Starting Out How to begin a lean transformation and how to go lean from the get go.
Organisations and interviews in this issue include: Univeristy of Sheffield, Cardiff Business School, Online Business School, Accolade Wines
In this issue: Starting out, starting over, just carrying on– how different are they? How Accolade Wines bottle up their lean initiatives. The Lean start-up- how and why? How to start as you mean to go on, lean. Company culture in lean start-ups The role that culture plays in lean beginnings.
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March 2016
EDITOR’S LETTER
Dear Reader... If you don’t win over the neigh sayers or deliver the results expected, it’s classed as a failure. As a start-up your main focus might not be on the ways to make your company more effective or to implement practices that mean you can improve processes year on year.
Commissioning Editor & Designer Fred Tongue
f.tongue@hennikgroup.com
Managing Editor Victoria Fitzgerald
v.fitzgerald@hennikgroup.com
Editorial Director Callum Bentley
c.bentley@hennikgroup.com
Art Director
Jamie Rector
The most difficult part of any journey is the start because everything is an unknown, that’s why in this issue we look at ways for you to help change culture to accept change, how to implement continuous improvement from the get go and some of the problems that lean practitioners experienced in order for you to avoid the same pitfalls. Rachel McAssey and David Speake have provided a look at the way the University of Sheffield implemented their lean programme, some of the pitfalls and the lessons they learned while going through the process.
j.rector@hennikgroup.com
With this issue we are looking at the start-ups and starting processes for becoming lean, attaining operational excellence and continuous improving long after the start. It takes a lot of effort and planning to implement a change programme. You have to battle those saying, “but we’ve always done this,” secure the appropriate funding and go-ahead for the project and then show that the project is delivering tangible, quantifiable results for the company.
From the Online Business School, Marcos Panaggio, examines the culture required in start-ups to be lean from the start. I would also like to take this opportunity to announce that nominations are open for The LMJ Lean Top 25. We will be holding an event on the 11th May where we honour 25 individuals who are outstanding in the field of lean, continuous improvement and operational excellence.
If you would like to nominate someone the criteria are: 1. Innovation – A lean practitioner whose ideas and enthusiasm have led them on a new path of lean, whether it be a minor tweak to the existing way of implementation or a revolutionary idea that has been a game changer. 2. Championing – A person publicising lean and helping its reach grow. Someone who is driving more knowledge of lean and creating awareness of continuous improvement. 3. Involvement and waste reduction – Someone who has passionate about lean and has created or managed a lean implementation or continuous improvement change that has seen a significant rise in profit margins of increase in production. To nominate someone please send an email to LeanTop25@hennikgroup. com with a brief description of why that person fits the aforementioned criteria. You can nominate as many people as you like. I hope you enjoy this issue and some of the wonderful contributions. Happy reading,
Fred Tongue
Commissioning Editor
In order to receive your copy of the Lean Management Journal kindly email lmj@hennikgroup.com or telephone 0207 401 6033. Neither the Lean Management Journal nor Hennik Group can accept responsibilty for omissions or errors. Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.
CONTENTS
March 2016 4 - - - - - - -
MEET THE EDITORS
5 - - - - - - -
NEWS PRINCIPLES AND PURPOSE
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Starting out, starting over, just carrying on– how different are they? Gil Woodward, global lean manager at Accolade Wines, tells us how his organisation deals with lean.
The Lean Start-up: why and how? Jerry S. Sikula talks about lean champions and their role in the lean start-ups.
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Solving daily problems is everyone’s responsibility Owner of ProSolve Solutions, Mark Stewart, examines the role of problem solving in a lean organisation.
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Company culture in lean start-ups Marcos Panaggio writes about the culture needed to start lean.
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Lean university- the early years Sarah Lethbridge discusses the ways Cardiff Business School managed to lean down.
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It’s the start that stops us: five factors Gwendolyn Galsworth discusses the problems of starting and how to overcome the most common pitfalls.
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CASE STUDY Lean startup at The University of Sheffield We have an indepth look at the savings that the University of Sheffield made after setting up a lean programme.
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OUT OF THE BLUE Selling horses and seeing systems on a road less travelled Bill Bellows is back and discussing how black and white is not always the right way to look at things.
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LEAN ONLINE
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LEAN EVENTS
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SUBS FORM March 2016 | the-lmj.com
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MEET THE EDITORS
Our experienced editorial board members contribute to the journal providing comment against articles and guiding the coverage of subject matter.
Jacob Austad
Novo Nordisk, Denmark
LeanTeam, Denamrk
Lean Enterprise Research Centre, Cardiff Business School
Bill Bellows
Brenton Harder
David Ben-Tovim
President, In2:InThinking Network
Commonwealth Bank of Australia
Flinders Medical Centre, Australia
Gwendolyn Galsworth
Joseph Paris
Sarah Lethbridge
Visual Thinking Inc., USA
Operational Excellence Society
Cardiff Business School. UK
Malcolm Jones
Torbjorn Netland
Dr Nick Rich
Industry Forum, UK
Nowegian University of Science and Technology, Norway
Steve Yorkstone Edinburgh Napier University, UK
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John Bicheno
Rene Aagaard
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Swansea University, UK
More information about our editorial board. their experience, and views on lean is available on the LMJ website:
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NEWS
Catalyst catapult their training online Catalyst Consulting have recently announced the launch of their online lean six sigma training, offering customers the opportunity to take their market leading and award winning lean six sigma training class-room courses online. Catalyst’s training, which attracts world-class levels of customer satisfaction, now offer their lean six sigma yellow belt and green belt courses online, enabling customers to participate and choose how they engage with their training without leaving the office. Unlike some other online lean six sigma training courses, Catalyst offer personalised training, assigning a fully certified Catalyst coach to support each participant. Coupled with their ‘as-live’ online training, combining a rich library
of over 1000 HD training videos filmed during their in-class training, specially adapted for online learning, and engaging classroom materials, Catalyst’s new online training programmes provide a fully engaged, approachable and personalised course, leading to full accreditation and certification by The British Quality Foundation once the courses are completed. Martin Brenig-Jones, Managing Director at Catalyst and co-author of the best-selling Lean Six Sigma for Dummies, comments: “We are delighted that our successful lean six sigma training programmes are now available to customers online. We also provide a certified Catalyst coach to support each participant and we hope that this personalised element will encourage delegates to engage with these online learning materials.”
“We are delighted that our successful lean six sigma training programmes are now available to customers online.”
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NEWS
Sri Lankan tea estates get lean shape up New research has suggested that current structure of Sri Lankan tea estates needs to be modernised to bring them up to speed lean management styles. The average Sri Lankan estate worker plucks an average of 18kgs a day less than their Indian counterparts who pick 27kgs a day on average and are even further behind Kenya where they pick an average of 48kgs a day. Dr Nishan De Mel is the Verite Research executive director of the research project that came up with these findings and is aimed at improving the livelihoods of the majority of Tamil workers on plantations. The research points out that lean management needs to be adopted at the estates and factories. There needs to be better communication between the workers and management in order for them to understand what is expected of them. On the back of the research negotiations have begun to improve wages and reward systems, improve working conditions.
UK company invests in lean Grainger & Worrall, a UK manufacturer that deals in castings, engineering and machining has invested ÂŁ1.5m in a flexible manufacturing system.
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The system houses three heavy machining stations and provides a lean and flexible solution for vehicle builds. The new system and set up allows for shorter turnaround times and lower inventories. The firm also has an in process robotic inspection cell, which uses a highresolution camera with highly precise measurement tools for 100% part validation. This system also incorporates a bar code scanning function that allows track and trace of all parts.
Edward Grainger, Director at Grainger & Worrall, comments: “As a pioneering total castings solutions provider, delivering innovative solutions for our global customer base is a key part of our daily operations. Investing in the latest technologies allows us to continually expand our service to give a complete solution for short-run, small series automotive projects�.
NEWS
SCM spreads lean message SCM Group has started spreading the lean message to its customers. SCM Group manufactures and designs woodworking and panel processing equipment. The firm recently had Jim Lewis and Brad Cairns of the Center for Lean Learning , speak at an event on the effects of lean thinking on productivity with and without automation and technology. The event took place at SCM’s open house at its new West Coast location and showroom in Carson, California that was opened last year. West Coast sales manager Fabrizio La Volpicella said, “We need to be a consultant, not just a supplier. We want to help them (use) lean manufacturing, and help them become more efficient and improve production flow. “The relationship between manufacturer and customer has to go beyond equipment sales.”
India goes lean The Chartered Institute of Insurance (CII) recently held a lean manufacturing workshop in Chandigarh. The objective was to develop expertise in lean manufacturing in industries, teach manufacturers of the importance of lean and how to incorporate what they learned on the day in to their organisation. “Manufacturing units incur huge losses due to lack of awareness of the good and proven manufacturing practices, hence such workshops are need of the hour to create more awareness and build capacity of the industry members to augment industrial growth,” said Rajiv Aggarwal, chairman of Himachel Pradesh state council. The workshop had participants from a wide range of industries including pharmaceutical, automotive, engineering and textiles. The event covered how to reduce cost, improve quality and enhance delivery reliability along with a chance for peer-to-peer learning and discussion.
Manufacturer appoints black belt The Egbert Taylor Group has appointed manufacturing specialist Marcus Davies to the role of General Manager for its Oldham site in a move that is expected to add value to the longstanding Sellers brand and build on its commitment to new product development and expansion. A certified Six Sigma Black Belt, Marcus will be responsible for improving the Oldham site’s operational efficiency and implementing a robust production framework across its existing product portfolio and those earmarked for launch in 2016. On his appointment Marcus comments: “The Oldham site, where Sellers’ products are manufactured, is at an exciting stage in its lifecycle. Not only does it have a strong reputation for quality of build and an ability to produce one-off, bespoke units to
suit the needs of multiple industries, but it also has the potential to be a leaner, more efficient and more profitable manufacturer. I’m looking forward to bring over 20 years experience of manufacturing and strategic growth to the Egbert Taylor Group and play a role in seeing the company flourish over the next 12 months.” Brendan Murphy, Chief Executive of the Egbert Taylor Group, adds: “When it comes to manufacturing, the general manager plays an integral role and can have a huge impact on the success of a business. With a raft of new products scheduled for launch in the coming months it is vital that the production process is optimised and that the team is working as efficiently as possible. In Marcus, I am confident that we have found someone who will help take the Oldham site to the next level and we welcome him to the team.”
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PRINCIPLES AND PURPOSE
Starting out, starting over, just carrying on– how different are they? Gil Woodward from Accolade Wine takes a candid look at the start of your lean journey and the ways his organisation deals with change. Remember for a moment what it’s like starting something new, something complicated – scuba diving, driving, learning to play a musical instrument. Once you’ve got the instructions, all the different things you need to think about can feel over-whelming. It is not unusual when faced with a large new data set to feel a form of mental paralysis, that feeling of uncertainty that comes early in the learning process. Eyes now opened up to new opportunity, the way to achieve the potential is often unclear. New data, new
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stimulus, opens us to new possibility – but that possibility is only realised once assimilated and actioned in a new context. This process is hard enough individually, but harder still in the context of those new enthusiasts who have assumed the responsibility of taking lean to pastures previously unknown. The role of those enthusiasts is a social one; it is their role to assimilate lean knowledge and new learning into an existing culture. Acquiring the knowledge in the first place can be a difficult enough task. Visiting
Gil Woodward
Global lean manager at Accolade Wines
PRINCIPLES AND PURPOSE
an established lean environment helps, but observations are of a point in time, and often give little insight to the cultural and behavioural changes that have led to that point. To use a mathematic analogy, you see the value, but not the historic trend. Reading around the subject helps, but so much of the continuing appeal of fiction is that written media gives us scope to fill in the blanks with our imagination, and the same happens even in the thoroughly evidence based business books, despite the amazing skill of so many writers. Reading around the subject is a step on the journey to understanding. So having made observations of successful organisations either first hand or from books or training, the question that every new enthusiast has to tackle at some point is, ‘Where do we start?’ When out and about visiting and observing established lean cultures the novice enthusiast is likely to feel that they are faced with a problem that the established culture is not. ‘Somewhere this good must know where they’re going, right?’ It is proposed here that, rather than a problem that is unique to organisations starting out on a lean journey, the difference in an established Lean culture is that the organisation has made its peace with the question, ‘Where do we start?’ and is likely to have well established routines for handling it. Changes in direction are frequent, expected and managed – but all within the overarching philosophy of providing increased value to the customer. That’s the ‘true north’, but getting there is iterative and uncertain. Wrong decisions
will be made along the way, the context in which we are working will change; changing markets, customers, products, legislation - all will affect the leadership direction. So, ‘where do we start?’ is just an example of the kind of questions that characterise the reflection and evaluation that leaders in lean organisations practice. At the time of writing this, Accolade Wines is at the end of its financial year. The Bristol based site is executing its interpretation of ‘hoshin kanri’ – often translated as policy or strategy deployment. This is the 5th iteration on site at Accolade Park and every year it has grown, changed and evolved. In July (as an Australian company, Accolade Wines operate an Australian reporting cycle) the new plan is put into action, with new improvement projects, accountabilities assigned and objectives communicated for the year ahead. The improvement objective setting is tied into the financial goal setting with the aspiration and intent of one agenda, where the improvement priorities are in balance, in harmony between the various competing interests. The performance review cycle set by the HR function also works on the same annual cycle, enabling the alignment of HR, financial and lean priorities. Each agenda is important (and do bear in mind that the list, HR, finance, lean, is not exhaustive either) with each agenda potentially competing for the same resource in the organisation. The challenge is clear and consistent in all organisations, are you going to manage the competing priorities or are you going to play the management
equivalent of ‘whack-a-mole’? For those of you not familiar, ‘whacka-mole’ is a children’s game where, equipped with a mallet the player must hit the moles as quickly as possible as they poke up from different, random holes. It feels relentless, impossible to achieve, the target is to keep the moles in their holes and yet they keep randomly popping up. The alternative is to try to bring the different agendas into balance. Rather than, ‘where do we start?’ the question for Accolade has become, ‘what are we going to do next?’ The mechanism of determination for the projects is formalised and inclusive. Inclusive is key, because the improvement projects will be ‘our’ projects, they won’t be ‘my’ projects or the ‘senior management team’s’ projects. The aspiration should be for this process to be part of the culture – culture is always personal, so without individuals within the team feeling ownership for the projects and the process
“So having made observations of successful organisations either first hand or from books or training, the question that every new enthusiast has to tackle at some point is, ‘Where do we start?’”
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of generating them then there is a risk that team members distance themselves from the projects. This is lean principle 5, ‘continuously improve in pursuit of perfection’, systematic iterative improvement at a strategic level. This 5th lean principle doesn’t just mean keep going with the A3’s and the SMEDs, and 5S it’s just as much about continual activity at a strategic level. So what does this look like? In Accolade’s case we have cockpits – summary visual management. These are divided into two sections, the bottom half describes how we are ‘running’ today’s business, the top half contains how we are ‘creating tomorrow’s business’. Out of Accolade’s strategy deployment they create ‘annual roadmaps’ that contain the key improvement priorities for the year. This happens at both a site and departmental level. There are 11 departmental roadmaps supporting the overall site roadmap and providing tangible direction for each of the functions, created in part by everyone at Accolade Park.
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Recently Accolade Park in Bristol was visited by a potential supplier for the first time, they were really impressed and remarked, “What is there left to do?” It reminded the author of an observation made of Toyota, and despite my best efforts I’m unable to attribute it. The author remarked that on visiting a Toyota assembly plant they were surprised how many times the andon cords were pulled on the production line, their reflection was that contrary to the gut assumption - that excellent businesses don’t experience
problems – actually the converse is true, the skill is in the identification and response. Accolade Park is a problem rich environment, so problem rich the team have to prioritise what they do as they can’t do it all at once, thanks to what the author learnt from this observation of Toyota and the experience of working in such an environment I have learnt that to be problem rich is part of creating a successful environment for lean. Strategy deployment is one tool that can support our handling of this weight of opportunity.
“The author remarked that on visiting a Toyota assembly plant they were surprised how many times the andon cords were pulled on the production line.”
PRINCIPLES AND PURPOSE
The lean start-up: why and how? Jerry looks at the ins and outs of lean start up, gives us the criteria for what a lean champion should do and also tells us some easy lean wins that any company at any stage can implement. We have all read numerous articles about lean, lean six sigma, operational excellence, TPS, TPM, the list goes on and on. The reason, is that we all are trying to figure out how to be the best of the best in our industry. For some of us this is very true, and for others it may be a sign of the times or even a “flavour of the month” from the new guy in charge…. “Everyone is doing it and so should we.” I am hoping
that if you are reading this that you fall into another category, “Continuous Improvement, Continuous Learning”. Lean management, today takes an approach that the tools come from structure and foundation, however, the landscape is constantly changing. We must evolve as managers and leaders to not only continue to improve our department/site/company, but that we must continue our
Jerry S. Sikula Plant Manager and Lean Six Sigma Black Belt at Stratas Foods
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learning and training to share best practices within our lean community. The lean start up, what does that look like? And why do we do it? Lastly, how do we do it and find gains and ways to sustain the improvements? Our objective here is to: a. Identify key aspects/tools of a successful world class lean initiative b. Understand elements of defining a value stream and business case for lean c. The opportunity to evaluate your progress on the lean journey to world class performance We should be focused on the bottom line, and as we move towards world class or best in class performance, we earn greater profits while spending less. As we reduce and eliminate waste, we affect the bottom line. I want to start off by saying that what I am about to outline in this
article is from an operational/ manufacturing perspective for a lean initiative. We all know that the tools of lean that have been used extensively in manufacturing across the world are now also finding its way into the service sector and health care industry not to mention countless others. I will also focus on more of a general approach to lean and not dive into the statistics of six sigma. My hope is that this quick review and highlight of success will help kick off your start to lean thinking. The lean journey typically begins due to the need to cut or reduce costs or to increase revenue. If we diligently go after removing and eliminating waste in our value stream we should hope to reduce cost. Increasing revenue can take on many variables…but in some cases if we can increase our efficiency and thereby increase our capacity to produce more of our product/service (at the reduced cost); we can effectively increase some of the revenue
“Lean management, today takes an approach that the tools come from structure and foundation, however, the landscape is constantly changing.”
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stream and add to the bottom line profits of the company. As lean champions our path for making our business case or the start of the lean journey looks initially like this: 1. Current Situation: Describe the situation in terms of high-level processes, performance gaps, business drivers, & the sense of urgency. 2. Trends/Best Practices: Describe trends & best practices such as performance benchmark data for competitors. 3. Statement of Need: Describe the gap between current state & future state. Address the risks associated with not closing the gap. 4. Scope: Describe the project boundaries with included and excluded components. 5. Benefits/Objectives: Describe the benefits with a direct link to business strategies, objectives, & measurements. 6. Cost/Resources: Describe the time-phased costs of the project & is best broken into specific phases with milestones, deliverables, & specific resources. 7. Justification: Provide the benefit & cost analysis consistent with standard company practice such as return on investment (ROI) and/or payback period. 8. Success Factors: Describe the specific commitments required for success & additional assumptions.
PRINCIPLES AND PURPOSE
We need to start with the business case so that we can ensure buy-in from all levels, especially from the top management. As we go through this exercise around preparing the case, we have the opportunity to focus on our key issues and following this structure will ensure that nothing is left out. Many times I have seen projects, goals, and improvements fail or fall short due to very poor planning or lack of structure. There is a discipline and diligence around all aspects of lean from the planning stage, to use of the tools themselves, to the sustainability and lean success. FOCUS ON VALUE ADDED Value Added: Activities necessary for meeting customer requirements. ELIMINATE WASTE Waste: Activities that consume resources but do not add value. Waste reduction is central to all the tools of Lean. Learning to identify waste forces you to question and improve the process along the way. Today we will summarise the 5 fundamentals that take any organisation to World Class operations… The 5 principles of lean: a. Specify value in the eyes of the customer b. Identify the value stream: eliminate waste and variation c. Make value flow at the pull of the customer d. Involve, align and empower employees e. Seek perfection….continuous improvement cycle These are specific in activity and sequence. These can and
should be done with suppliers and customers - not in a vacuum. Let’s start with the value proposition: •
Value must be defined in terms of specific products at specific prices at specific times
•
The customer must perceive/ recognise the value and be willing to pay for it
•
For it to be truly value added – it must done correctly the first time
•
The cost of producing the product waste free should reflect help to define the target cost
If the value stream is properly mapped out then we can ensure that we have identified all wasteful activity.
Waste likes to hide in plain sight and disguise itself as work and value. We map the current state (finding all the waste) and then move into mapping the future state (lean state). We use the tools within lean but we must challenge the team at this point to move towards lean thinking….moving away from the assumption that we intimately know our process to questioning everything along the way. All value streams have internal (departments or plants) and external components (vendors, suppliers and even customers) that must be correctly identified. It is imperative to remember that, in a lean organisation, the value and value stream are determined solely by the customer. If we can truly be lean and eliminate waste, we have the ability to allow the customer to pull the value and
allow it flow in a timely fashion (Just-in-time) as much as possible. The best or optimal flow/pull system will reflect: shortest cycle time, no defects, no waste, and little to no inventory or work in progress.
Empowerment The one crucial factor that I cannot emphasise enough in a lean start up is the engagement and empowering of all employees. Once there is a plan and a vision from top management and the alignment that comes from the idea that there will be a shift in culture, then we must work on the entire team. Make no mistake about it, the shift that has to happen in the organisation will require buy-in from all levels. My experience has been that as we include employees in decision making and problem solving activities, we enable a motivated and committed work force around continuous improvement and lean activities. Another bonus that I have found is the morale of all levels of employees increase as job satisfaction increases. Initially the start of the lean journey may be a rough one wrought with significant change, but as we emerge and come out the other side, the lean enterprise is much easier to manage at all levels. We are shifting from “the way we have always done things” to a lean thinking culture that strives to question everything. The zenith of empowerment allows for all employees to be part of the process and also requires that they have a voice in bringing solutions to the table.
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The essence of any lean enterprise is that all employees at all levels work together to identify and solve problems, engagement through total employee involvement.
Lean tools Where do you begin? How do you determine what is needed and which tools are too complicated at the start? I would like to focus on a few simple ones and by simple; I mean that they can be implemented relatively quickly without a lot of investment or extensive training. The goal here is the “Lean StartUp”, so starting down the path although has planning and a vision, we want to get rolling and find some quick wins and build momentum into building and shifting the culture. My principle is following structure and foundation of simpler tools and building onto that as the lean enterprise grows and becomes more successful. There is a fair amount of diligence, rigor, and discipline that go along
“My experience has been that as we include employees in decision making and problem solving activities.” with using these tools daily, but also the long term sustainability and favorable results that come with them. The recipe for some quick wins and successful start: a. 5S/6S – An organised workplace is one without waste
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b. Value Stream Maps – Current State vs. Future State, gap analysis c. Problem Solving – Pareto Charts, 5-Why, PDCA, A3 d. GEMBA – Get to the shop floor and observe and engage e. Visual Management – Daily management around KPI’s Each one of these tools is part of the foundation of lean. I am not going to go into great detail (each of these subjects has massive amounts data and literature available) however, I will address why they are important and have merit.
5S
To start our quest for eliminating waste, what could be better than workplace organisation. What is 5S? In short, a place for everything and everything in its place. Sort, Straighten, Scrub, Standardise, and Sustain….and the movement to the sixth “S” would be around Safety. This tool is fundamental because it requires a culture committed to continuous improvement. The basis of lean is standardisation and stability, and 5S is key in standardisation and stability. 5S is not merely about cleaning up, it instills discipline and allows us to easily spot variation from standard operating conditions.
Value stream mapping/ flow charts The theme continues in identifying waste in our value stream with flow charts and value stream mapping. In working our way through the current state, we have the ability in this stage to identify hidden “factories” or
processes that jump out at us, otherwise known as waste. This value stream map helps to point out our gaps and misses and is the basis for our improvement efforts. Remember the value stream includes all value added activities (the ones the customer wants) and the non-value add (waste and other activities) that is part of our product/service to the customer. If we focus our flow geared towards the customer requirements, we end up with an optimal flow with minimal waste.
Problem solving activities and tools To borrow from the lean tools of six sigma, a good approach to lean as a whole is DMAIC. •
Define the problem – clear problem statement
•
Measure – baseline performance
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Analyse – significant root cause analysis
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Improve – the plan to fix (elimination of top causes/ gaps)
•
Control – permanent process/ product improvements and changes
In the DMAIC process the analyse phase or step is the critical one to success since if we do not get to root causation, we only fix symptoms and not true problems. I have found that the use of an accurate Pareto Chart will bring about a clear path to some quick wins. Accuracy of the data going into the Pareto Chart is crucial and employees need to understand their role in this process. Using root cause analysis
PRINCIPLES AND PURPOSE
to fix the top issues on the Pareto Chart one or two at a time will move the needle in a hurry on the path to World Class. Many like to skip over analysis and get to the improve stage, mainly because they feel like they already know what is wrong and want to get to the business of improving quickly. The foundation and structure in A-3 Reporting as well as 5-Why and Fishbone problem solving will help to ensure the root cause is the focus of the improvement or fix. The PDCA cycle (plan-docheck-act) is a very structured and scientific method to root cause analysis and problem solving. The discipline and rigor that goes into Deming’s PDCA cycle is yet another reason that this is a foundation and building block to success.
Gemba walk Some may not be overly familiar with this term, but the idea is that we go to the shop floor (or wherever the work is done, “the real place”) and observe. It has been called “Management by wandering around” as well as a “Waste Walk”, whereby we are on the continuous search for wasteful activities and ways to make improvements. This tool coupled with empowerment
will provide tremendous strides in employee engagement and hopefully additional buy-in from numerous levels. As a manager or leader, the more time we spend on the floor with our core management team, the more opportunity there is for our shop floor employees to be part of the improvement process as we solicit input on issues and concerns. This is a daily practice that coupled with problem solving activities (PDCA) and other lean tools is a very effective method.
Visual daily management This tool wraps everything together so that all within the department or facility can see the improvements over the course of days/weeks/months. Visual Daily Management is a systematic, fact-based, goal oriented, active style of leadership to manage operational performance. Again, coupled with the PDCA cycle is one that brings about structure and aligns the entire team (labour and management) in continuous improvement. It must include clear goals and should also be linked to
corporate strategy and KPI’s (Key Performance Indicators). The leadership group should be able to drive improvement and plan daily activity around the data collected here, while employees know the process and can help with problem solving. This becomes a dashboard for accomplishment and helps keep a process in place for daily accountability. The daily management should effectively link the vision with execution by tracking actual vs. plan and keep the team on track and aligned. The benefits of implementation and using lean tools for continuous improvements are considerable, however, I do want to reinforce the idea that, lean is a shift in culture as well. We must keep in mind that lean is more than tools in a toolbox, it is a mindset, it is total system approach, and as lean thinking is embraced, the culture of the organisation shifts. Lean implementation must be an integral part of the organisation’s strategy, and successful implementation requires commitment and involvement across all levels.
“All value streams have internal (departments or plants) and external components (vendors, suppliers and even customers) that must be correctly identified. It is imperative to remember that, in a lean organisation, the value and value stream are determined solely by the customer.”
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Solving daily problems is everyone’s responsibility Lean Six Sigma deployment Over the last two decades lean six sigma (LSS) has been adapted from manufacturing to service processes and has become the dominant operational improvement mechanism in business and government. In fact, recent studies indicate that more than 70% of the top 2000 global organisations say they use lean six sigma in some way, shape or form. There can be many problems with deployment, ranging from leadership support, relevancy to the business (maybe due to strongly competing priorities) and effective change management.
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A significant cost of deployment is regarding the training investment for the LSS belts. The issues below are typical of why the return on investment is not realised: •
Significant numbers of green/ black belts not achieving certification
•
Significant numbers of green/ black belts not completing more projects after certification – and hence becoming mature belts.
•
Yellow Belt is ~40 hours of training with little practical application – so much of it is forgotten. Similar for White Belts.
Mark Stewart Owner of ProSolver Solutions Ltd If we take an organisation as a whole (all employees) most are not LSS belts and this means that even after many years of investment in
PRINCIPLES AND PURPOSE
LSS programs the vast majority of employees have not been involved in any practical application, and therefore have little understanding of what LSS is. After all the investment, effort and time spent on deployment this a real shortfall – especially in the quest for organisational culture change to drive continuous improvement. Surely in today’s market of complex and relentless business challenges everyone in an organisation needs to take on the responsibility of solving workplace problems and this requires a formal structured approach. If you were to ask 20 random people within your organisation to spend ten minutes and write down what is their approach to solve simple daily business problems, what would the summary show? Without a structured approach employees will waste precious time focusing on symptoms and therefore implement inappropriate solutions. When you solve for a symptom you don’t solve the problem – the problem persists affecting productivity both internally and externally. Regardless of the experience level of the employee most professionals feel compelled to jump to the answer and not apply the upfront critical thinking in order to identify the true problem at hand. Quite often, organisations experience the following: •
Problems that they just can’t solve; workarounds are the norm.
•
Solving the same problem over and over again.
•
Significant or repetitive complaints from customers (external/internal).
•
Areas of performance that
•
are generally below the desired standard.
application themselves as well as understanding the bigger picture.
Significant time discussing problems without using data, a formal structure and without resolution
“Where there is no standard, there can be no kaizen.” – Taiichi Ohno.
These are all examples of the chronic condition of chasing the symptom and not executing a formal problem solving process to understand those symptoms, uncover the root cause and repair it. Only solving the symptom costs the organisation significant time / money.
An alternative or complimentary lean six sigma deployment approach But there is a way to change the mindset, to leave behind the symptoms and identify and attack the true root causes so that problems are solved robustly, workarounds are avoided and processes are fixed. Training all members of these organisations in the common techniques used in problem solving can reverse those losses and start to change the organisation’s culture. Success cannot be sustained without developing an army of problem solvers throughout the organisation. Limiting problem solving to a select few experts, as is often the case with initiatives like LSS, prevents creating a culture where everybody improves the work they do every day. An organisation-wide initiative engaging all employees in a standard problem solving process based upon a very simple version of LSS DMAIC is an innovative way of approaching this. It allows for all employees to be able to embrace the basic
This quote is used frequently to emphasise the importance of standardised work such as systems and work processes – but it is also important to have a standardised problem solving process across the organisation. Deploying a very simple version of DMAIC provides a very light but effective method to leverage the strengths of LSS to all employees. It should be: •
Easy to train via a train the trainer approach so all levels across the organisation are trained
•
Supported by a people change model to ensure that the skills learnt become habit
For those that already have green/ black belts it is totally complimentary and will add further value and impetus to those programmes. For any size organisation, which wants to embark on LSS deployment, this is an innovative way to engage employees faster and more cost effectively – more like a ‘bottom up’ approach that can expand into green/black belt training if required. Future green belt candidates can be selected more effectively by choosing employees who show a real aptitude – this also gives a message that employees who show an aptitude can be rewarded with green belt training and are more likely to achieve certification and use lean six sigma going forward towards possible black belt.
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PRINCIPLES AND PURPOSE
Another benefit of deploying a simple DMAIC based problem solving process is that all management are more fully involved and introduced in a practical way to LSS so when they have to sponsor projects and work with their teams they feel confident to both use it, support it and experience the benefits. In the 1980’s and 1990’s, many companies introduced total quality management (TQM) which introduced the culture, attitude and organisation of a company that strives to provide customers with products and services that satisfy their needs. One of the areas of TQM was in employee teamwork – quality circles, a participatory management technique that enlists the help of employees in solving problems related to their own jobs. Circles are formed of employees working together in an operation who meet at intervals to discuss problems of quality and to devise solutions for improvements. A simple DMAIC based approach focused on problem solving, giving a methodology and a common language can be an enabler to employees (and management) engaging in continuous improvement teamwork.
Driving habitual use - a culture change model A large-scale employee-training program would have little payback if it were not supported by a strong change management strategy to drive regular use. Here the powerful and portable change management model recommended is Influencer™ (New York Times Best Seller) by VitalSmarts. This proven, yet simple model can help ensure the
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“Training all members of these organisations in the common techniques used in problem solving can reverse those losses and start to change the organisation’s culture.” behaviour change of employees across the organisation to achieve that vision of all employees using simple DMAIC for problem solving. It focuses on a few high-level ‘vital behaviours’ that are driven by strategies from six-sources of influence. Understanding these vital behaviours and also the ‘crucial moments’ when they must demonstrate the use of that vital behavior is key – and as these vital
behaviours become habit we get the change we need. So the way forward is not just the training but also the change management to go with it and truly make it part of the organisation’s culture. Once a culture of problem solving ability is established across the organisation, all employees can: •
Think about daily challenges in a structured way
•
Define problems properly, measure current state, identify root causes and implement robust solutions
•
Make alerts and recommendations to their 1st line manager
•
1st line managers can help, understand and prioritise issues
•
Demonstrate to the customers that they can fix any issues
•
Be more productive both individually and as teams.
PRINCIPLES AND PURPOSE
Company culture in lean start-ups What is the difference between “my company manages with a lean philosophy” and “my company will manage with a lean philosophy”? It seems that it is a simple time difference between two verb tenses. Nevertheless, the concept behind the second expression involves a more complex cultural transition and transformation.
work in process (WIP) as well as production according to the market demand. Undoubtedly, this lean company is the dream of every great manager. Although it is possible, it might not be easy to make it come true. In most cases the implementation results in failure. The reason why might arise from underlying cultural resistance that should be overcome.
When we scan a manufacturing plant that uses a lean manufacturing, six sigma system or a mix of the two, we find excellent financial results, profitable production performance and an exceptional work environment in operation and infrastructure. Furthermore, it has a small stock of goods and
One of the steps to implement any continuous improvement method is to know what the results of key performance indicators (KPI) are. To do that, it is essential to measure the production lines performance, namely the overall equipment efficiency (OEE) and the WIP. Both indicators represent the operational cost and have
Marcos Panaggio Professor at OBS Online Business School an impact on the company throughput. In a typical plant, we can find high a level of WIP
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PRINCIPLES AND PURPOSE
and stock of final goods with high equipment utilisation. Sometimes the OEE is poor but the WIP continues to be higher. Here we will look at the first pillar of cultural resistance: the fear to be controlled. Most people are afraid to explain why bad indicator results exist in their manufacturing process or how to improve them. In addition, in most of cases, the operational information is centralised by a small group of people who do not share information with other teams or departments. For example, if somebody asks the production supervisor about the impact on the cost of this process, he does not know about it because the cost information is only made available for the plant manager or, in some cases, for the administrator back at headquarters. Here we meet the second pillar of cultural resistance: the fear to share information. The third cultural resistance is eagerness. The world looks at Toyota as the father of lean manufacturing and rightly so, but hardly anybody thinks about the process that Toyota faced to get the Toyota production system (TPS). Most literature mentions that a lean system requires about six months to be implemented, but in my experience, it is more time consuming than that. When one of the methods or tools of lean manufacturing is implemented, managers expect immediate results, but that does not happen. Indeed, it may be that the initial results are worse than those generated without using a lean tool. Normally, instead of being patient and waiting for the implementation of the new tool, workers begin to question the new
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processes. In a short time, more time will be spent in defending the tool than in explaining its proper use. The fourth and most important pillar to cultural resistance is the focus on reducing costs. The orientation towards reducing costs is another management mistake when we want to change the company mentality and start to think about continuous improvement. This might sound strange, but managers have not assumed that it is better to improve performance instead of reducing costs. In fact, focusing on cost reduction causes lack of success in almost all initiatives to implement continuous improvement systems.
Fear to be controlled The last aim of a lean management system is to control people. Therefore, it is illogical to feel controlled or questioned by a management model. Usually, when we measure indicators or WIP level, hidden inefficiencies start to arise and people try to justify themselves and start to get defensive.
The four pillars of cultural resistance 1. Fear to be controlled 2. Fear to share information 3. Eagerness 4. Focus on reducing costs
Attitudes like that make a strained atmosphere between managers in each meeting results and in the daily routine. For example, talking about stocks, one of the first CEO’s questions is why the stock of final goods level is so high. At
that moment, the plant manager starts to make excuses about the indicator results and blame other departments, the market or some other excuse. However, this is not the point. Any lean system seeks ways to optimise a manufacturing process regardless of people and prepares managers to attempt to review the results with a very good analysis of the problem and a detailed action plan, not only to improve the KPI but also the whole process. The plant manager should explain the problem and its resolution, not justify it. Once upon a time, an old plant manager told me: “It is better to show what you will do than to explain what happened”. To overcome such cultural resistance, all company members should assume that any management model helps us to improve processes (machines and people), but not try to lay blame.
Fear to share information Some people think that having information means power, safety and sometimes makes them feel important and useful. However, information flows freely across the company regardless of people. When the profit and loss accounts (P&L) are analysed, revenues, cost of sold goods and sales, general
“Most literature mentions that a lean system requires about six months to be implemented, but in my experience, it is more time consuming than that.”
PRINCIPLES AND PURPOSE
and administrative expenses are seen. Revenues means sales, which means price and volume, customers and other sales KPI, then, cost of goods represents manufacturing performance and production KPI, and finally, expenses are the rest of fixed cost KPI. There are not any secrets, the information is there. All over the organisational pyramid there are people working to achieve the company’s mission and vision and its the main goal: earn money. Therefore, employees must know how their performance affects costs and how they can improve it. I remember a case in a cement plant, where workers did not have any targets, KPI or costs, because the information was just for the plant manager and workers only had to produce. How can workers produce good products if they do not know if they are doing well? They need information about their performance. For example, in quick response manufacturing (QRM) teams can decide irrespective of how to complete the job. The workers know the value chain about the products they make, their KPI, costs as well as revenues. In many countries and cultures, there are some troubles with sharing information of costs or revenues with unionised workers. In other cases, the problem is trafficking information to competitors. In short, there are many other excuses that prevent sharing information with employees, but they are just excuses. Contrary to such misconception, it happens that Toyota shares its TPS with its competitors and has continued to lead the market. Therefore, sharing the right information
with each employee in pursuit of company results should be noted. For example, a worker that assembles a piece of a machine using screws, must know that every screw that falls to the ground and gets lost, generates a percentage increase in the total cost of production of that machine. In addition, he must know about the main KPI of his operations and the targets to be achieved. When managers assume that the information is crucial for the proper development of operations and scope of results, we will have a company aligned with the goals and on the right way to achieve them. Then, we will have overcome the cultural resistance to sharing information.
This always happens when managers get tired of hearing that the information is not reliable at each results meeting. It is clear that not until breaking down cultural barriers, the results are not really visible, although there are substantial improvements from the first day of the management model implementation. The desired results appear when the chosen management system is operating in a continuous regime, because in the transition the results fluctuate.
Eagerness “I need it yesterday,” my boss used to yell at me. Patience is the toughest pillar of resistance to get over. For the first pillar of cultural resistance, the fact that to understand a management model is designed to improve processes instead of controlling people, how long would be required to break this paradigm? Surely, it would be a month or two, or until everyone involved feels they are not being questioned every time a poor performance indicator appears.
“The last aim of a lean management system is to control people. Therefore, it is illogical to feel controlled or questioned by a management model.”
What is your opinion about the second pillar of cultural resistance that we have seen? It will probably take a little less time than the first one, because, in most cases, not using procedures that compel people to share information, but to make the decision to run such procedures, generally takes about six months. March 2016 | the-lmj.com
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The manager’s eagerness to see a high results level in a short time, induce them to put pressure on people involved in continuous improvement teams and workers in each department, mainly the manufacturing employees. Such pressure is converted into actions to force the lean system to generate exceptional results (seemingly) when, in fact, it is still not able to reach them, because the company is not mature enough yet. Here comes the time where everybody in the company, managers and workers, start to question the effectiveness of the lean system and its tools. In general, to implement a lean methodology, companies hire external consultants. This part of the cultural change process put the consultants through their paces and in many cases others replace them with an, apparently, better professional performance, but they are not the problem. Eagerness is one of the most difficult barriers to overcome and responsible for a large percentage of failures in implementing new management systems. However, once such
cultural resistance is overcome, the management model will begin to generate the expected results and the culture of the company will become lean. Focus on reducing costs There are many companies using a cost reduction strategy to increase their profits. Nevertheless, it is not always the best way, especially when a lean programme is being run. It is important to mention that there are two different ways to reduce costs: optimising by using a lean system or cutting costs. The second is the worst way and destroys any management method. One of the first actions of a cost reduction strategy is to cut down on everything even on people. For example, the budget for training is the first thing to be cut and in second place, the lean manufacturing consultants. Consequently, all people in the company start to feel uncomfortable and fear to be dismissed. What is more, the lean implementation is stopped and the cultural changes realised are lost. Lean manufacturing, six sigma or other management methods are the best way to increase
the company profits. They are focused on continuous improvement of processes, inventory reduction, minimising WIP and optimising times. New trends in management aligned with lean manufacturing aimed at reducing and optimising time such as the methods of quick response manufacturing (QRM) and the theory of constrains (TOC). The strategy of cost reduction generates immediate benefits, but cannot be sustained over time. Lean systems generate benefits in the medium term and long term, but, most importantly, they are sustainable. This cultural difference must be overcome to make a real change. The four above mentioned pillars of cultural resistance are uncorrelated and coexist all at the same time, although the sequence presented in this article has a relation of precedence. It is very important to understand that cultural change takes time and depends on the type of business, environment and country where a company operates. Certainly, if we want to implement a lean system as Toyota did, we must break the cultural barriers first.
“Eagerness is one of the most difficult barriers to overcome and responsible for a large percentage of failures in implementing new management systems.�
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PRINCIPLES AND PURPOSE
Lean University- the early years In this article Sarah looks at the struggles that faced Cardiff Business School when it first began its lean programme and shares some lessons that she and her colleagues had to learn through trying. When I joined the Lean Enterprise Research Centre (LERC) in 2005, I didn’t have much of a clue about what lean actually was. I was recruited to the Health and Services team and my role was to examine the transfer of lean from manufacturing to services. I’d say I spent nearly a year attending conferences and events, shadowing colleagues who were running workshops in hospitals, investigating in lab
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services and on farms investigating in red meat value streams. Despite desperately throwing myself into these activities, I remained pretty clueless. I was intrigued however. Everything I read made complete sense and I could see that the workshops that I attended gave employees the opportunity to take control of their processes and improve them.
Sarah Lethbridge Cardiff Business School. UK
PRINCIPLES AND PURPOSE
I was also very much enjoying the consultant role, where you’d fly into an organisation, unpack some tools, suggest a few things, then ride off into the sunset. Little did I know that my early days of blissful ignorance and ‘revered external wise one’ status would soon come crashing to a stop.
The Lean University Project Professor Peter Hines, then Director of the LERC would openly state that universities were the ‘last bastion’ of sectors as yet untouched by lean. Driven by an agenda to push forward the boundaries of lean knowledge, and also, frustrated by some of the internal workings of the university in which the centre was based, Peter had several meetings with the then vice chancellor, David Grant and the Lean University project was born. In 2006, £½ million was set aside to fund a three-year programme. The funding would be split in two. A central core team would be recruited to carry out the lean work day to day. The other half of the funds would be to support a team within the LERC to assist with the deployment of lean and to understand the transformation from a research perspective. For the first couple of years of the project, 100% of my time as a researcher was spent on the Lean University project. I worked closely with my colleagues from the LERC and also with the Central Lean Team. The programme was divided into three strands. A key element would be a piece of work designed to align the strategic direction of the organisation. The main body of the work would
be within three key university value streams that together, ‘touched’ the whole organisation. These were: 1; the process for developing, delivering and closing down a research project 2; the process for developing a new programme of education and 3; the process of how to pay external suppliers and staff. The final aspect of the programme would consist of smaller continuous improvement projects that came about to try to solve a particular issue. (It is interesting to note that, at the time, the term continuous improvement did not have the same whole system, never ending connotation that it does now). The Lean University project began in earnest and soon I was asked to lead the “Supporting
starting out on your lean journey, might be able to benefit.
Seek collaboration and avoid tactics which actuall divide Early lean workshops had uncovered the fact that there was a need to better connect senior management to the improvements that were being identified. So, in an attempt to engage them as part of the change process, I created a senior project team who would address the systemic issues that arose from mapping sessions. I imagined that this would mean that when we were working hard to improve on the shop floor and encountered issues that were outside of our control, we could
Elements of the Lean University Programme Research Funding” value stream improvement/end-to-end project. This was the first lean project I had ever led and I learned an awful lot, mainly because of the number of mistakes I made. In the spirit of continuous improvement, I’ll share my learning points with you, the things that I make sure that I now address within lean engagements, in the hope that those of you
quickly pass these problems to the senior team who would solve the problem and enable the project team’s work to continue. In reality, the senior team did not progress many of their issues and so, despite great progress being made within the project team, their enthusiasm was dampened upon discovering that the senior March 2016 | the-lmj.com
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PRINCIPLES AND PURPOSE
team were not managing to complete their actions. The hierarchical two-tier approach reinforced the divide that existed as opposed to tailoring change to the specific needs of different levels of the organisation.
Your emotions as a facilitator are key People often talk about the change curve in terms of the emotional process that employees will move through as aspects of their work is fundamentally altered. What is not so often discussed however, is the change curve of the improvement facilitator. I felt trepidation as we started the project, joy as I could see that our work was starting to make a difference, frustration as we encountered problems and then, to my shame, resignation as I effectively gave up in the face of significant challenge. Supporting research funding taught me the exceptionally powerful, emotional role that the facilitator of change employs and how wrong I was to let my feelings and enthusiasm affect the process, effectively giving up on the hard working project team when the going got tough, a mistake I have vowed to never make again.
Start small, complete one project and learn It is clear to me now, after nearly 10 more years of experience, that the projects that we started in the early stages of Lean University were just too large. We had aimed to come into contact with every facet of an organisation of 6000 members of staff and
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30000 students, within the first 24 months. The ‘Pillars and Platforms’ metaphor is useful here where a pillar improvement project refers to a lean engagement that is narrow in terms of scope, but deep in terms of the range of tools that are deployed. A platform refers to an engagement that is wide in terms of organisational reach, but shallow in terms of the number of tools that are consequently able to be used. Research conducted by the LERC with Nicola Bateman, now at Loughborough University, Ann Esain and myself have shown that Pillar projects work well in the early stages of a project to enable learning and that platforms, without key strategic support, are very difficult to enact without significant organisational buy in in the initial stages. Within Lean University, too many platforms were initiated too early on, and also, they were initiated concurrently. Smaller, pillar work in the first years would have enabled us to have developed a more successful change narrative and would have provided more opportunity to learn and grow as a team. In addition, it seems to me that we are often very good at employing the PDCA scientific approach to work, on actual processes, but aren’t as good at applying the PDCA approach to the act of improvement itself. Completing just one small project and completing it well would have been a better place for my lean leader’s journey to start.
Internal change agents have a much tougher job than external change agents- they must work with power My first lean engagements had been as a consultant. I was completely unprepared for the shift in approach that is required when you are trying to enact change within the organisation within which you work. Senior support is absolutely essential -although this is also true when working as an external consultant; most external consultants are commissioned by senior people, who possess authority and budgets and hence, have an automatic interest. As an internal change agent you must gain the trust and support of those with power. Failure to do so, severely limits your effectiveness as a champion of improvement.
Education is essential
Although the Supporting Research Funding project did not glean the results that were anticipated or hoped, there were lots of benefits on the ground. What was really clear was that when working with talented, committed individuals, you could start to share lean tools and techniques and help to shape their approach to work positively and forever. Most of the successes of the project came as a direct result of a fantastic project manager based within the central research team. Our experiences within these end-toend projects shifted focus into the development of a Lean Skills for Managers programme. Again, in hindsight, we should have started this initiative sooner.
We trained key managers across the university and they then simply incorporated some concepts and tools into how they manage and lead teams, a much more sustainable approach. Critically, for me, I only truly started to understand lean when I started to teach it. Something magical happens when you prepare sessions to share learning and then also, when you stand up and start to communicate concepts and ideas. I had many lightning bolts of realisation whilst stood in front of
my peers talking through different aspects of the approach.
help them to skip through some of our pioneering encounters.
Cardiff University, along with St Andrews, were the first universities in the UK to adopt a lean approach. Given the considerable pressures that the university sector is under, many universities now have dedicated teams leading improvement initiatives. I’ve been lucky to work with many of these individuals and have always tried to be open and honest about what we have learned within our Lean University experiences, in order to
That said it seems to me that there is a kind of inevitability about the mistakes that are made as a new lean improvement facilitator. You have to go through these things in order to develop and grow your skills. As most lean devotees will surely attest, learning and lean go hand in hand, you’ll never know everything that you need to know and consequently, the learning must never end.
“I only truly started to understand lean when I started to teach it.”
Lean University’s Approach to Education
PRINCIPLES AND PURPOSE
It’s the start that stops us: five factors Why is launching an improvement initiative so tricky? And getting it to stick even trickier? Why do companies so often bail in the early stages of improvement—long before they even have had time to fail? Whether six sigma, lean, theory of constrains, or, yes, the visual workplace, putting knowledge successfully in place—so it achieves the promised outcomes—can be challenging, especially in the early stages. It’s the start that can stop us and often does. At the outset, an improvement implementation is always in jeopardy. It is at the start that obstacles tend to multiply like fruit flies on a bitten pear. That is
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also when many companies give up. They bail. The power broker sponsor, already skilled in rehearsing trouble, may misread the signs, or get impatient, and pull the plug. Or he gets promoted and moves on, taking the passion of his original vision and leaving a power vacuum in its stead. It all falls apart. At the outset, an improvement effort is always at risk until—it grabs. Only then can it begin to sink deep roots. In this article, I map out five factors that can, at the start, doom our best-intended improvement vision: 1.
The mistaken pursuit of perfection
Gwendolyn Galsworth Visual Thinking Inc., USA
2.
Demanding results too quickly
3.
Casually choosing a methodology
4.
Choosing a methodology with no operational protocol
5.
Letting your trainers begin to train for the wrong reason
PRINCIPLES AND PURPOSE
1. The mistaken pursuit of perfection. Perfection is an ideal that many in the field of operational excellence promote. While it works for the East where process is also on top of the imperative hierarchy, the notion of perfection has proven a difficult orientation for us in the West. Western thought rests on a foundation of dualism—judgement and comparisons. We gravitate towards sharp contrasts and opposites, all of which promote polarised thinking. If there is a good, there must be a bad. If there is a black, there must be a white. We see this everywhere—in our politics and religions and in our ideas of beauty, age, and aging. Trying to operationalise perfection creates a kind of tyranny in the person (or company) that seeks it and misses—because, if the opposite of perfect is imperfect, then most of us fail, a lot. The antidote? Replace perfection with the notion of progress. Modest but always moving forward, progress is the mooring that provides us with a destination: Better. It also provides many points of comparison, not just one. Perfection as the ideal is, by definition, unattainable and always out of reach. It can rob us of our progress. So give yourself and your company a break and recognise that, while effort is not exactly a result, it is only through effort, frequently renewed, that we proceed down the road far enough to create new outcomes.
2. Demanding results too quickly. Sometimes it’s us. Sometimes it’s our manager. But when results
are demanded too quickly, the organisation loses the time it needs to learn how to get them. The how factor gets short-circuited, a theme I refer to throughout this article. How do we do it differently this time? Better? More completely? How do we cultivate a new way (a process) that ensures that we get results and not merely complete tasks? Task versus process—which is more important? It’s a bad question because we need both. Results and people alignment. If we focus too hard on results at the start, tasks will get pushed to completion, long before an emotional and cultural foundation is provided in which to grow the change. Part of the purpose of the “start” period is to prepare the work culture to hold the change. Companies, large and small, miss this opportunity when they mandate, for example, a 10% or 30% KPI improvement by the end of the next quarter. Rare is the enterprise with sufficient improvement maturity to pull that off. Any improvement method worth its salt is teaching new thinking—and new thinking takes time to cultivate. When we implement workplace visuality, for example, we ask value-add associates to implement borders and addresses—aka, the visual where— because that task gives line employees a chance to grow in their ability to think a new way—to think visually. This then becomes a stepping-stone for more advanced visuality. But if the company mandates a tight deadline for getting hourly employees to apply “lines and labels,“ it robs itself of a thinking workforce, along with the 15% to 30% productivity increase
that the visual where—operatorled—repeatedly provides. Instead of building commitment muscle and thinking skills, the company asks employees to complete shortterm tasks. Demanding results too quickly often signals a misunderstanding of how to make change last. There is so much discussion nowadays about sustainability. “We have to make it sustainable. We have to find a way to make it stick.” I say: Build your sustainment capability into your improvement approach. Build it into the front end. That brings us to the next factor: Make sure your improvement methodology is viable. Don’t choose casually.
3. Casually Choosing a Methodology. Selecting an improvement methodology is an important, executive-level decision. The method you choose—and the reasons you choose it—represents the first line of strength on your improvement journey, whether about visuality, six sigma, 5S, or mistake proofing. Selected carefully, that method becomes an investment decision, never made casually during a game of golf but soberly in the boardroom, with your operational leadership in attendance. This in fact is the very start of the start. When improvement fails because the method itself is not robust, a chain of tangible and intangible deficits is triggered. Tangibly, the problem the method was aimed at solving remains. Nothing got better. Intangibly speaking, this failure prompts a loss of heart, a dimming of hope, and an erosion of confidence—confidence in ourselves to make a change and in those entrusted with leading it. March 2016 | the-lmj.com
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Heads may roll. But the deeper damage shows up later when the company tries again—and fails again, either for the same reasons or seemingly different ones. A few years after that, another attempt is made, with the same disheartening results. To many, this sounds suspiciously like “flavor of the month.” But it is not. It is the start that stopped us again.
4. Choosing a methodology with no operational protocol. The method we chose may contain an appealing what—we love the outcome it promises. But the trouble begins if it does not also contain a viable how—a robust process for achieving that outcome—an implementation protocol. What and how are two separate things. It is not enough to name the problem and its solution. We need a road map that shows us how to get there. We need knowledge plus know-how… content plus process, a fine head and the hands and feet to put the outcome sustainably in place. The Shingo Prize, for example, offers an excellent outcome framework. It does not yet, however, provide equal strength in spelling out how to get those lofty results. Without a robust how, chances increase that your outcome dream will indeed become a flavour of the month. No organisation wants that—no pay off and no results. A company that has learned how to implement is a hot commodity. It has cracked the code on getting a return on its improvement investment—because it not only knows what outcomes are
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important but also how to create a success it can build on. It moves from strength to strength, often enjoying the added pleasure of spicing up the deployment protocol and making it local, even a little peculiar. The result is know-how that tastes and smells like Cherry Garcia and not plain olde vanilla—implementation effectiveness with personality.
5. Letting your trainers begin to train for the wrong reason. Before your trainers start to train others, they need to train themselves to ensure they understand the content well enough to teach it—and the deployment process well enough to coach it. Training effectively means that instructors not only share information, they also ignite and inspire, and they get results. This is part and parcel of a professional trainer’s trade. But most companies do not use professional trainers. Instead, they keep training in-house, often asking an employee doing one job to do training as a second job. Sent by the company to get certified, a would-be instructor is ushered through the what: the tasks and content (e.g., 5S, six sigma, value-stream mapping). Rarely is she taught how to deliver a compelling how: how to teach effectively and trigger and support transformation. As a result, a new trainer will often present the material painstakingly but half-heartedly and be left to wonder why participants are not clamouring to get on board. Stopped at the start, our fledgling trainer feels a failure.
The solution, once again, is to add how to the what. The trainer needs to learn how to train the materials before she is held responsible for the results. That is why I always make the first cycle of training about the trainer’s learning, not that of the students. I call it the “A Cycle.” The A Cycle is the first go round during which the new trainer finds her seas legs, practices, tries things out, gets the hang of instruction. The trainer learns. And yes, she makes mistakes. I often say that Cycle A participants (the group) become causalities of the trainer’s learning—in much the same way that a first child becomes the causality of the parents’ learning curve. The kid may need therapy by time he’s 14 but the parents have learned a lot. They decide to have a second kid because they now they can do a better job. Same with our new trainer. If she does a good job learning in Cycle A, there will almost always be a Cycle B, C, D…and R.
Consider these five factors. Your improvement effort is at its most fragile at the beginning and any of these five has the power to stop you—and they often travel together. Ignoring them will make the going rougher and tougher— and give us lots of reasons to bail. Make no mistake. If we decide to keep going, we will learn. If we decide to bail, we will learn. But we can also take steps to make both decisions easier. It’s the start that stops us but only if we let it.
CASE STUDY
Lean Startup at The University of Sheffield This article is a case study of the work undertaken at the University of Sheffield between 2011 and 2014 to set up and run a ‘lean’ process improvement unit. It will discuss the rationale for the creation of the unit, and cover the successes and challenges of the approach taken. It will also describe some of the projects undertaken, with a summary of their outcomes, both financial and, perhaps more importantly, some of the lessons learned along the way. Background There was no ‘burning platform’ at the University of Sheffield which mandated the introduction of an efficiency drive. We are a large and successful Russell group University - one of the world’s top 100 universities renowned for the excellence, impact and distinctiveness of our research-led learning and teaching. So why set up a lean unit? As so often, the catalyst for change was a series of unconnected events.
Our Computing Services exec team, taking up an invitation from the head of computing services at St Andrews, visited their lean unit (known as Lean Central) in the summer of 2011 to look at their work. At that time none of us had any knowledge of lean or its potential in higher education. What we saw at St. Andrews was very impressive. Over a series of projects they had made enormous improvements to many university processes, and were at a stage where they
Rachel McAssey, Head of Process Improvement Unit, University of Sheffield
David Speake Senior Process Improvement Coordinator, Process Improvement Unit, University of Sheffield
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CASE STUDY
were able to insist that significant computer systems development was preceded by work on process. The approach was one, which had instant resonance for Sheffield, struggling with ever increasing demands for computerisation of administrative processes, and yet unable to verify that new systems decreased or improved those processes. Here was a way in which we could assure ourselves that systems development was useful and worthwhile. The team came back from St. Andrews enthused and determined to run some pilot process improvements at Sheffield, both to improve our own chances of success, and more broadly to test our institution’s readiness for change. At the same time, the publication of the Diamond Report on improving efficiency in higher education, which called for ‘process improvement, simplification, and standardisation’, was a spur to the senior management of the university to evidence improvements within our institution. As a result, two pilot projects were set up as a proof of concept, with the aid of a consultant from St Andrews. Pilot no. 1 was to attempt to improve the student computer registration process, while no. 2 was to overhaul the process for amendment of University course regulations. The projects were chosen simply on the basis of complexity - 1 felt to be easy, and 2 hard. Run over the space of six months from November 2011 onwards, the pilots were a remarkable successes, due in great part to the expertise of our consultant. Improvements from the first pilot were immediate, with
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student queues at registration greatly reduced, student cards issued quickly and correctly, and agreed standard processes for student card production and distribution. Project 2 identified considerable improvements around harmonisation of timescales between academic departments and central services, and also in the simplification of the regulations themselves. Implementation of these improvements took longer, as considerable computer systems development was necessary before the full benefits could be realised. Response from the University as a whole was very favourable, with most of those involved whether as project team members or wider stakeholders seeing that the approach could certainly work elsewhere, particularly with the many administrative and studentfacing processes. Following the projects’ success, a justification was written for setting up a ‘lean’ initiative at the University of Sheffield.
Setting up the unit The initial case was made for the establishment of a small Lean unit (named, after some deliberation ‘The Process Improvement Unit, or PIU) with two staff and administrative support. We were conscious that there was little likelihood of the University agreeing to an institution-wide initiative as it would be seen as too risky and resource-intensive, and we were convinced ourselves that dedicated resource was essential to make some headway with the lean agenda. In order to ensure that the unit was in a position to operate effectively
from the start, we recommended that one post would be filled by someone with considerable existing expertise in lean methods, to be advertised externally, and one post should be filled by someone familiar with the operations of the University and who had already established networks and knowledge of major University processes. The remit of the unit was simply ‘improvement of efficiency and effectiveness of University processes through streamlining and standardisation’. Funding for two years was approved by our University Executive Board, and the present co-author volunteered for the task of setting up and running the unit. In the event, both ‘process improvement coordinators’ were internal appointments as no suitable external candidates were identified. Formal training in lean six-sigma was undertaken, and we were fortunate enough to have ongoing coaching. Key to the visibility which the unit needed in order to gain credibility within the University was the wish of the Vice-Chancellor to be head of the Steering Group which was to govern the work of the unit. Without this active support from the top, it is unlikely that the unit would have attracted the projects which started to come its way. The first meetings of the Steering Group crystallised the purpose of the unit as being: 1.
To run process improvement projects and workshops
2.
To embed a ‘lean’ culture within the University
Furthermore, the steer of the VC on projects to be undertaken
CASE STUDY
was very much that we should help with those processes where people actively asked for our help; in other words we should operate on a ‘pull’ principle. This guidance was invaluable, as it gave us the confidence to spend time on vital communications with academic faculties, to produce leaflets, to train ourselves, and more importantly, to be seen as responsive to need rather than as ‘meddlers’ who appear unwonted and unwanted with a thesaurus of management-speak and the unspoken threat of job losses.
“With the help of colleagues from our AV services we turned an unused large office in our computer centre into a flexible workshop, with AV facilities, comfortable chairs, and most importantly, walls painted with whiteboard paint, so that we could make all the work done as part of a project visible to everyone.”
Approach to running the unit The pilot projects were run via Rapid Improvement Events. Feedback from the projects emphasised the value of this approach. The opportunity for key staff to take some time out in order to understand and agree the problems with the current state and present an agreed action plan for improvement activities was critical in supporting process improvement. We decided that The University of Sheffield would continue to run projects via Rapid Improvement Events to maximise the opportunity for collaborative improvements. RIEs which are guided by expert lean practitioners were identified as a way of ensuring that processes are improved using lean principles rather than a ‘toolkit approach’ which has limited durability. “A toolkit-based approach is taken without an understanding of key principles. Although these tools can lead to short-term success in improving internal efficiency they rarely engage with core Lean principles – the centrality of the service-user and external orientation to organisational effectiveness.” (Zoe Radnor).
Space Critical to our initial successes was the creation of a dedicated space for our rapid improvement events. Our visit to St. Andrews, and the two pilot projects at Sheffield, had convinced us that a space away from the day job for people to think about their problem was highly important. So with the help of colleagues from our AV services we turned an unused large office in our computer centre into a flexible workshop, with AV facilities, comfortable chairs, and most importantly, walls painted with whiteboard paint, so that we could make all the work done as part of a project visible to everyone. We also make use of breakout space in an adjacent office when necessary.
We were also aware that providing coffee, biscuits and lunch go a long way towards creating a good environment for innovation. We also try to bake cake for our project team members at least once during a project, as a tangible way of recognising the hard work they put in.
The role of the co-ordinators For our project members, our role may look simple enough ask them simple questions and stop them fighting. However, for us, it’s about understanding in some depth (and we’re always learning) lean principles, and being able to explain these in a way that makes sense to, and resonates with, the team.
CASE STUDY
At the start of the project we are making sure that the project scope is reasonable - all too often there is a desire by project sponsors and teams to load the project up with all sorts of tangential issues. “This is what a LPO (Lean Promotion Office) should facilitate and encourage - to look at things in a fresh way, from different viewpoints” p187 Bicheno and Holweg. We’re also involved in collecting baseline data with which to measure the current process. We guide the team through the improvement process, stressing that an improvement project is a first step along the road of continuous improvement. We are constantly monitoring the team dynamic to ensure that all voices and ideas are heard. We are on the lookout for those times when the project team pulls back from bold improvements, and for the suggestions that lead to a win-lose solution. Of course there is a training role as well. We do teach some improvement tools as an aid for understanding process, but as we point out, there’s not much point in being given a spanner if you don’t know which nut to tighten. As well as focussing on the project team and their work, we try to make sure that we keep the project sponsor up to date with emerging ideas, resource requirements and conflicts of interest. And of course, we’ve learnt ourselves that we need to support the team throughout the implementation of improvement ideas, so that they feel supported, and so that we can check the tendency to go back to the status quo when difficulties arise. During this implementation phase we’re reminding the team of the need to collect data about the process,
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Here we were able to reduce the time taken to process a claim by some 80%, while reducing errors month-on-month, incorporating complicated pension autoenrolment and UKVI requirements .
so that it can be compared with the baseline data. We are fortunate in being able to have two facilitators at most of our project workshops. This really helps to ensure that we do what we say we’re going to do, and masks the inevitable lapses in concentration and patience. We are a resource which is available even when a project closes to help, advise and guide continuous improvement activities.
First projects The first major project - and it was a major project, rather than the small starter we’d wanted while we found our feet - was the reorganisation of the ‘Certificate of Acceptance for Studies’ process. The certificate is necessary for overseas students, and is a requirement of the (then) UK Border Agency. Because its implementation by the agency was rushed and ill-thought out, constant changes had been made to the requirements and timescales, with the result that the University, along with other universities, was left with an incoherent series of process steps, mostly checking and correcting earlier errors and gaps in data. Certificates were produced
for students who never turned up, and with data that was no longer correct. As the University’s reputation and UKBA trusted status depended on a compliant process, this was extremely worrying for our senior management. Conceptually the improvement was straightforward. We reversed the order of process steps so that the certificate was produced only when all, or nearly all, the data was correct, and the student actually required the certificate. However, although a number of steps could be changed without changing computer systems, the longer term solution did involve systems development, and this is where we learnt our first lesson of process improvement. We now try very hard to ensure that improvement can be made without relying heavily on systems development. In this respect, it’s therefore often easier to make improvements to manual processes than it is to those which are already heavily computerised. However, we were able to reduce the time to issue a certificate by 50%, and reduce the number of unused certificates by 20%, as well as increasing our confidence in our compliance. A clear learning outcome for the
CASE STUDY
“As well as focussing on the project team and their work, we try to make sure that we keep the project sponsor up to date with emerging ideas, resource requirements and conflicts of interest.”
project team was the benefit of thinking about process prior to systems develoment. Following this qualified success, we invited to look at the way casual workers are paid by the University. Again we found that most of the work in the process, and the considerable delays sometimes experienced, were due to multiple layers of checking and authorisation, unclear division of duties between our HR and Payroll departments, and so on.
Lessons learned after first year •
•
•
•
The necessity for systems development slows down implementation dramatically and can lead to disillusion with Lean. Project team members need the full support and understanding of middle management. Participants may feel “We’ve been leaned” and that no further improvement is necessary. The University’s annual cycle for many processes slows down implementation and
•
•
•
measurement. Point improvements to processes can have a negative ripple effect elsewhere which needs to be considered. It is hard to interest teams (and sponsors) in data collection. The feeling seemed to be that “it’s bound to be better, we don’t need to collect that information”. People’s response to the need for change is often “Give me two people and a computer system”. We have to work hard to challenge that view.
Second year of operation The continuing support of our VC was in evidence when he suggested a reception for selected departmental heads to be hosted at his home. For us this was a key moment - it validated our work so far, and it indicated (at least to the invitees) that the Process Improvement Unit had arrived and was a part of the University. Our second year saw more projects, and also requests
for discrete workshops rather than full-blown projects. While a half-day workshop can be valuable, for defining problems, or mapping a current process, we worried that it was being seen as ‘process improvement lite’ by the University, and we worked hard to ensure that the distinction was clear, so that our attendees didn’t think that a process map was the only output of our work. Coupled with new projects we increasingly focussed on training. We knew that as a small unit we could not hope to improve everything everywhere, and that our real purpose is to help embed a culture of continuous improvement. To do that we developed a range of training, including awareness and practitioner courses, along with simple process mapping. To date we have trained 36 staff as practitioners, and 104 staff have attended awareness and other training. It is a measure of our success that at the end of the second year, and the end of the initial budget, the decision was taken by the University to continue funding the unit on an open-ended basis.
Challenges •
•
It remains difficult to get project teams and sponsors to understand the importance of data gathering, both before and after process improvement. The differences in administrative practice between academic departments make it difficult to achieve major improvements for departments as a whole.
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CASE STUDY
•
•
•
Central Services have tended to benefit more from improvements. Continuous improvement as a concept has been hard to embed in project teams’ thinking, although there have been notable successes. Scheduling improvement events is difficult, particularly when senior and academic staff are involved. We have had to alter our practice to cope with this reality, using interviews and separate meetings where necessary. The shifting student population makes direct and continued engagement with them difficult.
Successes Our contact and involvement with other lean practitioners in the sector, both through the LeanHEHub and other groups and conferences was important, both for our continued learning, and for letting us see that our problems and challenges were not unique, but shared by all.
Our VC’s vision that projects should come to us has proved to be the right decision. Having these voluntary projects has meant that we now are able to command some respect within the institution, and are now starting to tackle the big processes, such as staff recruitment. Although the initial aim was to recruit an external Lean expert, in fact the knowledge and understanding of the University environment which we have has proved to be a key component
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of our success so far. We are not consultants, we are part of the organisation, and have both contributed in the past to its successes and failures. Our project teams and training attendees know that we’re talking about an environment that we understand.
Current direction, projects and activities The success of PIU projects so far has been greatest when there is clear practical support from project sponsors and line management. More work needs to be done on building understanding of the nature of process improvement projects and the shift in thinking which they involve. PIU does not see itself primarily as a ‘fixer’ but as a change agent helping University staff to focus on continuous improvement. Ultimately therefore, the measure of success is not how much money or time PIU can help to save, but how well the culture of continuous improvement is embedded in the University. Clearly this is a goal to which everyone must contribute.
Conclusions The establishment of a lean unit was challenging and rewarding and has produced tangible benefits for The University of Sheffield. Critical success factors include learning from good practice in other institutions and sectors, getting senior support and funding, and responding to pull from the institution to identify projects. The support PIU gave to projects at implementation stage was also critical in ensuring that improvements were implemented and initial ‘teething problems’ were identified and solved using lean thinking.
“We knew that as a small unit we could not hope to improve everything everywhere, and that our real purpose is to help embed a culture of continuous improvement. To do that we developed a range of training, including awareness and practitioner courses, along with simple process mapping.”
Produced by:
The Lean
TOP25 Nomination deadline: 1 April 2016 Produced by:
10 May 2016 | London Do you know someone demonstrating excellence in continuous improvement? The LMJ Top 25 recognises the achievements and contributions of individuals who are paving the way for innovation and championing continuous improvement in their organisation. Help us promote the different ways people are working together through operational excellence and the individuals whose ideas, enthusiasm and passion are improving the future of lean management. If you know someone who has improved productivity, performance, culture or process flow please let us know.
Visit the website to make a nomination: the-lmjtop25.com
OUT OF THE BLUE
Selling Horses and Seeing Systems on a Road Less Travelled Bill Bellows, President, In2:InThinking Network
Beginning with the June 2015 edition of the Lean Management Journal (LMJ), I will be preparing a monthly column, titled “Out of the Blue.” As with the articles I have been writing for the LMJ since 2009, these columns will highlight concepts associated with an integration of ideas from W. Edwards Deming, Russell Ackoff, Genichi Taguchi, and Tom Johnson, amongst many other systemic leaders, with applicability to improving how individuals and organisations think together, learn together, and work together. The concepts will be presented through a wide range of anecdotes, united in a way that offers a new lens for revealing and adopting the Toyota Production System. In keeping with the use of the expression, the aim of these articles is to present concepts to the LMJ community, which might appear to be “out of the clear blue sky,” yet, could be immensely valuable to lean practitioners. Midway through graduate school, while employed through the summer months in an engineering position, I joined fellow interns in an after-hours outing at a local pub. With our internships coming to an end, we invited our department manager to join us. Unlike the technical questions we answered all summer long, our manager took the opportunity to challenge us with a down-to-earth business question. Instead of the queries W. Edwards Deming used to probe senior executives, including “What business are you in, what business will you be in 5 years from now, 10 years from now?” our manager asked us
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to explain the difference between crime and business. We stretched to offer explanations that might impress a member of management with our embryonic business acumen. After he allowed us to exhaust our textbook answers, he enlightened us with his trouble-free answer; “business is legal and crime is illegal.” In consideration of the fine line between business and crime, poet Robert Frost once offered his advice on the secret to selling a horse; “Take care to sell your horse before he dies. The art of life is passing losses on.” Yet, what can be said of those who will receive these losses, be they co-workers,
customers, or, more broadly, fellow members of society? In recent reports in British media, questions have been raised about Google’s parent company, Alphabet, and its tax bill in the UK. Specifically, are they paying enough? A year ago, similar questions were raised about Apple and their US tax bill. Given their record profits, should they be paying more in taxes? Or, are they, along with Google, electing to pay the minimum amount needed to comply with the current tax laws? While the phrase “tax loophole” is often used by the media to explain
OUT OF THE BLUE
“With binary simplicity, what is legal is not illegal. What is alive is not dead.” these corporate behaviors, if the laws were changed once again, would one be surprised to learn that they have both found yet another way to minimize their tax bills? Could it be that the “loophole” designation overlooks the ability of anyone meeting a requirement to do so minimally? As with asking our then teenage daughter to be home by midnight, could we complain if she arrived at 23:59? Or, is this a loophole? If we changed the requirement to 23:00, would a 22:59 performance be surprising, if not labeled a loophole? No more so than what happens when a friend, a university professor, assigns the question, “List at least 20 ways to do X,” as homework to his students, and receives a list of 20 ideas from each student when their answers are submitted. With binary simplicity, what is legal is not illegal. What is alive is not dead. What is good is not bad. What is on time is not late. What meets requirements is not delinquent. As introduced in my July 2014 article, “Business as Unusual – Shift from Big Problems to Great Opportunities,” I refer to this “Pass or Fail” logic as category thinking. In everyday practice, we use a finite number of distinct categories to differentiate answers to questions such as “Are you a citizen of the United Kingdom?” and “Does your car have petrol?” or to display commands on man-hunt posters “Wanted: Dead
or Alive.” By contrast, continuum thinking offers the possibility of an infinite number of answers when the inquiry shifts from “Does your car have petrol?” to “How much petrol is in your car?” The many differences between category and continuum thinking are often perceived as philosophical. In a very pragmatic sense, our ability to think about, see, and manage systems depends on which mode of thinking one activates, category or continuum. To better appreciate this finding, consider a “supply chain” inquiry I have posed in seminars and presentations across the United States and United Kingdom, as well in the Middle East and Asia, where the answer has proven to be independent of location or the type of organization, which has hosted me. This question borrows from the use of a grading system in a classroom setting, where (in the US), grades range from the category of outstanding (“A”), to good (“B”), to average (“C”), to poor (“D”), and failing, (“F”). On a continuum, scores will typically extend from a high of 100 to 60, with 60 as the transition point from degrees of good to failing, all the way down to 0. Given this classroom-grading context, my “supply chain” inquiry is “What letter grade, or numeric score, is required by (“external”) suppliers to your organisation for all parts and components purchased?” And, the same question can be asked about the letter grade requirements for “internal” suppliers, handing off to internal customers (i.e. co-workers). From aerospace procurement to the automotive and biomedical industries, extending to the construction industry and
healthcare, quality is almost universally defined according to a tradition of “conformance to requirements” that dates back at least 200 years. These efforts remain in heavy-duty use today through the likes of lean six sigma and operational excellence programs, with an ultimate quality goal of “zero defects.” “So,” he replied, with a degree of irritation, “I should go home and instruct my “So,” he replied, with a degree of irritation, “I should go home and In such a binary system, good parts are those, which meet requirements and bad parts are those, which do not. Once again, what is good is not bad. Assigned tasks are either complete or incomplete. Asking one’s young son or daughter to put his or her books in their bedroom may well result in them being placed inside the doorway to their room. For, what is in is not out. What is often surprising to learn is that the letter grade requirement is not an “A,” but rather a “D,” which translates to 60 on a numerical scale. As with the difference between an ”A-part” and a “D-part,” differences between parts scored as 60 and 70, 80, 90, 95, and 100 are invisible, on a part level, in this widely used supply chain quality protocol, even those with aerospace standards characterised as “advanced.” In such a system, might the secret to selling a part or a component be to sell it before it fails? Once, when confronted by the realisation of his organisation’s “pass or fail” procurement system, a seminar attendee responded by sharing his newfound frustration with this protocol.
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OUT OF THE BLUE
“There‘s no one to call in our current system. All the parts are good.” tell my daughter to get “So,” he replied, with a degree of irritation, “I should go home and instruct my daughter to get passing grades in school.” When asked how he arrived at this conclusion, he replied, “Because you said there’s nothing wrong with a pass or fail system.” As a point of clarification, I explained that although the current procurement system defaulted to the category thinking of “pass or fail,” I encouraged him to engage others in Minding the Choice (see my February 2016 article – Come Together and Mind the Choice) between when to define quality through category thinking and when to define quality through continuum thinking. As for semantics and pragmatism, what are the economic consequences of assembling aerospace, automotive, biomedical, and construction parts and components, or a team of horses, with letter grades of “D” versus letter grades of “A”? One need not look far or dig deep to find economic losses revealed by assembly challenges, if not delayed deliveries of nextgeneration products, unknowingly constrained by the 18th-century quality standard of “conformance to requirements.” One need not look far to find meetings being called to explore and examine the paper trails of parts and components labeled “bad,” yet
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with little earlier effort (perhaps labeled non-value-added) to monitor their letter grades, “A,” “B,” “C,” or “D,” and prevent “bad” from occurring. One need not look far to find excessive assembly and integration efforts for parts and components labeled “good,” the very losses described by Robert Frost in the context of dying horses. On one occasion, when I explained the potential for assembly losses from “good” parts to a manager responsible for component integration, she realised she was, at the very moment we met, experiencing a sizeable loss. When I suggested she contact those suppliers who had provided her with the “good” parts, for closer examination of their respective letter grades, she shrugged and replied, “There‘s no one to call in our current system. All the parts are good.” For many, the current organisational system, described by Dr. Deming as the “prevailing system of management,” closely parallels the theme of an ethics seminar I once heard about. In a 3-hour marathon, the webinar presented short interviews with coworkers across the company. Time and again, each interview ended with a co-worker confessing their passionate commitment to “do the right thing,” often in keeping with how they were raised by their parents, or how they trained as an Eagle Scout. What was missing To return to Robert Frost’s comments about the secret to selling a horse, to sell it before it dies is to focus on oneself, as anyone who receives any set of requirements is free to do, invisible to any “pass or fail” reporting. As explained by the letter grade was the size of the system when
“doing the right thing.” Is one to do the right thing, with passion, by them self, by their manager, by their department, by their senior director, by their vice president, by their president, by their spouse, by their parents, by their state, or by their country, but to name a few of the infinite options available as the system expands from oneself to include more and more, both in time and space. options of the effort one applies in meeting any requirement, the variation in how well one meets requirements on their assigned task (from “A” to “D” for letter grades or, from 100 to 60 on a numeric scale) affects how their part, module, or component integrates with that provided by others. Genichi Taguchi is reported to have explained the economics of this decision making, through his “Quality Loss Function,” to engineers and managers within Toyota during the 1950s. The difference between small, medium, and heavy losses during assembly operations is a function of how well the team members see the greater system they are part of and their willingness (as well as need) to go beyond the minimum effort each is obligated to deliver. At stake, is how big a system they can see and their commitment to do the right thing, once the proper resources are available. To paraphrase Robert Frost in his poem, The Road Not Taken, could it be that Toyota, guided by insights from the likes of W. Edwards Deming and Genichi Taguchi about seeing and managing variation and systems, “took the one [road] less travelled by, And that has made all the difference.”
LEAN ONLINE
Lean Online John Hunter has been blogging since 2004 and has built up a noteworthy site for lean content http://management.curiouscatblog.net/
@theleanlibrary has been tweeting about lean literature, case studies books and more since 2010 and is well worth a follow to find some great new content to add to your reading list.
Jiju Anthony has published an interesing article over on Linkedin focusing on why six sigma fails: http://bit.ly/1TzMIHM
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LEAN EVENTS
The Lean Event 2016 27th-28th April 2016, The Dome, Brighton, UK
Lean Product and Process Development Exchange- 2016 LPPDEEurope 25th-28th April 2016, Wokefield Park, Reading, UK
The lean event is about the practice of innovation in modern business. It’s for leaders, product managers, designers, marketers – as well as their colleagues and collaborators. Some of the biggest names will take you through the challenges and barriers, the learning points and the winning strategies. All this in a single-stream conference, offering you plenty of opportunities to network, explore and get inspired. To find out more and book your place visit: http://theleanevent. net/2016/
The conference is now in its thirteenth year and is being organised in collaboration with the Lean Enterpirse Academy. It provides great learning and networking with a mixture of lectures and workshops. To find out more, visit: http://bit. ly/1PPRhN3
21st-23rd April, 2016, Manchester, UK
To find out more visit: http://www.leanconf.co.uk/2016
March 2016 | the-lmj.com
7th-8th April, 2016, Utrecht, The Netherlands An event aimed at helping you organise for the future and training your employees to work in and create a lean organisation. The event offers speakers from some of the largest European companies and some thought provoking workshops To find out more visit: http://www.leanevent.nl/
LEANCONF16
A 3-day event for entrepreneurs, startups and people look to create lean companies.
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Lean Event Europe 2016
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