The Kanban Business is Thriving

With the risk of sounding like an advertisement for a particular company, I was happy to read this article detailing the 2009 successes of web-based kanban tool provider Ultriva. It appears that this slow economic environment hasn't hindered the company's growth. Essentially, I appreciated the implication of this article: even this tough economy has not distracted many manufacturers' with complex and intricate global supply chains from focusing on reducing the massive waste and improving efficiency.

Any company that expands it operations into culturally and technologically diverse regions introduce a whole range of new procurement, distribution, time, security, and scalability problems. In addition, one of the most common roadblocks I hear about is the integration of a kanban methodology into an existing enterprise resource planning (ERP) system because lean is action-oriented while ERP is data-driven. Have you addressed and overcome these problems? Has your company reconciled the use of lean principles and scheduling software?

Implementing Lean With Your Suppliers = Partnership

I was quite impressed with this case study of a lean supply chain initiative, written by Steve Crom, that appeared on the Supply Chain Management Review site. Other than the substantial reductions in inventory and cycle time, note these important qualitative results:

• Direct lines of communication between the parties involved: purchasing, planning, customer services, manufacturing, quality in both organizations, for quick response and problem solving.
• A sense of teamwork between organizations, the foundation for making breakthrough improvements that last.

These results cannot be drawn on a value stream map or expressed on a spreadsheet. These accomplishments rely on the people running the process and influencing the culture of the transformation.

Note some of the requirements to maintain and replicate the process:

• Select suppliers who share in the belief that more is to be gained by working in partnership than in traditional, arms-length relationships.
• Pick the team leader carefully, interpersonal skills are key.
• Appoint a full-time project coordinator.

Here is yet another instance in which the success clearly rests not only on particular employees technical skills, but their attitudes and interpersonal abilities. "Leading" here means making the important decisions AND possessing the ability to communicate and inspire.

Does your organization cultivate leaders who inspire responsibility and partnership?

Karen Martin On Your AM Dial

Karen Martin (author of both The Kaizen Event Planner: Achieving Rapid Improvement in Office, Service, and Technical Environments and Metrics-Based Process Mapping: An Excel-Based Solution) will be a guest on the The Lean Nation radio show on Friday, March 12, from 4 pm to 5 pm (EST) on 790 AM Talk and Business, hosted by Karl Wadensten. She will discuss holding kaizen events in non-manufacturing settings.

You can listen live on 790 AM (Citadel Broadcasting, ABC Affiliate) in Providence, Rhode Island. In addition, the show is globally available via a live audio stream at 790business.com. She will be answering questions and listening to opinions, so feel free to call in to the show at 401-437-5000 or toll free at 888-345-0790. If you can’t tune in live, a podcast will be available after the show.

The Lean Nation is a new show on 790 AM and airs weekdays from 4 pm to 5 pm (EST) and streams online at 790business.com. The Lean Nation features real world examples and actionable advice from local and national business leaders on how “to reinvent yourself into a lean operation in business and in life.” The show's host, Karl Wadensten, is the president of VIBCO, a Rhode Island manufacturing company.

A Lean Six Sigma and Environmental Practices Survey

James Marsh, a PhD candidate at Sheffield Hallam University in the UK, is currently researching the environmental benefits and/or trade offs resulting from Lean and Six Sigma initiatives. Mr. Marsh is analyzing the key differences from various industries and departmental functions and would like Lean and Six Sigma leaders and team members from the widest cross section of global companies possible to complete this survey he created.

This survey takes only about 5 to 10 minutes to complete, and all users retain their anonymity. Please do participate and feel free to pass this survey on to other colleagues actively involved in Lean and Six Sigma initiatives -- the more data gathered, the more accurate the research.

Making the Invisible Visible

In a recent blog post titled Green Money, I requested that readers provide their "thoughts on the tactics used and difficulties faced when mapping electronic value streams." I received an insightful response from Carlos Venegas (author of the book Flow in the Office) explaining how he approaches that subject, so I am presenting it here:

“The key task in improving any electronic or office process is making the invisible visible. In factory environments, you can see what’s happening. We don’t always have that luxury in the office. Too much happens inside computers, inside people’s heads, and between people in conversations and meetings. Luckily, there are ways to make the invisible visible.

Let’s start with value stream mapping (VSM). This tool is excellent for making the invisible visible. Because you are capturing blocks of activity on the value stream map, you are making the invisible visible. It’s really a no-brainer. You must not do anything different if you think of automated processes as blocks of work, just like in a factory process. From the VSM, you can determine which systems are parts of kaizen opportunities.

It’s in these kaizen opportunities that people tend to run into problems. How do you address an office process or computerized process using lean tools and principles? Again, the key challenge is making the invisible visible.

Here’s one way to do it: build a workflow chart. Within the scope/boundaries of the targeted process, print out screen captures of every single screen used in a process. Then put the screen captures up sequentially. Now, draw lines from data element to data element. (Sometimes there are paper forms used in the process; include those, too.) The workflow chart helps the team see the four wastes of the office: information waste, process waste, physical waste, and people inefficiencies.

In factory workshops, teams will often do a process walk to level-set the team concerning the process and the wastes held within. The workflow chart gives the office team the opportunity to have a ‘virtual’ process walk. They can use the workflow chart to understand the process, identify the specific wastes, and design experiments, and then document the solutions.”

Lean "Mentor" Hospitals

Although I always like reading about the successes gained from a lean initiative, I don't mind hearing about them as well! Listen to this news report from Dave Padilla from KCBS in California.

The proliferation of lean initiatives in healthcare during the past five years has been dramatic because of rising costs and the legacy of redundant and wasteful processes. It appears the Contra Costa Regional Medical Center in Martinez, CA revolutionized its operations and the quality of patient care after it adopted its version of a lean management design. The important strides -- most notably, the significant reduction of ventilator-associated pneumonia instances -- has resulted in the facility being named a "mentor hospital" by the Institute for Healthcare Improvement (IHI). Much praise should be given to CEO Anna Roth and her entire staff for the determined effort and measurable results.

Where do you see the potential power of lean making crucial improvements in hospitals and medical facilities? What are the biggest hurdles to not only the successful implementation of the tools but the development of the proper culture?

Green Money

Although many green initiatives -- such as the automobile and energy industries embracing hybrid technology and alternative fuel sources, respectively -- have been receiving much media attention, I was glad to find this article by Patrick J. Moore detailing the "greening" of treasury and bank processes. The "electronification" of processes resulting in paperless solutions is becoming the standard, not the exception.

Other than focusing on the obvious benefits of electronic processes, such as a saving of more than 2,208 pounds of paper saved per year by a typical corporate treasury, this article reveals the ancillary costs that some might not realize at first glance: more than 27,000 gallons of gasoline are saved by not transporting the paper once used in these processes and the reduction of significant storage fees to house the paper records.

One area that is not touched on in this article is the growing role of the IT department in regard to simplification and security. In addition, these departments must be careful not to introduce electronic waste in the revised processes. I'd like to hear comments and thoughts on the tactics used and difficulties faced when mapping electronic value streams. How does one rethink the use of typical "visual" management tools?

Lean Implementation Problems: Different Cultures, Same Mistakes?

I was recently perusing an article that appeared in the March 2010 issue of Asian Social Science titled Why Most Chinese Enterprises Fail in Deploying Lean Production authored by Lixia Chen and Bo Meng . In the section that details the problems encountered when deploying lean production, the four main mistakes that Chinese enterprises commit are:

1. Solely paying attention to lean tools.
2. Hoping to achieve quick results.
3. Indiscriminately imitating and copying the practices of others.
4. Mastering the superficial knowledge without understanding the essence of lean production.

I couldn't help but smile just a bit when I read those four obstacles -- Are any of these mistakes really specific to Chinese or any Asian culture? I'd bet that if I asked you to explain the four main causes of lean implementation failures in the USA, you'd construct a list almost exactly like this one. Is it not just basic human nature to try to simplify a complex transformation and merely focus on the immediate results?

Have any readers worked for or consulted with manufacturing organizations located in China? Please share your thoughts.

Toyota Customers and Their Confidence

As the congressional hearings on the Toyota recalls continue on Capitol Hill here in the US, Zogby International released the results of this interactive poll. Although it's interesting that most of the general adults surveyed still believe that Toyota vehicles are more safe than those produced by other automobile manufacturers, it's the information gleaned from current Toyota owners that's the most revealing: 39% believe that Toyota vehicles are more safe than other vehicles while 47% believe that Toyota vehicles are equally safe as other vehicles.

As the hearings continue today with testimony scheduled from Toyota president Akio Toyoda and the resulting media analysis and spin, most will be curious to see how these poll results might change. What are your thoughts of this poll? Are you surprised by the results? In regard to the congressional hearings, there has been much conversation about the intent and motives. Do you feel the hearings are providing a fair forum for Toyota and its customers?

To Whom Do You Listen? The Customer or the Market?

Many businesses throughout the years have been using an array of processes to capture customers' explicit requirements and as well as their unstated "wants" -- these techniques strive to hear "the voice of the customer." Recently, expanded, more robust versions of these processes have been developed and applied with the intent of capturing the "voice of the market" instead of just the voice of the customer. I asked Eric Reidenbach, author of a recent book on the topic, to explain the differences between the two. He replied:

"'Best in Market' is the accolade bestowed upon the market share leader. Look at John Deere in agriculture and Caterpillar in construction and you will find the two leaders who have built their leadership on the basis of superior value. Customer value is the best leading indicator of market share and top line revenues and comes from a deep understanding of how markets define value. Note that I said markets and not customers.

Many companies slavishly monitor the voice of the customer (VOC) but ignore the more powerful voice of the market (VOM). Market share derives from three sources:
1. Retaining current customers
2. Upgrading current customers to buy more, buy more frequently, etc.
3. Acquiring new customers.

The VOC is important in achieving the first two components of market share but cannot address the third component. It is the VOM that provides the information platform for acquiring new customers by being able to provide information on the competitive dynamics that drives share gains. Your value proposition is relative to that of your competitors and requires constant management. After all, if you are not managing your value proposition, who is? Answer: your competitors."