Understanding Lean Visions 2
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Grasping the fundamentals of the Lean Vision
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Understanding Lean Visions 2
- 1. Lean isn’t just a toolbox! Understanding Lean Visions
- 2. Lean Vision Lean Toolbox Company Objectives Problem Solving Results
- 3. Traditional Organization Structure CEO Manager Supervisors Operators 1. Sets company direction 2. First face to the customer 3. Responsible for quality 4. Directs change downward
- 4. Lean Organization Structure CEO Managers Supervisors Operators 1. Sets company vision 2. First face to the customer 1. Responsible for quality 3. Directs change upward 2. Accountable for quality
- 5. Principles of Lean Value Value Stream Flow Pull Perfection
- 6. Four phases of Lean Phase I The foundation for leadership, cultural and behavioral transformation. Phase II Management transformation begins and sustainable business improvements start to be realized. Phase III Business improvements are further accelerated in terms of balanced scorecard Phase IV A ctivities expand through the whole enterprise including the supply base .
- 7. Continuous Improvement Phase IV Phase I Organizational Development Phase II Discipline Building Phase III Tools For Quality, Delivery and Cost Improvement Continuous Improvement and Collaboration
- 13. The good The bad The ugly
- 18. Shigeo Shingo , A Study of the Toyota Production System Be persistent! Change takes time!
- 19. Lean Vision Lean Toolbox Company Objectives Problem Solving Results Developing People Problem Awareness Problem Solving Techniques Performance Improvements
Editor's Notes
- Lean isn’t just a toolbox! Most people see Lean methodologies as a set of problem solving tools in the toolbox. But this could not be farther from the truth. Without the Lean Vision to direct the work and support the corporate vision, the accomplishments of the lean tools will fall short of expectations. This shortfall creates a disillusionment and the sentiment that they have just experienced the “Flavor or the Month”. Thus begins a downward spiral! The Lean Vision is not to be confused with the Corporate Vision and Mission Statement. The Corporate Vision pertains to the external world of customers and shareholders. The Lean Vision pertains to the internal world of how you see your people, infrastructures, and processes. The two visions are different but are intertwined and can not be separated. Understand the Lean Vision before tackling the application with the tools of the toolbox.
- Lean requires a vision to function effectively and in order to be effective, must drive change. There are four parts of the vision that will be explained. The vision will drive the course of objectives for necessary changes. The objectives will require a tool to solve the problems involved. The right tool for the application is chosen from the toolbox. The result of problem solving using the tools is fed back into the vision for justification of results in meeting the vision criteria. This circular feedback is what sustains, verifies, and justifies the Lean Vision. If the results do not do this, then you should question if you were working on the right “problem” or if the Vision is truly serving the core purpose of the company.
- Before we go too far into the Lean Visions, a different perspective needs to be explained. This perspective compares the traditional view of business and the Lean view. In a traditional enterprise perspective, the CEO is at the top of the pyramid. The CEO sets the company direction, acts as the interface with the customer, is responsible for the customer’s quality, and directs change downward to effect that quality. The focus of this structure is on the CEO’s position.
- Lean on the other hand turns the pyramid upside down. The CEO needs to set the company vision and will direct all operations toward that end. But the CEO is only accountable for quality, not responsible. Responsibility entails changing the form, fit, or function of a product to meet the customer’s requirements. The CEO is only accountable for the actions of those people that do change the form, fit, and function of the product. This is a subtle but major change in perspective with Lean. The operator, on the other hand, does change the form, fit, and function of the product and therefore is the first face to the customer. They have direct responsibility for the quality that the customer receives. Everyone above the operator is there to support the operator in their efforts to satisfy the customer requirements. Although the CEO directs the enterprise vision downward, it is the operational staff, empowered by Lean, that drives change through the organization. Soon, higher levels in the organization must change to the new pace or they will stifle the efforts at the lowest level to fully satisfy the customer.
- The principles of Lean are very simple indeed. There is the creation of Value from the customer’s perspective, not our perspective. Then we need to understand the processes that creates value called the Value Stream . Making the product Flow through the creation process speeds value to the customer. Next we create a Pull system to generate product on the customer’s demand while we are striving for Perfection of Quality by the removal of wasteful practices that do not add value to the process. Nothing needs to be any more complicated than focusing our vision on these five principles. But to see the five principles is much easier than to understand them. To understand the five principles, it takes a vision that “frames” our world very differently than the way we have been accustomed to seeing it. We have, all of us, been a creature of the experiences that we have had. This shapes or frames the way we see our world. We have been conditioned to respond to these experiences and seem to react without deep conscious thought. Lean teaches a different vision that allows people to focus on the five principles. But first we need to learn the phases of the Lean journey.
- The four phases of Lean deployment and development carry some interesting implications. Phase I – The cultural and behavioral transformation of any institution is the very foundation of the Lean Vision. This is where the Lean Principles are taught. The people have to understand the change required and the benefits of the change. Fear of losing a job is not a good motivator but reasons for improving a job are! The vision must instill the right motivators to create a cultural change. Phase II – Discipline Building is where the Lean Vision starts being evident. The rubber starts to meet the road as improvement projects are started and visible business gains are being realized. Don’t be afraid to start with some low hanging fruit as it is a great morale builder. The acceleration of enthusiasm and momentum will be needed in the future. Then take on the more difficult problems. This phase does not end as a point on a time-line but continues throughout the lean journey. Phase III – The Tool Use phase is the point of real acceleration of change. This is the time when the vision becomes unified with the tool set to create a holistic approach to change. Typical of this phase is the development of the Balanced Scorecard as the metric that measures progress. Phase IV - The Continuous Improvement phase is the expansion phase where the Lean is spread to all the other parts of the organization. No institution is scared, so even Marketing, Sales, and Finance get involved in the Lean progress. The two curved lines represent the benefits and the management effort involved in Lean deployment. As Lean is developed and deployed, the benefits will increase greatly with maturation and the management efforts required will be reduced as the work populace takes on the responsibilities of the Lean Vision.
- This chart is an adaptation of the methodology used by the Toyota Nummi plant in California. Here you can see the various combinations of the areas of People, Materials, Quality, Workplace systems, and Partnering that take place during the phases of. In the beginning, Phase I, is where the Lean Vision must be developed in order to have the culture to allow the other steps to be performed correctly. This is the phase of over-view training and establishing commitment. This will be a test of the soft skills of working with people. Phase II starts mixing the soft people skills with the environment of the workplace. There are simple exercises here for 5S and developing standardized work that re-enforce the disciplines. Don’t be afraid to cherry pick the low hanging fruit because that builds morale. Phase III is what everyone thinks of when we say Lean. This is the heart of the toolbox for the work space, quality, and materials. The visibility of these Lean tool is what draws people to this point in the development scheme. But without the culture and discipline of Phase I & II, it is very difficult to sustain results in Phase III. Phase IV is the highest level of maturation in Lean. This is where the Lean culture of continuous improvement spreads horizontally from department to department and plant to plant and even to customers and suppliers.
- In looking at the four focuses of the Lean Vision, people classically home in on “improving performance” as their primary driving force behind the business. After all, performance measures are a very visible indicator. But they often ignore or do not develop the areas of problem awareness, problem solving, and developing people. So, try looking at the relationship of these four focuses backwards. If you don’t develop your people as your greatest asset, then you probably are not aware of the problems in the business. It then goes to say that if you don’t have problem awareness then you probably don’t have the thinkers with the problem solving skills and assets required. Without being aware of these problems and solving them, the enterprise performance will suffer. So we will look at each of these four areas in more detail.
- The vision of improving performance will lead you directly to the existence of the second vision, Problem Solving. And then the third vision of Problem Awareness, derived from developing and training the people, leads you to the Lean toolbox. This is the structured approach to Lean Visions. Quality in performance is best exemplified with the lean tool, Poke Yoke. Fool proof or Error proof the system so that you can not make bad quality products. Don’t try to inspect quality in because that is a WASTE of time and effort. Cost is an often elusive item to pursue because it occurs after or as a result of actions taken. In the beginning, focus your efforts on what is in-between operations and not the operations themselves. There are many ‘hidden costs’ and ‘costs hidden’. This is why product is not flowing through the process. Hidden costs may be the carrying costs of inventory. Costs hidden may be the result of striving for labor efficiency at the expense of producing only what the customer requests. Delivery to the customer can be as important as quality and cost. It is really a matter of understanding your systems well enough so as to time the execution of processes to deliver goods on time. Q,C, and D are a balancing act. In a balanced system, none should be sacrificed at the expense of the other.
- Seeing is believing and seeing is understanding. As any detective will attest, all witnesses do not see the same event the same way. But you will be much farther along the road to understanding if you go see. For repetitious operations, the Six Sigma Design of Experiment (DOE) methodology is an excellent way to test for solution to a problem. Lean toolbox methods such as Total Productive Maintenance, Single Minute Exchange of Dies (SMED)/Quick Change Over, or Poke Yoke may be the solutions you are looking for. All solutions require feedback to determine the rate of success. Be sure you are measuring and gauging the correct factor to determine success.
- The story of Linda: Each morning Linda would enter the production scrap reports into the computer system. One morning the computer system crashes and locks up all the IT system. Even shipping labels and bill of ladens could not be printed so no inventory moved on to or off of the docks for all the company’s North American facilities. The IT department traced the problem back to a data record entered into the system with Linda’s ID. The eight digit part number was entered into the scrap field causing the system to try to generate replacement orders for 18,042,000 scraped castings. Assigning blame to a guilty party doesn’t focus on and correct any problem. There are usually systemic situations within our organizations that allow problems to exist. Apply root cause analysis to find the source and then correct the problem. Linda entered the data incorrectly because the system allowed her to. No one had error proofed the data entry screens with templates. Performance suffered because of quality work. Linda was not punished but the programmers had a lot of work to do in error proofing data entry. If you have a truly inept worker under your supervision, challenge the traditional assumptions . Is your situation due to the actions of the worker or the actions of the HR department not having adequate screening procedures for new hires? You will still have to deal with the inept worker but may be able to influence the policies of the HR department so it doesn’t happen again. Maybe you should update the training procedures! Don’t be like the phrase “asleep with eyes wide open”. The Circle on the Floor exercise is a method of taking time to simply watch the process flow around you. Take time out to see what is happening around you and then question why things are moving in that manner. 5 Why is a problem awareness tool, not a problem solving tool. The 5 Why methodology will lead you to the most likely root cause of a situation. Then you will have to reach into the toolbox to find the right tool to correct the problem. Challenge every step of the 5 Why with three questions: What happened, Why was it not detected, and What is the systemic root cause in the system that allowed it to happen?
- Our people are the most critical asset that we have! The time spend in developing them is time well spend. It has been shown that the most effective way to teach someone is by doing. Use the teach, show, do method. Performance should not be a subjective measure. Develop realistic means of measuring performance. A measure of how gregarious a person is can be very difficult but a measure of customer’s responsiveness to a salesperson through customer feedback isn’t. Few people realize the number of mistakes made by non-uniform teaching methods. Practice standard teaching methodologies in order to get uniform results. One of the most sought after prizes is recognition of one’s achievements. Celebrate the victories, even in small ways, and you will boost morale.
- Now we will review the four visions again and look at the good, the bad, and the ugly. Before we looked at what the visions are. Now look into your processes and see if this is what you are doing, wish to do, or are working contrary to.
- Mentoring – one of the greatest sources of pride that I have is seeing one of my people rise to a higher position of responsibility. It is the evidence of being a good teacher! Building the performance mindset through teaching with standard methods is not a topic that comes last. It comes first, and in the middle, and at the end! Since people are our greatest asset, it benefits us to always spend time developing their abilities. A sensei of mine once conveyed a very funny story. He was asked if he took his lean methods home to be used there. He sheepishly admitted that he had tried to lean out his wife’s kitchen. She promptly told him to mind his own business and get out of her kitchen. The morale of the story is: You have to have the same Lean Vision in order to be able to use the tools in the toolbox.
- A resent teaching session of Practical Problem Solving had one participant saying “I don’t have a problem.” She was rebuffed by the statement from Toyota’s Director of Engineering Nampachi Hayashi, “the biggest problem is thinking you are okay”. Problems are not black and white. Start looking where things don’t meet the expectations. Even the sacred institution of the accounting department is not free from scrutiny. Look where a constraint seems to be impeding the process. If you can’t get materials because the system is slow in paying their bills, look at the accounts payable department. Expectations are not reality, they are goals and aspirations. Expectations should be tempered with reality. A 10% reduction in head-count budget without a reduction in workload may not be realistic if the tools are not provided to achieve the goal. General Electric is expecting a 64% increase in commercial jet engine order. GE wants to ramp up with new facilities but the same head count they currently have. Is this realistic? The presence of empirical data becomes a primary determinate, but not an absolute, for taking the six sigma path.
- Go See – seeing yields a much better understanding and isn’t subject to third party interpretations. Is-Is Not – You must define the boundaries that you are working in or the there will be project creep and focus spiraling. Measure what is realistic – Don’t ask for a tolerance in ten thousandths if the drawing says thousandths. Don’t gauge a new worker against some one that is thoroughly trained and experienced. The Gross Domestic Product measures MS software by the weight of the plastic it is made with. Analysis – yields an answer, not a career. Improvement – simple is often better. Sheep may be all you need to keep your yard trimmed. Review – the cycle of verifying that you have truly solved the problem. Problem solving helps complete the circle back to your vision. If the results of the problem solving do not support the core of the vision, then your system is not in balance.
- The teaching of Dr. Eli Goldratt in The Theory of Constraints taught us that there are three important factors in business: Throughput, Inventory, and Expenses. These are the similar in nature to our Quality, Cost, and Delivery focuses. Throughput requires quality with a delivery focus. Inventory is an necessary cost to throughput but can be minimized. Expenses are all other costs associated with the production of goods or services. Anyone can game the system throughput/inventory/expenses or quality/cost/delivery. We have all seen it being done at different levels of management. You can insure delivery at the expense/cost of labor the same way quality can be insured at the same expense/cost. Likewise expense/costs can be improved to the detriment of delivery through reduced inventories without a proper plan. If you understand your constraints and focus your effort there, you can move forward and prosper. If you focus efforts on what is not the constraint, you will sub-optimize the systems. Do your metrics truly reflect the intent and purpose of the vision? If you can not draw a direct line back to the core of the vision, you are probably measuring the wrong thing. If you measure efficiency but productivity is the vision focus, then you are wasting energy and conveying the wrong message by pursuing the metric!
- This chart is taken from the Shigeo Shingo’s book on industrial engineering. It is here to prove two points. Be tenacious, all problems are not solved on the first try. This chart shows eleven attempts. Be patience. Even for Toyota, this problem correction took about eighteen months. Keep the vision that performance counts!
- In the beginning we said that the Lean Vision must support the Corporate Vision. Then we reach into the Lean toolbox to select the appropriate tool to further the company objective. The tool is used for problem solving whose results should support and reinforce the Corporate Vision that we started with. If we now apply the Lean Visions to this model, we can see how the development of the Lean Vision is backwards or contrary to what most people would perceive it to be. We first need to develop our people through communication of the vision and training. The corporate culture has to be established to allow the education and empowerment of the employees. Write into your charter your commitment to change and development. The development of the employees will give us the overall perception and awareness of problems in our processes. This is the comparison of the current situation to the stated expectation. To do this you must communication the expectations so that everyone is aligned. Disciplines of Lean methods are being built at this point. With this awareness we can choose the correct tool and techniques to address the problem at hand. This step will required a point-of-use training. Training on an “as needed” bases reinforces the principles better that mass information training. And by addressing the problem we can enhance our performance in the areas of cost, quality, and delivery. The Lean cause will spread horizontally and eventually vertically through the organization to further the momentum of the Lean movement. In the end, the results must come full circle to support the original Lean Vision and Company Vision. If you want it to happen, plan for it to happen!