Managing Times by TBM Consulting Group

J a n u a r y. 0 7

MANAGING TIMES S h a r i n g

S o l u t i o n s

f o r

Y o u r

L e a n

J o u r n e y

Iow a Grea t Pl a c e s: Br ou gh t t o Yo u by L e a n

8 Conditioned behavior in the workplace

10 Wasted energy, wasted money

12 Innovations to standard work documentation

PUBLISHER’SNOTE

Looking forward to the New Year, we might ask ourselves what to do differently to improve our current competitive advantage. If you haven’t already started a lean transformation, now is the time. Global competition will only become stiffer in coming years, and companies that fail to transform themselves to create the agility and responsiveness to survive in a demand economy will soon be left behind. The motivation to transform your organization can come from several sources. The most obvious is the “burning platform,” a situation so serious that “jumping off ” the old approach and reinventing is the only hope for survival. A second motivator is the emergence of serious threats, such as new or stronger competitors, disruptive technologies or solutions, substitute products and services, and the bargaining power of mega buyers and suppliers. Whatever your reason for transforming your company, the process requires, above all, committed leadership. When you have decided that going lean makes sense for your company, then it’s up to you to make it happen. Leadership requires vision, customer-focus, communication, innovation, alignment, measurement, discipline, and continuous improvement.

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Leading Change

When you think about great American companies, you think of the visionary leaders who found innovative ways to solve common problems. As those companies matured, the innovators left and their entrepreneurial spirit faded. Markets became saturated with competitors offering roughly the same products and services. The mantra became “new, improved”—small changes to keep up with the competition—rather than “new, new”—innovations customers valued. Passionate leadership was replaced by professional management. A new generation of leaders sequestered themselves in corner offices to pore over the latest financial reports. Companies became victims of management by the numbers. Today’s lean leaders must have a renewed passion for what they do, fueled by personal involvement in listening to customers and improving the processes that solve customer problems. The cultural change that is essential to a lean transformation is not an uprising brought about by a discontented mass of employees, but a revolution stirred by the company’s leaders. Senior leaders must be personally involved in the improvement process. If senior leaders delegate this responsibility, the company will have trouble transforming itself. Transformation starts with a vision that creates the excitement and urgency within the organization that will be the catalyst for change. The new culture focuses on customers, values speed and innovation, demands quality, and recognizes that employees are partners in achieving a company’s goals. And it all starts with a mission and a vision established by the company’s leaders. So as you look toward the New Year and assess ways of making your company more competitive, consider your leadership—and resolve to become more involved and committed, to engage employees, and to truly lead your organization in the direction you wish it to go.

Effective leadership is what enabled the state of Iowa to use lean and the kaizen process to develop an innovative initiative that benefits all Iowans. Read about how the governor used his influence to help state agencies cooperate to get the Great Places initiative up and running in record time. (p. 2) And while leadership drives culture change, the change itself comes through individuals changing their world view of the workplace. Learn how our work and learning habits are set by our early learning experiences in a new column, “Accelerated Learning.” (p. 8) As fuel prices continue to rise, and the issue of global warming becomes more prominent, businesses need to consider ways of saving energy, not just for environmental concerns, but because it’s good business to do so. (p. 10) Also you may notice we’ve refreshed the look of Managing Times for the New Year. I hope you’ll find the issues more enjoyable to read. We hope to include even more topics of relevance and interest to your lean journey.

Anand Sharma, President & CEO, TBM Consulting Group, Inc. asharma@tbmcg.com

J a n u a r y. 0 7

MANAGING TIMES A publication of TBM Consulting Group 800.438.5535, www.tbmcg.com

Publisher Anand Sharma: a s h a r m a @ t b m c g . c o m Executive Editor William A. Schwartz: bschwartz@tbmcg.com Managing Editor Julie Poudrier: jpoudrier@tbmcg.com Featured Columnists Doug Kiss Joe Panebianco

David Pate Anita Walker

Contributors Stacy Aponte-Morris Al Blake Olga Bouche Herb Borwn Nero Haralalka Gary Hoover Donna Hopkins

Fabrizio Moroso Mike Serena Melissa Slater Sam Stevenson Noel Temple Joe Tipton

Art Direction and Design IONA design www.ionainteractive.com Printing Carter Printing & Graphics, Inc. www.carterprintingnc.com Published bi-monthly in Durham, NC 4400 Ben Franklin Boulevard Durham, NC 27704 LeanSigma® is a registered trademark of TBM Consulting Group, Inc. If you would like to receive this journal via email, send your vital information including email address to tbm@tbmcg.com

On the cover: In a leap of faith, Iowa used the kaizen concept to create a new initiative called Iowa Great Places. In just a year, the program was designed, advertised, Iowans were engaged, and three pilots were selected. It was made possible by the state government’s lean mindset, coupled with leadership from the governor and cooperation among state agencies.

LEANCOMMUNITYNEWS Pierre Garneau joined Sargent Aerospace Canada (a subsidiary of Dover), Anjou, Quebec, in May 2006 as director of operations. … Several changes have taken place at Altec Industries’ Burnsville, NC, site. Michael Little is the new assembly supervisor in the Dump Body and T-box areas. Jason Antolovich is the new manufacturing engineering supervisor, and Jessica Guglielmone, Justin Dement, and Blake Eckard are supporting manufacturing engineers. Mason Walt is the new E-coat paint supervisor. Todd Hammel is heading up the Quality Department as supervisor. And Kit Cumberson is the new continuous improvement coordinator. … At Woodharbor Doors and Cabinetry in Mason City, IA, Chad Larson, formerly continuous improvement manager, has been promoted to operations manager. … At Hayward Pools’ Clemmons, NC, location, David Fay, formerly KPO manager, has moved to become scheduling manager. Randy Staley has moved from KPO technician to molding supervisor, and Gary Gaydon has moved from the KPO to technical services. … David Lloyd has been appointed distribution center manager at Argos Barton in the UK. … Gary Amato, vice president of Hubbell’s Industrial Technology (HIT) Division has been also been made vice president of Hubbell’s Electrical Products (HEP) Division. … Phil Jones, formerly with Argo-Tech, is now director of operations for Western Enterprises (a Berkshire Hathaway company), located in Westlake, OH. … Thierry Vasseur is the new continuous improvement coordinator for Sealy’s St. Narcisse operation in Quebec, Canada. … John Formoso is the new global learning manager for McCain Canada in Toronto, Ontario. … Tasha Marvin, formerly vice president of continuous improvement at Deli Express in Eden Prairie, MN, has left her position to spend more time with her family. Her brother, Tom H. Sween, Jr., vice president of lean and logistics, has taken over her duties. … TBM has added a few new sites to our roster. We are working with BREG, Incorporated, a medical device manufacturer located in Vista, CA. Our sponsor there is Vice President of Operations Don Healy, former vice president of operations at

Medtronic Neurosurgery in Santa Barbara, CA. … We have also added a new Energizer Holdings, Inc., plant in St. Albans, VT. Javad Mirpanah is plant manger there, and Rob Green is lean coordinator. … In Europe, we have added Lippert-Unipol, with locations in Haan, Germany; Epfenbach, Germany; and Brito, Portugal. LippertUnipol is part of the Jason Group, specifically Jackson Lea in Conover, NC. ... TBM has also added a number of new staff members and consultants worldwide. Angélica Ayala is the new administrative assistant in TBM’s Mexico office. Ken Koeneman is the director of business development for TBM’s LeanSigma® Value Chain Practice. Bill Remy is joining Ken in leading that sector of our business. Angela Scenna is the new director of marketing, located in the Durham, NC, office. Reinhard Stück has joined TBM as a Europe team leader, based in Germany. Simon Law has joined as a senior management consultant working out of our U.K. office in Derby. … TBM is opening two new offices as well. Russ Williams has moved to Australia as managing director of the TBM office located in Melbourne, Victoria. In anticipation of a 2007 opening of an office in India, TBM has hired three new consultants, Dileep Kulkarni, Ram Mohan, and Devraj Singh. Devraj will be managing director of the India office.

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

CASESTUDY

Iowa Great Places: Brought to You by Lean By Anita Walker, Director, Iowa Department of Cultural Affairs

For more information on Iowa’s Great Places, visit www.iowagreatplaces.gov

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In a leap of faith, Iowa used the kaizen concept to create a new initiative called Iowa Great Places. Iowa State Government is well-schooled in the value and conduct of kaizen events, but this was a new application for us. The standard kaizen usually maps and improves an existing process. The Great Places kaizen was more like product design. Great Places was a concept—a product that didn’t exist—and we decided to use the kaizen process to help us create the initiative, going from concept to reality in record time. This is our story. The Great Places initiative grew out of a new approach to state budgeting, called “budgeting for results,” by Governor Tom Vilsack. In the normal course of things, each year the state agencies request from the governor specific budget increases. Usually those requests were accepted, or in the worst-case scenario, all agencies would be told to cut their budgets by a certain percentage. Governor Vilsack was bothered by the fact that budget discussions always seemed to focus on the percentage of increase or decrease for each agency, while the “big black box” containing the bulk of an agency’s budget was never reviewed. He wanted to re-examine whole budgets and base budgeting on need and results. His budgeting plan is basically zero-based budgeting—he expected state agencies to tell him exactly what they were going to do with the money in their budgets and the results they were going to deliver for Iowans.

To implement the plan, Governor Vilsack created buying teams for five general areas he focused on in his leadership agenda, and then all of the agencies were invited to propose initiatives that would deliver the results he wanted. Basically, he went shopping for results. Literally hundreds and hundreds of proposals came in from all of the state agencies and then he prioritized them, in a sense taking his shopping cart and buying what he thought was going to deliver the best results for Iowa, until no money was left. Coming Together Iowa Great Places was an initiative of the Department of Cultural Affairs, and was one of the top initiatives the governor purchased. There were two powerful ideas behind Great Places. One was a challenge to Iowans to be bold and creative and think about how they could make their place a great place by focusing on what is real and genuine and authentic about the place. The initiative wasn’t driven by the map—county lines or city limits—but rather by whatever the natural edges of a place really were, whether it was a Victorian neighborhood or a wild prairie or the length of the Mississippi River or a cultural district in a downtown

Kaizen is the kind of process where you don’t meet every Thursday for the rest of your life–you get it done in a week.

area. You know when you enter the place and you know when you’ve left it, and we wanted to focus on what is really special and genuine about that place. This initiative encouraged Iowans to open their eyes and look around at what was special and genuine about the place where they were. The second challenge was to state agencies, and it was both bold and somewhat surprisingly pedestrian: work together. We’re very good at telling others, like counties, that they need to work together, but we’re not very good at doing it ourselves here in state government. What tends to happen is that each agency really focuses on its mission, whether it’s to build roads, or clean

up the environment, or educate kids, and each of us has a certain budget or capacity to serve the state and we do it within our own silo. The idea behind Great Places: “What if we took the collective capacity of all the state agencies and focused on a particular place? We could actually have a transforming impact rather than this peanut butter approach where everything is sort of spread in a thin layer and nothing really happens and people get exhausted waiting for tangible results.” We had the idea, the governor had chosen to support it, and then we had to actually develop the initiative. That’s where we turned to Jim Scott and kaizen. What we liked best about kaizen is that we had

already used it effectively in process improvement. It also had demonstrated an ability to create cultural change, and we knew that this was going to involve a great deal of cultural change within state agencies and in the communities. And we were in a hurry! We needed to make something happen in short order, and kaizen is the kind of process where you don’t meet every Thursday for the rest of your life—you get it done in a week.

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

CASESTUDY This initiative was quite a departure from business as usual. The idea of collaborating and coordinating among state agencies is so alien to the culture that it required an Executive Order from the governor to get people to the table. Engaging People Eighteen state agencies participated in the pre-event. The body language was classic. Imagine everyone sitting around the table, hunkered down with their arms folded, looking askance at the person sitting next to them, and basically saying, feeling, and exhibiting the notion, “I’m here because the governor said I had to be here, but I’m mainly here to protect my stuff.” This attitude was not surprising. We are all people who care about our initiatives and our agencies’ missions, and we’ve been operating in an environment of scarcity— trying to get things done without enough resources. How could we give up even a small part of our resources? This is where Jim’s help was invaluable. Jim is so fabulous at getting people engaged because he manages to peel back the layers and barriers and gets people to re c o g n i ze that they’re in silos. He got us to see how we got in those silos, how the mistrust was built, and how we could open everything back up.

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

By the end of the day everyone was asked, “What are you willing to put on the table for Great Places?” We went around the room and everyone literally opened their pocketbooks and put every program and service on the table. You could feel the sense of empowerment—all of a sudden, although we always felt we never had enough to do anything, we could see that collectively we could make a difference, we really could transform communities. What we had come to understand is the connectedness between all of our different programs and services, that all of the things these state agencies do individually really matter to each other collectively. And I think that really was a breakthrough understanding for us all. The next step was to develop an initiative that would serve Iowans and Iowa communities. That’s where the actual week-long kaizen event came into play. The event included something like 20–30 people representing 18 agencies, plus a few citizens, broken into two teams. The kaizen event was held in March 2005. The governor had announced the Great Places initiative in his “Condition of the State” address in January, and by March

we had the kaizen event. We were moving practically at the speed of light from a government standpoint. As I noted previously, this was a different event—instead of putting a process up on the board and examining it and taking out the delays and other waste, we were actually creating the process from square one. The kaizen team agreed on a couple of things at the outset: • We didn’t want to make a program on top of all the other programs that already existed in the state government. • We wanted to eliminate as much mis trust and bureaucracy as we possibly could.

Great Places have…

We then broke into two teams. The job of one team was to define what a great place is. That team came up with the seven dimensions that define a great place (see sidebar), and all of them needed to be represented in a community. One of my favorites is “having a creative culture,” where people are not only open to different kinds of people but also to people with new or different ideas. The other team worked on a process to implement the initiative—going from a bunch of state agencies thinking about how we’re going to collaborate on great places to actually picking three pilots, because we recognized we wouldn’t be able to implement this in a large number of communities in the first year. Just as with a normal kaizen event, we put our butcher paper up on the wall and started to map out a process. We listed parameters we wanted to consider: • We wanted to choose our pilots based on readiness. • We didn’t want to have a big application process. • We needed a process for telling eve ryone about the initiative. • We needed a means to get people and communities into the program.

Once we mapped out the plan, we started to work out how to implement it. We decided that we would go out into the communities and hold forums to introduce the initiative and let people know how they could participate. Taking into account our desire to keep things simple, we decided that application to the program would simply require a letter from interested parties. From there we brainstormed how to get from the application to a more formal proposal from interested communities. We felt it was important not to require people to come to Des Moines to make their proposals. That meant we needed teams to go out into the communities.

A unique sense of place An Iowa Great Place possesses a sense of place that values historical roots while embracing a shared vision which welcomes, includes and involves both natives and newcomers and promotes itself as a great place. Engaging experiences An Iowa Great Place provides and supports authentic, credible, and varied opportunities for individual and community expression, interaction, and common experiences. A rich, diverse social fabric An Iowa Great Place promotes and encourages social interaction—formal and informal—throughout the community or place, with equal opportunity for all people to participate. A vital, creative economy An Iowa Great Place contains a balanced, growing, transformative mix of rewarding jobs and sustaining capital. A pleasing environment An Iowa Great Place offers clean, healthy, and accessible natural and built environments that enhance the quality of life.

We had all the swim lanes on our butcher paper just like you do on all the normal process improvement events, but instead we were mapping out what the process was going to be, who the players would be, who needed to be involved in the process in order to develop the initiative, and where in the process they needed to be involved. The end result looked much like the process map used in a regular kaizen event, only we had done ours in reverse, starting from what we wanted to end up with and building it backward from there.

A strong foundation An Iowa Great Place contains infrastructure that is available, accessible, and responsive to everyone—the entire social fabric. A creative culture An Iowa Great Place displays a shared attitude of optimism that welcomes new ideas, based on a diverse and inclusive cultural mosaic.

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

CASESTUDY

We came up with a process for how we would get the word out (through community forums), how many forums to hold, what we were going to do at the forums, and who was going to plan them. The forums were the way we planned to launch the initiative. We considered the process that would take us to the selection of the pilots and then to the end game of writing up the contract between the state and the place, with a distinct outline of what results were expected and when. One of the different prisms we used was to look at it not just from the state agency point of view but also from the points of view of the public and communities coming into the program—our customers. Government is a mysterious labyrinth that can be intimidating to negotiate. One of our goals was to demystify it, to make it simple. From the customer’s perspective we wanted to make it easy for the citizen to become involved while at the same time promoting certain values that we thought were important, such as inclusiveness, clear and quick results, strong local leverage, and being creative.

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

Taking the Show on the Road Once we had a process mapped out, we traveled around the state holding forums to introduce the Great Places initiative. We got nearly 150 letters asking to become part of Great Places. One of the most inspiring things about these letters is that for once instead of bemoaning what was wrong, the individuals who wrote talked about what was right and wonderful about a place. A sense of hope and confidence and pride came through loud and clear in these letters. The next part of the process was working with these places to help them develop their vision. The governor had appointed a Citizen’s Advisory Board (CAB) of 12 people from across the state to help us. We trained coaches, 75 people from throughout state government. The coaches worked in teams of two and visited each of the 150 places to work with them on their proposals. What we were looking for in our pilots was an inclusive plan—not something just dreamed up by a city planner and mayor, but something that included a cross-section of the community. We wanted to see clear, quick results identified. We wanted to see a strong local leverage. We wanted to see the communities stepping up and finding local resources to make this work too. We also wanted to see innovative, creative ideas.

The coaches paid at least two visits to each of these places to help them with their proposals. Then CAB members visited the communities to hear the presentations. It really made more sense to do it this way as there’s nothing like being there to get a sense of a place. It made a huge difference to the communities to see the state coming to them. That was a real powerful piece of the initiative. Ultimately three pilot places were chosen: Sioux City, Coon Rapids, and Clinton. We then spent a couple of months hammering out a partnership agreement which literally identified what was going to be achieved in each community and what the community and state were going to put on the table to make these things happen. And those agreements were in place by January, just a year after Governor Vilsack announced the initiative. In that short time we had developed the program, advertised the program, engaged Iowans in the program, and selected three pilots—warp speed in state government! And it was all possible because of our lean mindset. Sweet Success No specific appropriation was made for the Great Places initiative in that first year since the idea was that the various agencies could leverage their funds through collaboration. But we discovered a need for gap funding to cover situations in which money was needed in a community for a specific issue but no current state program was available to address it.

“Each individual has to have an emotional and mental shift…and that’s the magic of kaizen.” So we went to the state legislature and asked for $1 million in gap funding. The legislature turned us down flat. They said, “No way are we giving you a million dollars, we’re giving you $6 million.” That’s something else that doesn’t happen in state government. The other thing they did was authorize us to work with six additional communities. Once again, there was great enthusiasm across the state, and by November 2006 we had picked six additional Great Places. We’re already starting to see wonderful things happen. For example, Sioux City has a unique architecture called “Sioux City terra cotta.” Now Iowa State University in Ames is going to have a branch architectural school that will focus on that terra cotta architecture. The elements of the initiative are very complex and interrelated. In Sioux City the initiative includes everything from changing the nature of the way the interstate addresses the community so they can have a better “front door” to clearing out a stockyard area to enlivening a farmer’s market. They’re very multifaceted, but they all work together within a community to make it a great place. The initiatives in our new communities are just as diverse and exciting. In Jackson County in eastern Iowa the initiative includes everything from the restoration of historic buildings to development of the wine industry there. Fairfield’s initiative focuses on everything from its historic barns and trails to an amazing innovation to

develop the entrepreneurial culture in that community as it develops cutting-edge businesses. Each place is unique, and they have managed to focus on what is authentic and build on that. Even outside of the Great Places initiative agencies are starting to build relationships that are paying off in other ways not necessarily even related to Great Places. Governor Vilsack’s support and leadership were key to our initial success. And the positive change we’ve seen in communities has driven greater engagement at both the state and local level. We think it’s a great initiative that serves people and makes government work better. Magic of Kaizen In the Department of Cultural Affairs, we’ve used kaizen events five or six times, for issues like turnaround time on our Arts Council grants and review processes in our historic preservation unit. We’ve used kaizen within the museum to lean the processing of objects that come in and for our exhibit design process. In each of these cases, the processes already existed and we were able to gain dramatic improvements, shortening turnaround time, removing delays, and eliminating repetition. Kaizen has been enormously effective for us, and we’re very excited about it. We’ve proven with the Great Places initiative that kaizen can also give dramatic results for processes that don’t yet exist.

One important thing that must be mentioned is that while kaizen-implemented process improvement is very deliberate, mapped out, and data driven, there’s something cultural that happens during the course of an event as well. That mindset change is another powerful outcome—above and beyond the results and the data, the charts and graphs that are delivered within a kaizen. Before kaizen there’s an organizational cultural dynamic that exists and there really has to be a cultural—almost emotional— change during a kaizen event. In many cases the participants must give up doing work the way they used to, and in some cases they have to change their relationships with their co-workers—they have to do a better job of communicating or trust that someone else is going to do their piece. Each individual has to have an emotional and mental shift in order to make the kaizen successful. And you can see that happening—there’s a lot of the drama that takes place with a kaizen event. But when they come out the other end it’s just amazing how people’s attitudes have changed, and it’s very positive and forward-looking and there’s such an enormous sense of satisfaction from having taken yourself out of the process—it’s not personal—then making the improvements and then really seeing the results. That culture change was a big part of Iowa Great Places as well. And that’s the magic of kaizen.

“Collectively we could make a difference, we really could transform communities.”

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

ACCELERATEDLEARNING

Learning Behavior By Joe Panebianco,TBM Senior Trainer and Design Specialist

Joe Panebianco

If I were to ask you about school or your experience taking a class, what would be your first reaction? Most people react by getting the chills and making statements like, “I hated school” or “I never learned anything in school that was useful in my job” or “School is boring, dry, and dull.” This isn’t an article about the failing school system, overcrowding in the classroom, or poor results on standardized tests. But our experiences in school shape our views of learning and our behaviors. We carry these views and behaviors with us throughout our lives, and once we finish school and enter the workplace, they influence our roles there as well. Taking a look at how experiences in school condition our behavior at work and how they can negatively impact the workplace is important. A learning program must include behavioral objectives as well as learning objectives. This article will address how our behaviors are shaped and how they can be counterproductive in the workplace. Future articles will address the process of learning and what it means to learn. Roots of Conditioned Behavior We are conditioned through our experience in school to think and behave in a certain way: • The teacher asks the questions and the students respond. • The teacher has the answers and the students do not. • The students have succeeded when the teacher tells them they have. • The student does well when he works to please the teacher. According to Dr. W. Edwards Deming, we learn all of this by the age of 10 years old. (Senge, 2006). This is an excellent example of Skinner’s operant conditioning at work.

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B. F. Skinner devised the term operant conditioning to describe how behavior can be modified using four techniques: positive reinforcement, negative reinforcement, punishment, and extinction (Skinner, 1953). By consistently using positive and negative reinforcement when certain behaviors occur, we encourage those behaviors to continue. Similarly, when punishment or extinction are applied consistently to specific behaviors, those behaviors are discouraged or weakened. Though we may not be accustomed to the technical term operant conditioning, most of us are familiar with the concepts of positive reinforcement, negative reinforcement, and punishment, and will easily recognize how our behaviors in school were shaped using these methods. The classic example of positive reinforcement is a good grade or gold star in school, acknowledgment during a staff meeting, an “Employee of the Month” award, and that long-awaited promotion. Since we enjoy the outcome or reward, we repeat the behavior as often as possible so that we can experience those feelings again. With negative reinforcement, certain behaviors are encouraged because, if we do those behaviors, we will avoid an unpleasant consequence. One example might include dropping the lowest grade of a student who completes all of their homework assignments by a given deadline. In the workplace, this could translate to completing work by a certain deadline in order to avoid irritating the boss.

Punishment weakens a given behavior because the student does not want to experience the negative consequences. In order to avoid punishments such as detention or letters sent home to parents, students modify their behaviors. A workplace punishment could involve probation, demotion, or termination. Extinction occurs because a particular action elicits no reaction. Since the student or employee does not experience any reaction—good or bad—as a result of his efforts, the behavior stops. For example, the “class clown” will stop acting out once his antics begin to go unnoticed. Conditioned Behavior in the Workplace We carry these conditioned behaviors with us through the rest of our lives; as you can see, we even take them with us to work. Let’s take a look at our previous list and substitute student for employee and manager for teacher. • The manager asks the questions and the employee responds. • The manager has the answers and the employees do not. • The employees have succeeded when the manager tells them they have. • The employee does well when he works to please the manager.

It is no wonder that people show up at work and behave the way that they do; we’ve spent from 12 to 16 years being conditioned to do so. Think about some of the common complaints of managers: • Employees lack initiative, because they are waiting for the manager (teacher) to tell them what to do. • Employees look to their managers (teachers) for validation (good grade, gold star, bonus, promotion). • The manager is the only one with the right answer. This isn’t a criticism of employees. Managers come to work with the same conditioned behavior and expect those who report to them to behave as the student in the relationship. • I told them what to do and they did something else. • They seem to do whatever they want. • If I don’t tell them exactly what to do and watch them every step of the way, they will goof off or mess up the project.

improvement effort would rest on the shoulders of a critical few, and that means it would fail. Continuous improvement requires employees to break out of the mold of conditioned behavior and become proactive members of the learning process, speaking up when they notice something that could be improved, asking and answering questions before they require the intervention of a manager, working to improve the entire organization—not just to please the manager. How to deal with our conditioned behavior in the workplace will be the subject of my next article. Conditioned behavior is a cultural barrier to successful organizational transformation. We’ll look at how to support the learning and behavioral objectives needed for a successful cultural transformation to becoming a continuous improvement organization.

Everyone Contributes In continuous improvement organizations, everyone contributes their knowledge and experiences to transform, and continually better, the organization’s processes. If all employees waited for their managers to tell them what to do, the organization’s

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

TECHTALK

Resource Conservation: It’s Good Business By Doug Kiss, TBM Senior Management Consultant

With the cost of energy going through the roof and not likely ever to return to past levels, it makes sense to review your energy use and see if improvements can be made. Energy use has not historically been a large part of normal lean activities, but addressing energy really makes sense, especially when you consider the hard dollar savings that can be gained, not to mention the conservation aspect. You can use kaizen to address energy issues just as you would to address productivity concerns. The only difference is that energy is an area typically left unexplored. You also needn’t be an energy expert to make significant improvements in your organization. It’s easy to start out by simply looking at the big picture—heating, cooling, water, and electricity use both in the plant and on the business side. Basically, the idea is to apply the lean tools you’re already using to another aspect of your business: energy use. When an energy kaizen team is chosen, stay with the 1/3, 1/3, 1/3 format, except that one of those thirds should be composed of your organization’s energy experts. To start, make an inventory of your main users of energy. In some plants this could be the entire facility; in others, it might be just one or two processes or machines. Once you have identified where energy is used, you can determine where the greatest opportunities for effecting savings exist by brainstorming ways to make big energy users more efficient. To make it easier to determine where to start, create an impact/difficulty list of the all the ideas the team has come up with. Those that are the easiest to change or provide the greatest savings will rise to the top of the list to become your best opportunities. At this point, you also need to consider what you can realistically do in one week.

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“One thing you can’t recycle is wasted time.” —Taiichi Ohno

The same can be said about wasted energy. Starting Point So how do you start to examine your organization’s energy use? First look at historical data. This includes a 12-month history on utility use, both in dollars and measures (e.g., gallons, tons, kilowatthours). Consult with your in-house experts on where energy use has the greatest impact. Measure and track current energy use. Search for obvious energy losses: leaks, spills, and systems that may be experiencing imminent failure. Observe the current state of energy use, as well as accepted practices. Remember that an organization’s greatest energy-related loss is loss of life, so keep safety at the forefront. Be sure to make a list of energy sources: • Oil • Steam • Gas • Water • Air • Electricity Finding Trouble When thinking about energy use in your organization, consider the following facts: • You can gain 10–15 percent energy savings by standardizing operating procedures and taking a proactive approach to maintenance. • Typically, for every 100 units of energy used, fewer than 10 units become useful.

• A single compressed air leak can cost about $12,000 a year in wasted energy. Likewise, a failed trap on a 1/4-inch steam line can cost approximately $1,200. • Motors use 60 percent of industrial electricity. A 20 percent energy savings can be gained through motor and starter maintenance. Additional savings can be realized through drive or belt alignment. • 45 percent of all the fuel burned by U.S. manufacturers is consumed to raise steam. Steam boiler system inefficiency occurs through boiler blowdown, exhaust stack gas loss, and condensate and systems vent loss. Opportunities for energy savings include minimizing boiler blowdown; returning blowdown condensate; preheating makeup water with waste heat; minimizing condensate and system losses by choosing proper trap types and sizes, replacing failed traps, returning all condensate, and insulating headers and primary piping; improving exhaust-stack-gas efficiency by adjusting combustion semi-annually, cleaning boiler tubes, and flue gas analysis. • It is not uncommon to find that 50 percent of the compressed air generated for a facility is lost through leaks. For example, at one plant, two 400-horse power compressors and one 100-horse power compressor were required to meet the demand for compressed air. After teams replaced and fixed leaking air hoses, horsepower requirements were reduced by 44 percent.

The preceding list is a small representation of the kinds of losses companies routinely accept as the price of doing business. Certainly addressing or making timely repairs to obvious energy sinks such as those described in the preceding list can save substantial amounts of money. For example, one company found that 850 of 5,000 steam traps in one plant were broken, with a $1,200 annual cost of energy lost per trap. Simply fixing those traps saved the company more than $1 million. But rather than being content with fixing the obvious, why not look for potential problems and address them before they start costing money? Be Proactive A number of products exist to help find various types of leaks around a plant. An Ultraprobe is portable, durable, accurate, and can be used to detect pressure leaks, vacuum leaks, and vibrations. One manufacturer found that by using an Ultraprobe to locate 400 compressed air leaks and repair them it was possible to go from using six various-sized air compressors to four. The result: a savings of more than $300,000. Other types of monitoring equipment are available to manufacturers, including portable oil analysis monitors to assess fluid cleanliness, infrared monitors to detect leaking steam traps, and infrared thermography to detect overheating motor bearings or loose electrical circuit connections. One big advantage of these predictive technologies is that their use does not require downtime.

Total Productive Maintenance The aim of total productive maintenance (TPM) is to improve the equipment operating condition, sustain equipment at an optimal level of performance and reliability, and lengthen the life expectancy of equipment. TPM is not a maintenance program. Ownership of the TPM process by manufacturing is essential—it begins the transition from machine repair to machine maintenance and improvement. Your organization’s maintenance department should not be spending time repairing equipment (putting out fires) but rather should be finding, preserving, and expanding manufacturing capacity at lowest cost. As an acquaintance of mine said some time ago, world-class manufacturers have changed their mindset—they no longer view labor as the problem and machines the solution; instead they see machines as the problem and labor as the solution. Operators become the front line by monitoring equipment operation and being active in preventing breakdowns—they are the early detection system. Green: More than the Color of Money Another important reason to take a serious look at energy loss is to stay in step with changing societal mores. Increasingly companies are trying to maintain a greener image to satisfy their stakeholders’ and consumers’ desire to be socially conscious. Many energy sources are nonrenewable, and the use of others is environmentally risky. A company that addresses its excess energy use to realize costs savings can also gain the added benefit of being environmentally conscious—and that’s certainly a win–win situation.

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

FIELDNOTES

Using a Card System for Standard Work Documentation By David Pate, TBM Senior Management Consultant

Recently, I led a setup reduction in a process industry plant. As is usual with setup reduction, one of the tasks was to identify the particular elements to be accomplished, the sequence in which they were to be accomplished, and who was responsible for completing them, for both external and internal tasks. This particular plant was what I term a “mission control” environment. Very few people are within the plant, and most operational control of the process and equipment is done from a centralized control center. Another attribute of this location more common to the process industry is that areas to

Managing Times | January 07 www.tbmcg.com/news/newsletter.php

be accessed were distant from one another and in some cases remote (for example 200 feet up an elevator on top of a silo). Just to keep things interesting, the number of people available for a changeover varied. Depending on a number of variables, including the type of changeover or sanitation and the availability of supervisors to assist, the number of personnel assigned to a changeover varied by as much as 50 percent. During the kaizen event, the team easily identified the setup reduction process work elements and their sequence. Opportunity for improvement arose when it came time to determine who should perform each task. Because the personnel available for changeover could vary, setting standard work by operator caused the team some consternation. Some potential solutions: • Set standard work for the minimum number and use extra help when available. The issue is that following the element sequence exactly to avoid a major process loss or injury is critically important. A good way to enable any extra help to “plug in” didn’t exist. The remote locations of many of the tasks made it difficult to tell where in the setup process anyone was. • Set standard work up for the minimum operators and stick to it. This solution potentially increased setup time by 25 to 50 percent. • Set a standard number of operators required, and maintain that. Different changeover types require different tasks and changes to different parts of the line. In some changeovers operators would be available only if their processes were not being changed. Running of the process requires relatively little labor, so adding labor for changeovers did not make sense (nor ever does it). So the team was a little stymied. Standard work is critical to successfully reducing and,

more important, sustaining setup time. I recalled that visual management is as critical as standard work and that I had previously used a card system for total productive maintenance (TPM). The cards for TPM identify the tasks to be performed and how long they should take. When used on a scheduling board, they visually indicate completion status. I suggested using such a card system for setup standard work to ensure that all elements would be completed in the right sequence and as many trained operators as were available could be used. Each work element was placed on a laminated card along with the sequence of that element, a picture of the task, the time required to perform it, any tools required, and any safety considerations. Each card had thin magnets attached to the back to adhere to a metal “setup board.” The team determined that there should be three colors: green for external elements, red for internal elements, and yellow for startup/system-fill elements. The board has three color-coded columns on which cards would be placed to visually indicate their status: scheduled, in-process, and complete. Before changeover, all of the cards would be arranged in order in the “scheduled” column. As tasks are performed by any operator, they are moved to the “in-process” and “completed” columns. Any available operator could select the next card from the “scheduled” column and perform that task. Care was taken by the team to place elements that had prerequisite tasks on the same card with the prerequisite element. With this method we could shave off the maximum time for setup in a safe and sustainable way.

2007 TBM LeanSigma®/Kaizen Promotion Office Exchange Ma rch 21–23, Chicago, IL

March 21-23

Every year the TBM LeanSigma /Kaizen ®

Promotion Office (KPO) Exchange offers a forum for lean managers and practitioners from a broad spectrum of manufacturing and service businesses to share their lean journeys, best practices, and lessons learned. This year, the KPO Exchange will be hosted by Sealy Mattress in Chicago, IL. In continuous improvement circles, leaders and change agents know there is a flow of real-world experience that is difficult to capture and apply. The global network of lean practitioners who gather at TBM’s LeanSigma/KPO Exchange recognize the importance of this knowledge and consider this event the best lean practices user conference. We will start with a tour of Sealy Mattress’ Batavia plant, where we will visit a number of areas and see how Sealy has improved supermarkets (including half-shift supply), metric boards, sewing room standard work-in-process, scheduling, maintenance, and shipping, among others.

This year, we have also added a new feature: round table discussions. You will be able to choose a session of interest to you and engage in an in-depth discussion of the subject, facilitated by a TBM consultant. On Day 3, each round table group will report out to fellow exchange participants the highlights of their discussions. Round table topics will include: • Managing Up—the 360º Manager • Progressive 5S • SQDC Management • Challenges in Implementing Lean in the Process Industry • Value Stream Mapping Once again we will have a diverse list of topics and speakers who will share their experiences with LeanSigma in lean management accounting, managing for daily improvement (MDI) and sustaining MDI, cultural transformation, LeanSigma value chains, dealing with metrics and measurements, policy deployment, process improvement, and design for LeanSigma, among others. Don’t miss out on this opportunity to network with your peers and share ideas for successfully implementing and sustaining your lean journey. If you would like to attend the 16th Annual TBM LeanSigma/ KPO Exchange, contact Cheryl Groves, 800.438.5535 or cgroves@tbmcg.com. Managing Times | January 07 www.tbmcg.com/news/newsletter.php

J a n u a r y. 0 7

MANAGING TIMES TBM LeanSigma® Institute 2007 Event Schedule Corporate Office 4400 Ben Franklin Boulevard Durham, North Carolina 27704 USA 1.800.438.5535 Australia 403A 86 Bay Street Port Melbourne, Victoria 3207 Australia 03.9681.7385 Brazil Avenida Moema 170, cj 45 Sao Paulo -- SP Brasil 04077-020 55.11.5051.7490 Canada 1980 Sherbrooke Street West Suite 800 Montreal, Quebec - H3H 1E8 514.933.1462

Quest for the Perfect Engine TM Feb. 6-7 Feb. 27-28 Mar. 7-8 Mar. 14-15 April 12-13 April 17-19 April 18-19 May 2-3 June 13-14 June 20-21 June 27-28 Aug. 8-9

Hong Kong, CH Daytona,FL Sao Paulo, BR Monterrey,MX Pune,IN Salt Lake City,UT (plant tour) Germany UK Spain Cincinnati, OH Beijing, CH Dearborn, MI

August 15-16 August 29-30 Sept. 4-5 Sept. 17-18 Sept. 20-21 Oct. 2-4 Oct. 18-19 Nov. 7-8 Nov. 13-14 Nov. 14-15 Nov. 14-15

Sao Paulo, BR Shanghai, CH Mumbai, IN UK France Pomona, CA (plant tour) Munich, GR Chongging, CH Argentina Madras, IN Mexico

Oct. 24-25

Sao Paulo, BR

Sept. 18-19 Nov. 14-15

Durham, NC Durham, NC

LeanSigma ® for Process Industries April 17-18

Mexico

Lean Management Accounting Mar. 13-14 July 24-25

Durham, NC Durham, NC

LeanSigma ® Fundamentals Sept. 11-12 Mexico Design for LeanSigma New Products and Processes Mar. 5-9 June 25-29

Durham, NC Durham, NC

Sept. 17-21 Dec. 10-14

Durham, NC Durham, NC

Kaizen Breakthrough Experience

Monterrey, Mexico Calzada San Pedro #250 Nte. Edificio HQ Col. Miravalle CP 64660 Monterrey, NL 52.81.50.00.91.36 Switzerland 29, route de Pré-Bois 1215 Geneva 15 Switzerland 41.22.710.77.70 United Kingdom 3 Gleneagles House Vernon Gate DERBY DE1 1UP United Kingdom 44.1332.367378

Feb. 19-23 May 14-18 June 18-22 Aug. 6-11 Nov. 5-10 Nov. 12-16

WIKA – Lawrenceville,GA Hayward Pool Products- Pomona, CA UK - TBD USA – TBD USA – TBD Germany – TBD

Management for Daily Improvement May 7-11

USA, TBD

Nov. 12-16

USA, TBD

Shop Floor Kaizen Breakthrough Instructor Training Feb. 6-9 April 10-13 April 10-13 May 15-18 June 26-29 July 17-20

Durham, NC Durham, NC UK Sao Paulo, BR Durham, NC Mexico

Aug. 28-31 Sept.25-28 Oct. 9-12 Oct. 30-Nov. 2 Dec. 4-7

Durham,NC Shanghai, CH Durham, NC UK Durham, NC

Oct. 2-5 Oct. 2-5 Nov. 6-9 Dec. 11-14

UK Sao Paulo, BR Durham, NC Shanghai, China

Kaizen Promotion Office Workshop Jan. 30-Feb. 2 Durham, NC April 17-20 Durham, NC July 10-13 Durham, NC July 17-20 Shanghai, CH

LeanSigma/Kaizen Promotion Office Exchange March 21-23 Sealy Mattress - Chicago, IL (plant tour)

Sigma Kaizen Black Belt Week 1: Week 2: Week 3: Week 4: Week 5:

March 26-30 April 16-20 April 30- May 4 May 21-25 June 25-29

Durham, NC Client Site TBD Durham, NC Durham, NC Client Site TBD

Sigma Kaizen Green Belt Week 1: March 26-30 Week 2: April 16-20 Week 3: April 30-May 4

Durham, NC Client Site TBD Durham, NC

Lean Leaders Exchange June 6-8

Autoliv – Salt Lake City,UT (plant tour)

Business Process Kaizen Instructor Training May 8-11

Durham, NC

Oct. 23-26

Durham, NC

Oct. 15-19

USA,TBD

LeanSigma Vision Tour June 18-22 June 26

USA,TBD Brazil