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Lean Transformation


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This presentation was done at the MD&M West Conference in Anaheim, CA on 2/11/15. In it, we explain why most lean programs fail to produce lasting results, why a lean transformation model should be based on Key Process Indicators (KPI) and Key Behavioral Indicators (KBI), how strategy deployment and A-3 thinking can be used to cascade metrics and goals down to the front lines, and how to operationalize lean daily management and daily Kaizen using A-3 and the Improvement Kata

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Lean Transformation

  1. 1. Lean Transformation for Medical Device Development and Manufacturing Lean Leadership: Anchoring Organizational Values To Lean Principles Darren Dolcemascolo Ken Flaherty
  2. 2. Agenda and Objectives 2  Introduction – Lean and Why Lean Efforts Often Fail to Yield Long Term Results  Lean Transformation – Bridging the Gap  Anchoring Values to Lean Principles, Aligning Principles to Systems, and Using Tools to Create Great Systems  Lean Leadership  Role of A Lean Leader  Managing for Daily Improvement  Q&A ObjectivesToday’s Agenda  Understand why most lean programs fail to produce lasting results.  Understand Why a Lean Transformation Model Should be Based on Key Process Indicators (KPI) and Key Behavioral Indicators (KBI)  Understand How Strategy Deployment and A-3 Thinking Can be Used to Cascade Metrics and Goals Down to the front lines  Understand How to Operationalize Lean Daily Management and Daily Kaizen using A-3 and the Improvement Kata
  3. 3. Introduction: What Lean Means Taichi Ohno once said, “All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash, and we are reducing the time line by reducing the non-value adding wastes.” But, he also said: “The Toyota style is not to create results by working hard. It is a system that says there is no limit to people’s creativity. People don’t go to Toyota to ‘work’ they go there to ‘think’.”
  4. 4. Goal: Highest Quality, Lowest Cost, Shortest Lead Time Best Safety, High Morale Just In Time Right part-Right amount-Right Time Jidoka Quality at the Source •Line Stop •Visual Controls •Error Proofing •Andon •5 Whys Operational Stability Standardized Work PM/ TPM 5S Leveled Production •Flow •Takt Time •Pull •Quick Changeover Lean: Toyota Production System Flexible, Capable, Highly Motivated People
  5. 5. Observations About Lean “Programs”  Executive Management often expresses a desire to “implement” lean practices for cost reduction, inventory reduction, faster time to market, etc.  Initial Rapid Improvement Events (Kaizen Events) yield promising results.  After a short period of time, level of engagement decreases.  There is a return to the status quo before “Lean Implementation.”
  6. 6. Why Does Lean Fail to Yield Long Term Results  No Strategy and/or No method for cascading strategy from the boardroom to the front lines  No Way to Tie Company Guiding Principles to Actual Day to Day Activities.  No System for Daily Kaizen (Continuous Improvement)  No System for Daily Management  Little or No Leadership Engagement  “Expert” Driven / No Front-Line Engagement  Focus on “Implementing Tools” Rather than Solving Problems
  7. 7. Closing the Gap
  8. 8. VALUES govern BEHAVIOR PRINCIPLES govern CONSEQUENCES thinking behaviorCore values Anchored to Guiding Principles Desired CULTURE“If principles govern consequences, value principles.” - Steven R. Covey What we value Thinking beliefs/attitude
  9. 9. GUIDING PRINCIPLES SUPPORTING PRINCIPLES Measure what Matters Align Behaviors with PerformanceCreate Value for the Customer Identify Cause & Effect Relationships See Reality Focus on Long TermCreate Constancy of Purpose Enterprise Align Systems Think Systemically Alignment Align Strategy RESULTS Stabilize Process Rely on DataFocus on Process Standardize Processes Embrace Scientific Thinking Insist on Direct ObservationContinuous Flow & Pull Value Focus on Value StreamImprovement Assure Quality at the Source Keep it Simple & Visual Seek Perfection Identify & Eliminate Waste Integrate Improvement with Work Empower & Involve EveryoneLead with Humility Cultural Enablers Develop People Respect Every Individual Assure a Safe Environment
  10. 10. Aligning the Organization
  11. 11. EXERCISE – Anchoring Principles
  12. 12. 1. Select an example of ONE of the Following: (Place on the left side of the grid) 1. Values (identify 3-4) 2. Strategic Objectives/Priorities (identify 3-4) 2. Select 3-4 Principles from ANY dimension (Place a check mark under the principle) 3. Identify key ROLE (L) Leader, (M) Manager, (A) Associate. EXERCISE – Anchoring Principles PART 1
  13. 13. 3. Describe ideal behaviors for each combination of principle and selected (value or objective) (One for each Role – L, M, A) L M A Focus Leaders define the strategic direction of the organization that captivates the voice of the customer using strategy deployment at all levels. Leaders routinely communicate the direction and transparently shares organizational performance to ALL levels on a regular basis. Managers communicate the strategic direction of the organization in a simple, visual manner with regular follow-up at the worksite. Managers engage in two-way communication to ensure associates understand how they affect the strategic direction in their area. Associates identify how improvements in their area link to the strategic direction and objectives of the organization. They also translate how the work they do impacts their area's goals and measures. L M Aleaders managers associates EXERCISE – Anchoring Principles PART 2
  14. 14. FOCUS HERE behavior behavior “Ideal behavior”behavior behavior TOOLS SYSTEMS PRINCIPLES Behavior can be… Frequency • Observed Duration • Described Intensity Scope• Recorded Role Levels of Observing Behavior
  15. 15. SPStrong Positive W Weak XNot Existent SNStrong Negative Assessment Scale
  16. 16. (Objectives) V.1 V.2 V.3 V.4 V.5 Key Behavior Indicators (KBI) Mission Vision Strategic Philosophy C.1 C.2 C.3 C.4 C.5 W.1 W.2 W.3 W.4 W.5 W.1 W.2 W.3 W.4 W.5 S.1a S.1b S.1c • Tool. 1 • Tool. 2 • Tool. 3 • Tool. 4 • Tool. 1 • Tool. 2 • Tool. 3 • Tool. 4 • Tool. 5 • SubSystem.1.1c • Tool. 1 • Tool. 2 • Tool. 3 • SubSystem.1.2c • Tool. 1 • Tool. 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 CE CPI EA R G G G G G G G G G G G G G G G G G G G G ❺ ASSESS Mapping Performance and Behavior for Alignment Key Performance Indicators (KPI)
  17. 17. • Identify existing culture • Describe the desired (ideal) culture • Translate the desired culture into specific behaviors • Align the organizational objectives, goals, & measures • Examine, adjust & monitor organizational structures and work processes (systems) Mapping for Alignment Continued
  18. 18. Where is Your Time Spent Top Management Middle Management Supervisor Front Line Associate Strategic Implementation (Breakthrough) Daily Management Kaizen 0% 25% 50% 75% 100% Percent of Time
  19. 19. What Lean Leaders Need to Learn  Managing from where the work takes place (gemba)  Developing themselves and others  Live the core values and principles (example; respect for people and continuous improvement)  Manage effectively from the gemba  Become a role model for discipline problem solving  Become a teacher and coach for disciplined problem solving
  20. 20. Daily Management System  What is your daily system for:  Understanding performance?  Modeling principle based behavior  Seeing waste and eliminating waste?  Discovering problems and resolving problems?  Continuously improving?  Coaching and developing staff?
  21. 21.  Visual Controls  Leader Standard Work  Managing Daily Performance  Managing Standard Work  Daily Problem Solving and Continuous Improvement  Employee Suggestion System  Start Up Huddles and Escalation Systems  Gemba Walks  Developing People / Coaching Elements of a Daily Management System:
  22. 22. Problem Solving Story Theme (subject) Background (Why I/We Chose Theme) Current Situation (Analysis of Problem(s) and Cause(s)) Countermeasures (to address causes(s)) Implementation Follow-Up (Review/Evaluation Results – Unresolved Problems) Future Actions (New Countermeasures and/or Standardization) Grasp The Situation Plan Do Check Act
  23. 23. A3 Problem Solving Report Story Theme: Answers the question, “What are we trying to do?” I. Problem Situation •The Standard •Current Situation • Discrepancy/Extent of the Problem Rationale for picking up problem (importance to business activity, goals and values of the organization) II. Target/Goal • Measurable description of what you want to change;quantity, time III. Cause Analysis Problem: Potential Causes Most likely direct cause Why? Why? Why? Why? Why? Root Cause: IV. Countermeasures (Resulting from Cause Analysis) • Temporary Measure • Long Term Countermeasure V. Implementation What Where Who When Action to Place Respons- Times, be taken ible person Dates Cost VI. Follow-up •Unresolved issues & actions to address them? •How will you check effects? • When will you check the effects? • How will you report your findings? •When will you report your findings?
  24. 24. Daily Kaizen Using the Improvement Kata  kata - a routine you practice deliberately; a pattern that becomes a habit.
  25. 25. The 5 Questions 1. What is the Target Condition? 2. What is the Actual Condition now? 3. What Obstacles do you think are preventing you from reaching the target condition? Which *one* are you addressing now? 4. What is your Next Step? (next PDCA / experiment) What do you expect? 5. When can we go and see what we have Learned from taking that step?
  26. 26. Why the Improvement Kata Works People consciously practice new behaviors each day. In the long term, this affects the organization’s culture. Over time, this influences people’s thinking and attitudes. Adapted from Toyota Kata, p. 237
  27. 27.  Lean Programs fail to create a lasting culture change because the focus is often on the application of tools alone.  In order to effect culture change, we must adopt a principle-based architecture.  We must align our organization’s activities to its values/principles/strategy, and then measure KPI’s and KBI’s.  We must adopt a system for Daily Management and Daily Kaizen. 27 Summary
  28. 28. Questions?