other teams, internal or external, this competitive spirit is balanced by co-operation, the sharing of knowledge across the whole organisation and a focus on long-term goals, not short-term reward. Everything we’ve learnt from the events of the last decade reinforce not only how stultifying but how dangerous the command and control budget model can be - think Fred Goodwin and RBS. Lean beyond budgeting organisations, where the controls are adaptive, staff time has been released by removing the frustrations and constraints of budgeting and their energy, and motivation increased by being empowered to make value adding decisions through local knowledge, are surely the way forward to achieving real impact in any sector.

www.leanmj.com | November 2014

C A S E S T U D Y L uxus

The lean approach: lightening the workload R ead about : Investing in staff for the business to grow Sensible, low cost solutions Engaging the team as a whole for a sustained improvement

he staff at Louth-based technical recycling and compounder, Luxus, managed to gain a £30,000 a year saving for the company thanks to a lean project which they proposed as part of their national vocational qualification (NVQ) level 2 studies. The project was one of three initiatives suggested by Luxus staff when they were asked to consider lean approaches to solve business problems in their day to day work. Luxus managing director, Peter Atterby, explains: “We wanted to provide an opportunity where our staff on the factory floor would be able to influence how the business works by identifying problems that they could solve using lean thinking as part of their NVQ studies.” As a result, three teams suggested the following projects: a system for improved feedstock management

CASE STUDY

A bout L uxus

26,000sq metres A production capacity of 45,000 ton p/a Running since 1965

in the factory yard; identifying markets such as recovered fuel for scrap waste from its manufacturing processes and a re-use scheme for bulk feedstock bags.

We wanted to provide an opportunity where our staff would be able to influence how the business works

One team believed that they could be more efficient in the management of materials distributed throughout the yard. They had identified there were problems with the current manual system used to track stock and wanted to find a more accurate solution for tracking material movements. So they introduced a before and after survey which enabled staff to measure exactly how much time they spent searching and re-organising stock.

The team decided this problem could be better solved by introducing a computerised mapping system, which will be fully automated enabling staff to find stock instantaneously. The new system will monitor all stock movements and by whom, so all feedstock can be easily tracked. This system data will also be more easily shared within the business too. The team also decided that a reorganisation of the yard was needed so feedstocks that are never used together on the same job are stored separately so they are easier to locate. These locations are also logged on lot cards and blender sheets, with twice weekly checks so this information remains up to date.

The team began the process by simply using a spreadsheet to monitor their time on a daily basis for four weeks.

According to Peter Atterby, “We are really pleased with the results of all these projects, they have effectively helped to engage staff with lean based challenges thanks to their team led approach. It has already delivered tangible benefits, making a better and more productive working environment for us all.”

As a result, it was found that staff would typically loose around 100 hours a week either searching for feedstock or re-organising the space needed for new deliveries at a cost to the business of £30,000 a year. These results were presented by staff to the management board and a new solution was proposed.

This and the other lean projects are still on-going at Luxus as part of the teams’ NVQ study programme. The business now plans to introduce radio frequency identification (RFID) tagging to the feedstock management system to fully automate the procedure in the near future.

Staff would typically loose around 100 hours a week either searching for feedstock or re-organising the space needed for new deliveries at a cost to the business of £30,000 a year

www.leanmj.com | November 2014

L ean diary J oseph R icciardelli

Lean diary: 10 commandments for a leader of the future Joseph Ricciardelli, the operator of Tecla Consulting, returns with the lean diary and analyses the role of a leader in a lean transformation. Here he explores how important they are to maintaining standards and making sure any continuous improvement project gets off the ground and ultimately succeeds.

READ ABOUT: How to be a respectful, engaged leader Creating the brand of you How little victories can build up to a big victory

eing an international consultant, I consider myself lucky. I love what I do for my job, and I love what my job does for me. It gives me opportunities to meet and work with a myriad of people within multinationals and SMEs and get to grasp with various business cultures along the way. I cannot help but notice that no matter the differences in systems, behaviours and approaches, there is one common point: which is leaders, that have desire to improve themselves, mostly struggle in vain and lose the battle.

Iâ&#x20AC;&#x2122;ve put myself in their shoes, wondering, if one wanted to become a successful leader, which traits do they have to possess and which path do they have to take in order to become one? These days you can come across forests of books teaching and selling tips and tricks on the topic. If you are lucky enough, you will find some seemingly helpful ones supported by successful case studies, or get a stray with paraphrased versions. Studying, you will encounter definitions, practical guides and proofs. You will try to apply those whose pieces of advice you assess as the best. And you will probably fail. Why, if itâ&#x20AC;&#x2122;s already proved to work out? The answer is rather simple. Improvement systems are not just a set of tools that you can copy and paste; they are based on the most precious resources - people. Likewise the system, people cannot replicate the good-leader-traits

LEAN D I A RY

and a starting point you are never to forget. 2) The right direction

Ask your people a simple question: is motivation yielding results or results motivation?

nor can they be taught to be the ones, especially not only by books. They have to learn by doing, develop their skills and grow through the process of becoming the leaders. However, during many years of personal experience I have collected a few secrets, that will not teach, but rather facilitate, one’s growing into an exemplary leader. I’ve summarised them into 10 commandments to follow, in order to change your future as a leader. 1) Better one step made by 100 people, than 100 steps made by one person If you are called a leader, by default you are in a better position compared to the others; meaning that you hold a higher position in the organisational chart and probably the one on a payroll list; you make crucial decisions for your people and sign your valuable name under it. Every action you do, decision you bring, agreement you make is closely followed, monitored and commented, often copied by others. That role of a leader everybody looks up to, can lead you to a false belief you genuinely are better. If that happens, you are on a very dangerous ground, for you are not better than anyone. The results achieved come only as a product of the sweats of your team and you mingled – you alone would never reach the same goal. This is commandment number one

Deterioration

Improvement

A person whom nurtures themselves on healthy food and exercise will gradually enhance their wellbeing. On the other hand, the health of a couch potato eating junk food will, in time, decline. Which way to go in life is a matter of choice. The outcome would be obvious shortly, either way. As a leader, on a path of processes, you are the one responsible for choosing the direction, for yourself, the team and the company. You can take one of two: a direction of deterioration or the one of improvement. To do it right, you need capability, experience and feelings developed to comprehend if every single step of the project is going towards improvements or deterioration. As in everyday life, results of your decision would be visible soon enough. 3) The importance of small things Easier said than done, you think? It may seem so, but for the matter of fact it isn’t. It’s one-priority, and small-thing, at

www.leanmj.com | November 2014

L ean diary J oseph R icciardelli

5) Methods Results

Method

Involvement a time. Set the right thing in motion following the priority rule. Take small, methodical, easy to achieve, notbig-investment bites. Small steps will yield small results, but do not underestimate them. They will enable you to take control of every single bit of the project and let you see if you are heading in right direction. Eventually, the small things will topple the much bigger ones. An example is with 57 dominoes, from The One Thing, a book by Gary Keller and Jay Papasan, which proves this idea of little eventually overcoming large. A single domino is capable of bringing down a domino 50% larger than itself. It starts with a 5cm tall domino, and each one slightly bigger than the next. And by the time we get to domino eighteen, it could topple the Leaning Tower of Pisa. The twenty-third domino looms over the Eiffel Tower. Domino fifty seven practically covers the Earth â&#x20AC;&#x201C; Moon distance. Thus, take a small thing at a time, and take it seriously. 4) Results generate motivation Ask your people a simple question: is motivation yielding results or results motivation? I have conducted the poll. 90% went for the first option, 9% said it was a continuous loop, and only 1% replied that results were the spark and true engine of motivation. I agree with the minority. Small results, coming out of the daily kaizen your people reach, will last for a long time. Go for those improvements and they will drive your people ahead.

That role of a leader everybody looks up to, can lead you to a false belief you genuinely are better. If that happens, you are on a very dangerous ground, for you are not better than anyone

Back in the early seventeenth century the fathers of scientific method, RenĂŠ Descartes and Francis Bacon, stated that a generation of knowledge needs to follow a planned structure in a deductive manner of reasoning. Integration of scientific method into the science of improvement has been developed through time. So, in twentieth century, Deming developed PDCA, the four step cycle for problem solving that includes: Planning: definition of a problem and a hypothesis about possible causes and solutions Doing: implementing Checking: evaluating the results Action: back to planning if the results are unsatisfactory or standardisation if the results are satisfactory Now, in the twenty-first century, we are still to use Demingâ&#x20AC;&#x2122;s cycle as a proven problem solving method.

LEAN D I A RY

6) The success triangle What is success for a leader? Itâ&#x20AC;&#x2122;s when you gather people, train and empower them to identify and hack whatever challenges come along and roll with the PDCA cycle to the peak of success.

7) The best tool is paper

Improvement systems are not just a set of tools that you can copy and paste; they are based on the most precious resources - people

8) To think is free What does it cost to be a good leader? It will cost your energy, passion, patience and courage. However, to think is free. You have to use the benefit to facilitate the thinking process of your people as much as possible, as to avoid and eliminate obstacles due to bureaucracy and rules. If you come across a problem, you will probably take a toolkit, choose the best fitting tool and find the solution. But only if the tool is used properly. So, whatever tool you have in your hands (A3, tagging, 5Whys) it will only be effective if is utilised during the analysis and solution process.

9) Look far ahead and nourish the dreams Discoverers of the new world set sail with the guts to explore the unknown. What they had found was beyond their imagination. You are the captain of your boat that together with your crew should go towards the vision and mission. Stir the boat in the direction, keep an open mind and you will find a new world of improvement opportunities.

You can have the best tools, but if common sense is not involved, you will not arrive at the solution. Or rather, you may be able to tackle the problem, but the solution will be not sustainable.

10) Brand you I helped you go through these nine howto-become-a good-leader points making sure you are on the right path. Now itâ&#x20AC;&#x2122;s your turn to leave a mark, by making the tenth step on your own.

Hence, write down the problem on a piece of paper, use your brain, and find the solution.

The very last tip from me is continually develop in order to develop the others. Do not copy, but just be the brand you.

www.leanmj.com | November 2014

SECTOR FOCUS

volunteering

hen considering the application of lean tools and the broader approach to process management, many of us will be familiar with the leading-edge examples from the corporate sector, others, with the changes in the way our public services are being delivered by, for example, HMRC. But what do we know of the voluntary and charity sector? Forgotten cousin or active partner?

Lean in the VOLUNTARY SECTOR READ ABOUT: Exploring the adaption of lean in the voluntary sector How the economic crisis changed the way charities and voluntary organisations undertook their budgeting and finances

Nigel Kippax, is head of consulting and training at the National Council for Voluntary Organisations (NCVO), which is the largest umbrella group for voluntary and community sector groups in England. Here he explores the voluntary sectors relationship with lean and how they benefit one another.

Six years ago I began working in the UK voluntary sector and have for the past year been leading the consulting team at NCVO â&#x20AC;&#x201C; the largest umbrella body for UK charities with over 11,000 member organisations. Those new to the voluntary sector may be surprised to learn that there are over 160,000 UK voluntary sector organisations with a combined annual income of ÂŁ40bn and employing around 800,000 people. Not small by any standards. The sector has changed enormously over the past 25 years, partly driven through the growth in delivery of social care services which are part funded through government contracts. Government funding has proven to be a two edged sword in that is has provided money, but the greater reliance on government contracts has brought with it the risks associated with funding cuts. The recent years of austerity have placed enormous pressures on voluntary organisations, both directly through reduced contract funding, and indirectly through reduced individual giving. So how has the voluntary sector responded to the financial pressures? I believe the voluntary sector is now in a fourth phase of response.

P hase 1 : D enial

When the financial situation took a turn for the worse in 2008/2009, my conversations with sector leaders were often couched in the idea that obviously no one knew what would happen until the government produced its spending review. Later, once the review was published, the response included an

SECTOR FOCUS

APPROACH Functional salami slicing

Activity centred

PROS

CONS

Easy to understand

Silo thinking

Quick to implement

Inward facing

Fits with current structures and lines of control

Will miss opportunities for improvement

Driven from the core purpose of the organisation

Requires cross department team working

Risks destroying capability

Outward facing

Often not a single person’s responsibility

Brings departments together

Requires leaders to think and act in ‘two dimensions’

Identifies improvements that don’t destroy capability

There are over 160,000 UK voluntary sector organisations with a combined annual income of £40bn and employing around 800,000 people

element of procrastinating as everyone waited on what specific impacts that would have on any one charity. As with many major challenges there was a tendency in some quarters to wait and see and continue with charity as normal while government cuts were announced. Eventually, however, the challenges of operating within an environment of reduced financial income became clear. Many leaders then looked for a well tried and tested route to meet these challenges.

P hase 2 : R aise more funds

When the consequences of reduced income were clear, organisations increased the intensity and professionalism with which they sought to raise funds assuming that new income could secure the charity’s future. This was reflected in recruitment figures in 2010/2011 where up to 90% of all advertised vacancies were within fundraising. The reaction to reduced income was often get a new director of fundraising to sort this out. Unfortunately although this worked for a few, the overall pot of money available was getting smaller, so returns were ever more difficult to secure. A lot of excellent work was done, but fund raising alone is not the long term solution for the sector.

P hase 3 : S alami cost cutting

The third phase saw charities reducing costs, re-focusing priorities and cutting services. The salami or functional approach to managing costs has a number of advantages. Firstly, it’s easy to understand. If it is deemed necessary to reduce operating costs by 10%, then why not give each department head a target of 10% reduction? This fits well with often established lines of authority, particularly where the default leadership style tends towards command and control. At first sight it would also appear to be fair and reasonable. On closer inspection, however, this approach is somewhat less fair than at first glance. I have often met department heads who are very conscientious about overheads and run a tight ship. If this head is given the same target as a colleague who may have been working with excessive fat in their team, how can this possibly be fair? Worse still, a salami approach will encourage silo working. It is almost certain to overlook major opportunities to improve ways of working in the links between

www.leanmj.com | November 2014

S E C T O R F O C U S volunteering

fighting for change and supporting them to have better lives. Much of their work is centred on delivering government contracts, an area which has faced severe reductions in funding.

departments and risks destroying capability. A functional approach may have advantages, but it also has severe limitations meaning it cannot be considered a sustainable approach to managing costs and performance.

The senior team have set out to transform the way the charity operates to ensure the long term success and sustainability of their work. Their selected approach includes the use of a target operating model incorporating architecture on the key areas of strategy; people; technology; processes and performance. This is another excellent example of changing times in the voluntary sector.

P hase 4 : I nnovation and managing processes

A sustainable approach to managing costs will focus on the processes that cut across departmental boundaries. This is often not easy to implement as it cuts across normal lines of authority and requires team working to delivery benefits, but the advantages of this approach will far outweigh the challenges. Several voluntary sector organisations are now in the fourth phase; recognising the need to think differently about their business model, the way in which income is secured, the mind-set adopted in solving problems and the way processes are managed and operated. Lean thinking is alive in the voluntary sector. To illustrate the point, NCVO convened a leadership forum in early 2014 on the lean charity - how to adopt lean tools in the voluntary sector. Interestingly, there were twenty large charities who were either already doing lean, or who were very interested in finding out more. Even as recently as a year ago I don’t believe such as session would have attracted more than one or two participants. Examples of what’s currently going on:

C L I C S argent

CLIC Sargent is the UK’s leaking cancer charity for children and young people operating with an annual turnover of £20m. They provide clinical, practical and emotional support from diagnosis onwards. Two years ago the charity embarked on a programme of lean six sigma and other business process management methodologies, to innovate and get ready for future growth. Earlier this year they published the results of the Better by Design programme showing how over £1m had been saved from recurring overheads without affecting front line services. A real testament to the process centred approach to cost management and an excellent example of changing times in the voluntary sector.

C hildren ’ s S ociety

The Children’s Society provides children’s social care across the UK, operating with an annual turnover of £40m. The charity is focused on the disadvantaged,

D iscussion

Interestingly, in each of the above examples the language adopted by the charity could be regarded as very corporate. There are those in the voluntary sector who balk at the use of such business language, but perhaps things are really changing. It is clearly not possible to take a given tool or approach and apply it simplistically across sectors, or across different organisations for that matter. Some degree of tailoring is required to fit the specific situation and working culture. However, my conversations with sector leaders over the past six months suggest, strongly, that the time is now right to introduce process management methodologies, including lean, to voluntary sector organisations. For many it will be seen as a financial imperative. For others it’s a farsighted recognition that change and improvement are inherently good for us and, if implemented wisely, will also be good for our society as a whole.

ARE YOU A

L E A D E R OR A FOLLOWER?

The only conference you will need to attend to be a leader this year. Featuring: Bloodhound SSC Institute of Manufacturing

Dennis Eagle

David Smith

Kate Bellingham

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S P E C I A L F E A T U R E

F inlay M iller

Cyber kaizen Finlay Miller, a lean consultant at the University of St Andrews, presents a light-hearted and personal look at the word of lean in cyberspace. The pitfalls and problems involved with bringing lean into the world wide web and how lean ideas can tackle the proliferation of non-value adding ephemera. R ead about :

orking with the web and its people is always a good time. Maybe it’s the technical and creative mix in the room, the ever changing, ever innovating www landscape as the backdrop, or maybe it’s simply, that as an ex-journalist, digital media reminds me of my inky-fingered beginnings.

Business v people online How to run a lean website Using data to understand lean

Whatever is going on, continuous improvement rarely feels this good. Over the last few years I’ve had the pleasure of working in the online arena a number of times, tackling initiatives within different spaces of the wonderful world wide web. It’s not necessarily the most obvious place to do kaizen.

SPECIAL FEATURE

F irst off : the people - y stuff :

It seems to me, those responsible for the online-ness of an organisation are less fettered by tradition than most, maybe because they and their industry, are comparatively young. The idea of status quo, to the average web designer, is merely a vague childhood memory of some bad boogie woogie, often accompanied by an uncle dancing badly at a wedding. Their world moves fast, and they get to see that speed every time they go online, whether at work or at home. Imagine if, with every single browse, you learned how to do your job better. Meanwhile, web workers seem to have the concept of the customer pretty much down pat, as well. How many times does the query “what about the user?” – arise? There are times it has been hard to keep up.

The idea of status quo, to the average web designer, is merely a vague childhood memory of an uncle dancing badly at a wedding

web teams may well understand their reliance on one another better than other functional groups. Cyber kaizen has also moved around its thinking on the relationship of the two lean principles. It used to be considered respect for people was the prerequisite for continuous improvement. However, if you have a team fully engaged with continuous improvement, it will open their minds to all possibilities and as a result, all opinions - the bed rock of respect.

M eanwhile : the business - y stuff : As with any other business area, there are less

They are entirely engaged with the practice of analysing user data to help guide improvement. Web analytics are after all quite easy to get hold of and quite hard to argue against, and ultimately this enables PDCA to become the webbed folks subconscious funderland. Within their work, technologies change, designs change, user trends change, and if you add this to the fact that most, if not all changes in an organisation are reflected online, you surely have a people open to innovation. But, of course, there is also the respect for people principle to consider here and it would be wrong to go on pretending web professionals are all wondrously lovely, balanced and basically perfect individuals. Because clearly, who is? However, there is something about the nature of this work and the clear and distinct lines between skill sets that almost demands adherence to Aristotle’s, ‘The whole is greater than the sum of its parts.’ I think

www.leanmj.com | November 2014

S P E C I A L F E A T U R E F inlay M iller

positive things to confront when working in and around the web. Alongside all the lovely people-y stuff, is some less lovely business-y stuff.

crack. Furthermore, without clear responsibility for strategy and work priority, a web team will be left at the whims of whoever shouts loudest, without an agreed rationale to push back with. I don’t know if you’ve noticed, but the loudest people in the room are rarely the most reasonable.

For example, while continuous improvement is considered and desired by webbies, it can be hard to deliver in a consistent way across large organisations with many content editors and a comparatively small central team. Content management is often devolved to the extent that duplication and variation are rife. Whether it be text, documents or links, it basically exists due to a lack of information, and goes live because editors are not sure of the reliability of the central source and at the same time, to compound the issue, are unaware of what the user needs. As a result, many service sector websites grow so large that support and maintenance become the every day for digital professionals. Another common problem is web sites being built to reflect the structure of the organisation around them. Let’s imagine a design delivered with the small number of internal users in mind rather than the much larger number of external users. External visitors, as web professionals will frequently explain, don’t often care about how a team is structured, what it’s called, or who is in it. Adding that internally focused architecture and content actually detracts from the user experience. Of course, both of the issues described above are symptoms of two much larger and related issues. Ownership and understanding. If you have a devolved model of ownership, consistency of design, voice, brand, is a tough nut to

Which leads onto the second overarcher; few people really understand what the web is about. For example, what users want, how an information architecture should be laid out, and how online content should be written. There’s a lot going on. Some think because we go online we understand how to do online. There is skill here we just don’t see – which is entirely the idea.

If you have a devolved model of ownership, consistency of design, voice, brand, is a tough nut to crack

The Gov.uk digital transformation initiative unveils its concept around content design with the old adage: just because a person can count doesn’t mean they are an accountant. They then fully reveal by saying, just because you can write, doesn’t make you a web content designer. And its true, web work is a complex and subtle scene. Failure to understand this often results in an organisation leading itself down the proverbial garden path into the land of boom and bust, where their site needs major revamps every few years in order that normal service might resume.

C onclusion :

It is all these positives and negatives that make engaging in improvement work within the digital world rewarding and challenging in equal measure. It would be fair to say harnessing the potential of people to improve business delivery is the same wherever you are and whatever you are doing. But what sets web work apart is the extent to which these sit at opposite ends of the spectrum, creating huge potential and making online the ideal place to do kaizen. Of course as always, lean stays the same, providing the philosophy and methodology to deliver successful change to work practice and culture.

SPECIAL FEATURE

A nd lastly :

e. People are often given web responsibilities in addition to their real job, and not always because someone has identified the skills required within them.

How does lean thinking and the web stuff fundamentally engage? Here are a few thoughts for the road, or the infobahn, if you prefer:

Note: While much of the removal of waste in real world processes frees resource then reapplied to deliver new value, the removal of waste within the virtual world almost always results in a direct increase of value.

Considering the old classics of clarifying who the customer is, what they are trying to do and of course what they value in a particular online experience, will inform the build of a website to a great extent.

User stories and customer journeys allow webbies to see the value stream and identify waste.

Flow is a major consideration for web wizards and they are constantly trying to weave their magic to simplify and smooth the user experience

Speaking of which: a. Inventory, for example, is a big issue online. It’s not storing pages necessarily has a significant impact on space, or the tying up of financial resource, but too large and complex an architecture makes it harder for the user to find what it is they are looking for and what’s more, many digital products have a shelf life. b. Considering motion of the user’s focus on a site is certainly key within web design. Too many images, too many and overly complex graphics and menus, all cascading from endless waterfalls of scrolling - we have all experienced these joys. c. Then, of course, there is waiting. When a page looks great, but takes ages to load and has drop downs that respond tardily, the feel is poor, cheap, half-baked and basically unacceptable. Most sites are, first and foremost, functional things. d. Over production and over processing are also begging to be peeled from online value streams. Content is king, it’s been said. Yet many websites are littered with reams of well worked prose. Users engage differently online, where succinct snappy writing, which is kept to a minimum, is the order of the day. The message has to be conveyed quickly.

Flow is a major consideration for web wizards and they are constantly trying to weave their magic to simplify and smooth the user experience.

Look and feel is one area that benefits greatly from studying and optimising flow. By considering motion around a page it is possible to create a design more visually digestible and engaging as a result. Meanwhile, a common look and feel enables flow throughout the browse.

In an online experience users are continuously and forever voting with their clicks. Everyday they pull from the virtual shelf that is a website and consume.

And the great thing is, the data is available. And the greater thing is it can be used to inform the organisation, structure, and labelling of content in a way that optimises user engagement. Trends can be witnessed in real time and acted upon. Allowing a home page, for example, to change on a daily basis, providing users with exactly what they need.

www.leanmj.com | November 2014

S P E C I A L F E A T U R E

LESSONS FROM DEMMING

Learning to discern: quality and quantity LMJ board member Bill Bellows, presents this month’s Lessons from Deming which focuses on variation and how to discern where the quality may lie with this raft of choices on offer.

There is little evidence that we give a hoot about profit W. Edwards Deming

hen my daughter was five years old, she joined me for a quick ride to the local supermarket to buy two items for dinner: a bag of hard rolls and a lime. Upon entering the store, I asked her to help me find the lime, to which she asked “What’s a lime?”, “It’s just like a lemon,” I replied, “but green, not yellow.” With

these instructions, she spotted the limes, alongside the lemons, and reached for one. She picked it up, examined it, placed it back in the display, and selected another. When I asked why she did this, her reply was very direct and far more than I was expecting of a five-year old. Quite simply, she said, “They’re not all the same.” I was reminded of a statement from Dr. Deming: “Variation there will always be, between people, in output, in service, in product.” On many occasions since this episode, I have asked adults, in a seminar setting, if they sorted through fruit, with the following instructions: imagine walking into the produce section of a supermarket, where all of the fruit is not bruised or otherwise physically damaged. Would you expect to see anyone sorting through the fruit? While the answers to the question are either yes or no, more important is the reasoning for sorting. To those who answer no, I often ask if they sort between parking spots in a car park, which they would readily admit to doing, generally preferring spots closest to the

SPECIAL FEATURE

entrance to the building they will enter. Also, to those who answer no, I have asked, if they are wearing a wedding ring, if they sorted when selecting a spouse. To those who do not admit to sorting through fruit, this inquiry always brings agreement, followed by a smile. To those who answer yes, I ask for an explanation of why they sort through fruit. Most often, they acknowledge the ability to discern differences between the pieces of fruit, from firmness to size and shape, perhaps even colour and ripeness. On occasion, they attribute the sorting process to being driven by habit, without appreciation of their discernment criteria.

Toyota’s JIT system, was extremely successful in saving time in moving products through development at lightning speed

Shifting to parking spaces, drivers readily discern differences in location, as well as width, length, and shade cover. Yet, when counting the number of parking spaces available to customers or employees, the counting process ignores this variation. In this quantitybased situation, these differences are not as important as matching the size of the car park with the level of employment or the expected number of customers. Meanwhile, the customers who sort through fruit, as well as the drivers who sort through parking spaces, focus on the use of the fruit and space, respectively. In appreciation of their own discernment criteria, their awareness of the inherent variation can be attributed to a systemic appreciation of how the fruit or space will be used. With acknowledgement of the variation in their choices, their primary interest is quality-based; fitness for use amongst the available options. To paraphrase Deming, quality is about how well someone is served, from a co-worker to a customer. While counting, from limes and parking spots to the number of employees or customers, is quantity-based, the differences between the entities being counted is quality-based, with a focus on use. For an aircraft manufacturer, if the parts of an airplane remained in boxes and were never assembled, then the variation in each part, as in the variation in limes and parking spots, would be very hard to discern. Variation appears in how well the parts are eventually integrated into a system and, how well the system

performs, day after day. Once again, quality is about use. But questions about the distance to the nearest airport are quantity-based, as the answer, whether in kilometres or miles, 10 or 100, ignores the differences between each unit of distance. In short, quantity is about counting. Students are students, doctors are doctors, customers are customers, and suppliers are suppliers. Deming explained quality with an appreciation of variation and, ultimately, use. Beginning in the early 1950s, Shoichiro Toyoda, son of Kiichiro Toyoda, the founder of Toyota Motor Corporation, was inspired to discern the difference between quantity and quality, between counting parts and using parts. Yukiyasu Togo, co-author of Against All Odds: The Story of the Toyota Motor Corporation and the Family That Created It, provided an explanation of Shoichiro Toyoda’s desire to implement a quality-based system, in parallel with the quantity-based just-in-time (JIT) system. According to Togo, Toyota’s JIT system, was extremely successful in saving time in moving products through development at lightning speed, yet only to face disgruntled customers in the marketplace, with long lines of products in need of immediate repair. To Shoichiro Toyoda’s chagrin, the best Toyota’s quantity-based production system could offer was immediate trouble-shooting. Guided by strong impressions of Deming during his lectures across Japan in 1950, Shoichiro Toyoda initiated Toyota’s total quality control (TQC) efforts, with a commitment for Toyota to eventually win the Deming Prize. As reported by Togo, Ohno eventually became a convert, when he saw TQC as fully compatible with JIT. Nonetheless, TQC efforts were openly resisted by the JIT community. Forty years later, in 2005, Shoichiro Toyoda was honored with the Deming Medal from the American Society for Quality. In a remarkable demonstration of learning to discern, Toyota remains a leader for its ability to finely integrate quantity control and quality control, and not mistake inquiries of how many, with systemic explorations of how well.

www.leanmj.com | November 2014

We want to hear from you! As the Lean Management Journal progresses on its own continuous improvement journey, we understand how important it is for us to listen to the voice of our readers. So we have set up our own suggestions box and would like you to tell us what topics we should cover in the journal and at our events in the next few months. What are the questions you want answered? What are the issues you are facing that you would like to read about? We believe in pull and will always welcome your suggestions and feedback. We will try our best to address every request by providing helpful, thought-provoking case studies, interviews and features. Donâ&#x20AC;&#x2122;t forget that our Letters and comment section is open to anybody in the lean community who wants to share an opinion or an experience with their peers. Your feedback is important to us as we strive to improve our publication, services, and overall reader experience. If you have any suggestions for topics you would like the LMJ to feature in the coming months, please send an email to the editor, Andrew Putwain, who can be reached at a.putwain@sayonemedia.com or +44 (0)20 7401 6033.

lean online

LEAN ONLINE

ROUNDING UP THE MONTH’S DIGITAL COMMUNICATIONS ON LEAN November’s lean online page returns and brings you all the latest gossip and discussions from the LMJ’s twitter and LinkedIn pages. Please follow us at: http://linkd.in/1vIt528 and comment on articles, so your voice can be heard on all things lean.

LMJ LinkedIn

LMJ Twitter

This month, LMJ LinkedIn’s top commenter Steven Boyd, operations manager at Tokheim wants to raise awareness of the Dundee lean network. A great organisation that helps lean enthusiasts in the region with their continuous improvement journey.

This month we bring you more interesting twitter enthusiasts who are out there, helping publicise lean in all its forms and to bring knowledge and learning to those who are not yet aware of its benefits.

The DLN’s purpose is helping local businesses be the best they can be. Adding value, reducing waste and building profit through lean.

T he D L N reinvents itself

At our team meeting this week we have decided the following format for the remainder of 2014 and all of 2015: Local go and see and kaizen Our team will visit a local organisation bi-monthly, review the current situation, request the organisation to present a problem, we will then kaizen and make real business improvement on the night.

Brian Maskell is the senior consultant at BMA consultants in New Jersey. He recently wrote for the LMJ and regularly blogs about all things lean.

Brian Maskell @BMaskell • Sep 22 Lean success comes from lean leadership. The tools and methods are in the books. The tools do not give success. Lean leadership does. Bob Emiliani is also a keen blogger and social media supporter who regularly writes about lean and is the author of several books. He recently wrote for LMJ on the topic of financial institutions and lean.

Bob Emiliani @BobEmiliani • Sep 18 Might we have greater success with #Lean if we re-branded it as iLean or offered gluten-free Lean? Christine Stewart is head of the Lean University. Implementing lean practices across Cardiff University. She’s a lean evangelist and writes on social media passionately about the topic.

If you would like to participate by hosting or by attending as one of the kaizen team please let us know.

Christine Stewart

This service is free - we do kaizen for fun and for to help keep ourselves learn.

@LeanChristine • Sep 18 A manager’s role is to give staff the ability to innovate, a feedback mechanism & the safety to take risks & make mistakes.

Please get in touch with them at http://dundeelean. com/ or @dundeelean and their LinkedIn http:// linkd.in/Y0zXeQ so you can help them with this excellent service and get involved.

And follow commissioning editor @AndrewPutwain. It’s the quickest and easiest way to get your views on LMJ heard. Raise issues with me, discuss lean or even if you would like to write for us.

www.leanmj.com | November 2014

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 :

L ean S ummit I ndia

November 5-6, 2014, Bangalore, India The Lean Summit is a two-day mega event designed for mid-to upperlevel managers, with a focus on sustaining their lean journey at the transformational level, and providing them the insights into innovative ways to enhance their lean journey. Highlights include: Deep knowledge development from the best known sensei in the lean world - John Y Shook, Chairman CEO of Lean Enterprise Institute and Jose Roberto Ferro, President Lean Institute Brazil A variety of learning situations, including keynotes, interactive learning sessions, and CEO panel discussion To book your place or for more information visit: www.leaninstitute.in/lean-summit

U K L ean S ummit 2 0 1 4 - L ean T ransformation : P ractical N ext S teps November 17-19, 2014, Kenilworth, UK

The Lean Enterprise Academy is holding its annual UK Lean Summit. How to build a management Highlights include: system to spread lean across Presentations, learning sessions the organisation? and lean master classes Providing insight into practical How to develop leaders to ways to get started, deepen or implement, sustain and expand enhance your lean journey lean transformation? Enabling participants to What are the key elements of build their own network of lean transformation? lean thinkers What is the role of a lean team in a successful transformation? Bringing together the best lean practitioners and sensei in the What are the key lessons learned lean world for participants to from applying lean thinking in learn from different sectors (government, health, industry, retail and Workshops on leading edge topics service) both internally and What does it take to move across the supply chain? beyond legacy assets and mindsets to involve users in creating To book your place and for new lean solutions? more information visit: www.leanuk.org/events

F actory P hysics S eminar 10 & 11 December 2014, Chesterton, Bicester, UK

This two day seminar, delivered by Dr Mark Spearman and Ed Pound of Factory Physics Inc., is for managers new to factory physics, and also for those delegates who attended the first seminar. Activities and highlights include: Simulation game: introduces the challenge of real world scheduling and how factory physics principles can be applied. Case study: based on learning to see value stream mapping book, but revealing hidden opportunities and pitfalls Essential tactical thinking and analysis: revealing opportunities that await, with an appreciation of: Inventory optimisation (investment vs fill rate) The throughput curve (non linear relationship) between throughput & WIP The operation and advantages of CONWIP in complex environments Operations strategy: including balancing the three types of buffer, appreciating variations & strategic choices that are not often recognised Pitfalls and wrong-thinking of MRP and ERP Financial statements and FP approach to accounting and measures For more information visit: www.buckingham.ac.uk/business/ professional-executive/ short-courses

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