Stop overthinking continuous improvement...
The ‘SIMPLE’ Lean Journey:
It has been 35 years since the book, Lean Thinking by James Womack was written. And, before that, the Toyota Production System and Just-in-time Manufacturing, were being studied and written about. Business leaders have sought the same benefits and outcomes often written about for the past forty to fifty years. The interest level in the Lean movement has lasted far beyond a ‘flavor of the month’ and has proven to be a worthy and lasting methodology for continuous improvement. With longevity, comes success. Although success has many interpretations, many companies feel they are struggling with sustaining their Lean efforts. To complicate matters, there is a plethora of trainers, consultants and schools all vying for company training budgets and eager to help with implementing Lean. As a trainer and consultant, I am reminded of this constantly and feel the need to defend myself periodically with, “but I just want to help!”. The truth is, there is a wide range of capabilities among Lean Service Providers and the reward of “Certifications and Belts” for your staff can be very compelling. To be clear, there is value to the individual for “belts” and “certifications” and it is a way to measure progress in human development. It is not a requirement for your company to have a certain number of them to be successful.
We like to keep things stripped down to the core principles of Lean Thinking and help companies create a culture of continuous improvement. We have found that the companies that focus on the right things (lean thinking), end up with sustainable performance gains, while others that focus on the tools of lean, (# of trained belts/ certifications/ implementing tools, achievement of targets) often miss any meaningful performance gains and never achieve a cultural shift. To move forward, let us keep things ‘SIMPLE’.
S – Start with vision.
Starting with a vision for Lean Thinking sounds straightforward. You are really just answering the question, “Why do we need to change?”. There may be several iterations of this question to get you thinking about it. What are the problems? What are the opportunities? What are the complaints? What do our customers, shareholders or bosses want? To move forward with change, people need a motivation. Including you! If you are not convinced change is needed in some meaningful, communicable way, you will never get people to follow you. The leader is responsible for setting the direction and communicating that (constantly and consistently) to the team. A vision for Lean or Continuous Improvement (or any other initiative) is key to setting off in the right direction. A nervous leader once asked me, “What if it’s the wrong direction?” I simply asked, “Have you never made a bad decision?” Lean Thinkers are lifelong learners, and they know that learning is a consequence of thinking and doing. If we do something that does not work, we analyze that, adjust the solution, and check it again. Classic PDCA (Plan Do Check Act). The actual vision you convey should be more of a picture painted with words versus a definitive set of goals and targets outlined to four decimal places. Vision is aspirational and not bound by short term timeframes. Usually, we are talking 5 to 10 years out and know we can make minor adjustments our course corrections as new information comes in. So, what is a good Vision for Lean? Well, the commentary may take many forms but in essence, it should sound like this. “Team, we are about to embark on a journey to transform our company to be flexible, agile and responsive to our customers. Our industry has become increasingly (competitive / challenging) and we want to provide the most value for our customers. We also want to be the best company we can be for you, our employees, and the community far into the future. For many, the changes we will need to make to our processes will be vast and may even feel radical. This is not a statement that our current processes are terrible, they have at least, allowed us to get this far. What is clear though is, the thinking that has led us here needs to be different to achieve the level of operational excellence we will need in all departments and not just manufacturing. Our vision is one where our manufacturing and service teams can provide products and services to our customers in the way we need them to, without the roadblocks, bureaucracy and slow decision making that have hindered us in the past. For us to hit our operational goals, we will need to think very differently. We can’t wait to get started!”. An example of Lean vision/ goals are:
Our Operational (Aspirational) Goals:
· 100% On Time Service
· 50% Reduction in Defects (YOY)
· 20% Productivity gains (YOY)
· 20x Inventory turns
· Visual Control and 5S Everywhere!
From The Lean Turnaround Action Guide – Art Byrne, 2017
I – Invite new thinking!
New thinking requires companies to explore outside of ‘what they already know’. There may be some training required to get people to be open to the possibility of something different. That training may be a visit to another facility already doing what you are wanting to do or bringing outside experts in to help you teach and coach people for success. This is not a time to solely learn in a classroom. Thinking and learning happen by doing! It is important to learn and do, in short timeframes to maximize the benefits and get the culture change moving forward. If you wait until you have deployed some huge training program and everyone has received their desired ‘belt’, they will have forgotten most of it by the time you ask them to participate on a team. What is different about the SIMPLE process? Provide any relevant training, right before an event or activity. This way it is not a long-drawn-out training program, it is a ‘here’s what you need for next week’s event’, program. The event or activity is the more important component to allow people to learn while doing. Like mentioned above in the Vision section, the thinking that got us here is not the thinking that will get us to the next level of performance. We must go into this with a learner’s mindset, not an expert’s mindset. Even if you have been the company’s ‘expert’ and have the most seniority in the current methods, you will need to ‘let go’ of the way it has always been done and move to a position of, ‘how can we do this better?’. It is ok to be skeptical. It is ok to question. It is even ok to debate the problems and solutions. It is not ok to do nothing, however. We must seek new thinking and open our view of the World within our companies. Ask why, a lot!
M - Measure the right things!
It has been said, “what gets measured gets done!” What is also known about this is, if we measure the wrong things, the wrong things get done. So, what are the right things? Think Lean. If we can measure the processes of business that highlight the wasteful activities, the non-value-added steps, the time it takes to complete tasks, the real pace of customer demand, we will have far more powerful data to make meaningful change. Many companies have mountains of data available, but we find that often it is filtered by business systems and processes such that it no longer reflects ‘the truth’ and as such, cannot be trusted to use and make better decisions. For example, let us look at the typical MRP system that helps plan and schedule production operations. The system uses algorithms and logic that has been programmed into it to group and batch activities together for ‘efficiency’ while simultaneously stripping away critical information about what the customer really wanted, when they really wanted it. In other words, we collect incoming orders one at a time, batch them together into like products, schedule them in batches, produce them in batches, store them in batches waiting for the last few items to complete so we can ship them out to customers. Often this occurs in longer timeframes than the customer really wanted. So, as far as data goes, any data extracted from the MRP system to use in analysis, is heavily biased by the system that it had to fit into and processed it. If we try to look up customer demand, it will be smoothed by the batching activity and heavily influenced by the production schedule yet what we want as the truth is literally, what did the customer originally order and when did they want it (without any filtering or scheduling applied). Good data provides transparency to those who need it. Transparency of where it comes from and what has happened to it so far. If I want employees to help provide outstanding value to our customers, they need the raw information about what the customer wanted and when, even if we cannot fulfill it, at least we have the information to know we let the customer down and can use it to improve on our services. As an example of what we mean, which measurement is a better measurement of On Time Delivery and customer value? 1) Schedule Attainment or 2) Requests Met. Schedule attainment is an important measure no doubt. It measures, ‘do you do what you said you were going to do?’ However, the measure of Requests Met is a true measure of what the customer feels. We may be 100% on schedule attainment but, only 75% on requests met. It would appear then we are good at keeping promises but are giving 25% of our customers a reason to search elsewhere for a more capable supplier. If employees have this kind of information, we will have a greater ability to improve upon our capabilities. Some key things to measure in any process:
What is the Takt time (customer demand)
How long does it take to complete the process (work content)
What are the wastes here?
Defects
Downtime
Motion
Extra processing
Over production
Waiting
P – Plan for Kaizen!
Apart from being another Japanese word in the Lean lexicon, it means “change for the better”. And whether you are talking small, incremental improvements or weeklong Kaizen events or problem-solving teams that systematically solve issues over time, it is all the same in kaizen. By inviting new thinking, we can apply kaizen to make change as rapidly as possible. If you know something needs improved, why would you want to delay its solution? The essence of kaizen is that we apply our thinking for reducing and eliminating waste from our business processes so, an understanding of the four fundamentals of Lean is required:
Work to takt time
One piece flow
Standard work
Pull system
Kaizen then allows us to focus on overcoming the problems so long as the solution(s) move us as far toward the fundamentals as we can get. Then, do it again and again until the aspirational goals are met. But do not just apply kaizen to manufacturing. That is where many have made mistakes before. Understanding your business is a series of processes performed by people to deliver value to customers is key to applying kaizen to streamline and flow all business processes, especially those in the office and support areas. Kaizen is how we will transform the people while transforming the processes to deliver more value. Companies need to plan for more kaizen than they typically would. Tentative managers, plan on one kaizen event (weeklong event) per quarter, Lean thinkers plan on up to four per month and dozens of employee led improvements at the same time. One improvement, implemented per employee, per month should be a starting goal for end of year one and go up from there. Some people think that if much improvement is happening, there should be less kaizen. In fact, the opposite is true. By doing much kaizen, we discover much more improvement is still needed! To support the volume of improvement necessary, you will need to teach and coach the company leaders. From team-leaders, supervisors, managers, and executives, all will need to be engaged in the process and more of their responsibilities geared to supporting employee driven, process improvements. Some benchmarks in measuring kaizen activity and employee participation are:
Everyone participates in at least one Kaizen Event per quarter.
One Quick & Easy Kaizen solution implemented per employee per month.
L - Learn by Doing!
Lean thinking has been around now since the mid 1990’s in its current form (since James Womack’s book by the same title) and has spawned a mountain of books and training courses that could take a lifetime to complete. This, by definition, would not be lean. Lean is about learning by doing. Learn what you need, go apply it right away, evaluate the effectiveness, learn from it, and apply it better, repeatedly. Kaizen is a perfect example of learning by doing. Instead of sitting in a boardroom, discussing what problems there are and what ‘should’ be done by someone and making a list, the kaizen team, sets their goals and goes out to evaluate and implement real solutions as quickly as possible in real time. For this to be most effective, we also need to remove the bureaucracy and typical hierarchy that gets in the way of action. Others, complain that we should wait until we have a ‘perfect solution’ to implement once and not have to worry about it again. To these folks, I say, “so, we should continue to suffer with the current process until we find a perfect solution?’ This is typically met with a response of, “well, no, that’s not what I meant.” Remember, unless we try something, no knowledge will visit us!
E - Expand to All Areas!
Forget what you think you know about Lean manufacturing. It is not about manufacturing exclusively. Lean can be applied to any business setting, engineering, maintenance, sales, distribution, healthcare, dentistry, software development, auto repair shops. You name it, lean thinking applies. Regardless of your business, you need to plan kaizen in all areas.
Often, some of the biggest gains in creating flow and value for the customer come through challenging, and changing, the business processes that have been created over years of batch thinking and centralization of departments. When we begin to think about the product or service as ‘wanting’ to get to the customer when the customer wants it, made at the last possible moment (for freshness!), following consistent processes to ensure quality, and done only when ‘pulled’ via a signal to do something, true magic starts to happen. In most companies, the silos of departmental structure often create adversarial relationships internally that lead to poor customer response and defects, often blaming each other for it to deflect responsibility. The quicker we can get the business processes to truly support the value-added work, the quicker we dominate the industry. To summarize, think about the customer experience as being from first contact until next sale. This will encompass the entire product or service life cycle. Now, how many opportunities for customer experience exist? Sales call, customer service, delivery of goods or services, installation, payment, warranty and/or aftersales service, and back to customer contact again. This is just a summary list boiled down to six main contact points but could entail many more actual interactions at each point. The point is, when doing business with your company, do customers have a positive and valuable experience? Do they feel like you are the only vendor that can meet their needs and provide the value they are looking for? We need to apply lean thinking across the whole organization to achieve such goals. And it is a lifelong journey.
Lean thinking really can be SIMPLE. The first change comes with your commitment. Through changing perspective on traditional business processes, looking at them through the eyes of customers and employees and implementing simple, flexible, agile, and responsive solutions, you can achieve any goal set.
We offer you success in your Lean Journey!
Author - Chad Metcalf
Chad is President and founder of Value Stream Solutions Inc., a Canadian company that specializes in teaching and implementing Lean Thinking into businesses of all types and sizes. Covering coast to coast and the USA, our mission is to strengthen manufacturing capabilities and communities. To engage in the conversation, connect with Chad through www.valuestreamsolutions.com, comment on this article, or communicate directly at cmetcalf@valuestreamsolutions.com.