Building a Lean Enterprise:
Navigating the Common Obstacles
to Success
May 13, 2010
Company

LOGO
Your Instructor
 Provides Lean transformation
support to non-manufacturing
settings.
 Co-author, The Kaizen Event
Planne...
You will learn…
 How to establish a five-year improvement plan.
 Essential organization-wide learning needs.
 How to ac...
Do not underestimate the degree of
learning, patience and resources
needed to experience success!

© 2010 Karen Martin & A...
Obstacles to Success

Problem: Weak or No Leadership Buy-in;
Attempting a Grass-Roots Effort

© 2010 Karen Martin & Associ...
The Executive Champion(s)

© 2010 Karen Martin & Associates

6
Obstacles to Success

Problem: No Sense of Urgency

© 2010 Karen Martin & Associates

7
The Journey Begins
Create and communicate
a sense of urgency /
burning platform





“Why should we care?”
The delicat...
Establish a Sense of Urgency
 Shrinking margins
 Customer dissatisfaction
 Shrinking market share
 Rising costs
 Incr...
Obstacles to Success

Problem: Non-Existent or
Unrealistic Strategy

© 2010 Karen Martin & Associates

10
Develop a Strategic
Improvement Plan

In many organizations, there is fairly
significant disconnect between what they
aim ...
Five-Year Plan
1. Where are we now (in terms of performance)?
2. Where do we want to be?
3. What’s it going to take to get...
Establishing a Strategic
Improvement Plan
Tied to business goals / strategic plan
How much? How fast? Priorities?




...
Achieving Optimal Performance

Quality
Morale

Cost
Optimal
Performance

Safety
© 2010 Karen Martin & Associates

Delivery...
Lean as a process design technique
Hoist Rig Up Spaghetti Diagram
Before Kaizen Blitz Improvements
Estimated distance walk...
Lean as a business management
approach

© 2010 Karen Martin & Associates

16
Building a C.I. Culture
Years 5 & Beyond
Company-wide engagement –
everywhere, all the time

Support needed only for
audit...
Obstacles to Success

Problem: Lack of Alignment
Around the Improvement Strategy

© 2010 Karen Martin & Associates

18
Create a Lean Steering Committee?
Role














Gather improvement ideas from across the enterprise.
Evalu...
Lean Steering Committee
Composition - 10 people max



Cross-functional
Mixed perspectives (sr. leadership, middle
mana...
Obstacles to Success

Problem: Lack of understanding;
Missing skills

© 2010 Karen Martin & Associates

21
Largest Obstacle to Success:
Lack of Understanding & Skills
Lack of training
Ineffective training




Poor timing - La...
“Hooking” People into Improvement

“You had me at hello.”
© 2010 Karen Martin & Associates

23
Spectrum of Learning
Continued
Learning

Proficiency

Skill
Development

Deeper
Understanding

Behavioral

Intellectual

A...
Largest Obstacle to Success: Lack of
Understanding & Skill Development
 Leadership




Initial ½-day to full-day overv...
Improvement Professionals’
Learning Needs – The Basics
 Business


Finance, sales & marketing, operations, etc.

 Your ...
Improvement Professionals’
Learning Needs (continued)
General





Process management
Project management
Communicatio...
Improvement Professionals’ Learning Needs –
Tactical Tools

Process
Stabilization
Tools
Improvement Professionals’ Learning Needs –
Tactical Tools

FlowEnabling
Tools
Professional Development for
Improvement Resources
University-based


University of Michigan; Ohio
State;University of K...
Organization-wide Learning
Lean foundation tools









Tools: Work standardization, error-proofing, 5S & visual
m...
Obstacles to Success

Problem: Inadequate improvement
resources

© 2010 Karen Martin & Associates

32
Improvement Resources
Internal



Dedicated vs. shared responsibility
Quantity

External



Training & development
L...
How many dedicated resources?
Ultimately 3-5%, per GK.
Examples




2,400 employee org has 4
dedicated resources and
1...
Obstacles to Success

Problem: Slow results

© 2010 Karen Martin & Associates

35
Year One
Experience quick successes




Requires skilled professionals – if not internal, then
bring in external suppor...
Year One – Quick Successes
Select 1-3 value streams, based on business need



Select executive sponsors and/or value st...
Obstacles to Success

Problem: Results not
communicated

© 2010 Karen Martin & Associates

38
Communication Options
Intranet
Closed circuit LCDs
Posted / Visual




Improvement boards
Break rooms
Hallways

Pay...
Obstacles to Success

Problem: Processes not monitored
and continuously improved

© 2010 Karen Martin & Associates

40
Process Management
 Process Owner


Monitors KPIs (key performance indicators)
 2-5 max
 Types









Operati...
Obstacles to Success

Problem: Everything waits for a
Kaizen Event

© 2010 Karen Martin & Associates

42
Blue = Improvements that do not require help from others.
Yellow = Improvements that require help from others.
Shingo-Prize Winning Company’s
Suggestion Program
For ideas that require help from other departments:
1. The employee comp...
Recognition board includes photos of the improvement and the suggestor’s name.
Names from successful improvements go enter...
Shingo-Prize Winning Company’s
Suggestion Program
For ideas that do not require help from other
departments:
1. The employ...
Obstacles to Success

Problem: Workforce remains
disengaged; improvement resources
are expected to “do for others”

© 2010...
Breaking Old Habits
Define facilitator for all


Coach and teacher vs. “do-er”

Communicate improvement resources’
role...
You will learn…
 How to establish a five-year improvement plan.
 Essential organization-wide learning needs.
 How to ac...
The Transformation Process:
Key Success Factors
Strong sense of urgency / burning platform
Leadership alignment around s...
For Further Questions

Karen Martin, Principal
7770 Regents Road #635
San Diego, CA 92122
858.677.6799
ksm@ksmartin.com

©...
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Building a Lean Enterprise: Navigating the Common Obstacles to Success

  1. Building a Lean Enterprise: Navigating the Common Obstacles to Success May 13, 2010 Company LOGO
  2. Your Instructor  Provides Lean transformation support to non-manufacturing settings.  Co-author, The Kaizen Event Planner: Achieving Rapid Improvement in Office, Service, and Technical Settings Co-Developer, Metrics-Based Process Mapping: An Excel Solution Lean Enterprise Program Instructor University of California, San Diego Karen Martin, Principle, Karen Martin & Associates 2
  3. You will learn…  How to establish a five-year improvement plan.  Essential organization-wide learning needs.  How to accelerate results via organization-wide 5S/ Visual Management, Standard Work, & Error-Proofing activities.  The benefits of establishing a Lean Steering Committee.  How to develop a kaizen culture that generates “single hits,” while also achieving home runs and grand slams.  How to establish an infrastructure that builds organizational competencies, while generating measurable results.  The importance of building a foundation for success even if you’ve been on the Lean journey for years. © 2010 Karen Martin & Associates 3
  4. Do not underestimate the degree of learning, patience and resources needed to experience success! © 2010 Karen Martin & Associates 4
  5. Obstacles to Success Problem: Weak or No Leadership Buy-in; Attempting a Grass-Roots Effort © 2010 Karen Martin & Associates 5
  6. The Executive Champion(s) © 2010 Karen Martin & Associates 6
  7. Obstacles to Success Problem: No Sense of Urgency © 2010 Karen Martin & Associates 7
  8. The Journey Begins Create and communicate a sense of urgency / burning platform    “Why should we care?” The delicate balance between motivating and inducing fear Data sells! © 2010 Karen Martin & Associates 8
  9. Establish a Sense of Urgency  Shrinking margins  Customer dissatisfaction  Shrinking market share  Rising costs  Increased domestic and/or global competition  Desire to absorb growth without adding commensurate staffing  Impending acquisition  Safety and quality slips  Reduced innovation © 2010 Karen Martin & Associates  Staff burnout  Rising turnover  Regulatory pressure / compliance issues  Rising litigation  Social, economic, environmental, or political pressures  Downward performance trends (in speed and/or quality)  The unknown 9
  10. Obstacles to Success Problem: Non-Existent or Unrealistic Strategy © 2010 Karen Martin & Associates 10
  11. Develop a Strategic Improvement Plan In many organizations, there is fairly significant disconnect between what they aim to achieve with Lean and the way they go about achieving it. © 2010 Karen Martin & Associates 11
  12. Five-Year Plan 1. Where are we now (in terms of performance)? 2. Where do we want to be? 3. What’s it going to take to get there?       Expertise / guidance Learning / workforce development Time Resources Strong communication Leadership © 2010 Karen Martin & Associates 12
  13. Establishing a Strategic Improvement Plan Tied to business goals / strategic plan How much? How fast? Priorities?   Evolution vs. revolution Establish clear goals and objectives.  What do you hope to achieve with Lean?  Within what time period?  What does that future state look like?  How does it feel?  What is it like to operate in that future state?  How will we measure our success? © 2010 Karen Martin & Associates 13
  14. Achieving Optimal Performance Quality Morale Cost Optimal Performance Safety © 2010 Karen Martin & Associates Delivery 14
  15. Lean as a process design technique Hoist Rig Up Spaghetti Diagram Before Kaizen Blitz Improvements Estimated distance walked during Rig Up = 3095 ft Diagram follows the Floor Hand and does not include moving the A-Frame Rig Up Time = 90 minutes Florida Hospital DeLand Discharge Process - 2A Pilot VAlue Stream Champion: Nancy Clark Future State Value Stream Map 1/26/2010 Customer Demand (2A Only): 8 discharges/day; 55/week; 2,860/year (Takt Time = 26.2 minutes) Patient Relieve nursing from transporting nurse-collected specimens to lab Perform / Improve Med Rec at admission Process Blocks Additional Cerner Training Canopy Green border = Value-Adding Yellow border = Necessary Non-Value-Adding Red border = Unecessary Non-Value Adding Cerner Kaizen Improvement Bursts Implement Discharge Huddles Clear Patient Relieve Nursing of Patient Transportation Case Management %C&A = 99% Create Standard W ork for Entire Process Clear Patient; Create Transfer Packet (if needed) Implement Visual Tracking Enter Order Streamline Attending/Consult Communication Primary Nurse Primary Nurse PT: 1 mins. %C&A = 99% Note: Ongoing 1 mins. Hold Discharge Huddle Enter DC Info (Depart I) Case Mgr & Charge Nurse Primary Nurse PT: 15 mins. %C&A = 90% 15 mins. PT: 10 mins. %C&A = 90% 10 mins. Before: 3,095 feet walked Transport Patient Error-Proof Disposition Codes HUC PT: 1 mins. %C&A = 99% Write Order; Complete Paper Med Rec Phy sician PT: 30 mins. %C&A = 80% 30 mins. © 2010 Karen Martin & Associates Perform Med Rec; Print DC Packet Primary Nurse PT: 20 mins. LT: 40 mins. %C&A = 50% 40 mins. 20 mins. Messengers 0900-0430 Nursing 0430-0800 PT: 5 mins. %C&A = 99% Error-Proof Med Rec %C&A = 99% Add Pt. to Discharge Board; Update as Needed AFrame Purple = RIE-1 Blue = RIE-2 Orange = Project (Owen) Green = Leadership (Opal & Daryl) Prepare Patient Primary Nurse PT: 15 mins. LT: 30 mins. %C&A = 80% Remove Equip & Items w/ Meds/Body Fluids; Call EVS; Discharge Patient Discharge Patient Primary Nurse PT: 1 mins. LT: 1 hrs. %C&A = 99% P/U HUC 2.0 hrs. 5 mins. Water EVS PT: 5 mins. LT: 2 hrs. %C&A = 90% 30 mins. 15 mins. Clean Room; Change Bed Status to Available 60 mins. 1 mins. PT: 30 mins. LT: 60 mins. %C&A = 95% 60 mins. 30 mins. Lead Time (LT) = 6.1 hrs. Process Time (PT) = 127 mins. % Activity = 34.7% Rolled First Pass Yield = 21.7% Power Pole 15
  16. Lean as a business management approach © 2010 Karen Martin & Associates 16
  17. Building a C.I. Culture Years 5 & Beyond Company-wide engagement – everywhere, all the time Support needed only for audits, bandwidth gaps, continued learning “Life is Good” Stage • Daily kaizen is the norm • “Action now” dominates • Most processes are stabilized with minimal waste and output variation “Settling In” Stage Years 3 & 4 More staff engagement – reduced need for formal Kaizen Events Years 1 & 2 Small percentage of staff engaged – project-based Light support from seasoned improvement professionals Heavy support from seasoned improvement professionals • Demonstrating learned competencies • Process owners manage performance • Becoming more proactive “Disruption” Stage • Sensei-dominated • Much mentoring & learning • Heavy use of Kaizen Events • Many issues to be resolved 17
  18. Obstacles to Success Problem: Lack of Alignment Around the Improvement Strategy © 2010 Karen Martin & Associates 18
  19. Create a Lean Steering Committee? Role           Gather improvement ideas from across the enterprise. Evaluate & prioritize improvement opportunities (closely tied to annual business goals). Enable alignment across leadership team. Communicate upcoming improvements and outcomes. Aid in necessary culture shift. Assure ongoing process measurement and continuous improvement is occurring. Determine ongoing workforce development needs. Stay informed about competing priorities and shift improvement focus accordingly. Allocate resources. Assess progress and adjust as needed. © 2010 Karen Martin & Associates 19 © 2010 Karen Martin &
  20. Lean Steering Committee Composition - 10 people max   Cross-functional Mixed perspectives (sr. leadership, middle management, improvement resources) Meeting Frequency – scaled back over time    Monthly for first year or two Possibly quarterly for years 2-5 Disband in year 5, if organizational DNA is “set” © 2010 Karen Martin & Associates 20
  21. Obstacles to Success Problem: Lack of understanding; Missing skills © 2010 Karen Martin & Associates 21
  22. Largest Obstacle to Success: Lack of Understanding & Skills Lack of training Ineffective training   Poor timing - Large gap between classroom content and real-world application Inappropriate content – too much, too little, etc.  Establish clear learning objectives – what should participants be able to do after the training?   Does Sr. Leadership really need to go through green belt training? Improvement professionals need to be proficient in ALL Lean tools and leading change  No application – learn-do is vital!  All principles and tools and no “sales” (here’s what Lean can do for us) © 2010 Karen Martin & Associates 22
  23. “Hooking” People into Improvement “You had me at hello.” © 2010 Karen Martin & Associates 23
  24. Spectrum of Learning Continued Learning Proficiency Skill Development Deeper Understanding Behavioral Intellectual Awareness © 2010 Karen Martin & Associates 24
  25. Largest Obstacle to Success: Lack of Understanding & Skill Development  Leadership    Initial ½-day to full-day overview Reflection and continued learning every six months Required reading – The Toyota Way and others  Middle management  Eventually at least a 2-day overview about key principles and process management  Frontlines   Eventually at least a 2-hour overview about key principles Heavy emphasis re: “what’s in it for me?”  Improvement resources  Significant development © 2010 Karen Martin & Associates 25
  26. Improvement Professionals’ Learning Needs – The Basics  Business  Finance, sales & marketing, operations, etc.  Your industry     Your customers Your competitors Regulatory and political environment Market trends  Your company / organization      SWOT (strengths, weaknesses, opportunities, threats) Revenue streams Cost structure Business goals Leadership concerns (and other key stakeholders) © 2010 Karen Martin & Associates 26
  27. Improvement Professionals’ Learning Needs (continued) General     Process management Project management Communication Countering resistance Lean Philosophy    Value, Value Stream, Flow, Pull, Seeking Perfection PDCA Workforce engagement © 2010 Karen Martin & Associates Analytical and Execution Tools        Key Lean Metrics A3 Management Root Cause Analysis Value Stream Mapping Metrics-Based Process Mapping Spaghetti diagrams Kaizen Events 27
  28. Improvement Professionals’ Learning Needs – Tactical Tools Process Stabilization Tools
  29. Improvement Professionals’ Learning Needs – Tactical Tools FlowEnabling Tools
  30. Professional Development for Improvement Resources University-based  University of Michigan; Ohio State;University of Kentucky; University of Tennessee; San Diego State University; University of California, San Diego In-house certificate programs or singlesubject workshops Workshops & conferences – LEI, AME, Shingo, ASQ, IIE, etc. Read, read, read… © 2010 Karen Martin & Associates 30
  31. Organization-wide Learning Lean foundation tools      Tools: Work standardization, error-proofing, 5S & visual management (using the PDCA method) Audience: middle managers to senior leaders Initial training: half to full-day session Assignment: Improve one area or one process; one month to complete Reporting & reflection A3 problem-solving development   20 max; 4-8 problem teams (owners) Skilled coach © 2010 Karen Martin & Associates 31
  32. Obstacles to Success Problem: Inadequate improvement resources © 2010 Karen Martin & Associates 32
  33. Improvement Resources Internal   Dedicated vs. shared responsibility Quantity External   Training & development Leading improvement activities  Observational learning + results generation  Coaching © 2010 Karen Martin & Associates 33
  34. How many dedicated resources? Ultimately 3-5%, per GK. Examples   2,400 employee org has 4 dedicated resources and 15 part-time trained facilitators. 1,200 employee organization has 6 dedicated resources. © 2010 Karen Martin & Associates 34
  35. Obstacles to Success Problem: Slow results © 2010 Karen Martin & Associates 35
  36. Year One Experience quick successes   Requires skilled professionals – if not internal, then bring in external support Don’t attempt to solve your toughest problems first – build “improvement muscles” Gain leadership support  Via education, experience, and results Familiarize the workforce to Lean principles and benefits Begin identifying and/or developing dedicated improvement staff. © 2010 Karen Martin & Associates 36
  37. Year One – Quick Successes Select 1-3 value streams, based on business need  Select executive sponsors and/or value stream champions Conduct proper value stream mapping activities, including the development of an actionable implementation plan  Execute the implementation plan   Heavy use of Kaizen Events to begin shifting culture, develop the workforce, and gain quick results © 2010 Karen Martin & Associates 37
  38. Obstacles to Success Problem: Results not communicated © 2010 Karen Martin & Associates 38
  39. Communication Options Intranet Closed circuit LCDs Posted / Visual    Improvement boards Break rooms Hallways Paycheck stuffers Company newsletter Meetings  Standing agenda item? © 2010 Karen Martin & Associates 39
  40. Obstacles to Success Problem: Processes not monitored and continuously improved © 2010 Karen Martin & Associates 40
  41. Process Management  Process Owner  Monitors KPIs (key performance indicators)  2-5 max  Types        Operational (Time & quality) Financial Customer / external stakeholders Employees / internal stakeholders Reports performance Leads continuous improvement as necessary Manager or lower is best © 2010 Karen Martin & Associates 41
  42. Obstacles to Success Problem: Everything waits for a Kaizen Event © 2010 Karen Martin & Associates 42
  43. Blue = Improvements that do not require help from others. Yellow = Improvements that require help from others.
  44. Shingo-Prize Winning Company’s Suggestion Program For ideas that require help from other departments: 1. The employee completes a yellow suggestion card and places it on the Improvement Opportunity Board under the “new opportunity” column for their department. Company-wide improvements are placed in the Company-Wide row. The department’s designated “improvement lead” reviews the suggestions and talks with stakeholder departments as needed. Company-wide suggestions are reviewed by the Lean team. 2. • • If OK’d, the improvement lead moves the card to the “in process” column, allocates resources, and the PDCA cycle begins. When the improvement is complete, the card is moved to the “completed” column. If not OK’d, the improvement lead contacts the employee directly and communicates why the suggestion won’t be implemented.
  45. Recognition board includes photos of the improvement and the suggestor’s name. Names from successful improvements go entered in a monthly drawing for prizes.
  46. Shingo-Prize Winning Company’s Suggestion Program For ideas that do not require help from other departments: 1. The employee completes a blue suggestion card, gets a manager’s 2. signature, and begins implementing the idea (via mini-PDCA). When the improvement is complete, the blue card is moved to the “completed column.” Recognition – – All the employees names for completed improvements (both yellow an blue) are entered into a monthly drawing for a gift card (movies, Starbucks, etc.) or T-shirt. Pictures of visual improvements with the employee’s name are placed on the “Wall of Fame.”
  47. Obstacles to Success Problem: Workforce remains disengaged; improvement resources are expected to “do for others” © 2010 Karen Martin & Associates 47
  48. Breaking Old Habits Define facilitator for all  Coach and teacher vs. “do-er” Communicate improvement resources’ roles and responsibilities Demonstrate through action Avoid having improvement professionals serve as the process owner  Audit function only to assess organizational learning, progress, and reporting © 2010 Karen Martin & Associates 48
  49. You will learn…  How to establish a five-year improvement plan.  Essential organization-wide learning needs.  How to accelerate results via organization-wide 5S/ Visual Management, Standard Work, & Error-Proofing activities.  The benefits of establishing a Lean Steering Committee.  How to develop a kaizen culture that generates “single hits,” while also achieving home runs and grand slams.  How to establish an infrastructure that builds organizational competencies, while generating measurable results.  The importance of building a foundation for success even if you’ve been on the Lean journey for years. © 2010 Karen Martin & Associates 49
  50. The Transformation Process: Key Success Factors Strong sense of urgency / burning platform Leadership alignment around strategy   Improvement priorities are closely tied to organizational strategy and annual business goals. Careful planning to avoid “implosion” and change fatigue Value-stream driven improvements. Heavy use of Kaizen Events in first 1-3 yrs. Dedicated improvement resources. Entire workforce receives exposure to Lean. © 2010 Karen Martin & Associates 50
  51. For Further Questions Karen Martin, Principal 7770 Regents Road #635 San Diego, CA 92122 858.677.6799 ksm@ksmartin.com © 2010 Karen Martin & Associates 51

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