Sunday, July 8, 2018

When Good Enough Just Ain't Good Enough

If you think you want to work really hard to build a lean business strategy, then the goal can only be one thing. LEVERAGE OPERATIONAL EXCELLENCE TO CREATE MARKET DISRUPTION.

A lean strategy is just too hard to settle for anything less than greatness. Lean is not about better. 

Thousands try lean and thousands fail. Those that succeed have the happiest, most motivated employees and customers that are happy to pay more. Many of those that don't succeed are very good companies, but here is definitely a huge payoff when you go from good to great. For example, 
  1. Turnover dwindles to nothing. The whole concept of a lean strategy is to deliver exactly what the customer wants when they want it. This is done by attacking the non value-adding activity your customer won't pay for.....the 8 wastes. By attacking and eliminating the 8 wastes, productivity soars (sales per labor hour), which means I have the ability to pay people more money. And give them over-the-top benefits. In my own business, people were not leaving when they were making more than they could anywhere else. People were not leaving because winning is fun!
  2. I can attract top talent. People are not willing to do the 8 wastes for a living. Word spreads fast when you become "one of the best companies to work in Connecticut" (5 times). One of your goals has got to be that your company becomes a very difficult country club to join. As my lean strategy developed, the number of candidates for any given job got longer and longer. 
  3. Customers care less about the price. Lean is a fancy word for time management. And I'm not talking only about my time, I'm talking about my customer's also! By engaging every employee to declare war on the 8 wastes every day, lead times shrink. My goal was to delight my customers by making every process faster. Speed kills! How fast to get a sample? A quote? A return? A question answered? Their order? Sure, your customer might go shop for price occasionally, but they'll be back. Good enough is service just like everyone else. Operational excellence is market disruptive. In the words of my friend Doug Hall, "if you're not meaningfully unique, you'd better be cheap!".
  4. We begin to compete against ourselves. After a few years of my own first lean journey, I realized I was paying little to no attention to what my dozens of competitors were up to. I really didn't care and was not concerned. The goal is perfection (which we never reach) but we can get to excellent. 
  5. Lean, if you stay with it, can make you pretty much recession-proof. During the Wall Street fiasco of 2007-09, we never had to lay anyone off and we actually paid bonuses those years. That my friends, is when I became a zealot!
One last favorite quote: "if you want results others don't get, you need to do things others won't do!"

Sunday, June 24, 2018

9th Waste? Banging Your Head Agaist the Wall

Can we agree that as leaders, we only have one value-added job? That is, of course, to build leaders. When we wake up in the morning to get ready to go to work, our objective is ONE thing: develop people!!! Managers are blessed (challenged) with the responsibility of working closely with (thereby developing) people to build robust, bullet-proof processes free of the 8 wastes (defects, overproduction, waiting, non-essential processing, transport, inventory, motion and un-used employee brainpower). Our job is NOT to develop our offices, computers and conference rooms. Our job is definitely NOT to constantly firefight problems day after day. 

Firefighting is not something you can put on the customer invoice. Your customer has zero interest in how much firefighting, pain and suffering or re-work went into delivering what they need. They won't pay for it. You pay. And it all comes out of your ability to pay more, which costs you the ability to recruit and develop new talent. Firefighting is a very common form of the waste of non-essential processing!

In my own business, my goal was always to be the highest paying employer in our marketplace, to be in a position to offer the best health care and to pay the highest bonuses. The goal was to be recognized as one of the best companies to work in Connecticut (achieved 5 times). This goal was realized when our processes became more robust. Our processes became more robust when our attention as managers turned away from firefighting and toward working day after day with our process experts (the people who DO the work in the factory and in the offices) to slowly, steadily eliminate those 8 wastes in every process using the process of A3. 

In his 2010 book Toyota Kata, Managing People for Improvement, Adaptiveness, and Superior Results, author Mike Rother talks about how 75-80% of a manager's time needs to be spent doing "improvement work". Firefighting and supervising are a far cry from improvement work, and NOBODY gets developed!

Respect for people means not sitting by (in our office or in meetings) and allowing people to do chaotic processes for a living. Humans are not fulfilled when they find themselves frustrated (and tired) doing the 8 wastes for a living with no end in sight. My hero, Taiichi Ohno, who is credited with developing what is now known as the Toyota Production System, was known as a volatile, impatient person. His frustration was not with the people who did the work, but with managers who would allow people to do bad processes day after day. 

So try to remember that we have only one value-added job as managers: developing people so they don't feel like banging their heads against the wall!









Sunday, June 17, 2018

4 Reasons A3 is a Code of Conduct!

As you are aware, nothing makes the fur stand up on my back (if I had fur) more than when I hear people refer to A3 as "a form". Or even higher fur when people talk about doing "A3 reports". The process of A3 is a lot of things, and I promise you it is way more than a form or God-forbid, a "report". 

In fact, I think of A3 more of a code of conduct. Here is a list of 4 things that A3 IS:
  1. A3 is a tool to create a culture where people stop jumping to solutions in problem solving. The A3 form itself is designed to walk us through the scientific method of problem solving (Define-Measure-Analyze-Improve-Control) because each box is one of those steps, and we can't move to the next box until we are satisfied with the previous one.. It is designed to make sure a 3 to 5 person team does the DMAIC in order! There is a reason why we like to do the DMAIC in order...….because we don't like solving the same problems over and over. A3 gives everyone practice doing the DMAIC in order, until it becomes habit!
  2. A3 levels the playing field-I don't care if you are the Shah of the company, if you find yourself on an A3 team, all titles get checked at the door. Everyone has equal status and it doesn't matter if you are the VP of Operations or the summer intern. Nobody is more or less important than anyone else. A3 is not about influencing by rank or status, but about 3-5 people learning how to gain agreement! A3 teaches managers to stop answering questions with answers (because they think they have to) and teaches how to answer questions with open-ended questions. The difference is, as managers we get to learn just how smart people are. A3 values every brain, not how big the office is.
  3. A3 is about practicing respect for people-if a process improvement impacts someone's job, they have had better be part of the thinking! Remember that it is disrespectful for me to fix your job. Nothing kills people's morale worse than being on the butt end of a lousy process. Most times, when people are doing silly, backward, wasteful processes for 40 hours per week, they were not the ones who developed and implemented said process. Ironically, a person who has been doing the same job for 5 years has been doing that job for 10,000 hours. That alone pretty much qualifies that person as a process expert and should at least be part of any changes!
  4. A3 is a way for managers to develop leaders-I like to say that A3 is about developing leaders in your company, and the process improvement is second, like icing on the cake. Imagine an entire of population of people willing and capable of pulling a team together, going through the DMAIC, thereby improving the process and then being capable of getting up in front of their peers and teaching everyone else what they did (at the A3 closing)? When you think about it, that is the behavior we expect of leaders. Think of A3 as a training ground for future leaders.
So, if you see me out sometime, please refrain from all this talk about A3 being a form or a (gag)report. There's nothing scarier than me with my fur standing up.

Sunday, June 3, 2018

5S is NOT I Repeat NOT Housekeeping!

Famous Housekeeper Hazel
For many years, I thought of 5S pretty much like everyone else does. I thought 5S was about housekeeping, sprucing up the place, making our workplaces pleasing to the eye for visitors. The way I always explain 5S to rookies is to think about how you clean out and organize your garage:

Sort means I take everything out and put it in the driveway. Then I need to decide what belongs in the garage and what doesn't. For the stuff that doesn't, I do "red tag"....put it to the curb for trash pickup, have a tag sale, whatever. It just doesn't go back into the garage.

Set means that everything that goes back into the garage will have it's own easily identified, labeled spot, not a random spot, or where it fits.

Shine means that in the process of doing set, I might power wash my epoxy floor, paint the walls, clean up oil spots, vacuum spider webs, etc.

Standardize means that I will develop a checklist for this new and improved space that will make it easy to check (on a schedule) that everything is in it's place.

Sustain means I will have the discipline to do those checks routinely, like church. Once per week, twice per month, whatever. Doesn't this seem really simple? Then why is 5S one of the most difficult lean tools to use?

Because 5S REQUIRES respect for people and working really hard to gain agreement with everyone who works in that area. Once I did a "sort" and "red tagged" a rocking chair without gaining agreement with my wife and then had to do some dumpster diving ("un-red tagging"). The process of A3 is the perfect way to gain this agreement and leverage diversity to "5S" successfully. If you don't gain agreement, or you dictate it, be prepared to re-do 5S over and over. And over. 

Think about the financial impact of not doing 5S (standard work). If, throughout your business, 100 people each spend just 5 minutes per day searching for tools, raw materials, reports, e-mails, other paperwork or other supplies they need to do their job, then you will have invested 120,000 minutes (2000 hours, or fifty 40 hour work weeks) in one year (240 work days). Put another way, you just paid 100 people $70,000 to not do the job they are being paid to do, but to engage in some of the 8 wastes (motion, waiting, etc.)

5S is not about sprucing up or housekeeping. Leave that to Hazel. 5S is about standard work and saving time and money!

Sunday, May 6, 2018

LEAN and Quality: Corrective Action or A3?

A question I am often asked is whether it is preferable to keep much of our quality management system (QMS) separate from our continuous improvement process or "lean".

For those of you who read this blog religiously, you will remember that I often refer to customer complaints as the single best opportunity for organizational learning. The A3 process, and especially "Yokoten" (the A3 "closing") is designed specifically to give everyone short, continuous  bursts of organizational learning. In the book "The Fifth Discipline", author Peter Senge describes organizational learning as the fifth discipline. The more people can learn about the "whole" (instead of merely their own area of expertise) the better.

I love to think of customer complaints, and any problem we face as an organization as tuition. Often there is a steep cost for learning. (anyone pay college tuition lately?). Nothing is more frustrating than paying tuition over and over for the same course!!

Way too often I see the quality department as a silo in many companies. Too many well-intentioned quality managers keep quality problems isolated and hidden. Complaints and complaint resolution are reduced to a pencil pushing exercise on forms that go in a drawer or on the computer to satisfy various ISO business standards, and NO REAL systematic, steady organizational learning occurs.

If you find yourself paying tuition over and over and over for the same course (not learning from our mistakes or not getting to root cause), then it is probably time to inject some real energy into your quality system by using A3 to do CAPA (Corrective and Preventative Action) especially if you have worked to develop a strong, steady, continuous spirit of kaizen in your business. 

The 4 fundamental principles of the Toyota Production System are:
  1. Make decisions based on a long term philosophy, not on short-term financial goals;
  2. Continuously develop your people and partners;
  3. Believe (and demonstrate) that the right process will produce the right result; and
  4. Make your problems visible and the basis for your organizational learning. 
By integrating your quality management system with your A3 process, you are working at least 2 of the 4 fundamental principles. If CAPA is pencil-pushing, you are working on none.

Doing CAPA properly means getting to root cause. Root cause analysis is a team sport....it is almost impossible to do solo. An A3 team of 3-5 people is perfect for root cause analysis. Doing CAPA properly means going through plan, do, check, act (PDCA). PDCA is not meant to be done alone. Another term for doing PDCA alone is "jumping to solutions".  The boxes on the A3 form are designed to be done in order in the sequence of PDCA!  

At my own company, quality issues went on the A3 board and were required to close in 5 work days. A 3-5 person team was formed where quality was working hand in hand with operations, shipping, a salesperson, sometimes even with the customer. The closing was all about all of us getting smarter and working to become experts in our business. 


Sunday, April 29, 2018

LEAN Legos: A Challenge for All You Lean Thinkers

I have the honor of teaching a class at Central CT State University called "Lean Operations Management". The class meets once a week on Friday mornings from 9:30am until 12:05pm. I've been teaching this one class for 6 years. My students are generally Juniors and Seniors and Graduate students, and they are highly motivated and wicked smart. 

Since my class falls the morning after "Thirsty Thursday" night, where some college students might partake in some party-like behavior, I realize it would be cruel and unusual for me to make them listen to me for 3 hours. So, all 15 sessions feature learning lean concepts using Legos. Yup, college students play with Legos every single week for an hour or so. 

The way it works is we pretend we are a manufacturing plant comprised of 6 employees. Each shift is 6 minutes long. Each employee adds 2, 3, or 4 parts to a 16 piece finished airplane. The object of the game is simple.....how many planes can 6 people build in 6 minutes? As students learn to see and eliminate the 8 wastes in this process, they can make more and more planes with the same number of people and in the same 6 minutes. Their performance is tracked with a simple profit and loss statement. Each employee is paid $1 per minute. Each Lego has a raw material cost of $1. Every finished plane is sold for $85. 

We shoot video of every 6 minute shift, and the video is e-mailed to each student so they can watch it and suggest ways to eliminate one or more of the 8 wastes (defects, overproduction, waiting, non-essential processing, transport, inventory, motion and unused employee brainpower) for the next class. They then do A3 to gain agreement and implement the improvement(s) using PDCA (plan do check act).  Nothing beats direct observation to learn to see waste in a process. 

The "world record" for this exercise is 56 finished planes in 6 minutes. My current class, featured in this video, just tied the world record. They will be shooting for a new world record next class. 

You will notice that the students have implemented Kanban in the form of a card placed in front of each workstation. This is to avoid overproduction. The rule is you can't work on a new piece until the next person's card is empty. An empty card is a license to make another part. Kanban is a very good way to link processes. Instead of 6 seperate silos (or departments), the 6 processes are now linked. It is based on the premise of "use one make one". Without it, inventory would pile up in front of the slowest process. 

You will also notice they have an andon system. By raising their hand when they are not physically working, they are "shedding light" or making visible the fact that there is a problem....they are experiencing the waste of waiting. 

Before the students implemented Kanban and andon (and dozens of other A3s), they were only capable of making 8 planes in 6 minutes, and there were hundreds of unfinished plane parts (WIP) at the end of the shift. Profitability was -250% and sales per labor hour was $18. For the shift on the video, profit is near 25% and sales per labor hour is $120. With the same number of employees and the same 6 minutes!

My challenge to you is to watch this video and suggest one improvement. Let's pretend our customer just gave us an order for 60 planes but they need it in 6 minutes.....how would you proceed?

Sunday, April 22, 2018

5S and Floor Markings by Jesse Allred of Creative Safety Supply

5S is really about establishing standard work and visual manufacturing. In today's post. Floors are often overlooked as a good way think through your 5S effort.  Jesse Allred of Creative Safety Supply provides some good ideas on how industrial floor tape can help you standardize your workspace!  

So you’ve decided to go Lean with your manufacturing and implement the 5S system in your facility, but where do you start? An organized workplace is a safer and more efficient workplace, but organizing surroundings, especially in a large warehouse, can be a daunting task. 

One of the most effective and easy-to-use tools you can utilize when implementing 5S efforts is industrial floor tape. The limits to organizing with tape and floor markings are seemingly endless, and incredibly cost effective. Whether you’re just starting down the path of Lean manufacturing or you’re well-versed in the 5S world, here’s how to use floor tape and floor markings in each pillar of the 5S methodology. 

Sort – For the first step, focus on removing waste and unneeded items from the workspace. You should get rid of anything that is not essential to the running of the facility, and only keep what is absolutely necessary. Use floor markings to establish designated waste areas; this will give workers a space specifically for waste, and as the area gets full, the waste is more likely to be removed.

Set – The next step of the process is to allocate specific areas for everything in the workplace. This includes products, materials, equipment, forklifts, work desks, pallets, everything! Save time, effort, and the headache of painting floors by easily installing floor tape and markings. 

Lay down yellow lanes for pedestrian traffic so employees and visitors know where it’s safe to walk, install lanes specifically for forklifts, use the tape to create “homes” for tools and equipment to be safely stored; the possibilities really are endless. Not only will these markings improve efficiency with workers knowing exactly where items go, the area will be safer as dangerous tools can be properly out of the way, and workers are on the same page.  

Shine – This pillar is focused on keeping the work area clean and “shined” regularly. While this is more applicable to keeping tools and equipment clean, it is important to remember to clean the tape regularly to ensure visibility and extend the life of your floor tape. 

Standardize – Create standards within the workplace to achieve efficiency and ensure your efforts up until this point are maintained. This step may also include adding other 5S tools into your plan: schedule 5s events, create and display charts designating responsibility, and implement frequent Gemba walks to assess progress. Floor markings are valuable in the standardize step, as workers will constantly have clear visual reminders of the facility’s organizational goals and standards. 

Sustain – Once these techniques have been applied it’s time to sustain and continue the progress you’ve made. Once your floor markings are set in place, you won’t have to worry about them like floor paint. Over time, paint will fade and discolor, be worn down by foot and equipment traffic, and repainting will eventually be required as the paint chips and crack.

For more lean resources from Creative Safety Supply, check out https://www.creativesafetysupply.com/lean-articles/