Blog Archives

The Power of Direct Observation in Retail

All to often people make changes based on data without taking the time to observe what is really happening.  This can lead to decisions that are not in the best interest of the business.

Recently, in our retail shop the data showed that we had some product that was not selling.  If we would have gone strictly with the data, we would probably clearance out the product and not carry it anymore.  But, we believed the product was something that people truly wanted.

Instead, we observed people as they perused the shop.  What we saw was people weren’t even seeing the product with the way they were shopping the store.

We decided to re-merchandise the store and almost instantly, as in the next day, we had sales on the product that wasn’t selling.

Data didn’t tell us the problem, but it did point us in the direction of a problem.  That is were data is very helpful, but the power came in observation.  Observation helped us see what the problem truly was so we could take appropriate action.

Do you take the time to observe the problem?  Or do you just manage by data?

Jumpping to Improvement

I have talked in the past about the importance of direct observation.  The power in seeing the waste for yourself.  It really shines a light on what is really happening and it also is the best way for a person to continue to learn.

The question is,  “What do you do with those observations?”

Most often, I see people run out and try to eliminate or reduce the waste or even assign it to someone else to do.  While not entirely a bad thing, if you are trying to instill a lean culture don’t just jump to trying to improve.

Stop and reflect about what you are trying to do as an organization and use the waste you saw as a way to further the lean culture.

Most organizations I have seen do not have a systematic way to eliminate waste.  Usually, this is because waste is one of the first things people learn about lean.  What happens is people just go out and attack waste (again not a bad thing) without any direction.

If your organization is early on in trying to implement a lean culture, think about how you can make the waste elimination systematic.

Is this a good way to engage employees in a kaizen event to start to build trust?  Could be an easy win for everyone.

Should an improvement board to post the waste seen and how it is detracting a better option?  Use the waste you saw as an example of how to use the board and go and eliminate it yourself or with the help of others, but be involved.

If you observed multiple areas, do you want to concentrate in one department?  Make it a model for others in the organization.

Think about how you can make the waste elimination sustainable and systematic.  This will benefit you and the organization in the long run.

Buying New Equipment? Use What You Got.

During some recent blog reading, I was spurred to think about a past situation when a company I worked for was buying new equipment and how WRONG this decision was.

I had been with the company for about four weeks when I heard about a capital expenditure my director had just approved to buy nine more of a patented machine.  My company owned the patent.  That would give us a total of 99 of these machines.

First question I asked, “Why are we buying more of these machines?”

The response was a typical one, “We they need more capacity because we are meeting the demand.”

I didn’t ask anymore questions at that point.  I decided to go and see for myself.  This was easy because the corporate offices we were in was part of the main manufacturing building.  I had to walk about 100 yards.

During my observations I found two things:

  1. The overall OEE of the 90 machines was around 35-40% when it was running.
  2. At anytime I never saw more than 50 of the 90 machines running.  This was because we never had enough people to run all the machines.

SAY WHAT?!?!!

After a few hours of direct observation, it was clear there was no understanding of what was really going on.

First, attack changeovers and downtime to get the OEE of the machine up to the 75% range.

Second, why buy more machines if we can’t staff them?!

By my calculations, if the OEE was raised to the 75% range, not only would we not have to buy more machines we could get ride of about 20-25 machines we already had.  That would mean our current staffing would be pretty close to what we needed.

I presented this to my new boss and the director, but by this time it was too late.  The money had been cut and were pretty much crated and on the road to our facility.

This is why companies should question any new capital expenditures.  Companies should be maintaining and using what they have first.  The OEE should be at least 70% if not higher before considering adding more capacity through spending.

Do not make any decisions about capital expenditures until the current state is thoroughly understood.  The best way to do that is to go and see for yourself.

When in Doubt…Go and See

On a recent project, some senior leaders were asking for an update on the development of an app the team was building.  The team is using the Agile methodology, so there is progress and changes every day or two to the app.

Instead of trying to explain the progress, the team invited the senior leaders to the work space for a demo.

The demo went incredibly.  As soon as they saw the app, there was great understanding of how it worked.  Everyone was able to see not only the customer interaction, but also the aesthetics of the app.

The senior leaders asked some really great questions about the customer experience and how the app worked.  Because the team is using the Agile methodology, they were able to quickly add the changes to the app for a better customer experience.

If you want to understand something, go and see it.  It seems so simple.  Yet, that is not the first instinct of most.

By the team asking the senior leaders to come and see, they are setting an example of this behavior.  Hopefully, the senior leaders left with a sense that it was great they saw the app and the work environment and next time they have questions they just go and see.  Then it starts to carryover to other projects.  Slowly, the behavior starts to change because the benefits are seen.

Next time someone asks you for an update, take them to the work and show them.  Help change the behavior.

Lean In Project Management

Like so many that started learning and implementing lean in the late 1990s/early 2000s, I started applying lean principles and concepts in manufacturing.  I spent nearly 15 years applying lean thinking in a manufacturing environment.  I absolutely loved seeing the immediate change in material flow or the feedback from operators that someone listened to them and they were able to make things better.

It is no secret.  A manufacturing environment is a tangible environment to see the improvements and get quicker feedback back on how you are applying lean thinking because of the immediate visual results.

A couple of years ago, I moved from the manufacturing environment to the office/project management environment.  This was quite a change and one I looked at as a new challenge.  I took it on.  I have worked with product development and retail management teams.  Not even thinking twice as to what I was doing…until recently.

This summer I took on the role of project manager.  I am managing the deployment of technology to our retail environments.  The changes are not as immediate and not as visual as a manufacturing environment.  After a while, I questioned whether I was still applying lean principles to my work.  Finally, I took a step back to have a serious reflection and what I discovered is my previous 15+ years have engrained the thinking and principles without realizing it.

I have been directly observing the work as activities, connections and flows by sitting with the teams developing and testing the technology.  I see how the work and how the product works.  I have gone to a few retail stores to see the technology being used so I can bring those observations back to the team.  I also went to other retail stores using similar technology and talked with the store managers about what is working and what isn’t working for them.

The principle of systematic problem solving comes to light with using visual boards to status the project and highlight the problems that need to be worked on in the next 24-48 hrs.  We are trying to surface the problems quickly, so they can be resolved.  We have broken the issues down into categories to know which are the highest priority.

Systematic waste elimination comes from defining new processes that will continue once the project is launched.  We are working to improve and make them as efficient as we know how today.

Each day at standup, we are establishing high agreement on what we are going to be working on and how we will go about working on it.  This establishes clear ownership of the work and an expected due date.

Finally, we are learning about the product, the technology and our processes with every iteration.  Getting feedback incorporated into the product as quickly as possible.

The reflection helped me understand how I am using the lean principles everyday even if it is not in a tangible manufacturing environment.

How about you?  In what type of environment are you using the lean principles?

Gaming the System – MLB HGH Testing

There was an interesting story a couple of weeks back about the use of HGH in Major League Baseball (MLB).  It took years but there is finally testing for performance enhancing drugs, including human growth hormone (HGH).

The part that was most interesting from a lean and metrics standpoint was about the base lining of HGH.  Instead of using baseline data for the amount of HGH a person should have established by the World Anti-Doping Agency (WADA), MLB is establishing their own baseline.  What is even more incredible is the MLB is telling players when they will be tested for the baseline.

A MLB player can load himself with HGH in preparation for the test.  This would be no different than a department manager saving some of the extra production from the week before and print the finishing tickets the next week so both weeks look good.  MLB’s baseline procedure would allow players to skew the baseline to the high side.  Players could continue to take HGH as a performance enhancing drug and still “be within the baseline.”

This is gaming the system to your benefit and missing the true intention of what is trying to be accomplished.  This is why the principle of directly observing the work is so important.  When you go and see what is actually happening gaming the system becomes harder because you see the finished product on the floor waiting for tickets or that players might be juicing up for the baseline test.

A balanced scorecard and direct observation can help prevent gaming the system.

Great Direct Observation…A Quirk?

Last season a favorite TV show of mine had it’s final season (House).  This season a new show has started that I am enjoying quite a bit (Elementary).  The common thread in both shows is the main character is enthralled with solving the mystery.  The main tool they use is direct observation.  They are incredibly keen with what they see and what it means.

A trait both main characters share is the lack of social grace.  They can be considered jerks with the way they ask questions.  Yet, people overlook this because they solve the mystery.

I know these are TV shows, but to be that great at directly observing work, do you have to forget about social grace?  Does it allow the person ask more direct questions easier?  I don’t think so.  I may not be Dr. House or Sherlock Holmes but people can observe without losing their social grace.  I just find it interesting how TV portrays people with a keen skill for directly observing.

What are your thoughts?  Do you believe a person can ask questions and directly observe without being a jerk and do it at an extraordinary level?

Directly Observing in a Transactional or Service Environment

One of the lean principles I use is directly observe work as activities, connections and flows.  This sounds like a principle that would be easier to change.  In an environment where the deliverable is physical and moves between physical work spaces this principle is easier to live.  An example would be a manufacturing environment, where a widget is moving from machine to machine.  Is is easier to take the principle literally and go out and directly observe the widget.  A person can see the widget and the changes made to it.

Lean is not just applicable in these type of environments.  Lean is applicable in a transactional office or service environment as well.  This does not mean directly observing work is not possible.  It just means it is harder.

In a transactional/service environment you can sit with the person doing the work and ask questions as they do the work.  You will be able to learn a lot on an individual basis.

What if a group needs to learn and wants to observe?

It is really hard to cram multiple people into a cube or office…believe me, I have tried.  A different way to directly observe the work as activities, connections and flows is by creating a visual map of the process on a wall.  There are many types of maps and ways to map.  That isn’t as important as getting everyone to have a common understanding of what is actually happening.

The deeper purpose of directly observing work is to gain a thorough understanding of what is actually happening.  Not just one person.  Every person that is necessary must have a common understanding.  Reports can’t do that.  Neither can  sitting behind a desk.

There may be other ways to directly observe the work.  What is it you need to know?  What don’t you know/understand about the problem or process?  Once you understand what you need to know then you can determine how the way to gain that common understanding is for your situation.

How have you gained a common understanding around a process or issue?

Micromanaging…Or Lean Leadership?

I am a couple of weeks behind on this one, but I thought it was a good blog and worth mentioning.

If You’re Not Micromanaging, You’re Not Leading” was the title of a blog post by Michael Schrage at the Harvard Business Review blog site.

The title hijacked me right away.  Title alone goes against everything lean is about.  Then I read the article and found Michael was actually advocating for lean leadership behavior without calling it that.

…this vignette affirms my belief that leaders need to “go to the source”even before they turn to their best people. Seeing the data raw instead of analytically pre-chewed can have enormous impact on executive perceptions.

Sound familiar.  Michael is talking about directly observing the work.  A foundational principle of lean.  He gives a second example of why directly observing is important.

At one global telecommunications giant, for example, a critical network software upgrade was not only slipping further behind schedule, but the bug density was slowly creeping up, as well. The program managers’ key performance indicator dashboards showed nothing alarmingly unusual except the seemingly usual slippage and delays associated with a complex project with moving parts worldwide. The executive responsible for the deliverable (but not the software engineering itself) felt something amiss. The error rates felt too high and the delays too long, given the clarity of project milestones. He wasn’t technically sophisticated enough to read the code or analyze the testing, but he asked several project managers to share how their code was being documented. The raw material astonished and appalled him. The code was both hastily and poorly documented; the result was confusion and ambiguity that not only created delays but introduced errors into the software. The deadline-driven programmers, unfortunately, thought nothing of improvising just-in-time documentation via email, and misunderstandings and typos quickly propagated program-wide. The result was a worsening mess.

The executive intervention — making documentation a priority, streamlining version coordination, and changing the testing protocols — didn’t get the complex program back on schedule, but stopped things from getting worse, and dramatically improved both product quality and post-launch maintainability. It could never have happened unless leadership had the courage and competence to go to the source.

Great examples to bring drive home the point of how important directly observing the work is.  But, I do disagree with Michael on one thing…

Is this micromanagement? You bet! But real leaders are constantly called upon to create new contexts for people to succeed. Sometimes holding people accountable is the path of least resistance rather than what’s best for the organization.

I don’t think so.  Understanding current reality is not micromanaging.  It is necessary to be a great leader.

Micromanagement is telling your employees how they should be doing their job.  Worrying about how each detail is done which is different than worrying about what are the details and understanding the current reality.  There are quite a few comments below the blog mentioning similar thoughts also.  Micromanagement is more than just understanding the process and current reality.  Micro-managers fret about HOW you got the raw data or HOW you completed the work and try to tell you HOW to do the work.

Overall, a very good post.  I just hope it does not lead people down the path that understanding is micromanaging and then it carries over to be a black mark for lean.

What do you think?  Directly obrserving work or going to the source, Micromanaging?  Or not?

LEGO Showing Lean Like Behaviors

A few weeks ago, Ultimate Factories on National Geographic premiered an episode about LEGO.  My son is a HUGE LEGO fan and seems to have almost the whole LEGO City setup.  So this episode really caught our attention.

My son loved watching the artist/builders design the new Police Station and seeing all the sets being made in the factory.  What caught my attention were the things that seemed lean like.

Here is the full episode.  It is 45 minutes long.  Below are some highlights I picked out with time markers as to where they are at in the video.

(1:15 – 4:10 in video) Right off the bat, the show describes how the artist/builders go about designing a product.  The product manager takes his team out to real life sites of what they want to build to study them.  They look at what the site has and needs to feel authentic.  It is truly direct observation of what the team wants to build.

(6:40 – 10:00 in video) LEGO takes full advantage of standardization as much as possible.  The Police Station turned out to be a 700+ piece set, but none of the pieces are new and require tooling to be made.  Because the designers were able to build the Police Station out of existing pieces they were able to use that budget to design a police dog that is brand new adding to the experience.  My lean lens sees this as cost management in order to reinvest in innovation.  The innovation leads to a better experience and more revenue.

(36:12 – 36:20 in vide0) The video does not talk about 5S but there is some evidence of it.  In this clip, you can see the tape outlines on the floor for the staging of finished product.

(36:20 – 38:10 in video) In the 1990s, LEGO went through a period when sales were declining.  LEGO decided to go and see why this was happening.  They discovered their products were not meeting the needs of the adult customer, which is 50% of their market.  People were hacking the Mindstorm systems and creating bigger sculptures with the robotics.  They didn’t try to shut the hackers down.  LEGO embraced them and created new products.  They still invite customers to come in and help with designs.  They are focusing on customers needs.  Everything starts with the customer.

These are some of the quick examples I picked out.  If you notice, nothing I saw focused on lean manufacturing although I believe I saw some lean like things in manufacturing and distribution too.

I would highly recommend watching the full video because it touches on every aspect of business.   From customer focus to product development to manufacturing to logistics.  It is very complete.  If you are a LEGO fan, this video is a must see.

In the comments below, tell me what you saw from a lean perspective.  What did I miss?

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