Agile Manufacturing Update
Keeping You Informed On Lean and Agile Manufacturing
Agile Manufacturing Update
Progressive Lean: Sort and Shine Part 1
Just about anyone who has any experience at all with basic lean tools will know what I'm talking about in this phase. Sort and shine...what could be simpler? And you're right...it's Sort....then Shine. The training won't take long, if you get my meaning.
What will take longer is the actual implementation. Not because it's a difficult tool. But because you're going to do it in a way that may change the structure and will probably start changing the culture of your organization.
Here's why....team leaders and their teams are going to plan, schedule, and carry out Sort and Shine in their own areas. With help, of course, but mostly, they're going to do it themselves.
Here's the game plan:
What will take longer is the actual implementation. Not because it's a difficult tool. But because you're going to do it in a way that may change the structure and will probably start changing the culture of your organization.
Here's why....team leaders and their teams are going to plan, schedule, and carry out Sort and Shine in their own areas. With help, of course, but mostly, they're going to do it themselves.
Here's the game plan:
- If you don't already have team leaders, you need to identify and appoint them.
- You need to train the team leaders.
- Either during the training itself, or some time shortly thereafter, the team leaders need to put together a Sort and Shine schedule for their areas.
- The team leaders and their teams will conduct Self Reviews within their areas to show that they have completed and are sustaining Sort and Shine.
- You (or somebody) will track their efforts and post them. The team leaders will meet regularly (weekly or bi-weekly) to review progress, bring up issues, etc.
I'll talk about each of these issues in upcoming posts.
Progressive Lean: Strategy and Spread the Word: Part 4
Finally, you need to do some training for team leaders so that they are prepared for the next phase: Sort and Shine. So, there are two issues to consider: the content for the training itself and just who the team leaders will be.
The first issue is easily addressed: Just use the material I've provided here (see the link at the bottom of the post). Adjust the material as you need to. The only thing I ask is if you do use this material is that you mention my name. That's fair, isn't it?
You'll see that the material goes over the basics of agile manufacturing as well as the details of how to implement the Sort and Shine phase. There isn't enough detail there to allow you to lead the next phase but don't worry about that...we'll give you that knowledge through these posts.
As to who gets this training, that might be a tougher issue if you don't already have team leaders. By team leaders, I'm talking about operators who have a few additional responsibilities regarding communication to and coordination of a small group of other operators who work in the same area and/or do similar work. Where the span of control of supervisors isn't very wide, they can act as team leaders.
What if the span of control of supervisors is wide but you don't presently have team leaders? Or you have them in some areas but not others? My recommendation is that you develop the position. And, yes, I know....that can be a big deal. But It will provide benefits throughout the agile implementation and beyond.
Here are a couple of articles from another blog to help you along (the first article is a little heavy on the jargon, but you'll get the idea):
Role of the Team Leader
Team Leader As Focal Point
You'll read that team leaders have central responsibility for making the agile initiative successful. That responsibility starts with the next phase. You'll depend on them to plan and carry out most of the "on the floor" activities" of that phase.
Team Leader Training Materials for "Spread the Word"
The first issue is easily addressed: Just use the material I've provided here (see the link at the bottom of the post). Adjust the material as you need to. The only thing I ask is if you do use this material is that you mention my name. That's fair, isn't it?
You'll see that the material goes over the basics of agile manufacturing as well as the details of how to implement the Sort and Shine phase. There isn't enough detail there to allow you to lead the next phase but don't worry about that...we'll give you that knowledge through these posts.
As to who gets this training, that might be a tougher issue if you don't already have team leaders. By team leaders, I'm talking about operators who have a few additional responsibilities regarding communication to and coordination of a small group of other operators who work in the same area and/or do similar work. Where the span of control of supervisors isn't very wide, they can act as team leaders.
What if the span of control of supervisors is wide but you don't presently have team leaders? Or you have them in some areas but not others? My recommendation is that you develop the position. And, yes, I know....that can be a big deal. But It will provide benefits throughout the agile implementation and beyond.
Here are a couple of articles from another blog to help you along (the first article is a little heavy on the jargon, but you'll get the idea):
Role of the Team Leader
Team Leader As Focal Point
You'll read that team leaders have central responsibility for making the agile initiative successful. That responsibility starts with the next phase. You'll depend on them to plan and carry out most of the "on the floor" activities" of that phase.
Team Leader Training Materials for "Spread the Word"
Progressive Lean: Strategy and Spread the Word: Part 3
Let's assume you have developed a set of measures you're happy with.
The next step is to develop a calendar.
Here's what's going to go on your calendar:
Regular day and time for Steering Committee meetings.
I talked about the role of the Steering Committee (SC) in another post. The SC needs to meet no less than every other week (or twice a month, whichever) during the startup of an agile implementation. You can move to monthly meetings after a year or so, when the program has momentum. Weekly isn't too often. You should meet for four hours each month. In other words, if you meet twice a month, meet for two hours at a time. Weekly, meet for an hour. Devote one of your meetings to reviewing metrics. The other meeting can focus on reviewing recent activities and planning for upcoming ones. That's pretty much the agenda for SC meetings:
Somewhere along the line, you need to announce to everyone what's going on. Some companies already have "all employee" meetings of one sort or another. This announcement can be made at one of those meetings. If you don't have regularly scheduled meetings with employees, you need to plan one.
The announcement doesn't have to be complex or involved. Twenty or thirty minutes should do it. This isn't the time to train everyone in agile concepts and tools. It will be enough simply to talk about what's been going on and what will be coming up in the near future. And make a pitch for their participation of course.
Deadlines for full development of the metrics.
During the planning sessions, you decided on what metrics you'd be using for the agile initiative. Now you have to make charts for all of them. You probably have some of the data ready to go and it's just a matter of making the chart. In other cases, there might be some "data mining" to do first. In still other cases, you might have to actually gather the data. Put deadlines on all these activities or you'll be twelve months into the initiative with no metrics.
Regular all employee meetings to keep everyone updated on the agile initiative.
If you already have a schedule of "all employee" meetings, you're set. If not, make a schedule. There...that was easy, wasn't it?
General time frames for the upcoming phases.
This is a hard one because you've never carried out the phases before and I don't know how large or complex your facility is. So, we're talking general time frames here, not hard and fast deadlines.
A few guidelines will help:
.
The next step is to develop a calendar.
Here's what's going to go on your calendar:
- Regular day and time for Steering Committee meetings.
- An "all employee meeting" to announce the agile initiative.
- Deadlines for full development of the metrics.
- Regular "all employee" meetings to keep everyone updated on the agile initiative.
- Deadlines (albeit loose ones) for the upcoming phases
Regular day and time for Steering Committee meetings.
I talked about the role of the Steering Committee (SC) in another post. The SC needs to meet no less than every other week (or twice a month, whichever) during the startup of an agile implementation. You can move to monthly meetings after a year or so, when the program has momentum. Weekly isn't too often. You should meet for four hours each month. In other words, if you meet twice a month, meet for two hours at a time. Weekly, meet for an hour. Devote one of your meetings to reviewing metrics. The other meeting can focus on reviewing recent activities and planning for upcoming ones. That's pretty much the agenda for SC meetings:
First meeting each month: How are we progressing? (Review of metrics)An "all employee meeting" to announce the agile initiative.
Second meeting each month: What did we do last month? (Review of recent activities) and What's coming up next month? (Plan for upcoming activities).
Somewhere along the line, you need to announce to everyone what's going on. Some companies already have "all employee" meetings of one sort or another. This announcement can be made at one of those meetings. If you don't have regularly scheduled meetings with employees, you need to plan one.
The announcement doesn't have to be complex or involved. Twenty or thirty minutes should do it. This isn't the time to train everyone in agile concepts and tools. It will be enough simply to talk about what's been going on and what will be coming up in the near future. And make a pitch for their participation of course.
Deadlines for full development of the metrics.
During the planning sessions, you decided on what metrics you'd be using for the agile initiative. Now you have to make charts for all of them. You probably have some of the data ready to go and it's just a matter of making the chart. In other cases, there might be some "data mining" to do first. In still other cases, you might have to actually gather the data. Put deadlines on all these activities or you'll be twelve months into the initiative with no metrics.
Regular all employee meetings to keep everyone updated on the agile initiative.
If you already have a schedule of "all employee" meetings, you're set. If not, make a schedule. There...that was easy, wasn't it?
General time frames for the upcoming phases.
This is a hard one because you've never carried out the phases before and I don't know how large or complex your facility is. So, we're talking general time frames here, not hard and fast deadlines.
A few guidelines will help:
- Think in terms of months per phase rather than weeks, unless your facility is very small (20 employees or fewer). My present client has about 250 employees and a variety of operations. It's taking them about 8 months to get through Sort and Shine (the next phase). The original plan was six months. Another client with 400 employees and equally complex operations took about six months but they also had two full-time "lean champions" that I worked with to push things along. In general, it's going to take longer than you think.
- Be ready to be flexible. It's better to get through each phase well than quickly. As long as progress is being made and the effort is moving forward, don't get too locked in to specific deadlines.
- Monitor progress against the schedule at your Steering Committee meetings. You'll be able to adjust the calendar as needed before the deadline is hard upon you.
.
Progressive Lean: Strategy and Spread the Word: Part 2
OK, you've answered the question, "Why the heck are we doing this?"
Now you need to answer the question, "How will we know it's working?" And that gets us to selecting metrics for the initiative.
I've written a lot about metrics and their selection here on this blog. In fact, I'm just going to link back to those posts rather than re-write it all.
Now you need to answer the question, "How will we know it's working?" And that gets us to selecting metrics for the initiative.
I've written a lot about metrics and their selection here on this blog. In fact, I'm just going to link back to those posts rather than re-write it all.
How to Get Started: Part Five - Planning I
How to Get Started: Part Five - Planning II
How to Get Started: Part Five - Planning III
How to Get Started: Part Five - Planning IV
There you go. I know it's pretty lazy to just provide links but I didn't feel like typing it all again. Besides, it will help my Google Analytics numbers! Besides, I'm going to do the same thing when I get to developing the calendar, so get used to it.
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:
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.
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.
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.
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:
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.
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
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:
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.
- Strategy and Spread the Word
- Sort and Shine
- Straighten and See
- Simplify and Solve
- Standardize and Sustain
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:
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:
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:
- Reduce the manufacturing cycle time and make it less variable, and
- Improve throughput and make it less variable, and
- Improve the quality of your product and make that quality less variable, and
- Do all this while reducing the amount of material (inventory) needed to do it,
