Invisible Waste in Organizations – See the unseen blockages in Lean Transformation Presented at: Lean Management Congress 2009
Lean Transformation – Blockages Haven’t we faced? Thought over it??? But where is the obstacle?
What went wrong with Lean Transformation Million $ Question?
During Lean Implementation The 7+1 Waste1. Overproduction2. Waiting3. Transportation4. Over Processing visible! But these are Over the Carpet but5. Inventory is there Under what the Carpet?6. Motion7. Defects8. Unused Employee Creativity
What we know is far less than what we don’t• Take a closer look at your factory
Invisible Waste• You may pump in extra fertilizers or chemicals to make the plants grow.• But in turn it makes the soil infertile and unproductive.• It takes away the natural fertility of the ground.• The factor for infertility – Invisible Waste• They are found in either Value Creation or Value Stream.
Value Creation Value Stream• The invisible waste in Value Creation are of long term nature and are larger in impact.• They need huge changes in mindset in order to be eradicated totally.• The invisible waste in Value Stream is in the process and the systemic steps.• They can be brought out by severe observation and data analysis.
Policy & Procedures• Policy & Procedures – not revised for years• Lengthy and NVA procedure are discouraging• Policy not in place – people not in place• Decision Making is fuzzy if unclear policy• For ex. Policy to buy Machine and Hardware are same• Increase the supplier base over cost concerns, however actually you are buying variations
Culture• The set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group – unique to it• People visit Toyota – learn the tools employed• Toyota knows its culture cannot be copied• It is cultivated over a period of time• If not guided, then also there’ll be a culture• Build a Culture of Continual Improvement towards perfection
Culture .. How to Identify• What are we dealing with? Urgent – Important• How do we treat an Individual in every Transaction?• Trust Based Relationship (employer-employee)• Do we chat more about the person who is not there?• How is the Top Management?• Rituals, customs, anecdotes, success stories, artifacts• How is the furniture arranged, quotes on walls?• Beaurocratic, democratic, autocratic, open-door…..
Strategy• A strategy is a plan of action designed to achieve a particular goal (linked to Vision).• Strategy deals with the how part rather than the what.• Strategy gives the RIGHT Direction• You must know where not to delve• Vision will not help unless strategy is right• Growth strategy• Blue Ocean Strategy
Architecture of the Organization• Bigger Organization, higher is departmentalization• Micro Management – makes orgn. Sluggish• Every Link in the Pyramid is Useful• However, None faces the Customer• If architecture not right, you’re Structured to fail
Common situationManagement by push? Throw over the wall?
Measurement• Incentive should be based upon Value Addition• Production – up on all the cylinders, full throttle• Because higher figures, meant higher incentive• All produced is then stored – NVA• If Performance Management System is based on these figures• Lose a good supervisor, have a bad manager
Measure it to Improve it!!• Accounting – Rework is not counted• Month End Syndrome, Quarterly results – Fire Fighting• Budget Driven – measuring the other end• Still Measuring the Bottom Line as SalesUSE A HOLISTIC APPROACH• Balanced Score Card – Norton & Kaplan• Throughput Time is useful measure for all
Entrenched Paradigm• The significant problem cannot be solved from the same level of thinking that created it.• Think of a Paradigm Shift as a change from one way of thinking to another.• Its a revolution, a transformation, a sort of metamorphosis.• It just does not happen, but rather it is driven by agents of change.• Shift is not for others, it’s for you to begin with
Transformation Model SEE Shift in ParadigmCustomer SatisfactionProductivityProfit Improving Needs Process Principles GET DO Results Behavior Change
Communication Mobiles Media Internet Blackberry• High-Mesh communication – but Messed up
“Talk” is not Communication!• Sending Mails everyday – but no connection• No morning wishes - barrier to communication• Hiding the problems• Pink Elephant – Everyone knows but no one talks of it• Open Door Policy
Knowledge Management• Organizational Learning• Knowledge Transfer to next generation of employees• Make it simple• Excellent Knowledge Mgmt. – reduced chances of repeated errors• Teach and Train others swiftly• New Employee Induction becomes easy• Operations become operator’s knowledge independent