Does Lean Help the Smaller Companies?

I came across this article over on the Bloomberg.com site that details the struggles of Saab (the Swedish carmaker) during the past year to remain in business after its sale to Spyker Cars from General Motors. The situation is quite grim with suppliers halting shipments because of unpaid debts.

A quote from Garel Rhys, president of the automotive industry research center at Cardiff University in Wales, stood out. He states that: "There was a period about 25, 30 years ago when people mistakenly thought that things like lean production would allow the smaller carmakers to survive easily against the bigger companies. Nothing of the sort has happened."

What do you think of this statement? Is this the promise of Lean production? Can successful Lean initiatives alone guarantee survival? I look forward to your comments.

Is IT Overfed Yet Undernourished?

Steve Bell and Mike Orzen -- whose book, Lean IT: Enabling and Sustaining Your Lean Transformation, just won a 2011 Shingo Prize for Operational Excellence, Research and Professional Publication Award -- recently authored a short article for the online magazine IT Today.

Because 80% of most firms' IT (information technology) budgets are spent on "maintaining," while only 20% goes to "improving," Steve and Mike contend that this situation, like the disturbing trend in the eating habits of the US population, has created "overfed yet undernourished" IT operations and infrastructure. These costly efforts are not focused on creating value.

The authors feel that many organizations forget that "Lean is not free, it requires investment" and must remember to "create sufficient slack time in the schedule to allow workers to perform continuous improvement activities."

Are any readers of this blog involved in a Lean initiative focused on the IT function? Do you agree with Steve and Mike's assessment?

Lean Office? Really?

Last week at the Annual Shingo Prize Conference, I had a chance to talk with Drew Locher, who just recently published a book titled Lean Office and Service Simplified: The Definitive How-To Guide and has previously won a Shingo award for a book he co-authored titled The Complete Lean Enterprise: Value Stream Mapping for Administrative and Office Processes. During our conversation, I asked Drew: "Can lean really be applied in an office and service environment where so much variation exists?" Here is Drew's complete response: Much of the variation found in an office and service environment is "self created." Lean concepts such as standard work, batch reduction, and leveling are just a few that directly address much of the variation that is encountered. For example, the lack of standard work usually means that people perform similar activities in different ways. This creates variation. An individual "batching" a particular activity creates variation in the amount of work that moves from person to person or department to department. For example, if a person performs an activity once a week, then a week’s worth of work will arrive at the next step all at once. Further, if the person performs this weekly activity at different times it creates still more variation for the recipient. From the recipient’s viewpoint, the demand for this work will appear to be very unpredictable. It is due to the manner in which it is processed by the previous person, however, and this can be changed and improved. Now, not all variation can be eliminated. We can, however, often accommodate still more of the variation that remains. Believe it or not, unplanned work can be planned for. We can put aside time for "drop-in" work so that it can be processed in a way that minimizes disruption. Experience has shown that up to 90% of the variation that people struggle with can be addressed by the application of lean concepts. The result is a much more predictable work environment that is more productive and less stressful. Has any reader of this blog tried apply Lean to an office, service, or transactional environment? Do you agree with Drew's comments?

What is Applied Concept Mapping?

Brian Moon of Perigean Technologies recently co-authored a book titled Applied Concept Mapping: Capturing, Analyzing, and Organizing Knowledge, and I asked him, quite simply, "What differentiates Applied Concept Mapping from other knowledge diagramming approaches?"

Brain gave me a clear and succinct answer, so I thought I'd post it here:

Applied concept mapping is the application of concept mapping to problem solving in the workplace. Concept mapping is a theoretically and scientifically grounded diagrammatic method of knowledge representation developed by Joseph D. Novak in the 1970s and originally intended for educational purposes. In the past couple of decades, concept mapping has been applied to a myriad of knowledge problems in the workplace, many of which are covered in our book.

While there are many approaches to “mapping intellectual landscapes," “idea mapping,” and “visual thinking,” applied concept mapping is distinct in many ways. Few if any, are grounded in as extensive a theoretical and scientific base as concept mapping. None require the level of specificity that is the hallmark of an effective concept map. Indeed, concept maps require not only the articulation of key concepts, but the specification of the nature of the relationship between them. This specification, as well as the semi-hierarchical shape of the map and the extensive use of ‘cross-links’ that emerge as otherwise disparate concepts are connected, distinguishes concept mapping from other approaches to knowledge diagramming.

When created in the CmapTools knowledge modeling software kit, concept maps can be put to a vast array of uses: knowledge elicitation, transfer, and management; lexicon and ontology development; modeling; training and organizational learning; product, software, cognitive systems, and organizational design and engineering; stakeholder engagement; analysis; and distributed planning. This flexibility in application is a major differentiator – innovations in application spring readily from the basic notion of representing key concepts and specifying their relationships.

Has any reader of this blog ever used concept maps as a problem-solving tool? Did they effectively help improve the process?

Spend Analysis -- What Makes a Part "Right"?

After Michael D. Holloway published his latest book -- Spend Analysis and Specification Development Using Failure Interpretation -- I discussed with him the effects of machine downtime and replacement costs. I asked: "If I'm working in a plant, and I have so many different parts that I buy, how can I possibly figure out what is costing me the most in terms of reliability and affecting my operations?"

He had an insightful answer, and I'm reproducing it here:

Great question! First, many items purchased are done so because items either wear out or break prematurely. Some items such as pumps and motors may leave a big impression on us because the failure is dramatic but a screw, grease, or an adhesive may not be such a big deal at first glance. That is where many people make a costly mistake. One must first understand cost and value before one can appreciate the cost of failure. It is best to follow a Purchasing Specification Development Process, and I have outlined one in my book. It will aid you in identifying the reasons for purchase and failures as well as how to determine which items are costing the most. In addition, it will help you develop a comprehensive procurement specification that will drive down operation costs. When you are able to talk about these failures and examine the data as it relates to not only the cost of the item but the downtime and labor it takes to repair or replace it, it becomes obvious what to attack first. It is very important that you don’t take on too much and also to include others from different parts of the operation. Often the operators understand the equipment far better than anyone else.

What is the common factor that influences a purchasing decision in your organization? Is it price? Would this be the case if the engineering, production, and maintenance teams were involved in the purchasing requirements and part and product procurement specifications?

Process Capability and Discrimination Ratios

During a recent phone call with Douglas Relyea, author of the book The Practical Application of the Process Capability Study: Evolving From Product Control to Process Control, he mentioned some common questions that arise when consulting with leaders or organizations. I'll let Doug take it from here:

"A company CEO asked me this question just this week, and I receive many similar questions in regard to gauges:

I understand the measurement process analysis (MPA) performed on product XYZ bond strength indicates we have a discrimination ratio (DR) of 2 which, if I understand correctly, means we can use this gauge to separate XYZ product into only two categories – good and bad. Should we buy a new gauge?

My answer is:

No. A low DR is not always a negative. A low DR can be the result of manufactured product that has very little variation as compared to the variation of the measurement process.

In this case, the product variation is 9 gms/in² and the measurement process variation is 47 gms/in². The customer specification is 400 gms/in², minus 50 gms/in² with no upper limit stipulated. The production records indicate the bond for this particular product is generally produced with a mean of 500 gms/in². This measurement process is suitable to tell good product from bad and, in this case, that is all that is required. "

Do you agree with Doug's assessment?

What About Standardized Work?

I recently spoke to Timothy D. Martin and Jeffrey T. Bell, who recently published a book titled New Horizons in Standardized Work: Techniques for Manufacturing and Business Process Improvement, about the role standardized work plays the performance of processes. I asked them flat out: "What would be the most important point that you want to make about standardized work?" Here is their unedited reply:

Over the years, we learned quite a bit from the many mistakes that we made as well as our successes in applying standardized work in many diverse processes. We also found that others were often very interested in how we “saw” ways to apply standardized work. To ensure that we did not lose these experiences, we tried to summarize and capture the thinking behind our adaptation efforts. This is one of the reasons behind the idea of “new horizons”. We felt it was important to share these experiences and hopefully offer more detailed information on standardized work itself. Although there are a lot of books about the Toyota Production System (TPS) and lean manufacturing, standardized work often appears in limited detail. We felt that this might have led to some of the common misconceptions that we were running into about standardized work.

One of the main misconceptions is that there appears to be a common belief that standardized work applies only to manufacturing processes with short repeatable work cycles. We believe that standardized work principles can be applied to virtually any situation where work is involved. Toyota has taught us that we should not blindly copy what they have done, but rather that we must instead strive to understand the thinking behind TPS so that it can be adapted to our processes. This thinking, which includes standardized work, can be adapted to processes used in the office, on a construction site, in the kitchen, in an operating room, or even in the board room. The extent of these principles and philosophies is limited only by your determination."

Do you agree with Tim and Jeff? Can standardized work really be effective off the manufacturing floor? Do you think it would work with long work cycles? Is it dangerous in some particular professions to standardize work?

Misguided Pragmatism and Its Impact on Lean

I recently had a conversation with John W. Davis, author of Progressive Kaizen:: The Key to Gaining a Global Competitive Advantage and president of WFM Associates, and he discussed what he call "misguided pragmatism" in regard to Lean initiatives in US companies. I asked him to elaborate and here was his response:

It has been well over a decade since US industry was introduced to the Toyota Production System (TPS). During the same period, US manufacturing has gone through the greatest surge of plant closings and layoffs since the Great Depression - and the trend seems far from over. At first glance, this would serve to leave the impression that Lean Production has not been the panacea it was touted to be. But is the culprit Lean itself or how US industry typically aligns itself to the task?

That is a question that has and will continue to be explored in corporate offices and boardrooms across America. But to do the matter justice, the issue of conventional mindset and its impact simply cannot be ignored. Misguided pragmatism comes to bear when management accepts the need for change, but holds strong proclivities related to the way business has always been conducted. Coupling this with pragmatism surrounding the value of the change itself and the result will always be a restriction in the depth of Lean implementation pursued.

If the ultimate mission, assumed or otherwise, is to implement some of the tools of TPS, efforts will be applied at inserting various levels of Kanban, SMED, Poka-Yoke, etc. On the other hand, if the mission is aimed at fully and irreversibly changing the system of production (and is clearly understood as such by all concerned), strong efforts in achieving that goal can occur. The driving objective has to be more than making incremental improvement to an old and cumbersome system of production. It has to be aimed at establishing a mindset that a full and complete change to the system of production is absolutely crucial. If that one point is effectively understood, everything else will tend to fall in place.

What do you think of John's opinion? Do you feel that Lean initiatives have the tendency to merely "shine and polish" an outdated system instead of creating a transformation?

Lean for the Public Sector

I recently spoke with Bert Teeuwen who has spent 12 years as trainer, coach, and implementer of Lean in both industrial and public environment and currently serves as a consultant with the WagenaarHoes organization. He recently published a book titled Lean for the Public Sector: The Pursuit of Perfection in Government Services.

I asked Bert: "The title of your book suggests that processes in government are so unique they demand a specific Lean method to improve them. Why are these particular methods needed?" Bert's reply was quite interesting:

Most books about Lean are written with industry in mind. All the examples are about machines and installations. Some books are about Lean in the office, but civil servants are not impressed by all these examples from businesses. Public servants want to read a book about Lean when it contains examples from their own working environment.

The main reason, however, is that Lean in the public sector is indeed different! Organizations in the public sector function on a non-profit basis, so what should they do with the time or money earned with Lean? Another point is that considering a citizen as a customer is not always correct. Citizens are customers sometimes, but often they are subjects, voters, taxpayers, and users. When a parking guard or a policeman gives you a bill for incorrectly parking your car. Are you his customer? Are you in the position to say no and go to a competitor? In addition, consider the application for a building permit. As far as the applicants are concerned, they can build perfectly without that permit. But the permit was not created to solely serve the applicants but, for example, to protect their neighbors against excessive and intruding extensions to the applicants' houses. There is a different discussion about who is adding value to whom in the public sector.

And what about the pull principle? What is pull in the public sector? Is pull in the public sector always better? No, sometimes push is better, because the government has a duty to provide certain services for its citizens, even when they don't ask for it.

What are your thoughts about Bert's reply? What do see as the particular needs of the public sector in regard to Lean initiatives?

Receiving Effective Feedback

I recently had a conversation with change management expert Rick Maurer, who recently published a second edition of his best-selling book, Feedback Toolkit: 16 Tools for Better Communication in the Workplace. While we agreed that feedback is essential at work, I stated that many would say that they don’t receive effective feedback. I asked Rick to offer his opinion on why many employees feel this way. Here is his response:

"Feedback can mess with our self-image. In spite of what we say, most of us don’t want people telling us that we fell short or are doing something the wrong way. So, we set up mechanisms to protect ourselves from hearing anything that might disrupt our fragile view of who we are. For example, we surround ourselves with the proverbial yes-men and yes-women or we send mixed messages. The movie model, Samuel Goldwyn, once said 'I want people to tell me the truth, even if it costs them their jobs.' Wise employees understood which part of the message to heed.

If we want a workplace where colleagues give us feedback, then we must do things that assure people we truly want to hear from them. Here are a few points to consider:

• Only ask for feedback if you are willing to hear what others have to say. Otherwise, you are setting them and yourself up for a very uncomfortable exchange.
• The only appropriate response to feedback is 'thank you.' Of course you can ask questions of clarification, but don’t make excuses or explain your reasons for doing something.
• Make it easy for others to give you feedback. Jack was a client of mine who asked people to anonymously write reactions to a new management initiative on index cards and submit them to his secretary. At the all-hands meeting, he first said 'thank you.' And then he picked up that large stack of cards and responded to questions and comments. He did not defend himself. He took responsibility for his actions and decisions, and used their feedback to engage them in a conversation about what comes next.
• Jack found a way that made it easy for him to take in what others had to say. Note that he did not ask for comments during the meeting. He knew that he might hear something that would cause him to go ballistic, and that would end the meeting. . Getting comments before the meeting gave him time to react privately before he met with the team."

What are your thoughts on Rick's comments? Does your workplace environment foster true communication or is it merely an exercise?