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Agile Manufacturing Update

Progressive Lean: Strategy and Spread the Word: Part 1

Like Julie Andrews said to those Von Trapp kids, "Let's start at the beginning.  It's a very good place to start."

Before you go to kanbanning and heijunking, you have to develop a strategy for what you're about to do. Planning, of course, can be straightforward or very complex.  I bet you're like me in that you prefer straightforward planning. 

The planning I'm talking about will be done by senior leaders.  Essentially, senior leaders will discuss and come to consensus on the following:
  • An answer to the question, "Why the heck are we doing this?" , aka, a vision;
  • A set of metrics by which you'll measure your progress;
  • A calendar of events and milestones.
Let's take them one at a time. 

Why the heck are we doing this?
Before getting too far down the road, you need to get clear on why you're bothering to do all this lean stuff anyway.  In other words, you're going to have to establish an overarching vision for the initiative. Because, here's the thing...lean is a royal pain in the ass to implement.  Don't get me wrong.  The tools are pretty easy.  It's the discipline and the necessary culture change that will wear you out.

A "cost cutting only" vision won't work.  It's too hard and requires too much investment up front. 

What kind of vision will work?  A strategic one.  By that I mean that a lean/agile initiative has to be seen as a central part of your long term strategy to gain market share, building capacity so as to increase the top line.  OK, I could wax eloquent for pages about visions dancing like sugar plums in your head but the main point here is that you have a clear one that provides an answer to the question above.

The answer should be strategic and proactive.  "Cutting costs" is neither.

I'll talk about the set of metrics next time.


Company Culture and Lean: Communication

In a recent post, I listed eight components of company culture.  The idea is that these eight components are the building blocks of culture.  Further, they are eight "levers" that we can "push or pull" in order to change culture within the company.

Nobody will be surprised to see Communication at the top of the list, I'm sure.  Communication is, simply, the manner in which members of the organization pass information back and forth and the channels they use to do so.

As we go through the eight components or "levers" of culture, we'll find that each will have a continuum associated with it that we'll use to describe the company's culture.  In the case of Communication, the continuum goes from Tight on the one end to Loose on the other.

The closer a company is to the Tight end of the continuum the more likely it is to have close-to-the-vest, "need to know", untimely, infrequent communications through impersonal channels, e.g., posted notices, emails, "paycheck stuffers", etc.  There will be formal policies regarding who is allowed to see what, hear what, transmit what. 

Performance data, in particular, is likely to be closely controlled.  I once had a client who I was helping to implement TQM methods.  One of our first initiatives was to develop and share performance data, e.g., scrap, efficiencies, downtime,  with everyone.  One plant manager told me that, in the past, he would have been terminated for sharing such information with employees.

A lodging company I worked for didn't share customer satisfaction feedback with guest service employees until its TQM initiative started.

On the other hand, the closer a company is to the Loose end of the continuum, the more information (of all sorts) is going more freely through more channels.  Communications are more frequent, more likely to be transmitted face to face.  Information is transmitted on a "want them to know" basis.  Performance data is more freely shared.

There are circumstances and conditions under which a Tight Communications culture is to be preferred: think of patient medical records in a hospital, or individual account information in a bank.  In most organizations, though, a culture that is too close to the Tight end of the continuum risks having low trust, slow reaction to problems, slow decision making, and low morale.

The effective use of lean concepts and tools generally requires an organization to move down the continuum toward Looser Communications.

Company Culture and Lean

A lot of my own work is around helping companies change their cultures in ways that enable lean and agile methods but, I confess, I don't write much about it here.  And that's not a good thing, especially given how critical I am of the manner in which most lean literature addresses the issue of culture...or doesn't.

The problem for me and all those other writers is that culture is difficult to define.  Heck, it's even difficult to describe because it's so all-encompassing, so comprehensive. 

I've come up with a way of looking at culture that makes it all more accessible, I think.  We'll start with the model first, then work our way to specific examples.

The model tells us that there are eight elements that make up culture.  These elements refer to things that all organizations do.  Culture is simply...how they do them.

The eight elements are:

  • Communications
  • Decision Making
  • Planning
  • Collaboration/Teamwork
  • Motivating Performance
  • Managing Agreement
  • Teaching and Learning
  • Innovation
These elements are listed in no particular order of importance.  The model says that all organizations do all of these things, one way or another.  They may do them well or they may do them poorly but no organization has no internal or external communications.  No organization doesn't make decisions.  No organization doesn't plan.  And so on.

You might look at some of the elements and say, "Wait...I know of organizations that don't plan or don't innovate."  Again, doing something very poorly is different from not doing it at all.  Take innovation:  Can you point to an organization more than about 18 months old that is doing everything the same way it did it the day it started?  My guess is, no.  "But," you might reply, "I know of companies where such changes have been badly conceived, badly planned (when they were planned at all), and badly implemented. You can't really say that those organizations are innovative."

Again, to say that organizations, one way or another, attempt to change processes, products, services, etc. badly is not to say that they don't do so at all.

OK, you get my drift.

In the next posts on this topic, I'll provide a bit more description of each cultural element.

Progressive Lean: Let's Get Started

OK, after several introductory posts, we're ready to get started laying out the Progressive Lean approach.  Here are the five phases:

  1. Strategy and Spread the Word
  2. Sort and Shine
  3. Straighten and See
  4. Simplify and Solve
  5. Standardize and Sustain
Quickly, let's go through what will happen in each phase.

Strategy and Spread the Word
The Steering Committee is established.  That Steering Committee develops a plan and a schedule for rolling out the subsequent phases. 

The plan and schedule is communicated to everyone in the plant.  Supervisors and team leaders are trained as to how to carry out the Sort and Shine phase.

Sort and Shine
The plant, both shop floor and administrative areas, is divided into areas.  Each area has associated with it a team and a team leader who will further divide the areas into smaller locations.  The teams will develop and carry out a schedule for sorting and shining those locations. 

Straighten and See
Team leaders and supervisors are trained regarding visual controls.  The teams develop a new schedule for planning locations for everything in their assigned areas, putting everything in the selected location, and putting the necessary visual controls in place.Implementation of Leader Standard Work begins.

Simplify and Solve
Supervisors and operators learn and participate in value stream mapping, team problem solving (A3, 5P, 8D...whatever), set up time reduction, poka yoke, kanban, heijunka.  Teams are established to address operations problems and improvement opportunities.

Standardize and Sustain
Task instructions are developed.  TPM protocols are developed and implemented.  Systematic operator training and cross-training is implemented.  Leader Standard Work is fully implemented.

That's it in a nutshell...a small one.  Next time we'll look the whole plan over again and address some possible issues with it.

More on metrics...

Here's an article that I ran across in a LinkedIn discussion group...

As you might imagine, it's the sort of article that drives me (and, I'm sure, most practitioners) nuts.  Here's the first sentence of the article:

"Lean manufacturing principles, widely touted by companies as an effective way to eliminate waste and boost the bottom line, often do not achieve targeted cost savings, according to a study to be released on Wednesday."
Right away, we know something is amiss.  "Widely touted"?  Touted?  As if there were no evidence that lean principles and methods work?  Please.  OK, we'll allow for some journalistic license.  Let's go on.

"Analysts at New York-based consulting firm AlixPartners LLP found that about 30 percent of companies surveyed achieved a 2010 goal of cutting at least 5 percent of manufacturing costs by employing lean practices such as those championed by Six Sigma, Kaizen or Value Stream Mapping.

Nearly half the 100 executives surveyed were targeting savings of 5 percent or more. The majority of executives reported savings in the 1 percent to 4 percent range, which AlixPartners views as being below the optimal range.

In addition, nearly 60 percent of the executives surveyed do not expect they can sustain at least half of the savings they did make over the long term."

Nowhere in the article will you see anything further about what "costs" means to the survey takers.  Nowhere will you see anything about why these companies set cost reduction targets.  Or how they picked the targets they did set.  Or whether there were other gains that might have mattered more to customers than cost savings at their supplier.

If a company, say, reduces downtime by 50%, scrap by 75%, overtime pay by 90%, increases inventory turns by 50% to 100%, while improving delivery performance to just about 100%, improves market share, and increases sales per employee by, oh, 5%...do you think anyone gives a damn if costs only went down by 4%?

Why does the survey assume that cost savings are the only benefit that derives from an effective lean implementation?

Do you suppose the CEO's actually know what cost savings can be attributed to their lean initiatives?  How could they given all the variables that affect a company's cost structure?

I get just as impatient with articles that claim cost savings.  Here's one I found with a quick web search of "lean cost savings" that claims that one company's setup reduction efforts led to a $30,000 savings.  Really?  Where did those savings come from?  Fewer workers?  Less scrap?  Less overtime?  Reduced working capital?  The article doesn't say.  It does go on to say that the annual savings realized by the company are about $30,000 a year...probably way less than a 5% cost reduction for a $7M company.  And who knows if even that is "hard" savings.

Any company that implements lean only for "cost savings" will be disappointed.  Not because lean doesn't lead to substantial savings but because most companies don't do a good job of measuring costs and their sources. 












But first...another word about metrics

Both long time readers of this blog will know that I address the subject of lean metrics quite a bit in this blog.

I saw, and responded to a post on a LinkedIn group discussion that raised the issue for me again.  I'll be darned if I can find the original post or my comment but it went something like this:

Original poster asked how one might go about conducting a kaizen for which leaderships' stated goals are "50% reduction in the number of steps in the process, 50% reduction in travel distance in the process, reduction in WIP."   (I forget the target.)

My response: Start by dropping the bullshit targets.  (I didn't use that word because I was afraid my comment wouldn't get approved.  I don't worry about that here....because I own the damn blog!)

These are bad, wrong, hateful, egregious targets for a kaizen.  They are bogus.  They are meaningless.  They are altogether without worth.

Don't get me wrong....at the end of a successful kaizen, process steps might be reduced by 50%....or 75%....or nothing.  And travel distance might be reduced by 50%....or 99.9995%.... or 12%.  (Probably not nothing....it's not hard to reduce travel distance unless work stations are already crowded together and usually they aren't.)  WIP might be reduced by 50% or .02% or 99.995%.    And if the kaizen has an impact on these metrics, the team should say so.

But targets like these expressed this way tells me that management hasn't a clue...not the smallest clue...as to what lean is all about or what the purpose of a kaizen is.

How do they know that 50% is exactly the right amount to reduce travel distance?  Did they do an analysis of the travel distance and that's what they came up with?  If you believe that, I have a bridge I want you to consider buying.  Same with process steps....how do they know the process has exactly twice as many steps as it should?  And if the process does, shouldn't somebody have his or her ass tossed out onto the street?  Maybe the "leaders" that set the target, thereby admitting that they've been complicit in letting processes have twice as many steps as they need all these years?

If process throughput doubles, manufacturing cycle time through the process is reduced by 33%, process downtime is cut by 80%, scrap is reduced by 25%, setups are reduced by 75% and on time production increases from 33% to 95%...but process steps increase by, say, two steps, will the kaizen have been a failure?  According to the poster's company's "enlighted leaders"....yes.

So why am I so verklempt about all this? Because this issue of bogus metrics, especially cost reduction (which I'll address in my next post) is hurting the deployment of lean.  I know...that's a bit melodramatic.  But if lean/agile methods are tasked with creating benefits that it's not it's not, in particular, designed to create (cost cutting) or that just don't matter (travel distance), companies are going to convince themselves that "it just doesn't work". 

It's like telling your marketing department, "If you don't reduce travel distance and cut operating costs, you've failed!" 

"Whoa," you're thinking,  "Where did this marketing analogy come from?  It doesn't make any sense!"

Because lean implementations have more in common with marketing than theuy do with cost accounting.  You implement lean, not to reduce costs, but to be able to provide products and service levels to customers that your competitors can't.  Your customers don't give a damn what your "travel distances" are or how many steps your processes have.  They do care whether or not you're providing them the product you promised when you promised it.  So...if you can, through your kaizen:
  1. Reduce the manufacturing cycle time and make it less variable, and
  2. Improve throughput and make it less variable, and
  3. Improve the quality of your product and make that quality less variable, and
  4. Do all this while reducing the amount of material (inventory) needed to do it,
your customers will love you.  And they won't give a damn whether your travel distance went down by 50% or doubled.

Progressive Lean: The Overall Idea of It, Part Four

OK, this is the last introductory chapter I promise.

I just wanted to go into a bit of the philosophical underpinnings of Progressive Lean before continuing on.  I broached the topic a bit in my last post on advantages and disadvantages and want to develop some of those ideas further.

I tell my clients that all agile and lean boils down to two ideas:
  1. Reducing variability of performance
  2. Improving flow of material and information
In that order...mostly.

Low variability is another way of saying "operating excellence".  In other words, operating excellence is a foundation of agility and has to be achieved (or, at least, approached) before you can have good flow.  So that's what we work on first....operating excellence.

Now, the road to operating excellence goes through orderliness.  There's no other way.  So the early steps of Progressive Lean are devoted to creating that orderliness:  Sort and Shine in phase two and Straighten and See (visual controls) in phase three.

The road to operating excellence (reduced and controlled variation) also goes through standard work practices for leaders and operators.  Standard practice starts with standard conditions...sort and shine and straighten and see.

From another blog re: 5S

A blog I check into fairly often is Evolving Excellence.  Too often, they get into "the guv'mint is always bad" political posts (which wouldn't be so bad but they aren't real smart about it...I always call them on it and it's pretty much like shooting fish in a barrel).  But they also are tough on big companies that ship work overseas in the futile search for high quality at the cheapest labor dollar, which I like.  When they actually address lean issues (too infrequently for a blog devoted to lean, IMHO), they're pretty smart.

Anyway, I found a couple of posts at the blog on 5S.  And since we're about to talk a lot about 5S (or some of its components, at least), I figured they'd be worth your look.

Here's the first.  The author is obviously not a fan of poorly implemented 5S (as none of us is) and he seems to assume that all 5S is poorly implemented.  And, if the video he links to is any indication, he might be right.  But keep reading...he makes several good points as the article wends its way along, including the following:

"5S is most importantly the disciplined visual control over each operation within the manufacturing process.  It is the tool that enables you to rest assured that the kanban is working.  It is the physical manifestation of standardized work.  It is the essential support for operator-performed maintenance activities.  It enables everyone on the shop floor to know that the machine set-up/changeover process is operable as designed.  In short, it is the intersection of all of the process optimization and control aspects of lean."

Well said.  5S (or the components therein) should NOT be implemented simply so that the plant looks better.  It's not worth the trouble.  5S is all about visual control of processes: you should be able to tell at a glance whether or not your processes are in control or not.  5S creates the foundation for this condition.  Yes, your organization will look better.  But that's just a happy by-product.

Here's the other article from the same blog.  (You'll think you've been linked to the wrong article but read down a few paragraphs.)

Here's what the author says:

"5S is the systematic integration of all of the facets of manufacturing in the workplace in a manner that assures the best cost, optimum flow, perfact quality and absolute safety."
Again, well said.

5S is the best place to start lean and it pays dividends in and of itself.  But, as the author says, looking agile and being agile are two very different things.







Progressive Lean: The Overall Idea of It, Part Three

In my last two posts, I laid some of the foundations for this discussion of Progressive Lean.  This time I'm going to talk about what I see as the benefits of Progressive Lean.

The first advantage is that it provides companies with a step-by-step, "here's what you do first, here's what you do after that" approach.  Now, I now that sounds kind of like a sales pitch but a problem I've seen with most lean literature and presentations is that they cover a lot of ground but don't do a good job of answering the question, "OK, but how do I get started?  What do I do next Monday to get it off the ground?  Then what will I do next?  And after that?"  Progressive Lean answers those questions.  It doesn't throw a bunch of Japanese terms at you, then figure you know everything you need to know to be an effective "sensei".  (Geez, does that term bug me.)

Further, it starts with basic, comparatively easy methods, then works it's way toward the harder ones.  (I say  "comparatively" because the culture change required to sustain the deployment of even the most straightforward of the methods will be a challenge.)

Another advantage is that it locks in the gains from each phase before moving on to the next.  (That said, as we'll discuss, the phases have flexibility; there's no "We can't get to that problem yet because we're not to that phase," aspect to all this.)

The Progressive Lean approach can be applied in pretty much any manufacturing setting, however large or small, whatever the product.  Different tools and methods will be applicable in different setting but the phases that contain them stay pretty much the same.  (I haven't tried Progressive Lean in non-manufacturing settings but I'd imagine it would work there as well.  I'm just not sure how "pull scheduling" translates.)

The approach is also flexible with respect to the tools that it incorporates. It does lean heavily on 5S, especially at the start, and assumes that visual controls, leader standard work, operator standard work, value stream mapping, and team problem solving will be a part of any implementation.  As for Six Sigma, poka yoke, kanban, heijunka, etc., etc., it definitely allows and encourages their use but doesn't require it. 

The primary advantage, in my view?  It uncovers and addresses culture change challenges early in the process, when the company is working on the simpler methods.  If you've attempted to implement agile/lean methods, you know that culture change is the most difficult part of it.  If you haven't made the attempt, you'll learn that this is the case.  It's far better, in my experience, to be addressing culture change issues while implementing Sort and Shine before you get around to, say, pull systems and cell creation.

Does Progressive Lean have any disadvantages?

Honestly, none in particular that I've run into so far. 

A client that was especially eager to use one method or another out of phase ("When are we going to get to do value stream mapping?"  "What about this Six Sigma I keep hearing about?") but there's nothing that says you can't do that sort of thing.  At a present client, they're doing value stream maps and kaizens at the same time they're doing sort and shine.

Progressive Lean: The Overall Idea of It, Part Two

In my last post, I was laying the groundwork for my reasons for changing my approach to implementing lean.

The rest of the story has to do with a client I had.  The client had been implementing lean with another consultant for about a year before I got there.  They had conducted about ten "excellence events" and were happy with them but didn't feel that the overall idea of lean was really taking hold across the organization.  They learned about Progressive 5S at a conference they went to and decided it would be a good way to get the whole organization working together on lean. 

(A bit of backstory:  Most of the excellence events...you might call them kaizen events...had focused to one degree or another on 5S.  Most of the shop, though, not having experienced an excellence event, was pretty unorganized.  Top management had been a bit non-committal to 5S activities, preferring to see hard cost reductions.  The company hired a world renowned quality consultant to look at all their operations.  At the top of his report:  You need to clean up and organize the place if you're serious about quality.  Top, middle, and front-line management got really interested in 5S after that.)

So they started rolling out the version of Progressive 5S they had learned at the conference with my help and it worked pretty well.

I spent some time thinking about the flow of Progressive 5S and found that I could broaden it to include all the activities of lean, from planning through sustaining.  I came up with the 10S or 5S X 2 rubric  (I need to nail down which it is...I kind of like that 5S X2).  I've been using it with two other clients and it's working well. 

Remember, the approach I'm going to relate to you isn't just focused on 5S.  It started as Progressive 5S but my version is Progressive Lean. 
Progressive 5S only addresses 5S.  In Progressive Lean, 5S is integrated into a broader progressive deployment that also includes set up reduction, value stream mapping, cell creation, structured team problem solving, pull systems, and so on. 

In my next post, I'll go into some of the advantages I'm finding with Progressive Lean.

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