Building a Lean Enterprise: Navigating the Common Obstacles to Success

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
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

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

Do not underestimate the degree of
learning, patience and resources
needed to experience success!


4

Obstacles to Success

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


5

The Executive Champion(s)


6


Problem: No Sense of Urgency


7

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!


8

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

 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


Problem: Non-Existent or
Unrealistic Strategy


10

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.


11

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


12

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?


13

Achieving Optimal Performance

Quality
Morale

Cost
Optimal
Performance

Safety

Delivery
14

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.


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

Lean as a business management
approach


16

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


Problem: Lack of Alignment
Around the Improvement Strategy


18

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.


19
© 2010 Karen Martin &

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”


20


Problem: Lack of understanding;
Missing skills


21

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)

22

“Hooking” People into Improvement

“You had me at hello.”

23

Spectrum of Learning
Continued
Learning

Proficiency

Skill
Development

Deeper
Understanding

Behavioral

Intellectual

Awareness

24

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


25

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)


26

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


Analytical and
Execution Tools









Key Lean Metrics
A3 Management
Root Cause Analysis
Value Stream Mapping
Metrics-Based
Process Mapping
Spaghetti diagrams
Kaizen Events

27

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 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…


30

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


31


Problem: Inadequate improvement
resources


32

Improvement Resources
Internal



Dedicated vs. shared responsibility
Quantity

External



Training & development
Leading improvement activities
 Observational learning + results generation



Coaching


33

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.


34


Problem: Slow results


35

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.

36

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

37


Problem: Results not
communicated


38

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

Improvement boards
Break rooms
Hallways

Paycheck stuffers
Company newsletter
Meetings


Standing agenda item?


39


Problem: Processes not monitored
and continuously improved


40

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


41


Problem: Everything waits for a
Kaizen Event


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 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.

Recognition board includes photos of the improvement and the suggestor’s name.
Names from successful improvements go entered in a monthly drawing for prizes.

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.”


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


47

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


48

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.


49

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.


50

For Further Questions

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


51

Building a Lean Enterprise: Navigating the Common Obstacles to Success

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