Monthly Archives: May 2014

Process Improvement Stages

by Douglas Wood

The End Game: Advanced Lean Tools

Deming talks about the feeling of importance

Diligent application of Six Sigma reduces process variation, and sets the stage for successful implementation of advanced Lean tools including total productive maintenance, drastic changeover or time reductions, Kanban inventory controls, single piece flow, demand pull, and agile production.

Prior to this end stage, early Lean tools establish consistent but variable processes. In the end stages, Six Sigma reduces process variation. This paves the way for advanced Lean tools to be applied effectively. The result is a world-class operation.

Of course, a company’s operational needs should guide where transitions take place. No two firms have the same needs, resources or environment. Often, those closest to the operation must make the choice of tools on the spot. The need for team and individual training is paramount, and while top leaders should be involved and supportive, those at operational levels must have good knowledge to more effectively make those instinctive choices and apply the tools correctly and quickly.

I have observed over years of experience that the choice of tool is less important than the approach and the guidance of leaders. I have seen the wrong tool used in the wrong way and the project succeed. I have also seen the right tool used the right way and the project fail. The difference between success and failure, in my opinion, is often the leadership and the engagement of all employees concerned.

Fortunately, the application of the tools of quality and process improvement by those doing the work task always results in an increase in engagement.

Lean Management Overview

by Douglas Wood

The Value of Lean Management
Your Lean journey will be a custom one however the value is common for all choosing this approach to manufacturing. Successful training and implementation require an understanding of the synergistic relationship between each of the Lean tools. This involves management training at many levels and affects a variety of support functions within a large organization. Doing Lean a little bit a time will make it much harder to implement, and will take away personal engagement that your people will see as they make a real difference.

Lean is a method of small-batch manufacturing that employs:

  • Less waste
  • Faster change over
  • Reliable system of materials and labor flow
  • Standard work and team flexibility
  • Production leveling
  • More orderly workplace
  • Flexible and reliable equipment
  • Better customer and supplier relationships
  • Engaged and creative employees who are secure in their work
  • Managers skilled in coaching and guidance

To achieve this ideal world from where we are now is a mighty leap, requiring many changes in our current practices. Yet there’s no doubt, industry will get there.

Lean has roots dating back to the early 20th century. From Peter Drucker’s Concept of the Corporation in 1946, to Alfred Sloan’s My Years with General Motors in 1965, to James Womack’s The Machine that Changed the World in 1990, there is a clear arc of growth in process quality. Lean is the current approach for today, not a revolution, but rather a return to the roots of earlier industry that followed a clear path determined by a seasoned, consistent leadership vision.

To thoroughly understand the intricacies of Lean, there are many subjects to learn. Even if your organization decides that some of the possible Lean subjects are outside the designated scope, success requires training in all subjects. In addition, timing of the training is crucial and should be delivered just before it is used, so that participants can exercise their learned knowledge right away.

Successful adult training uses practical exercises to help internalize the material. Lecture, recorded, or self-study learning is limiting. Whether training is delivered face-to-face or online, each course should provide a chance for participants to practice what they are learning. Live interaction is key to mastering new subjects, and a chance to ask questions is invaluable.

A broad list of Lean subject areas:

  • Planning
  • Five S Approach
  • Standard Work
  • Involvement
  • Total Productive Maintenance
  • Value Stream Mapping
  • Human Flow Automation (Jidoka)
  • Just-in-time

These subject areas do not stand-alone. Each interweaves with the others, and implementation should consider that relationship. For example, The Five S approach is needed before work standardization can begin, and both require a strong dose of employee involvement and team management to succeed. Value Stream Mapping relies on work standardization, and Total Productive Maintenance is a needed precursor to Just-in-time.

Cautionary note: In my experience, if you try to implement Lean and leave out any of the key parts, you will fail to gain the full benefits. Indeed, you may fail to gain any benefits leaving your cost, quality, and/or service worse than before you started.

Two helpful teaching approaches include inserting Lean into interrelated courses so participants more easily understand Lean subject relationships; and manager overview training for more effective oversight of Lean implementation.

Lean involves many levels of management

Lean is far more than an operations issue. It helps individuals at different levels and in varying support areas.

General managers are often challenged with reducing cost while increasing capacity, capability and agility, improving customer satisfaction, increasing team motivation, improving product/service quality permanently, and reducing costly supplier issues—a tall order that Lean can handle.

Functional managers have a slightly different series of challenges. They need to make tactical improvements that smooth workflow. Success requires them to eliminate bottlenecks in production, decrease work cycle time, reduce rework, scrap, and service issues, and reduce good employee turnover. Again, Lean done right will help with all these issues.

Quality managers may also see Lean as a solution. Lean reduces massive defects (and the need for sampling plans) because a key Lean tactic is requiring employees to check their own work. The quality department must be the center of excellence for the various Lean tools and approaches and their influence may actually expand with Lean implementation.

Lean also affects many support areas. For example, HR should have an understanding of the skill needs and conflicts that could arise from Lean implementation. There is often dislocation when one area reduces labor while other areas increase labor to handle rising or changing demand and HR must be prepared.

Lean is not an acronym for ‘Less Employees Are Needed.’ This philosophy will put you on the fast track to the proverbial ‘crash and burn.’ Although some firms have had large layoffs combined with Lean, the Lean implementation followed the layoffs, and was not the cause of the layoffs. These firms were in deep trouble, and their Lean journey was the way to growth in employment, not more layoffs.

Register for Lean Courses Now

Cut the Cost of Mistakes

by Douglas Wood

The High Cost of Mistakes
Success depends on knowing the aggregate cost of failures within your organization—you cannot fix what is not measured. Even in rough form, the number will drive action. Profitable firms spend a great deal of money on mistakes; fixing them, trying to find them before they happen, avoiding them.

deming process integration

In our experience, we have learned that in a well-run firm, the cost of mistakes is often 5-10 percent of sales. This may sound incredible, but firms that are having problems experience costs as high as 20 percent!
We have seen in firm after firm, that measuring ‘quality costs’ provides the best way to reduce expenses, guide multiple improvement programs, and engage employees.

Think about this: how would it change things for you to be able to see all three: prevention expenses, measurement expenses, and the costs of mistakes? What kind of behavior changes would occur? How could you take charge of change? Would it drive a culture shift at your firm?

Prevention, Appraisal, Failure
We can teach you how to track three areas of cost, culled from your databases. We call it a PAF model, after the core cost components: Prevention, Appraisal, and Failure. The goal is to increase the smaller first two values and reduce the third, larger cost. It is easier said than done, unless you have the key.

Balance Sheet Cause and Effect
Can you pinpoint cause and effect in your balance sheet? You know that an ounce of prevention is worth a pound of cure, but can you manage prevention activities from a quick review of your existing management reports? The PAF model allows your entire team to see issues that cause inefficiencies and offer changes that may eliminate waste with only small investments in prevention.

The Challenges of Driving the Right Behavior
At times, you may feel that managing your team is like “herding cats.” Perhaps you are not measuring or reporting the costs in a way that everyone can understand. We have had years of experience in this arena. To gain the right behavior, you need to give the right motivation. Control means measurement, and others must understand the measure. It can be done! Let us help you accomplish this without imposing a burden in reporting and data collection.

The Long Term View: Working with Leadership Change
Have you ever seen a change in leadership derail a good improvement program? If your program is based on “doing the right thing” in the minds of your leadership, then a change in leadership is likely to change the program. Cost of quality efforts focus on maintaining strategic process improvement, therefore changes in leadership should not be a stumbling block to ongoing, forward progress. After all, most strategy is done in dollars and cents (or whatever your currency is.)

Register for Cost of Quality Courses Now