Lean Thinking - Respect For People

The foundation for Lean Transformation

Beginning the Journey and navigating this unknown (but common sense?) path requires a change in how Leaders and Managers relate with the employees.  This will be more than having a banner that states "Employees Are Our Most Important Assets!" in a 72 pt font or some kind of Employee Involvement committee that meets once a quarter whether they need to or not.  This is going to require you putting on your shoes and going to the place where the work happens.  And this should not be a one-time event, schedule the visits if you need to between your triple-booked meetings.

House of Lean with Respect for People as foundation

If this is your first time for your employees to see you on the floor, there may some staring and pointing, or some may even introduce themselves to you.  But I'm sure in this day of enlightened management techniques, you will not experience anything like this... right.  Employees will be open and honest if they are familiar with you and have some type of positive rapport.

You can also attend some of the team's meetings, listen to the comments they are making.  When was the last time you shared the company's strategy with them?  Do they make plans that align their Goals & Objectives with the direction of the company?  Do they understand how this Journey helps to improve the company's stability and long-term success?  Have you ever met anyone on the Board?  This Respect and Communication moves up and down the Leadership Chain.  Communication is not just Leadership making commands and the employees executing their wishes.

When we are developing and using our listening skills, we need to capture those comments that illustrate potential road-blocks to the implementation of the strategy.  These comments will need to be corroborated with your staff and seen in action.  The employees are looking for help when they need it, but we don't instantly implement suggestions just because they come from "the floor".  You will need to validate the problem's existence with measures.

We're not trying to make this a 12 month long six sigma project, sometimes the root causes are standing there and taunting us to make the first move.  Involve the Smart People in the measures, root cause identification and determining the solution.  The entire team owns the problem and the solution, this ownership will help facilitate the long-term solution that is followed and maintained.  Whatever the solution that is implemented, make certain that it is reflected in the standard work instructions.

When you have a measurable difference in the two methods, it's time celebrate success with the team.  Order some pizzas, make some certificates of appreciation, get them some gift cards, maybe it's time for a promotion, or some sort of positive reinforcement of the message that we are together on the Journey.  One instance of problem-solving does not make someone Lean, nor does it solve all the problems so someone "gets a belt".

If the problem is not validated, talk with the person who thinks it is there.  You may have missed something important, it may not align to the strategy, or there may be a deeper conversation to be had.  It is entirely possible that the Good Idea Fairy has been in the area having her way with unsuspecting employees.  Ideas have to be connected to a measured and validated problem statement.  If the decision is to not do anything about the problem yet, let the employees know why and when it may be addressed.

Improving is difficult enough, but having the team on board can make the Journey smoother.  Open and Honest communication can help make it happen.

Merry Christmas 2012!

Today is a good day to be with family and friends, and see if you can follow the Standard Work provided with many of the toys you may be constructing today.  The good one will have pictures to show what "right" looks like.  These are good examples to use around the office while you are creating or updating your own SOPs or Desk Guides.

Merry Christmas to all my friends and followers!  I hear that the Time of Resolutions is just around the corner!

When Is Enough, Enough?

A Long Time Ago In A Galaxy Far, Far Away...   

I was teaching the Statistical Process Control & Capability module during a Lean six sigma Green Belt class and one of the students asked, and I'm going to paraphrase, "When is enough, enough?"  I think this would be a normal question to ask while learning how to Make Value Flow.  The question came from one of my Quality friends, and I'm sure he was thinking about all the different processes he supported that needed improvement and certainly not when he could put his feet in the air and his "you-know-what" in the chair.

If you have been measuring your performance, then you should have some amount of data collected around the problem you are experiencing.  If you are having quality problems, you may have Defects Per Unit (DPU), or Defects Per Million Opportunities (DPMO).  If you are having delivery problems, you may have Cycle Time or Number of Days Early/Late.  If you are having cost problems, you may have Cost Per Unit or Weekly Printing Costs.  Either way, you need some data that represents your process.

We can see the performance is in control and the stable, but is the process meeting the customer's needs?  This is always the right question!

When we use SPC we are looking for  indicators that signify when to start asking questions about the process.  There are four that are the easiest to use and remember; 1) Any points outside of the control limits, 2) Six points consecutively going up or down, 3) Nine point consecutively above or below the center, and 4) 14 points consecutively going up and down.  Having a process that performs within these four parameters means that our process is in control and stable, which indicates the flow is predictable.

Here is your SPC warning!  Do not let any of you Quality Engineers catch you putting specification lines on your SPC chart.

What it does not tell us is are we meeting customer expectations.  This is where we take our Voice of the Customer specifications and lay them on top of a histogram of the data.  From here we can see our performance compared to customer specs of no more than 21 days (USL, LSL).

Current State

And as we can see from the fine specimen above, when our cycle times are 22-25 days we are not meeting customer expectations.  Our process is in control, but not performing to the wants and desires of the customer.  In fact it may be possible that our favorite customer is looking for a new supplier of their information needs as we speak and I think that immediate action is required.

At this point you should be constructing a charter, assigning one of your belts to lead the project, and kick-off the team.  Work your best as a Project Sponsor, Smart Person or Supplier/Customer and document the results in an A3.  When you have enough data with the new process you can see how the center and spread fit within the specifications.

If you have identified the root causes and adequately implemented a new process that has improved flow, then you are done with that process for now.  The biggest indicator is the edge of the distribution is some amount away from the specification.  For you math nerds, below is the formula and you want to get as close to 1.5 as you can.

Improved Process #1

Based on our results we can see that are delivering everything on time, and if we finish early we can hold the deliverable until the customer is ready.  Be wary of producing too much too fast.  That would make our work-in-process increase, which means the window between "doing work" and "getting paid" increases and this is detrimental to cash flow.

At the end of the day we want our products to flow without stopping though our value-added operations to meet customer demand.  Deliver too late and the customer must wait (Wait Time), but if we deliver too early the customer has to over-handle (Excess Processing) the product until they are ready to use it and this is "Inventory" they have to hold until they are paid.  If you have paid any attention over the last 5 years, this over-capitalization is one of the causes of the downfall of the American automobile industry.  Leadership is the decision-maker, but the following histogram represents one possible best fit.

Improved Process #2

Improving performance is not something that will automatically happen, learning curves are not absolute.  Market forces fluctuate and your ability to adjust with them could be one of your long-term indicators of success.

How do you use your data for improving flow?

Designing the Perfect Process

In all the work places we have been, do you remember ever asking how someone came up with this insane method to respond to a customer order?  Taking the order is easy, we receive an email from our website catalog system.  But everything else we do after that resembles a group of 5 year old Americans playing futbol (ok fine, soccer).

We would like to think the process was designed using the smartest people, using the best tools, and the most responsive and fair management techniques taught in the best MBA schools.  No such luck my friend.  Your current process was haphazardly put together using years of bad results from battling against lawyers, the least amount of communication possible, and it's certainly not documented or repeatable.  The last thing we also want is someone able to measure the process only to beat us up with the charts.

Does any of this sound familiar?

When do we start creating the new process?  The best situation would be during New Product Development or when you start to go after new customers.  Sometimes your current process does not meet the customer needs and small step improvement is not enough.

Let's start by defining a few characteristics of the perfect process and what it looks like:

1)  It has no review cycles, quality comes from the process
2)  There is no guessing
3)  There is no hunting and gathering
4)  The time from order to fulfillment is as short as possible
5)  The customer receives the order defect free and exactly when they want it

With this in mind, let's start....

You will need to collect any regulations that may impact your process or product, voice of the customer using surveys or direct interviews, and any business concerns that may exist.  We will put this on a House of Quality or Quality Function Deployment (QFD) (same thing... mostly, just don't say that to one of the Six Sigma guys).  Rate, prioritize, and score these to help determine the level of focus to be applied during the actual design of the flow.

Benchmark other organizations or companies dealing with the same type of product.  Be open and honest, those organizations getting good results will be very proud of their process and will happily show you their stuff.  There may be more information published on the internet, in trade magazines, or state/federal government survey data.

More time is used defining requirements so when it is time to document the new flow it almost creates itself.  Ok it's not that easy, you will need the smart people to help lay out the steps.  Lock everyone in a room, tape a long piece of butcher paper on the wall, break out the sharpies and sticky notes, and tell everyone to put their shoes on 'cause they're going to go do some work.

Start with the first signaling step and have the rest of the team fill out the remaining steps of the flow.  Keep a large copy of the QFD taped to the wall next to the flow so they don't forget about the customer's and other process stakeholder's needs.  Add the inputs and outputs to each step step to help the team focus on the thing going through the system.  Complete your Value Analysis and look for any of the 8-Wastes that can be eliminated before the process goes live.

When you have this completed and the team reaches consensus on the flow, put it in your SOP or Deskguide format.  Create the training to deploy the new process to the other team members who have not seen it and any new team members that come on board later.  Determine the measure points for Quality, Cost, Delivery, and any other Customer measure to finish the process.

If you have some sort of process automation, make sure you have separated the steps in the process to show which are performed by people and those performed by the computers.  Don't mix these as computers can't think critically and make decisions and people should not be creating information that no one will see.

Does the perfect process really exist?  Probably not, but can get very close.  All processes need to have learning steps so when quality or cycle time issues are identified they can be quickly eliminated from the process.  Update the Deskguide and document in an A3.

Everyone raise your right hand and repeat after me.  Go ahead, get that hand in the air.

1)  I will not accept poor quality from my external or internal suppliers.
2)  I will not pass on poor quality to my external or internal customers.

OK, put you hand down and share cool things your have seen in your processes!

Giving Thanks!

This time of the year we offer thanks to those people or things we have experienced through the year.  The lists are always long and we sometimes leave one or two off.  The great thing about thanking someone is that you don't have to wait until the third week of November to do it.

Beautiful Oklahoma Sunrise

And since we are here, I want to thank you for dropping by to read my latest ramblings-on about Lean Transformation and how we as Leaders fit into the puzzle.  I hope you continue to visit and leave comments because the conversations add depth to the concepts.

We Just Lost Half of the Team

One day were are a happy team, plenty of work coming in and we don't have too many customers calling every other day about their orders.  Then the boss from corporate comes in, goes to our branch manager's office and closes the door.  This does not look good.

A couple of the sales guys split, muttering something about hand delivering some reports.  A few of us go to lunch and the rest plan out the remainder of the day.  The manager's office is empty when we return, but our in-boxes have a meeting notice at the end of the day.  Of course we all panic, there was nothing in the body of the email and we never have cake at the end of the day.

The remaining minutes and hours count down and we all meet in the larger conference room.  The branch manager is standing at the front of the room with a powerpoint on the wall.  He goes through the charts; sales per employee, backorders by customers, quality surveys from customers, accounts past due to suppliers.  None of this looks good and our question was how long had it been like this?  Has anyone been paying attention?

One by one we were called into the office.  There were three of us at the table, the branch manager, someone from corporate HR, and I.  They asked if I understood the information presented and I said that I did, and I asked how long has performance been like this?  He made some comments about the softness of the local economy and expected it to turn around at any time.  None of what he said sounded good.

About half the team survived this round of layoffs.  We had to do something.....

This is how some organizations start their Lean Journey.  Sometimes we see teams respond with positive change by using their metrics and creating a plan to improve customer satisfaction and aggressively getting new orders and customers.  Sometimes the teams blame others, lobby for a government bail-out, and continue in their same, old, wasteful ways.

Just like any other personally damaging situations; smoking, obesity, and high-stress are all responses to bad practices and our businesses can exhibit the same types of response factors.  Fire-fighting, low customer satisfaction, and poor team relationships are not going to fix themselves.  You can't wait for the team to turn around on their own.  Someone (you) needs to make a bold statement.  "We will no longer be in the Fire-Fighting business!"

You will hear some chuckles, but it's ok.  Half of the team is gone, so how do you do the same amount of work with less people?  It's not simple, but you're going to have to learn from your mistakes.  Talk to your customers about your delivery, look at how you do things and improve.  You have to get the team out of Egypt and get Egypt out of the team.

You  may be tempted to start creating plans and roadmaps and start bringing in high-powered consultants.  If you were starting the Lean Journey when times were good, those tools would be perfect, but you are not and we need to start the transformation now.  Your Burning Platform (or BHAG) is right in front of you, take a picture if you need one.  Start with the processes you use to create your products and remember this analysis is based on the thing going through the system or process.  Do you have any performance data; cost, quality, delivery?  If not, then begin collecting it now.

Have you talked to your customers yet?  We will use that information when we create the new processes.  We may even pull out our House of Quality (or QFD) to help align customer needs and the requirements we must comply with.

We then map those processes and remember this is based on how we do it now, not how we want to or what the SOP says how the process is supposed to operate.  Ask where are those inspection review processes and how we fix the documents?  Circle these steps with a Red Sharpie, these will be targeted first!  If you have some sort of review trail from emails or a workflow system, put the quality failures in categories and force rank them by count so you can attack the worst offenders first.

Once you have that, get the team together for a fishbone party.  Remember that you put the problem statement or quality failure at the head of the fish and the potential causes on the four bones.  What four bones?  I'm glad you asked.

If you start using Man, Method, Measurement, Mother Nature, Material, and Machine in the office you will spend the next hours trying to get the team to not think of these in manufacturing terms.  In our information processes we use People, Place, Policy, and Procedures.  Nearly all issues that exist today will fall into those categories.  When the team is passed out on the floor and have nothing else to give, begin weeding out the least likely causes and work your way up to the most likely or direct causes.

Bundle related causes together and begin brainstorming potential solutions.  We will also begin to start mapping out the new process based on the number people available, a "No Fire-Fighting" culture, a bold statement that our internal teams will neither accept or pass on defective information, and we cannot inspect quality into our products as high-quality must come from the process.  Everyone must buy-in to the new process, both the smart people doing the jobs and the Leaders of the organizations.

Once you have tried a few things and have picked the best of the best (for now) you need to document how the process operates so when new team members come on when the economy recovers they have something to be trained on.  Determine some metrics so poor performance is not a surprise anymore and there will be plenty of time to respond.  Everyone needs to know what right looks like.

Transforming under fire is never pleasant, but the good times just doesn't always provide the need for change.  Bad things happen, and then we pick up the pieces and continue on.

When your team has been through a rough time, what kind of lasting change did you make?

Incentivizing Improved Performance

Have a team that produced great results when their past performance was consistently less than stellar?  Was this a one-time bump or will there be long-lasting results?  Do you think the team will show high performing metrics next review?  You probably know the answer to this.

Companies and their internal organization should have plans to improve or innovate their products and services.  Those plans need to be developed with and approved by the Board, flowed down through the Leadership Team, and marketed to the employees.  These plans should be visual, achievable and relevant enough so that anyone we ask will understand what right looks like.  We are asking for everyone's support as if the future of the company depends on it, because it does.

We know this is a journey and we should be plotting our course, stop once in a while and take a look at the progress you have made.  Bring the team together and show them that working together to a common goal can make happen. Along the way, take pictures, shoot some video, interview people involved in the change, and use your project documentation to create storyboards to help show the transformation.  Remember this is not small step change on one little project, but transformation across an entire site.

Think about how to reward the teams for this amount of change.  A pay increase would be great, but we're talking about real employee appreciation not short-term impacts that are quickly accepted as the normal condition.  Employees today are looking to make a personal connection that can act as compound interest on their careers.  They also want to know that their contributions are making a difference.

Companies in the recent past paid some percentage of the savings.  This is nice too, but too often the savings are soft or cost avoidance types of savings.  While these opportunities need to be implemented also, they increase capacity of the team and have the affect of reducing over-time to achieve better balance between life and work.  We have seen this types of reward systems become abused and leaves a bitter taste with the Leadership team when reductions to bottom line costs are not realized.

This type of thinking can certainly be used to motivate employees to continue improving and innovating, and employees knowing their efforts are appreciated make huge steps in retaining them.  Green Belt or Black Belt shirts with company logos are nice, but mentoring from the boss and opportunities to move up the ladder reinforce the confidence in the actual people doing the actual work.

What type of actions have you used to show employee appreciation?

Excellence Is Not Achieved By Bringing Everyone Else Down

Let's just get this out in the open; I am a free market conservative and one of the best tools in our arsenal to grow market share, innovate, and improve customer satisfaction is competition.  We compete with people, teams, companies, and economies.  We also have the innate ability to compete with ourselves.

As your organization travels your path you will have opportunities to grow and learn.  It is up to you to decide what to do with this new found knowledge; let it sit or implement it into your Standard Work instructions.  This new knowledge is not like wine that will get better with age.  Each day you do not implement is lost productivity and this loss is one of the barriers to growth.  You think, "we can't take on new work, we more than we can do right now", and you are right based on how you run the business today.

Excellence is a customer-based performance characteristic and you must compare your's to those you compete with.  I'm not suggesting that you try to get a tour of their facilities and steal the metrics hanging on the walls, but look at their service offerings on their website or talk to your customers that you know use your competitor's services.  You can also use your industry's benchmark.  But you have to look at that gap analysis as opportunity to improve.  Make sure you do not fall into the trap of rationalizing your poor performance by attributing your competition's success to luck or political alignments.




If you are not measuring your performance then you do not know what you do not know.  Also do not use the "I have not been yelled at by the Boss lately" metric to gauge your performance, this is a lie your brain uses to avoid potential conflict.  Using a Balanced Scorecard approach uses a series of questions and operational layers to determine what are the potential measures that would apply to your product or service, but is up to you to determine which to use.  You should use some of the measures that relate to Safety, Quality, Cost, Delivery, and Morale that will should aggregate performance, but not a single metric due to the risk of sub-optimizing the process to improve just one characteristic at the risk of negatively impact the others.

As you create your dashboard you will be tempted to use some high-end measurement system with all manners of bells and whistles.  I don't recommend this in the early phases of your measuring because you probably do not know what you need yet.  Spreadsheets or home-grown tools created in something like SharePoint will be just fine to start with.  As you develop your measures you must also determine how to respond.  What do you do when you see the measures going off the track?  Who is notified, how do you attack the problem, and how do you document the findings?

When you have your performance history documented and you see you are on your way to the top, think about comparing your current measures to past performance.  This would be the same as watching the futbol tapes after a game to see lost opportunities or turn-overs.  Where can the team improve performance by improving their skills?

What are you measuring in your office processes?

Book Review: The Integrated Enterprise Excellence System

Forrest W. Breyfogle III, the author of "The Integrated Enterprise Excellence System", has written about a system of strategic tools and methods to see the alignment and performance of organizations.  His book lays out the different methods of metrics, management governance, goals, and strategic development.  He connects these and other concepts using an Enterprise DMAIC model.

In my opinion this book was written for Leaders and Managers of organizations, people who's work is at the system level of the organization.  These could be team leaders, supervisors, managers, and executives.

Mr. Breyfogle has been a proponent of the "wise use" of statistical techniques and this book does a great job of connecting those dots to transforming organizations into customer satisfying machines.  I recommend this book to all my readers.

Bi-Polar Working Environment

Looking back on it, the highs were high and the lows were low.  Does work seem like an endless roller coaster?  Do you run from one fire to another, double-booked status meetings, or was that another failed review with the originator pulling out of the parking lot for the weekend?  You think you get off the ride at the end of the day when you leave the gate, or is that just the part of the ride that is not doing loops?

What is in your mind when hear "a steady flow of work"?  A gently flowing stream that pops with trout hitting the surface and the water is bubbling through the rocks?  No, that is supposed to be a vacation.  Did I just hear someone's cell phone buzz while we are fly-fishing?

How many of us walk in to the build and put on our fire fighting gear?  Go ahead and put your hands down, I'm not taking a survey.  Our never taking off the gear is an indication that we do not have a workflow control system.  Everything is hot and/or late.

Getting out this mode of operation requires everyone on the team, including the coach, is making a conscience decision to stop treating everything as a fire.  And we have to start learning from our mistakes.  The solutions that support the learning must also be appropriately applied.  Anchoring the entire organization because of ethical or technical issues does not help foster trust between management and employees.

Operational Excellence is about the journey, not the destination.  We learn and grow while building trust through relationships.  You may not see it at first, but when you realize the roller coaster is no longer running you can see organizations are made up of people, not systems and tasks.

I Smell Soap!

How many times have we heard the warnings?
"Our biggest customer is coming (or the boss, or some shareholders, or OSHA) and we need to clean this place up!"

So we have two days to "clean this place up!"  Lucky for us we have a few well trained firefighters that can work and hide stacks of files, miscellaneous inventory, and review those customer reports so we can ship them out early tomorrow morning.  Everything else comes to a screeching halt.  Did I just hear one of the supervisors whisper that this looks like a 5S Blitz?

The big day arrives, everyone looks busy, the boss looks at the Ops Manager and says, "I smell soap!"

Or...

The big day arrives, everyone is busy, catching up on two days of downtime, when our favorite customer arrives.  "All of your office areas smell so clean!"  

She is getting the 5-Star treatment.  Walking through the areas, seeing a white board with tracking numbers next to the reports they ordered with status of "Delivered" next to them.  The Office's Operations Manager is smiling, and gives the customer a box of branded office swag, cups, banner pens, and flash drives, on her way out the door.

LOVE the banner pens!!

For those of you who honestly think this is what a rapid 5S Event looks like or that 5S is Housekeeping, I have a little secret for you.  You are wrong, not mistaken, and those who told you that were wrong.  For the rest of us this is turns into an effort in futility and the clutter will return in about two weeks.

There is a way to avoid all the dramatics, and fire-fighting.  The site has to become organized.  This is not something that a small group can accomplish, it's going to take everyone from the employees all the way up to the Leadership team.

5S is a system of organization that helps us answer the following questions:
Sort - Do we need everything we have?
Set in Order - Do we have everything we need?
Shine - Can we see abnormalities?
Standardize - Can anyone do this repeatedly?
Sustain - Are we maintaining or backsliding?

Each "S" is built on the previous, and it starts by Sorting to remove the fog of clutter.  If you see half eaten bags of cheesy poofs laying around, listen to the voices in your head and throw them away.  When we Set in Order we are removing searching waste.  We are no long a hunting and gathering society, work should be the same.  The work of Sorting and Setting in Order is executed by the smart people.  The actual people doing the actual work knows what is needed or not needed.  The boss can come participate, but only as a set of hands doing work.

When we Shine we are keeping our machines (printers, computers, network drives, etc) in a like new condition so we can see a small problem before it becomes a much larger problem.  How often does the printer go down because you ran out of paper in the office or because little hang-ups turned into an issue where we have to call the guy who sold us the printer four months ago?

When we Standardize we are documenting how we do things.  Is there a standard method to creating folders on the servers for new projects?  How about projects that are complete or abandoned?  How long does it take someone to find the information they are looking for?

Sustaining the gains involves Leadership being active in the change process and I don't mean they only move their furniture around.  Take a waste walk, go to the gemba!  That is the actual place where the actual people are doing the actual work.  Does the work flow?

One of these days the customer, or the boss, or OSHA is going to stop by unannounced...

Don't just shake your head up and down, share what you have seen in the comment box.

Teaching With Simulations

One of the joys of being the Lean Guy in the office is I get to share my knowledge and experience with other people writing contract documentation, purchasing orders, engineering changes, software code, system specs, and all the other pieces of information floating around the office.  When we talk about Lean and the thing they are working on it is helpful to show an example of what right looks like.  This is helpful because their product is special, and no one else processes it like they do.  Special....right.

We will presume that I am not dealing with a TQM victim that is feeling frisky that day.

A tool that I keep handy is the paper flow simulation.  We use index cards as the "document", technical reviewers, value-adders transforming the document, and some metrics for quality, cycle time, and throughput.  This sim is cheap, easy, portable, gets the point across, and I'm not going to give away the ending, but all the team win.

Another great teaching aid is the 5S Numbers Game.  I'm not sure who developed this, but it is my favorite for teaching 5S in the information flow.  This link will take you to Lean Simulations' 5S Numbers Game page where you can download it and try it out for yourself.

My Favorite Sim in the Office!

There are other longer Lean System simulations, The Beer Game at The Lean Learning Center, and a  simulation used by the U.S. Military called FedSim.  These teach supply chain control, aligning tasks with requirements, and passing products through the enterprise.

Videos are great too!  Terry Tate, The Bridge of Death with the Old Man from Scene 24, Dinosaur Office, Building Planes in the Air, and others help to lighten the mood and show how far into the extreme a process could go.

When thinking about sims and videos, make sure the topic fits the organization.  Factory sims, stories, or videos will not work in the office.  First reason is because few of the people you are talking to have ever seen a factory, much less stepped in one.  Second is because factories are loaded with assets; equipment, inventory, tools, things being transformed into a product being sold to someone.  And our processes have computers, printers, fax machines that no one uses anymore, binders, paper cutters, IT Helpdesks; yeah, we're special.

What kind of sims do you use in the office flow?

Can Lean and Corporate Governance Play Together?

We’re going to go deep behind Executive Lines this week so don’t get left behind.  There is quite a bit of regulation out there telling companies how to act, walk, talk, eat, etc, etc, and if you want to raise some capital by selling shares of you company on the market you will have much more to deal with.  I will not be providing any opinions on the Sarbanes-Oxley Act, but over the last 30 years Corporate Governance has received plenty of attention especially after Enron, Worldcom, and other situations.

What is corporate governance?

Let’s start with a definition on Corporate Governance.  Simply, it is the system by which companies are directed and controlled, (Wikipedia, SEP 2012).   It attempts to define the interactions between Board of Director members, management, and shareholders.   You could add stakeholders to this list also based on the amount of airplay companies receive.  But let’s focus on the basic definition words “system”, and “directed and controlled”.

Much of this addresses the communication path through management, the board, and shareholders.  We can see this in the shareholder reports, and on financial websites with the company’s balance sheet, income statement, and statement of cash flow.  Inside the company the communication the board and management uses should be  a little more action oriented.  When I say communication, I mean the metrics.

How good is the company’s delivery? 
Oh, it’s good. 
How good? 
Real good.

Sound familiar in the office area?  Does anyone really know?  When the strategic plan is built, there should be some recognition of measurable performance goals.  If you don’t know, go ask your customer what is important about the delivery of your product.  Oh, it needs to be good.  How good?  Real good.

What is a Lean System?

Let’s go back to this system.  When we talk about a Lean System, we are talking about making our office products at the rate or pull of customer demand.  Do we have this thinking in our systems?  Yes, that does mean to put Just-In-Time methods in our order systems.  Remember, JIT is not just about reducing inventory costs, it puts a glaring spotlight on the problem areas.  The same areas where we improve the flow of our information products.

Align the Lean System with the Strategic plan and we begin to provide actionable metrics going to the board and management, and in the right hands of a visionary Leader this can produce transformation that strengthens the company and produces happy customer.  How happy?  Real happy!

The measures going to management should show how we are affecting the results.  These could show that performance is better, worse, or remained the same.  If the results have not changed, then the team has not found the root causes, or the improvements are not working and we will hold off the pizza party until we have sustained positive results.

Can we institutionalize continuous improvement?

Improvement can be institutionalized by creating the expectation, and required metrics to review, and growing the people who show aptitude for Leadership out of the ranks of Green Belts and Black belts.  I did not say that all Leaders should be belts, but there is a good place to look.  Leaders should have their performance measured and Executives do not have a “come-apart” the first time a chart is Red or Yellow.  These are indicators of process performance issues that need to be addressed.

ISO and CMMI provide frameworks of systems, but these are dependent on people working within the boundaries and keeping the documentation current.  Companies and teams still develop their own methods and processes and these should be measured and reported upon.  If you are not going to manage the process, then don’t measure it.  And don’t be surprised if you do not receive the performance you think that you are entitled to receive.

As we go through this journey, we should be using road signs and maps to help us see where we are.  Working with Leadership and our employees will strengthen the relationships and improve morale.  Doing the right things at the right time should result in satisfied customers.

Have you seen a successful transition of practices when Leadership has changed hands?

Future State Value Stream Mapping

Standing in the office, staring at the wall with your Current State Value Stream Map (VSM) pinned up, you may be thinking that someone needs to hide this thing before the boss walks in.  The communication lines look like one of those sketti-maps, and the work balance chart is normally distributed.  Take a breath and remember that this is a journey, don't stop believin'.

Remember the Normal Distribution?

Time for some calm and rational thinking, what did the Lean Policy Deployment matrix indicate that was the highest priority for the team?  You can see the operational targets and how they relate to what is important, but what does this mean for our processes?  Now we are connecting the dots between where we are now and where we need to be moving toward.  Do we have the measurements in place to help us see where we are?  If not there needs to be a line drawn in the sand for our baseline or starting point.

Take the goals from the Lean Policy Deployment matrix and any yearly "goals & objectives" given to the team, and connect them to your Current State VSM.  What picture emerges?  Does this flatten your work balance chart?  If you find that your goals do not change your VSM, you may have weak or ineffective goals.

Now is the chance to talk with the team.  Get their opinion on the obvious problems pointed out on the map.  What problems do they see on a recurring basis?  What opportunities do they see?  This is a great way to empower and engage the team.  They want to be listened to, they want to know that their input is valuable and that they are not just button pushers making documents go somewhere.

Our VSM friend, the Starburst!

Armed with this data, you have something to talk about with the boss.  Show them where you think the problems exists, show the data, and then show them the starbursts that you and the team created.  Give some credit for the creativity of the team!  Talk about where you think you could improve performance and customer satisfaction.  The boss may provide some more goals to think about for transforming to a Lean flow.

Take the starbursts and place them on a Benefit/Effort matrix and now you and the boss have something to work with to prioritize the improvement activities for the coming year.  Below could be your new best friend for prioritizing opportunities, the PICK Chart.  Decisions made from this matrix will need to be balanced against the Lean Policy Deployment matrix.  Think about what is important to improve and what is attainable. 

PICK Chart

If this is your first time to attempt to formally improve your processes, take the top one or two prioritized opportunities and compare their goals to the Current State Value Stream Map.  What impact will these make to the 4P's or to Safety, Quality, Cost, and Delivery?  These opportunities may enable other improvements, like communication flow or decision making processes.  Don't let the fear of making Quality improvements impact what is executed first.

Now we bring in our tried and true project management skills and abilities.  Write a problem statement without any assumption of root causes, define SMART goals, and determine deliverables.  Document the project on a one-page A3, there is no need for a 125 slide project briefing.  There is nothing brief about 125 slides, seriously, knock it off!  Put the smart people in a room, find the "Belt" person you have heard about and start exploring what is going on with the process.

Share what you have learned with the work team as you go through the project determining root causes and deciding what your going to do about it.  Create some metrics and a desk guide to keep you from backsliding to the old, comfortable, chaotic process.  You are responsible for the team's results, own it!  When the process is fixed, celebrate the success with the team.

In 12 months you're going to go through this again.  Make sure you have your stuff in order.

Is change hard?  Yes, but so is coming into work everyday knowing that poor performance is making an impact to the team's moral and no one cares to make it better.

Have you seen VSM be successfully used as a strategic planning tool or ever been involved in a VSM "Event"?

Current State Value Stream Mapping

Transformation has many requirements, two of those are knowing where we are and where we are going.  This week we will address how to see where we are using Rother and Shook's "Learning to See" method of Value Stream Mapping.  If you want to learn more about your process, this is a perfect way to do it. 

First the rules (oh, no!  not more rules), Value Stream Maps are based on products.  Don't get hung up on thinking about factories, we all make something.  Gears, cars, hot dogs, lawn chairs, pizzas, newspapers, lumber, stock analysis, laptops, contract statements of work, testing instructions, decisions what to spend resources upon, etc, etc, etc; get it?  We all produce something that is passed on to the next internal customer or our final external customer.

Our Current State map

Here is our example Current State Value Stream Map.  Current state means how the product flows as of today.  Again, how the product ACTUALLY flows, not what your ISO documentation says, or how you wish it would flow, but the no-kiddin' real way it flows right now.  If you don't know, go ask the actual people doing the actual work, in fact I recommend you go find out who those people are right now.  Go ahead, I'll wait...

As you can see in the picture the inputs from suppliers are on the left and the output going to the customer is on the right.  The product going through the flow is on the lower half of the map and the information supporting the flow is on the upper half of the map.  Under the transformational activity boxes is where we will store some important metrics like cycle time, touch time, quality yield.  And last, but certainly not least, the time line along the bottom which we will use for part of our value analysis.

Did I say last?  Two more things, identify the product/process and put today's date on the map!  This is really important as you begin to start constructing these high level maps.  One day in the far future you will find a stack of maps and wonder which ones need to be trashed and you will not have a time reference.  Yes I said trashed, we are not cartographers.

There are several things we can read from this map.  Check out the balanced work chart in the lower left corner.  If you are in love with TOC, you should be able to identify where the bottleneck is located.  The Value Added calculation is based on the amount of work in the system in hours and the cycle time of each activity.  The amount of work is based on the calculation of the number of items in the flow and the cycle time for one.

WIP (the number of items in the flow) is an important measure because it represents labor costs and material costs.  Add them together and you know how much money you have tied up.  If you could reduce your WIP costs, what else could you do with that money?  Expand your capital, update your old computers, hire another sales person?  Is the communication flow adequate?  If you are only talking to the last person in the flow then you may not be seeing how the other sections in the product flow are performing.

These maps help to see where to attack first, where is the longest cycle time, lowest quality yield, or longest touch time?  If you have a Belt in your organization, get their help analyzing what is going on with the performance.  While we are asking uncomfortable questions, when was the last time you were on the floor?

So next week we will explore the construction and use of the Future Vision map that will contain the 5-year plan.

What has been your A-Ha! moments constructing your Current State maps?  Does it make you want to start implementing solutions?

Lean Policy Deployment

Aligning tactics to strategy

Welcome to September!  Guess what it is time for now?  That's right, this year's goals and objectives for the company.  How are we doing this year so far?  Did you set sales, safety, delivery, or financial goals?  Did you build that new capability you wanted?  Are your teams progressing in maturity?

These are worthy and usual safe things to chase, but are they the right things for your company or teams?  You will also find that you may have a team or site that is the benchmark for the company.  Translating your vision into the strategy is up to you and your board of directors, and determining how to advance to that vision will be executed by management and the teams.  Each team member is aware of their strengths and weaknesses, and this tool can help them grow into that type of person they want to be.

How to build

1. Identify the key issues in the organization's customer focused performance.  These may come from a Value Stream Mapping Event or a strategic offsite meeting.
2. Determine measurable business objectives that address these performance issues.  You are not boiling the ocean, and they do not say "do stuff better".  A good tool to use here would be a Balanced Scorecard.
3. Define or Refine the overall vision and goals.  Goals will be listed under Target Operational Results.
4. Develop supporting strategies for pursuing the goals.  These will be listed next to the Objectives.
5. Determine the tactics (or projects) and targets that facilitate each strategy.  List tactics above Selected Projects and targets next to Improvement Targets.  
6. Decide the strength of alignment within the matrixed entries on the map.
7. Implement performance measures for every business process.  If it is worth doing, it is worth measuring and doing right.  Yes measuring is hard, but so is laying people off because you did not work on the things that were important.
8. Measure business processes during execution.  Do not wait until the end of the year to see if you hit any targets.

How to measure

And now we are off and running!  We are delivering sales orders, reports, and briefings.  The team is collecting data and we are compiling it into something that tells the real story.  Whether we are using a fully automated workflow tool with performance reporting, or collecting information on a form and typing it in a spreadsheet, we need to make sure we share it with the team.

Don't try to create excuses if the information is not great, we are smart enough to see through management's smoke screens.  This is the perfect opportunity to use some A3 Problem Solving.  Use the results to strengthen your system and processes, and celebrate your successes once in a while.


What results have you seen with your improvement planning?

Lean Flow and Employee Involvement

There is no shortcut or back road to Lean transformation, it's not a journey you make on your own change, and it's not a top-down only effort.  But you have some busy people that can help you navigate in the dark, they are your employees.  How many of us remember when work arguments were won based on volume and creative profanity instead of the facts and data of the situation? The yelling may have diminished, but I'm not sure we are all in for using facts and data.

We do know that it is rough out there, but this is not the time to hide in the office and wait for the dust to settle.  Now is the time to look at how we do things to better meet customer needs and expectations.  We know that Lean is based on the Toyota Production System and part of the foundation is "Respect for People".  Everywhere I have worked, Leadership says that "People are our most important asset".  Does anyone know what that really means?

Lean Transformation Model

As you notice from the model we start with choosing one of our products and ask the team what they think their customers would say about that product.  We need to go talk with the customer also, but this gives us a starting point.  Share this information with the team, it may shock or surprise them (or confirm what they know) but the truth will be there out in the open.  Think about how these truths align with the 4P's.

When we map and measure the processes that support a product we are using the team not only to uncover the hidden processes we use, but so we all have a common understanding how we construct that product.  There will be human interactions the team may not have experienced before and you need to be ready to lead them through the various situations.  Make sure you attempt to includes everyone's voice.  Even your hard working introverts that are not sitting at the table (there they are along the wall) have something to say.

If you have adequately defined the flow problem and identified the most likely direct root causes, ask your team members for their suggestions to overcome the causes.  Some of the team may have been through that type of problem and could have the answer.  Try the solutions before any wide-scale implementation to uncover any constraints you may not have anticipated.  One person on the team, or the boss, will not have all of the answer that is needed, but each person may have a piece of the answer and it is up to you to create the picture of the new process.

Once you have the solution implemented, track the performance and share the results with the team.  This should be displayed on a board in a common area and where you hold team meetings.  You may even be able to connect that information with customer surveys or financial analysis.  Share the before and after data with the team to show them their efforts are making a difference.

What has been your experience working with teams or being on a team that improved one of your processes?

Change Fundamentals

“Change makes me feel uncomfortable.”

“Change is hard.”

“We don’t need to change, everything is fine.”

I’m sure you have heard these before, maybe even said something like this.  But now you are in a position of Leadership or you are responsible for the activities of a team and you see that you’re not reaching the performance levels you need to get ahead.  Money Girl may be scheduling meetings with you twice a week to discuss your budget numbers.  You could be meeting twice a day and that is not going to solve your problems.

This model is used help align groups of people to specific results and keep them within the left and right boundaries of their tasks and responsibilities.  The Beliefs of the individuals on the teams will lead to the Behaviors which drive their Actions that produce Results.  This helps to show why people think “Change is hard” and you do not see the Results.  Turning the team around is not only your responsibility; it’s in your skills toolbox.

The first step is the hardest because the team’s lack of momentum has anchored them to the past.  Did they win a team performance or safety award ten years ago?  Does your team currently perform the best in the branch but their internal competitors should all be sent back to the farm team?  You may find the team is the “cream of the crap” and this is never a nice realization.

You need to find out what the team Believes.  Do they really know their performance or want to know?  Do they believe they have the ability or permission to make change?  Do the team members have the skills, knowledge, and ability to perform the work that is being asked of them?  And there are more questions you could ask based on your industry or location.

Beliefs are the hardest to change; many were shaped by past experiences.  You will be battling against previous good or bad managers, corporate cultures, left-wing professors, and perhaps an undesirable work ethic.  Some team members will be easy to shift and a small number, if any, will probably need to be released back to wild.  Jim Collins talked about having people in the right seats on the bus, assuming they are on the right bus to begin with.

Tools to help Leaders re-align the individual’s and team’s Behaviors are the Company’s Vision, Mission, Goals and Objectives.  Do your team members know how and where they fit in the Vision and Mission?  This may take some exploration with the team and your Leadership.  I have seen teams try to determine how they fit, review this with Leadership and are sent back being told to try again.  This is not a catastrophic event as long as you can show you are learning from the experience.

Goals and Objectives play a large part by providing a basis for measuring the team.  Remember that not every team will have Objectives for every Goal, and try not to overthink your importance to the site but be open to how everyone fits together.  Goals should link Objectives to the Vision and Mission.

Measuring the team’s current performance to the Goals and Objectives can be an enlightening event that will drive the team to Action.  Don’t just print the chart and stick it on the wall, share it with the team and ask questions that lead to sustained high performance.  Using A3 Thinking helps to document what the team is experiencing and how they can learn by evaluating the low and high performance times.  This learning is documented in the team’s standard work, SOP, or Desk Guide and is used for training new team members.

These Actions will create Results with increased performance, higher levels of predictability, and increased team moral.  We are not just robots moving paper from one pile to another pile; we are thinking creatures with drive and a desire to make customers happy with the products we provide.  The processes we work in will not improve on their own, they require the ingenuity and creativity we have in all of us to make change.  It is there, just waiting to flourish.

How have you seen or experienced a change in hearts and minds?

Poke-Yoke the Engineers

Being an engineer and forced into a box did not "feel" right.  How am I supposed to use my technical creativity to take these requirements and turn them into something you can hold in your hand?  Get away from me with your process stuff, I'm here to (hold up your shield) support the customer!!

I acted this way for a time while adjusting from being a recent college graduate to a responsible and productive member of society.  I had my office, with three computers, bookshelves full of component specs and design books, and my attitude of "THESE HANDS WERE TOUCHED BY GOD!!".  Obviously those people don't understand my brilliance and I must dumb-down my methods to meet their level of intelligence.  Now, if I could automate the human out of the equation quality and productivity would instantly improve.

Wow!! Was I really that full of myself?  I don't think I was very helpful during that time in my career.  I had just left Uncle Sam's Misguided Children two years before and graduated with my Manufacturing Engineering degree a few months prior. I had a few career successes and my level of confidence in my abilities were over-the-top.  I had lost my touch with reality and the work relationships suffered.

It only took a project or two to learn that my work produced a product that was needed for another team on the floor and their success (read as OUR success) was based on how well I performed, not just technically but to their schedule. I learned there was enough variation in my output to disrupt everything on the floor when I worked in my own smoke-stake or rice bowl.

We started by paying attention to the feedback coming from the floor.  How often were they coming back for us to fix something, how much time was spent during changeover, and how often did we deliver our products late to their need?  Simple, but powerful measures to gauge performance.  When we analyzed the data coming from the floor, we found the enemy and he was us.

Continuous Learning Cycle

Our first move was to document changes being made on the fly and changes being made at our desks.  Most of the changes had been made on the floor, which hid most of the problems and the information showed us how bad our product was.  A picture began to form showing what exactly who the culprits were and they were quickly standardized through our purchasing department.

Next we checked all our computers to ensure we were all connected to the right data sources.  Some had "drifted" off course and was quickly realigned to master libraries.  We saw a vast quality improvement after the last of the "bad" product had gone through the system.  It looked like the worst was behind us, but in reality we were still in a fragile state.  We still needed to update our standard desk guides.

When we stabilized our output, we began to chance variation in the inputs.  The design engineers had their design software connected to standard data sources linked to our MRP system.  We tracked our requests to them to fix their problems, shared that data in a professional manner, and saw results.  We found problems in the MRP system also and many times the reason was they did not think that option mattered to anyone.

It is great to feel like the hero that saves the day, but after a while we get tired of the same old problems.  It looks like no one cares when things do not improve on their own.  We live in the information age, and when there are problems with the information flow we have to address those to closure.

What has been your experience working in the data flow?  Have you seen improvements over the last few years?

What Are Belts and What Do I Do With Them??

Back in the late 90's, before Lean Guy and Money Girl were on the team, you may have worked in a factory with someone who said they were a Green Belt or Black Belt.  I'm sure you responded with some kind of Bruce Lee move or a Chuck Norris fact.  The Belt probably mentioned the F-Test, and you giggled, or talked about your misapplication of ANOVA because your data is obviously exhibiting a Weibull distribution.  You probably rolled your eyes and walked away shaking your head.

In today's environment the Belt is required to be more than a DOE expert.  The type of Belts you have should drive the activities being pursued.  The American Society for Quality may hold a standard for Green Belts and Black Belts, but many companies have developed their own standards for their own needs at the the amount of money they want to spend.

So what are these different Belts and what can they do for you and your operations?

Looking across the organization at external suppliers and customers are Master Black Belts or experienced Black Belts.  These people work with executive leadership and management to help identify and prioritize opportunities to improve flow, cycle time, quality, customer satisfaction, or other Voice of the Customer.  Their tool boxes may contain Learning to See Value Stream Maps, House of Quality or Lean Function Deployment, and have the ability to lead any team through any problem no matter where it exists in the organization.  Master Black Belts also develop training, and teach and mentor Black Belts.

Black Belts are equipped to solve problems across organizations in one site.  They can lead projects or 3P events that are larger in scope from a VSM, teach and mentor Green Belts, execute design of experiments, and design processes with less waste and variation.  Properly motivated Black Belts may be the best choice to fill Leadership positions since they are not afraid of metrics.

Green Belts can be thought of as people in the best position to learn about the operations.  They can handle small scope problems like quality defects or long cycle times on the operations.  Any of the statistical tests can be executed in a well-known spreadsheet and process flows can be analyzed on the wall.  High-powered statistical and simulation software is not required for Green Belts.

The Belts are simply people with the skills and knowledge to make good change.  The difference is in the scope and tools.  Think golf ball size scope & tools for Green Belts, beach ball size for Black Belts, and a row of beach balls for Master Black Belts.

Important message to Leadership!

Pulling the Belts into action requires Vision and Direction, two products Leaders need to have in their pockets at all times.  Unless you have some sick addiction to being the best fire-fighter, you should know where you are leading the organization.  This is a plan that can be monitored visually.  As problems are eliminated, record them on an A3 and reward good behavior.

These important skills and knowledge are being paid for and many Belts are standing by and ready to be put in the game.  Leadership's task is to have a well defined problem statement and SMART goals.

What has been your experience in getting pulled into the flow to make good change?

Costs Saved or Avoided?

Improvement opportunities in the office are everywhere; document reviews and the resulting rework, quarterly or monthly tasks that are late, and the amount of money spent on printing paper that ends up in the recycling bin, just to name a very few.

Sometimes Continuous Improvement teams have to justify their existence so they set financial targets.  Usually something bold like 1-2% of budget or 5-10% of salary (that's not really bold).  These become very interesting when the Lean Guy asks how much is a minute of downtime worth in our office processes or to show the metrics?  This turns into Lean Transformation only by project, not at the enterprise, and starts the familiar battle between two obvious allies, the Lean Guy and the Money Girl.

When charters are created and signed off by the Project Sponsor, we have to go create the "business case" for the projects.  This is usually a half dreamed up estimate with a shaky basis to a disco beat.  Enter Money Girl with her list of questions and the first one revolves around how much money can she have back at the end of the project.

Lean Guy's or Project Sponsor's first response is, "This is all cost avoidance".  Which is code for, "You ain't getting any of this money back" or "You slashed our budget last year".

Let's first have a common understanding of the terms, and this will work in almost any environment whether it's manufacturing, health care, design, government, or services.
1.  Cost Avoidance - This is where we decide to keep any money saved to use on other projects, or we were already overrunning budgets and this project brings us a step closer to even.
2.  Cost Savings - This is where we are going to return some amount of the savings back to the provider.

Cost avoidances can show up as improvements to Cost of Poor Quality.  This cost is usually comprised of rework costs, repair costs, and scrap costs, and all three of these are comprised of unplanned labor and material.  In the office processes rework will outweigh the other two as they are usually associated with manufacturing.

As we consider the amount of rework in our processes we use the amount of time we are actually touching the things we are creating and was kind of material we are using.  Material is easy to calculate as it is the number pages you printed before you stop seeing your document return for more rework, multiplied against the printing costs per page.  This number can be found online or provided by your handy-dandy IT Helpdesk friends.  Try not to pass out when you see the number and when blood is pumping again into your head, don't call the IT people to scrap all the printers.  Think about how to make information portable.

Another will come from the variation in the different ways the different team members perform the same task.  This may be measured in minutes or hours, but this needs to be one of your measures.  You can pull time & date stamps if you use an automated work-flow control system or email.  When you have a well documented baseline, share it with the team, maybe pull out a fishbone and ask why a few times.  When you begin developing a solution remember that email is not an automated work-flow control tool.

Cost savings arrives in the form of performing better than budgeted or projected.  This will be simple to calculate and defend if this can be applied to the cost of the product going to the paying customer.  If the new performance does not manifest increased demand, then you may find yourself overstaffed.  This is a great opportunity to think about other ways to add value to the internal products, or see if opportunity exists elsewhere in the firm.

Keep in mind that LEAN is not an acronym for Less Employees Are Needed.  I have seen this model used without improving the flow or scope of work tasks and within a short time the number of people were back to original levels.  This type of activity reduces the trust in you from your team members and would be labeled as L.A.M.E., a concept developed by Mark Graban, a blogger at Lean Blog.

If we are going to sell your improvement as a cost savings, there should be a reduction in the final price of the product for manufacturing or service organizations, or elimination of unneeded assets, or reduction in the tax rate for tax payers.  If the money is "intercepted" and used somewhere else, this is no longer a savings.

Although money is a great way to talk about projects, Lean Transformation is reflected in the Customer and the employees working in the information processes.  Don't ignore elimination of the other wastes just because you cannot quantify a financial figure.  If reducing the wait time a report experiences in the flow improves customer satisfaction, then you learn what you can about the flow stopper and improve your process.

What are your thoughts and what have you experienced?