Imagine a Smooth Drive to Work with No Traffic Lights.

Jan 31, 2012 – 11:57 am   |   Posted by Gary Rascoe

Most of us could get to work in half the time if we could just eliminate the stops and starts caused by traffic lights. Have you ever noticed how some drivers (or yourself) accelerate quickly then come to a quick stop at the next light or stop sign and then repeat the same process over again? If you are driving in the car beside that person you may feel good when you pass them or if you have the lights timed correctly. The waste of starting and stopping reminds me of the opportunities for waste elimination that can be accomplished through production smoothing—a foundation of the Toyota Production System. When a car accelerates to quickly brake again, think of the waste that is produced: excess fuel, wear and tear on the brakes and of course frustration that often results in a few superlatives from having to continually start, stop and restart.

What would happen if could create a steady pace between lights or in heavy traffic? The flow would be much smoother and there would be less waste. If the entire traffic pattern followed that example it would be much more efficient; production smoothing attempts to do just that by smoothing out the peaks and valleys of the production orders. Production smoothing helps to reduce overtime and the need for moving people in and out of a process.

Organizations often experience quality issues when responding to unexpected peaks in demand. Oftentimes, we must quickly ramp up production and introduce new associates who may be unfamiliar with the manufacturing process. When production smoothing is done correctly, you periodically and methodically adjust your output just like you do when driving through a different speed zone. True, a steady pace may not be as exciting as quick accelerations and stops but a smooth flow makes for a better process with less waste.

At work, people often spend most of their day jumping from one fire to the next or expediting orders or activities to make up for hiccups in the system. Just like a steady driving pace, the elimination of constant fire-fights in the workplace might be less exciting, but it is definitely more productive. What do you think? Wouldn’t it be a pleasant surprise at work to have a steady flow of work with fewer interruptions and emergencies? While you may not get the same sense of accomplishment as putting out a fire, you would have more time to focus on other, more value added activities. Do you think you could get used to that?

Comments (2) :, , , , Posted in Tech Talk

Medical Device Industry at Crossroads

Jan 27, 2012 – 1:46 pm   |   Posted by Nero Haralalka

The medical device industry is facing a tough environment – US regulatory process, the device excise tax, sluggish sales, pricing pressures and caps on reimbursement rates. Many executives in this industry summarize the environment as “challenging” and “uncertain”. Another area of concern is the impact of globalization and outsourcing. Because of the tougher environment in the US many medical device companies have resorted to growing sales by focusing on international markets and global sourcing. The increase in the excise tax, 2.3 percent by 2013, is having a negative impact on technology innovation.

So what is a medical device company to do in such an environment??

One such company has decided to combat these pressures by focusing on their continuous improvement (CI) transformation. They used value stream mapping (VSM) to quickly identify improvement opportunities. The main focus has been on driving quality improvements and cost reductions, but they have also started creating a Visual Factory. By making sure they have the proper safety, quality, delivery and cost metrics in place, supervisor training implemented with Managing for Daily Improvement (MDI) techniques, and shoring up the CI team they have achieved 30 to 40 percent improvements in productivity, reduced lead time by 50 percent or better, and reduced defects by 60 to 70 percent. Strong senior management sponsorship within the company has also been a key success factor in their improvement journey.

Read a case study on another medical device company that has had similar results.

Comments (2) :, , , , Posted in Change Management, Operational Excellence

What is the Next Frontier for Lean?

Jan 11, 2012 – 3:43 pm   |   Posted by Ku Ho (Jonathan) Chong

For more than three decades, Lean Production Systems have been successfully utilized and deployed globally to transform the operations of all types of companies, small, large, private and public.  Originally developed and popularized by Toyota, lean has been the operational excellence tool of choice for companies wanting to reduce cost, free up working capital and grow organically.  For those companies that have reaped the benefits of lean for the past several years, what is the next frontier?

Lean transformation is a never ending journey and we expand our line of sight beyond manufacturing operations, logistics and distribution.  Many companies are beginning to deploy lean techniques in transactional processes using business process kaizen to reduce lead time and eliminate waste.  However, many of these efforts in transactional areas are sub-optimized and are happening in functional silos when they can and should be applied to all areas of selling, general and administrative expense (SG&A) including: finance, human resources, sales, marketing and customer service.

The most effective way to deploy lean enterprise-wide is through end-to-end value stream management. An end-to-end value stream contains many value streams including product development and commercialization, marketing and sales, fulfillment, and after-market service to name a few.  Each end-to-end value stream is aligned to specific values that a different set of customers want.  For instance, a company can have one end-to-end value stream serving specialty customers and another end-to-end value stream serving retail customers.   Basically, stratified value stream management approaches allow you to align specific offerings and service strategies specifically to varying customer needs.

If you have a chance, check out a recent webinar we developed on stratified fulfillment value streams.   There will be more information coming on how to define, implement, and manage end-to-end value streams to identify waste opportunities and maximize customer satisfaction.

Post a Comment (0) :, , , Posted in Supply Chain

The Art of 5Y – Ask Why, Like You Were Five Years Old Again

Jan 09, 2012 – 12:26 pm   |   Posted by Joe Panebianco

Why? How is it that such a short and simple question can make you crazy when asked over and over again by a small child? Probably because we quickly realize that we don’t really know WHY something happens when we start peeling back the onion. However, that childlike persistent curiosity can pay some serious dividends if we want to understand the true reason something happens.

There are many effective tools to help get to the root cause of a problem and find a solution that is quick and efficient; one of my favorite is 5 Whys (5Y). The 5 Whys method simply states to ask why until you get to the root cause of a problem and then address that issue.

A classic example is when the National Parks Service was faced with the issue that the Lincoln Memorial was showing varying degrees of deterioration. The task force that was established to understand how to slow the deterioration found that weekly washing with high powered washers was causing most of the wear. If they stopped here, the solution would have been to find a different cleaning method—likely one that would have been slower and more costly. Instead, the National Parks Service used the 5 Why method.

1. Why is the Lincoln Memorial deteriorating?
A: Due to the use of weekly high pressure water cleaning methods.
2. Why do we clean the Lincoln Memorial so often using high pressure water?
A: Because of bird droppings.
3. Why do the birds congregate at the Lincoln Memorial?
A: Because the birds have a large food supply of spiders that live above the monument.
4. Why are the spiders so plentiful above the Lincoln Memorial?
A: Because there is a large food supply of insects.
5. Why is there a large supply of insects in the area of the Lincoln Memorial?
A: The insects hatch around sunset and are attracted to the lights on the Lincoln Memorial.

Solution: Since insects are attracted to the lights, then why not delay the monument lights until 30 minutes after sunset and allow the bugs to relocate themselves by finding other lights in the area?

Result: The bugs and spiders were greatly reduced, which caused the birds to no longer congregate in this area and leave their droppings.

The moral of this story: Ask why with reckless abandon. Pretend you’re a kid and don’t feel limited by the first answer you get. You might fix the real problem once and for all.

Comments (6) :, , , Posted in Metrics Management

Selecting the Right KPIs Can Make a Big Impact

Dec 12, 2011 – 10:59 am   |   Posted by Joe Panebianco

Everyone talks about the importance of managing with Key Performance Indicators (KPIs). As you learn more about what KPIs companies select and how the KPIs are used, you quickly learn that there are significant improvement opportunities for KPI selection and management.

The most common mistake is selecting only lagging indicators to measure performance, with no emphasis on leading indicators to monitor the process. An example of a lagging indicator is “Sales Revenue” recorded at the end of the month. A leading indicator for sales revenue is “Sales Quotes” which would monitor the sales process and give sufficient time to adjust and achieve the sales target. The lesson: if you only monitor the lagging indicator, by the time you realize you have a problem, it is too late, the month is over. If you measure a leading indicator, you can take action in time to achieve your goal.

The second most common mistake in KPI management is not getting to the root cause of the missed target and failing to develop a countermeasure plan. Many companies monitoring their KPIs see that they’ve missed a target and put a “Band-Aid®” on the problem by developing a plan to redirect resources and work harder to achieve the goal. In most cases, this means that they still miss a target—only by less. Most likely, they will continue to have the same problem over and over because their process failed to identify a root cause analysis and a countermeasure to address the root cause. Instead, you should follow a disciplined approach to problem solving that identifies the root cause for missing the KPI and developing a countermeasure plan that defines WHAT needs to be done, by WHEN, and by WHOM.

What issues have you experienced with KPI selection and KPI management? How have you made your KPI management system more effective?

Comments (3) :, , Posted in Metrics Management

The best homework is no homework!

Dec 09, 2011 – 3:51 pm   |   Posted by Gary Rascoe

In a recent blog I recommended that you audit your countermeasure effectiveness and provided a checklist. I have some additional advice about lean culture creation.

Let’s talk about homework…I never liked homework anyway! When I say that the best homework is no homework I mean that you (as leaders) should encourage associates to focus on getting things done vs. allowing folks to create lists. Long homework lists are a sign of scope creep.

For the ongoing lists on your SQDC boards, distinguish between the ‘quick hits’ and those that require additional resources. Use a difficulty impact analysis or a 9 block grid to prioritize items to focus on first. However, there will be numerous items that are low in difficulty where people can ‘just do it’. Involve the entire team to take ownership to get these done quickly. Provide coaching and training to ensure success. As problem solving and root cause analysis skills improve, the capability of the organization, speed of implementation and sustainment will increase.

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Become a Fix-It Organization

Dec 02, 2011 – 4:47 pm   |   Posted by Gary Rascoe

I have spoken with a number of people about my blog on counter or counterfeit measures and I realize how often people miss the mark on this topic. Leaders misinterpret walking through an area and generating action lists for true countermeasure management. When you create a true countermeasure culture the benefits are synergistic. Before you read the message below, how do you think your company is doing with successful countermeasures?

I had a discussion with a person that was in charge of safety and maintenance for a large company. Safety always came first. When the company or corporate leaders spoke on the state of the business or at any company meeting, safety was always the first topic. Every kaizen event had safety goals and there were a number of safety programs/promotions in place. Not surprisingly, the safety record improved but accidents still occurred.

Fast forward 400 plus days later; zero accidents. What changed? The leadership changed. While the previous leadership took safety seriously, a backlog of safety-related items accumulated due to the resource requirement to implement all of them. The list continued to grow until there were literally hundreds of items in the backlog. The new leadership held an offsite safety meeting and asked what was needed to improve. He listened and then resourced the effort to clean up the safety item backlog.

Today, there is almost no backlog and new items are quickly addressed. The result is that not only has the plant gone over 400 days without an accident, but there is an overall plant-wide productivity increase of around 5 percent.

Do you think the simultaneous improvement in safety and productivity is coincidental? My guess is that it isn’t. When I worked at United Technologies Corporation we had a saying, “watch my feet’. People see what get’s done and what doesn’t. Associates decide whether or not leaders are listening to them based upon the leaders’ ACTIONS and not his or her words. People take notice and the culture changes. Even more powerful is when associates participate in the countermeasures, creating even greater ownership. When a company culture changes for the positive, results are compounded.

What have you done to improve countermeasure effectiveness? What are you actions communicating to others? If you were to poll your associates, how would they rate your ability to get things fixed?

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Counter or Counterfeit Measures? What Culture Are You Creating? (Part 1)

Oct 26, 2011 – 1:28 pm   |   Posted by Gary Rascoe

While culture tends to be an elusive subject, the definition I prefer is Larry Bossidy’s, “Culture is the behavior of our leaders, we get expect and what we tolerate.” In previous articles* I stated that a sustained lean transition is more about culture change than it is about tools. We need to change leader behaviors if we are going to sustain results and create a continuous improvement culture. One of the most important behaviors is ensuring effective countermeasures. Whether it is a ’30 day homework list’ at the end of a kaizen report out, or a countermeasure sheet on a SQDC board, the principle is the same. Leadership has the opportunity with each action item to advance or to hinder the company culture. A good friend of mine, Frank Stroscio, Director of Lean Operations at Steris, captured the essence of the point when he used the phrase “counter or counterfeit measures,” Each action we assign is a ‘moment of truth’ and Associates are always watching to see what gets done and what doesn’t.

Every time we document an action item, we need to think about two factors:

  • What is the chance that it will be completed on time?
  • Will it have the intended effect?

If we assign names and completion dates without ensuring the proper resources available, it becomes a counterfeit measure. Likewise, if we simply assign an action that does not get to the root cause, it is also a counterfeit measure. The effect of counterfeit measures is deadly to a company’s culture. People soon see through the façade and become complacent or worse, skeptical or even cynical of their leaders. The overall effect is that people lose trust in leadership, which as Patrick Lencioni states in his book, The Five Dysfunctions of a Team, is the very foundation of attaining high achieving teams.

How well are you doing? Take a walk and go to Gemba. Whether it is a business or shop floor environment, go and see. Audit the countermeasure lists and look for the following:

  • Is there clear accountability for each assignment with name and scheduled completion date?
  • What per cent are being completed on time?
  • If complete, do the results verify that the intended effect has occurred?
  • Is is being sustained? How do you know?
  • If not complete, why not and what is the status?
  • Has the reason for non-completion been shared with the affected people?

How did your audit go? Did you take the opportunity to talk with people in the area to hear what they have to say? What is being done that you see as effective or ineffective? In a follow up blog I will provide some advice and would like to hear from you as well.

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Golf and Lessons for Lean

Oct 14, 2011 – 9:21 am   |   Posted by Gary Rascoe

Have you seen the movie “Tin Cup”? The setting is a driving range that is located out in the middle of no-where. The owner is played by Kevin Costner, who is nicknamed Tin Cup. He ends up qualifying for and almost winning the prestigious US Open by enlisting the help of a psychologist and his caddy as coaches. Along the way, there is a key lesson that directly applies to an organization’s lean journey: Master the management system and master the swing. Only focus on tools and you will get inconsistent results.

There are times in the movie where Kevin, “loses his swing”. When your swing goes bad the golf ball can go virtually anywhere, but rarely will it land where you want it to go. I can personally attest to this! However, when he does find his swing, in an effort to raise money Kevin bets some other golfers that he can beat them while only using one club for an entire round. Of course he ends up winning that round even though the other golfers had their complete sets of golf clubs available to them.

If you haven’t guessed it yet, the analogy is that the golf clubs are the lean tools and the swing is the management system. You can have a full complement of tools in your bag, but you are not going to win unless you have the right management system in place. Companies can implement any one of a number of tools such as 5S, visual controls, standard work, kanban, set up reduction and the list goes on. However, if you don’t have the management system in place to audit, sustain, improve and hold people accountable, all of those tools won’t do much good. You may see some short-term improvement, but simply adding more tools won’t make a significant improvement.

How many of us have been guilty of buying a new golf club that was guaranteed to improve our score? I tried a new driver once, but the improvement I saw was short lived. The fact was that my golf swing was too inconsistent. When I took lessons to improve my swing, my score improved and I had a whole lot more fun!

Have you audited your management systems recently? Have you implemented Leader Standard Work? If you find yourself struggling with sustainment, don’t go out and look for more tools. Fix your management system and the tools will magically become more effective.

Comments (3) Posted in Innovation and Growth

Want to Grow? Differentiate Yourself with Your Customer – Part 2

Oct 10, 2011 – 3:52 pm   |   Posted by Ken Koenemann

In my last blog, I discussed differentiating yourself with your product and product development approaches to gain a competitive advantage.  In this edition, I want to cover the topic of service differentiation.

What is service differentiation?  Most people go to delivery time first…how fast can the customer get their product after it is ordered? While in some industries this is critical, for many it is not.  I define service differentiation as becoming indispensable to your customer.  Another definition might be the infamous “easy to do business with”.  This can take many forms such as being a trusted advisor, collaboration between your two organizations or it can go as far as integrating your two businesses to operate as almost one.

In the Retail sector, many companies ask their suppliers to become category captains or champions.  Achieving this position provides these organizations with access to customer forecast information, detailed SKU sales information and the customer’s key strategies.  When you operate as a category captain, you get insights that the competition does not.  With these insights you can develop strategies to improve the revenue and profitability of your customer and differentiate yourself from the competition.   The other advantage, but being a category captain is not required, is typically these positions allow you to align your functional leaders from Product, Engineering, Supply Chain, Quality, and Merchandising with your customers functional leaders.  One-one-one meetings occur on a monthly basis and face-to-face meetings happen quarterly to discuss strategies that allow the organizations to become more integrated.

Creating a competitive advantage is a two-pronged approach.  Look at the products, understand how your customers use them and figure out how to make it easier and more profitable for your customers to use.  Look at the services you are providing to your customers and identify ways to make yourself indispensible.

Good luck.

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