Sunday, December 9, 2012

What "Policy Deployment" Means to Me

I believe that the only wrong way to "do lean" is to do nothing at all, or do it as a special program of department once in awhile ("events"). Lean pays for itself ten times over when it is used to build capacity and cash flow, and eliminate the 8 wastes in the hundreds of processes in your company.

One of the real advantages of getting to the point where lean or TPS is woven into every person's daily work is you can start to do some policy deployment, or as we lean zealots learned it, hoshin kanri. Wikipedia defines it like this

"Hoshin kanri (management compass (Japanese: 羅針盤 かんり is a method devised to capture and cement strategic goals as well as flashes of insight about the future and develop the means to bring these into reality."

I believe here are 3 components to bringing these "flashes" to reality. First is EDUCATION, second is METRICS, and third is KAIZAN (A3).

Let me give you a couple of examples of practical application. After we had gotten to the point where people were doing daily, small, incremental, steady movement toward flow using A3 as the vehicle, the President announced to the management team that he would like to be KNOWN for our customer service. Hoshin is a way for everyone to understand what management thinks is important. It is one thing to say you want to be world class customer service, but how do you drive it into your culture? First, EDUCATION. This could be in the form of benchmarking others, regular reading, classroom study, etc. I decided to study Disney. The people in our company were used to weekly classes in lean, so now the curriculum was going to be "Inside the Magic Kingdom". We bought 70 copies, handed them out, and chapter by chapter built the curriculum around how Disney is world class when it comes to customer retention (their business depend on it). The key is that you do not leave anyone out. If you worked here, you were included. Eventually, a group of people went to the Disney Institute, came back and led the classes for a few weeks. Nobody could deny customer service was important. People also started to apply the 7 principles of Disney into their own work. They began to view many of their peers as customers. Ideas were flying!

Next, METRICS. What to measure came out of the classes. The order entry group decided they no longer wanted customers calling to place an order to go into voicemail. Ever. The technical group wanted customers to get immediately to the best person to answer their questions without call backs or being transferred when they called. The shipping department decided they never wanted customers to wait when they showed up to pick up their orders. Same with truckers (common carriers) who arrived every day to pick up orders. These are only 3 examples of the dozens of things people started to measure. How many customers went into voicemail? How often did customers get transferred? How often did they get sent back to the receptionist after waiting on hold? How long did they have to wait when they showed up to pick up their order? People who made product started measuring how often things got down to the shipping area after 3 pm. (Trucks started showing up around 4, and at times, they didn't get loaded and hit the road until after 8 pm).

Finally, KAIZAN. To improve the metrics people needed to make process changes. These changes were made using the DMAIC and with consensus using A3 as the vehicle. People who wanted to place orders were automatically transferred to 4 people (one was in California) seamlessly if the phone was not picked up after 3 rings. This process change resulted in a small handful of customers ever going into voicemail. Customers who needed technical help were transferred from the receptionist directly to the cell phones of the tech people. When people did go to voicemail, the cell phone messages were changed daily to reflect the day and date every day, and the message promised a return call inside of one hour. Customers who showed up and had to wait for their order were given a shirt, a cup of coffee, and the incident was logged, and an A3 was done to prevent the root cause from happening again. One process change was a "doorbell" sound on the PA system to alert a small team of experts to come to shipping to help get the customers orders together very quickly. People did not want OUR customers to wait.

The key to hoshin kanri is anyone should be able to walk up and ask anyone in the company, what's most important, and they would all give the same answer. This is most easily accomplished with EDUCATION, METRICS & KAIZAN, The creativity of people will astound you as the flashes of insight about the future become reality!

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