Monday, July 30, 2012

What Are Belts and What Do I Do With Them??

Back in the late 90's, before Lean Guy and Money Girl were on the team, you may have worked in a factory with someone who said they were a Green Belt or Black Belt.  I'm sure you responded with some kind of Bruce Lee move or a Chuck Norris fact.  The Belt probably mentioned the F-Test, and you giggled, or talked about your misapplication of ANOVA because your data is obviously exhibiting a Weibull distribution.  You probably rolled your eyes and walked away shaking your head.

In today's environment the Belt is required to be more than a DOE expert.  The type of Belts you have should drive the activities being pursued.  The American Society for Quality may hold a standard for Green Belts and Black Belts, but many companies have developed their own standards for their own needs at the the amount of money they want to spend.

So what are these different Belts and what can they do for you and your operations?

Looking across the organization at external suppliers and customers are Master Black Belts or experienced Black Belts.  These people work with executive leadership and management to help identify and prioritize opportunities to improve flow, cycle time, quality, customer satisfaction, or other Voice of the Customer.  Their tool boxes may contain Learning to See Value Stream Maps, House of Quality or Lean Function Deployment, and have the ability to lead any team through any problem no matter where it exists in the organization.  Master Black Belts also develop training, and teach and mentor Black Belts.

Black Belts are equipped to solve problems across organizations in one site.  They can lead projects or 3P events that are larger in scope from a VSM, teach and mentor Green Belts, execute design of experiments, and design processes with less waste and variation.  Properly motivated Black Belts may be the best choice to fill Leadership positions since they are not afraid of metrics.

Green Belts can be thought of as people in the best position to learn about the operations.  They can handle small scope problems like quality defects or long cycle times on the operations.  Any of the statistical tests can be executed in a well-known spreadsheet and process flows can be analyzed on the wall.  High-powered statistical and simulation software is not required for Green Belts.

The Belts are simply people with the skills and knowledge to make good change.  The difference is in the scope and tools.  Think golf ball size scope & tools for Green Belts, beach ball size for Black Belts, and a row of beach balls for Master Black Belts.

Important message to Leadership!

Pulling the Belts into action requires Vision and Direction, two products Leaders need to have in their pockets at all times.  Unless you have some sick addiction to being the best fire-fighter, you should know where you are leading the organization.  This is a plan that can be monitored visually.  As problems are eliminated, record them on an A3 and reward good behavior.

These important skills and knowledge are being paid for and many Belts are standing by and ready to be put in the game.  Leadership's task is to have a well defined problem statement and SMART goals.

What has been your experience in getting pulled into the flow to make good change?

Monday, July 23, 2012

Costs Saved or Avoided?

Improvement opportunities in the office are everywhere; document reviews and the resulting rework, quarterly or monthly tasks that are late, and the amount of money spent on printing paper that ends up in the recycling bin, just to name a very few.

Sometimes Continuous Improvement teams have to justify their existence so they set financial targets.  Usually something bold like 1-2% of budget or 5-10% of salary (that's not really bold).  These become very interesting when the Lean Guy asks how much is a minute of downtime worth in our office processes or to show the metrics?  This turns into Lean Transformation only by project, not at the enterprise, and starts the familiar battle between two obvious allies, the Lean Guy and the Money Girl.

When charters are created and signed off by the Project Sponsor, we have to go create the "business case" for the projects.  This is usually a half dreamed up estimate with a shaky basis to a disco beat.  Enter Money Girl with her list of questions and the first one revolves around how much money can she have back at the end of the project.

Lean Guy's or Project Sponsor's first response is, "This is all cost avoidance".  Which is code for, "You ain't getting any of this money back" or "You slashed our budget last year".

Let's first have a common understanding of the terms, and this will work in almost any environment whether it's manufacturing, health care, design, government, or services.
1.  Cost Avoidance - This is where we decide to keep any money saved to use on other projects, or we were already overrunning budgets and this project brings us a step closer to even.
2.  Cost Savings - This is where we are going to return some amount of the savings back to the provider.

Cost avoidances can show up as improvements to Cost of Poor Quality.  This cost is usually comprised of rework costs, repair costs, and scrap costs, and all three of these are comprised of unplanned labor and material.  In the office processes rework will outweigh the other two as they are usually associated with manufacturing.

As we consider the amount of rework in our processes we use the amount of time we are actually touching the things we are creating and was kind of material we are using.  Material is easy to calculate as it is the number pages you printed before you stop seeing your document return for more rework, multiplied against the printing costs per page.  This number can be found online or provided by your handy-dandy IT Helpdesk friends.  Try not to pass out when you see the number and when blood is pumping again into your head, don't call the IT people to scrap all the printers.  Think about how to make information portable.

Another will come from the variation in the different ways the different team members perform the same task.  This may be measured in minutes or hours, but this needs to be one of your measures.  You can pull time & date stamps if you use an automated work-flow control system or email.  When you have a well documented baseline, share it with the team, maybe pull out a fishbone and ask why a few times.  When you begin developing a solution remember that email is not an automated work-flow control tool.

Cost savings arrives in the form of performing better than budgeted or projected.  This will be simple to calculate and defend if this can be applied to the cost of the product going to the paying customer.  If the new performance does not manifest increased demand, then you may find yourself overstaffed.  This is a great opportunity to think about other ways to add value to the internal products, or see if opportunity exists elsewhere in the firm.

Keep in mind that LEAN is not an acronym for Less Employees Are Needed.  I have seen this model used without improving the flow or scope of work tasks and within a short time the number of people were back to original levels.  This type of activity reduces the trust in you from your team members and would be labeled as L.A.M.E., a concept developed by Mark Graban, a blogger at Lean Blog.

If we are going to sell your improvement as a cost savings, there should be a reduction in the final price of the product for manufacturing or service organizations, or elimination of unneeded assets, or reduction in the tax rate for tax payers.  If the money is "intercepted" and used somewhere else, this is no longer a savings.

Although money is a great way to talk about projects, Lean Transformation is reflected in the Customer and the employees working in the information processes.  Don't ignore elimination of the other wastes just because you cannot quantify a financial figure.  If reducing the wait time a report experiences in the flow improves customer satisfaction, then you learn what you can about the flow stopper and improve your process.

What are your thoughts and what have you experienced?

Monday, July 16, 2012

Just-In-Time for What?

What JIT is and what JIT is not...

Just-In-Time, three little words that strike fear in the hearts of American manufacturing.  Site Leaders, Production Control & Logistics Managers, Team Leads, Purchasing Directors, and the list goes on of people who thought JIT meant that we could close our warehouses and just order parts we need when we need them and not have to worry about anything else.

Sorry, but that is just not right.  We have seen the results; late parts that causes the lines to stop, creates new positions in the company called expeditors, generation of new reports on shortages with special color codes and plenty of columns of useless information.  People get fed up with this thinking and go rogue.  We "find" parts outside of the supply chain, usually in someone's "safety stock" in their desk.  But that will not sustain the system for long.




Now that the rant is over let's talk about what JIT really is.  Using Just-In-Time thinking requires alignment of all activities on the "thing" going through the process to the final (paying) customer.  JIT is a future state of thinking, a result of implementing the 5 steps of Lean Transformation.  Remember, Lean is not a program, but how we run the business.

As waste and variation are removed, you are left with a stable and predictable flow where the work can be loaded equally through the different value-added teams.  This gives you the chance to measure the material required to produce your product.  How much paper do you go through in a month?  What is the cost of office supplies?  How often do you need to archive data to keep your servers available?  Are your teams spread out randomly, only where you could find space, or are they strategically located near the customers?  What is the $$ value of your work in process?

Yes, those are a lot of questions!  Important questions, and you should be asking more, even snotty questions.  And don't forget to ask the team if there are any roadblocks that need to be knocked down.  The intent is to guide the improvement teams to think outside of their "safe" places.

But we are not harassing the team to implement your idea of how the process is supposed to operate in your head, but enable the teams to succeed.  These questions may push the team to create break-through process redesign.  In the end we are looking for processes that operate to customer needs at the lowest possible cost.

As your internal operations begin flowing predictably, it's time to look at your suppliers.  Do they really provide the items you need, when you need it, at the amount your need it, and the right quality?  More questions?  Yes!

Time to reliably replenish is the metric for suppliers.  It captures quality, on-time delivery, and order delivery levels.  Use this information to know if you need to work supplier development opportunities as they should pay off in the long-term.  And make sure you include your engineers, supply chain pros, and quality.

JIT is a great result to achieve.  Lower WIP costs (WIP = Labor + Material), and lower overhead because we are holding the right amount of stuff we need in stores to support our activities.  Don't just think of it as a factory target, but as one that pays back to the bottom line and increases shareholder value.

Monday, July 9, 2012

What Are the Right Measures to Use In the Office

It's Friday afternoon and it's quiet, almost too quiet.  Your phone rings and it's the boss telling you to come to her office, now.

What is it now?  I'm almost done with my TPS report and I have big plans this weekend!

You find your pen and something to write on, and head to her office.  It's like this every last Friday of the month, a panic discussion about the end of the month metrics.

We're overrunning our IT and overhead budgets, what sales orders can be closed before the end of the month, and which suppliers we put off paying for another 30 days?

It's the same panic-attack every month, and the last branch chief was worse.  We should be able to predict these things instead of going through all this drama.  Some way of looking each week to see how we are doing. But we don't work on a manufacturing floor, we push paper around the office, we are completely different.

Wow, I think we have seen this situation play out more than once.  The key here is not only figuring out how to avoid the panic attack, but to be able to predict how the month will end with plenty of time to respond.  This journey certain starts with recognizing who the customer is and what do they want.  If the thing we are working on goes to a customer whether inside or outside, we will use the Voice of the Customer (VOC) to develop our metrics.  If there are corporate or team objectives we reaching for, we will use Voice of the Business (VOB) to develop the metrics.

The VOC conversation starts with something like "what are the things about my product that need to be perfect?".  The "things" may focus on delivery, quality, cost, performance characteristics, or any other "thing" that may be on the customer's mind at that moment.  You will need to guide the conversation based on some feedback you may have or you will spend weeks in the weeds chasing rabbits. These conversations will help improve the relationships with your paying customers and provide a creative outlet for the team to work toward instead of the day-by-day painting of rocks trying to find the color the customer wants.

The VOB conversation is based on those corporate objectives that come down at the beginning of the year, newly created government regulations, or corporate governance policies.  The boss is giving you signals that you probably should not ignore and some exploration of details of how to execute policies can provide insight on how to measure the execution.

Take this information back to the team and explore their input on what those measures are and how that data is collected.  Do you have systems that you work within that collect time and date stamps, who is contributing to or approving steps in the work flow, track travel budget or sales totals?  These may be sources of data needed to create the metrics that can show if the team is on track or not.  It may take a little time to create a baseline, but you will soon be on your way to avert being blind-sided.

When you have the metrics created, don't just hide them on the corporate share-point servers.  Share them with the team, talk about the performance and maybe some root causes if the performance is not where it should be.  Teach the team how to talk about performance improvement and don't use a bunch of Japanese or Six Sigma words to show everyone how enlightened you are.  This is not a finger-pointing session.


In the mid-90's I worked for a telecommunication company in prototype manufacturing, building typical quantities from 1 to 10 with the median quantity being 2 or 3.  Our model was Low Volume/High Mix and we were in the change-over business.  The boss kicked-off one of our weekly staff meetings with the question, "Where is the waste in our processes?".  This was an odd question, and instead of someone asking what he meant by "waste", the two main factions began to attack each other.  The meeting did not end well, but it did start me thinking about how we transform information and material into circuit boards.

We had business goals (VOB), build prototype work orders in 3 days and pilot production work orders in 7 days.  This was easy to think about in manufacturing, but I was leading the machine programmers, we were creating software programs and reports.  In reality we had about 2 hours to complete our work that fed into the next steps of the process that eventually provided engineering with test results to a final customer that was buying our stuff.

Ultimately we had to show that we were helping to improve our processes and we did this through the use of metrics over time.  Metrics that were reviewed on a weekly basis with the actual team doing the actual work.  When we were aware of a problem, we would convene on that problem, talk about root causes, determine what to do about it, and update the deskguide we used for how we performed the work.  And all this was tracked in our metrics based on the reports we were producing.

As you begin looking at what you do and what metrics are relevant, what you finally decide to use may be very different compared to what you started with.  This is part of the journey, finding the right roads to take you where you are going.  And if you want something quick and dirty to start with, three popular measures are On-time Delivery, Percent Complete Delivered, and Quality Yield. Remain positive with the team, some emotions will rise up and remind everyone that we are in this together.

Tuesday, July 3, 2012

Book Review: A3 Problem Solving

Over the past week I had a chance to read "A3 Problem Solving" by Jamie Flinchbaugh.  This book is easy to read and Jamie does a great job connecting the dots at the high level down to how a team interacts with the information and knowledge gained using the form.  Leaders will gain understanding of transformation that sticks.



A3's are a one-page brief of the opportunity or project that reads through the Plan-Do-Check-Act cycle.  I'm sure some of us have seen 125 slide briefings of Green Belt or Black Belt projects, but this brings it to a scope appropriate for easy and quick consumption.  I used the word "opportunity" because problems we have on our teams with performance are a chance for all of us to learn.

The profound part of the book is about measuring the success of Lean.  It's not about the number of people trained, but "the percentage of the leader's own work that has changed". You can see the change in the performance of the team, and the practices of the leader.

Whether you are new or old to Lean Office transformation, this book can provide further insight to the use of A3.  I highly recommend this book to all of my readers.

Monday, July 2, 2012

Lean Thinking - Find the Next Opportunity

Reaching the fifth step of our Lean Office transformation journey doesn't mean we are done.  In many cases you will find that as customer satisfaction is increase, in performance and cost, demand should increase.



5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.



The teams that reside up and down the value stream have been working hard to improve the internal processes used, linking those improvements to what is important to our customers needs, improving the reliability from our suppliers, and removing the systems that are not working how we want.  It has been a busy couple of years, but we are stronger as an organization and sales are really picking up.

It's easy just to pull onto the next off-ramp, close your eyes and watch everything run perfectly, but this is not going to be the case.  Although you thought that you had successfully fired Murphy, he will show up again.  It may not be with this team or branch, but someone will pick up the Murphy flag.  These instances will test the system we developed; our visual controls, and our team's ability to find root causes and tweak the standard work. 

One popular tool is the After-Action-Review (AAR).  This is a method that can be completed in a short amount of time, usually less than an hour, compared to a 12 month Six Sigma project or a 6 week Kaizen event.  The AAR asks four questions; 1) What happened, 2) What was supposed to happen, 3) Why did it happen, and 4) What can we do in the future to keep it from happening again.  Using this technique teaches teams to become Learning Organizations, as opposed to only groups of individuals working interdependently on the same product and using the "Hope for Change" to get good results.

At the same time we go back to step one in the journey to decide what product needs help next.  While we are learning to see the interactions in the enterprise, opportunities will begin to fill the suggestion box.  This helps to further enhance the "Respect For People" aspect of transformational change.  I'm sure we have all seen the signs that say "People Are #1" and listening to them proves it.

During this journey you will find people who need to be in Leadership positions.  Those Leaders will need to be charged with the duty of developing the next generation of Leaders the ability to think about the long-term costs of inaction.  This is a skill that has been lost over the years that needs to be reclaimed and it is up to us to do that.  They are the teachers and mentors in the Learning Organization.

Question everything, why is performance bad or why is performance good?  Learn it, share it, and apply it.