Book Review: The Lean Turnaround

Art Byrne is an execute that has been implementing lean in several companies around the world.  He started our with GE and gained experience with Danaher Corp before becoming the CEO of Wiremold where their lean turnaround is featured in the book “Better Thinking, Better Results“.  Since leaving Wiremold Art has used lean to turnaround companies as a partner with J.W. Childs Associates.  Art brings his vast experience to the readers.

Name of the Book:  The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company

Author: Art Byrne

Publication Date:  2012

Book description: what’s the key message?

Art really drives home the message about a company can only be truly lean if the leaders are setting an example and leading the way.  A lean executive does not dictate what others need to go do.  A lean executive does it himself.

Also, the executives have to transform the people.  Get everyone to buy-in from the shop floor to the executive suite.  There is no room for people that won’t buy-in.  In order to do this, as the leader you need to engage in the change and lead it.  Not support it.

Art lays out his principles to follow to becoming lean:

• Work to Takt Time
• Create one piece flow
• Utilized Standard Work
• Connect Customers to Work by Using a Pull System

What are the highlights? What works?

Art does a fantastic job of giving multiple examples of how he engaged employees and led the change even as a CEO.  This brings to life how it can be done and the thought isn’t some dream a consultant made up.

I really like how Art lays out obstacles to achieving his lean principles.  Accounting and standard costing is the biggest obstacle because it can show a negative result or cause bad decisions when doing things that are helping.  He then explains the changes that are needed and gives examples of the changes and how the finances would look different.

There are more examples of other metrics that Art recommends for a lean company.

Another powerful section of the book is how he used lean to grow businesses and profits even during tough economic times. Art even lays out a strategy for looking at companies when thinking about acquisitions.

The real life examples as a CEO and board member of companies really drives how a lean turnaround can be achieved.  A CEO must do a 180 from the traditional methods to do it and a leap of faith will be needed, but the reward is very high.

What are the weaknesses?  What’s missing?

This is a really good book, but I do see one thing missing.  Art speaks from a CEO or executive viewpoint, which is great, but what if you aren’t an executive?

One question I would like to see answered is how do lower level employees help executives want to do a lean turnaround?  Sure, one answer could be give them the book, but that probably won’t change everyone’s mind with just a single read.  How do you help an executive that seems to want to do it, do it?  Give them that final push and really start to see the benefits?

The book can also give the feeling that if you don’t have an executive leading and doing everything in the book then you might as well not go through with lean because you won’t be successful.  Art does not say that explicitly.  The book just gives that feeling.

How should I read this to get the most out of it?

I recommend this book for anyone but especially high level level executive or CEO.  Art lays out a great game plan and a compelling case for the executives to transform their work and create a lean turnaround.  Read the book straight through and then re-read it as you develop a plan to change your company.

I would also recommend it for more Wallstreet and finance people.  It would enlighten them on how to look at companies that deliver long term value to their customers.  Not just short term gains.

H&H Color Lab – American Company Growing Through Lean

H&H Color Lab began in the basement of Wayne and Shirley Haub’s residence in a suburb of Kansas City, Missouri, in 1970. Wayne and his brother, Ted Haub, owned a portrait studio that had just landed its first high school senior contract. With a background in and love for color printing, Wayne chose to install his own color processing equipment in the basement of his home.

Business increased, and so did the need for additional space and employees. What began with Wayne doing everything from his basement has grown to 165 people and 55,000 square feet of space over 40 years later.

H&H customers are primarily school/portrait/wedding photographers.  The offer a wide range of products from photo prints to books to Leather bound albums and digital products.

In 1999, H&H Color Lab started is Lean journey led by Lee Gabbert.  Lee had been with the company for 5 years at the time and was chosen to learn more about lean and teach others at H&H.  They started by reading “Lean Thinking” by James Womack and Daniel Jones.  H&H also decided to get a sensei to help them learn as they traveled the bumpy road down the lean path.

H&H Color Lab started by setting up work cells, going away from a department mentality. H&H moved to smaller batches, moving cells closer to the monuments (that they couldn’t move), standard work, and lots and lots of 5S.

Muda (waste), lead times, late work and quality all had improved. In fact, the gains from lean had now freed up space that was once occupied by manufacturing departments.  It allowed H&H to take the space and use it as a training facility to help customers from all over the United States. Thus, H&H University was born. Roughly 3,000 square feet of space was now designed and transformed into a learning center, working photographic studio with equipment, mock up photography sales room, photography studio work area, kitchen to host all day training, library sitting room with sample products that H&H produce on the book shelves and restrooms. By providing training for customers (mostly free of charge), you truly can engage in a partnership that can grow.

All of this work allowed H&H Color Lab to make a success transition from the “Age of Film” to the “Digital Age”.  Understanding their customers and providing training and education others companies do not, shows how the most important part of lean, focusing on the customer, helps you innovate, grow and thrive.

Here are results that H&H Color Lab have seen from their lean implementation.

	1999	2012	% Change
Late Orders	3,076	25	99% reduction
WIP	10,421	1731	83% reduction
Redo	5.3%	1.3%	75% reduction
% Shipped Late	49.3%	5.8%	88% reduction
Time in Plant	7 days	1.1 days	84% reduction
Sales			22% increase

Small Change vs. Large Change

Small change vs. Large change is a debate I hear quite often within the Lean community.

The meaning of kaizen is to continuously make change for the better.  Implied is to make small changes everyday and over time it will add up.  Paul Akers at FastCap often talks about the 2 second kaizen.

Every improvement counts.  This is small change.

The flip side of the discussion is large change.  Transform the work into something new.  Redesign the process, the layout, the flow.  Act in a completely different way.

My opinion…they are both right and you should do both.  The key is understanding what your organization needs and when.

If it is a traditional batch and queue organization (manufacturing or service), then as you start your lean transformation I would recommend large change.  Create a pull system where the parts or service flow uninterrupted.  Dramatically change the way you operate.

Once the large change is done, the improvement never stops.  This is when you start looking for the 2 second improvements in the process.  Everyday the process should be better.  Keep making small changes.

This isn’t the only way to go about a lean transformation.  It is just one way.  If you want to be successful with your lean transformation take the time to really consider your strategy for going about the transformation.

All in all, some improvement is ALWAYS better than no improvement…small or large.

Doing Laundry Teaches Us About Flow

Flow is a concept that lean teaches about how a product/service moves from beginning to end.  When the product/service stops there is a disruption in the flow.  This is when inventory starts to build between two steps in the process.

With the functional mentality, people only worry about optimizing each machine, without regard to the flow.  The thought is, “I have to run this machine as fast as I can and get as much product out as possible.”

The hard part for people with this mentality to understand is the product/service will only move as fast as the slowest operation.  No exceptions.  Period.

Image courtesy of Salvatore Vuono / FreeDigitalPhotos.net

Take a simple process like doing laundry at home.  My dryer is always slower than my washer, so when I have multiple loads of laundry to do nothing moves faster than the time it takes to complete a dryer cycle.

I move a load of laundry from the washer to the dryer and start the dryer.  Then I add another load to the washer and start the washer.  The washer always finishes at least 15 minutes before the dryer.  Instead of taking the laundry out of the washer and piling the wet clothes in a laundry basket, I let them sit in the washer.  Knowing the dryer is the slow part of the process, it would do me know good to start another load of laundry in the washer because it still won’t end before all the other loads have finished in the dryer.

This is how we should look at the flow of our processes at work.  It does no good to buy equipment or change the process to speed up a part of the process that is not the slowest step.  In the end, the product/service is still being completed at the same rate.

What is the dryer in your process?

Understanding Single Piece Flow

One of the first concepts that pops up when learning about lean is single piece flow.  This is a great concept and should be considered when it is appropriate.  Cooking my french fries might not be the time to use single piece flow, but downloading songs may be.

My wife runs a small business of her own.  She sells products online through her website and Etsy as well as events in our local area.  Selling online and brick-n-mortar poses problems from time to time.  One issue is wanting to provide a wide range of scents for customers, but not having large amounts of inventory on-hand because of the batch process of making the soaps in loaves.

After a year and a half, we think we find a solution to this issue.  Most of her requests for custom scents come through her online sales.  Typically, she has the fragrance available but can’t justify making 8 bars in a batch because the other 7 may sit for a year or longer.  She has found a mold that works very well and is the size she needs that allows her to make one soap at a time.  My wife can now fulfill the requests of her customers and offer more fragrances to her line in her online shop without the expense of carrying a year’s worth of finished product.

What about the live events to sell the inventory?

Good question.  The events are always in the Sept – Dec time frame.  So, if a customer orders a special scent in January, the rest of the finished goods would sit until September at the earliest.  She could have used the raw materials for other products.  The soaps that are high volume sellers and do well at the live events can be made in batches right before the event.  Any finished product that is leftover after the event season can be sold online.

It is a good mix of using single piece flow and batch processing when it best fits the situation.  It is about understanding your business needs and trying to meet those needs.  Not forcing everything to one solution whether if fits or not.

What makes sense for your business?

Counting Down the Top 10 Viewed Posts of 2012 – 5 Thru 1

2013 is now in full swing.  Before 2012 is too far in the rear view mirror, I thought I would recap the Top 10 most viewed posts on Beyond Lean for 2012.

New followers of the blog can use this as an opportunity to read posts they might have not seen in the past.  While, long time followers can use this as an opportunity to re-read some of the top viewed posts.

This post will count down the 10th thru 6th most viewed posts of 2012.  Enjoy!

5.  Sportscenter Has Killed U.S. Manufacturing (June 2012) – Previous Year Ranked #3 – Manufacturing is fundamental.  The U.S. has lost it’s sights on the fundamentals and is just worried about the flashy.  The U.s. needs to get back to the fundamentals in order to get back on top.

4.  Need the Mental Toughness of a Navy SEAL (February 2012) – Inspiration of a Navy SEAL got me thinking about the mental toughness it takes to create change.

3.  5S in the Office (September 2010) – Previous Year Ranked #1 – Most viewed post for two straight years now.  A look at using 5S in the office.  What is going too far and how to use 5S in the office properly.

2.  Keys to Sustaining 5S (September 2011) – Tips to help sustain (the 5th ‘S’) the gains made from implementing 5S.

AND……

1.  Why Are Lean People Seen As Lean People? (February 2011) – Previous Year Ranked #2 – Exploring the question as to why lean people are not seen as more than just lean experts.  Looking at a process from end-to-end seems like a good business practice no matter what the role.

I look forward to more posts in 2013!

Top 6 – 10 of 2012

2012 Lean Reading Conclusion

Earlier this year, I posted a blog about not reading any lean or business books this year.  Choosing to spend the year putting into practice more of what I have read already and trying to understand how it pertains to my work.  In June, I published what I had read to date to give people a flavor of what I have been reading.  I have accomplished my goal and read one non-work related book per month for the entire year.  I have listed all the books from the first half of the year below also along with the books from the second half of the year.

I found I really enjoyed reading these other books.  There was almost always a leadership lesson to be gained from these books.  My interests grew as the year went on and I was amazed as to what there was to learn from fiction books as well biographies.  With the new year upon us, I must now learn how to balance reading books for work along with fun fictional and biography books.

Enjoy!

January – Lone Survivor by Marcus Luttrell – This is the autobiography and recount of the lone survivor of a S.E.A.L. team member that got caught in a fire fight deep in Taliban territory.  It is an amazing story.

February - It’s So Easy by Duff McKagan – The autobiography of Guns-N-Roses bassist Duff McKagan.  GNR is my favorite band of all time.  Duff now writes for ESPN’s Page Two website.  He is a really good writer and the book is a great recount of his life and view of the GNR rise and fall.

March – 11/22/63 by Stephan King – This a fiction story about a guy who has a chance to go back in time and stop Lee Harvey Oswald from assassinating President Kennedy.  Long book, but very enjoyable.  A fun read.

April – American Sniper by Chris Kyle – Chris Kyle is a S.E.A.L. sniper that at the time of the writing was credited with the most confirmed kills in American military history.  This is his recount of his time in the S.E.A.L.s.

May – Fifth Avenue by Christopher Smith – A thriller novel about two of the most wealthy mean in New York City and the extremes their grudge will go to.  Good book.

June – Life by Keith Richards – This is the autobiography of Keith Richards the guitar player for the Rolling Stones.  I love the Rolling Stones and I was traveling the the UK for work…seemed like a good fit to read at the time.

July – Abraham Lincoln Vampire Hunter by Seth Grahame-Smith – Interesting book following the true path of Abraham Lincoln’s life ans encounters but with a fictional vampire twist to Abraham’s reason for making the choices in life that he did.

August – The Da Vinci Code by Dan Brown – What is the Holy Grail? I had seen the movie when it came out several years ago and decided to give the book a try.  It was excellent.

September - In Cold Blood by Truman Capote – This is a nonfiction novel.  It is the story of a brutal murder of a family of four in western Kansas in 1959.  Truman Capote does a great job of getting inside the heads of the killers.  It follows the family and killers from the day before the murders until the execution of the killers.  The book was written in the 1960s.  Living in Kansas now this true story captured my attention.

October – Gone Girl by Gillian Flynn – A twisted revenge novel.  This novel tells of a marriage gone wrong and the lengths a woman will go to to make it clear who is in control.

November – Dark Places by Gillian Flynn – Gone Girl was so good that I tried the book Gillian wrote before it.  Dark Places is a great who dunnit book.  It keeps you guessing until the end.

December – The Redbreast by Jo Nesbo – This novel is the first of the Harry Hole detective series.  Actually, it is the 3rd novel in teh series.  Jo is a Norwegian author.  The first two books have not been translated.  The 3rd through the 8th (just released in the U.S. this fall) have been translated.  Harry Hole is a police detective in Oslo, Norway.  He has taken to drinking but still gets the job done.  Very enjoyable detective novel.

What did you read this year?

Guest Post: The Importance of a Quality Management System

Today’s post comes from Alice Rose.  Alice is a freelance copywriter working for QMS International plc, a business certification company specializing in ISO 9001
http://www.qmsuk.com/iso-9001.php.

As the recession hit many businesses began to think of the best ways to cope and short-term solutions such as cutting staffing levels and reducing marketing costs were some of the most popular. But, as time has progressed and consumers are still being very cautious with their spending, I want to touch on some other ways that you can try and beat the big squeeze.

What is a quality management system?

A Quality Management system is the processes, procedures, organizational structure and resources that come together to ensure that a business provides a consistent and reliable service. It emphasizes different principles within a business such as leadership, continual improvement, staff involvement and different approaches to decision making.

It’s all about the consumer

The first thing to remember is that if you provide a great product or a brilliant service to the consumer then they are going to keep coming back. One way to check that your company is running a high quality business is to put a quality management system into place. Quality management systems often incorporate a ‘customer service’ element to them, ensuring that there are procedures in place so customers can record a complaint which means that issues can be addressed and reduced in the future.

Manufacturing industry

If you are manufacturing a product there are certain steps that you can take to ensure that the final product will arrive with the consumer in a high quality state. This can start at the beginning of the production chain, in the factory for example. Simple tasks such as ensuring your workplace is clean will lead to the creation of a better final product. As the product progresses along the chain if simple manufacturing tasks are conducted in a more streamlined fashion the consumer is more likely to receive a high quality product – which will also lead to less waste on your part, reducing costs.

Service industry

The services industry is not immune to the economic downturn and there are simple changes that your company can take to ensure that the customers are still happy. One of the simplest ways to find out if you are providing a good service is by encouraging customer feedback – if you know where you are falling down it’s easier to pick yourself back up.

Setting an example

It is important that quality management systems are considered as a priority by business management who have the facility and knowledge to implement these systems and who, leading by example, will encourage greater productivity and performance across the board as well as locating new areas of the business for growth.

Twinkies GONE!!

Hostess is filing for bankruptcy and going out of business.  There will be no more Twinkies.  I know this news is over a week old now.  I am behind.

My first thought when hearing the news was, “No Twinkies! No Cupcakes! No Ding Dongs! Ahhhhhhhhhh!”  I absolutely love all of those.  My daughter was distraught because the mini-donuts are a staple for our family as we travel on vacation.

I will miss those snacks.  I’m sure someone will buy the rights to the recipes and the brand names.  All will be good probably sometime next year.

My second thought was, “That company must have been horribly mismanaged!”

The Hostess brand of snacks were consistently much more expensive in the grocery store than comparable snacks.  Yet, people bought them up…me included.  Every time I went to the cash register to pay for some Twinkies I thought, “Wow!  They have got to be making a ton of money.”  Then to find out they aren’t.  What a shame!

With the brand recognition and the price they charged, how could you not make money.  I was going to dig into it a little bit but before I could I read Anatomy of a Twinkie by Bill Waddell over on Evolving Excellence.  It was a great post and answered a lot of questions.

From the post:

• 57% of their costs: Administrative, Overhead, Selling, Distribution, Depreciation, Other
• 28% of their costs: Ingredients, Packaging
• 15% of their costs: Factory Labor

I think that answers all the questions about mismanagement.  It is a shame.  Cut out the waste and leave what only adds value for the consumer and I bet they would have made a ton of money.  I bet whoever buys the recipes will be more efficient and make a great profit from Hostess’ demise.

Guest Post: The Manufacturing Institute

Today’s guest post is written by The Manufacturing Institute, an independent charity in the UK. They deliver a wide range of high quality education, training and consultancy services to build operational excellence in manufacturing companies – whether its through innovative thinking, lean transformation or skills enhancement. They also deliver charitable campaigns such as Make It and Fab Lab which help to improve the image of manufacturing amongst young individuals and drive grassroots innovation. You can visit their website at www.manufacturinginstitue.co.uk.

Typically, I don’t have guest posts promoting a business or organization. This one I felt was a good fit because it is a non-profit organization focusing on developing manufacturing. It is UK based, but I think what they are doing could be used by other countries to help their manufacturing efforts as well.

Companies Can Inspire, Educate and Develop Their Workforce with the Manufacturing Institute

The manufacturing industry is one which obviously demands a strong work ethic from its members, with some tasks being extremely laborious and highly skilled. With dangerous machinery, long hours and a hazardous environment all playing their part in many areas of the sector – it is of paramount important for employers to find staff who are motivated, inspired and proactive.

Training Programmes

With this in mind, the Manufacturing Institute plays a key role as an independent charity established to aid this process via a system of courses and programmes. Their work has been instrumental for firms across the United Kingdom as they look to improve, inspire and appropriately educate their workforces. The comprehensive range of training programmes available build operational excellence by encouraging pragmatic thought process, lean transformation, skills enhancement, the improvement of process and leadership development.

Make It and Fab Lab

In addition to this the Manufacturing Institute promotes operational excellence through a number of charitable campaigns such as Make It and Fab Lab. These encourage skilled youngsters to help improve the image of manufacturing as a vocation and promote grassroots innovation.

Manufacturing Careers

The Manufacturing Institute website contains a wealth of information for any individuals interested in their work and training. Whether this is youngsters looking to get into manufacturing as a career or existing manufacturers wanting to develop their already existing skillsets – the videos, documents and content at http://www.manufacturinginstitute.co.uk will make an enthralling read. One such news item which has been gaining a lot of exposure of late is the Six Sigma Green Belt, a hands on course focused on eliminating waste and increasing efficiency across the whole operation and along the supply chain.

Shingo Model & Prize

TMI are also the only UK educational partner for the Shingo Model and Prize. This outfit provides manufacturing companies with a blueprint to achieve the best possible operational excellence and also promotes the drive lean transformation, going hand in hand with the wider Manufacturing Institute ethos.

Further background to the kinds of work undertaken at The Manufacturing Institute can also be followed via the site’s comprehensive news section. This is updated on a regular basis with up to date news on the goings on at the charity as well as wider news in the manufacturing industry across the United Kingdom. Manufacturing enthusiasts can also subscribe to the TMI newsletter to ensure they do not miss a single news item.

This article was written on behalf of independent charity The Manufacturing Institute from the UK.