Last week, I attended a lean forum with speakers and breakout sessions. It was done very well. I was very excited that I was able to attend.
One of the speakers was a General Manager at a distribution center. She told the story of how lean has evolved at her facility and where it stands now.
When listening to transformation stories I try to listen for a few different things to see if they are really getting it or just going through the motions and implementing tools.
I will say her story, I haven’t directly observed, is a very promising and exciting story. I believe they are doing things right and well. There were two bits of evidence that lead me to believe this.
First of all, she is holding the staff, managers and all employees accountable for learning about lean and taking action. Not a lean group or a someone else. Herself and everyone around her. In fact, they integrated the lean staff into manger roles and no longer have that crutch to lean on.
There were stories of the General Manger’s own learning and changes. How getting dissolving the lean group but expecting better results helped make everyone accountable.
While dissolving the lean group worked for her and her facility don’t go do this just to remove the crutch. This General Manager was a true believer in what lean could do for her and she partnered with other local companies that were doing lean very well. She had a support system but it was one that held her accountable for leading lean. Not supporting it.
The second piece of evidence was a video she showed of a great employee driven improvement. Great it was employee driven, but what really stuck with me was the General Manager promoting the small improvement. It was about a five to ten second improvement in a manually process. This one small improvement was going to save $40,000 in a $19 million target she was going after.
Most people look for the BIG improvement to get the whole chunk at once. They don’t understand the large gap is made of hundreds of small problems. They don’t have the patience to go after the small problems. This General Manger understood this concept. It was very refreshing to see.
The facility still has a long way to go, but they are traveling down the right path and that was invigorating.
I will share more from the forum at a later time.
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?
Today’s post is from Tony Ferraro, on behalf of Creative Safety Supply based in Portland, OR (www.creativesafetysupply.com). Tony strives to provide helpful information to create safer and more efficient industrial work environments. His knowledge base focuses primarily on practices such as 5S, Six Sigma, Kaizen, and the Lean mindset. Tony believes in being proactive and that for positive change to happen, we must be willing to be transparent and actively seek out areas in need of improvement. An organized, safe, and well-planned work space leads to increased productivity, quality products and happier employees.
Lean is something that is often associated with businesses and focuses mainly on reducing waste and adding value. However, lately I have been pondering the thought “Can lean be taught to children?” Wouldn’t it be great if children learned the concepts of lean at a young age? My mind literally boggles at the sheer possibilities. I’m not talking about sitting children down in a classroom and teaching them lean exclusively like reading or math, but instead just weaving the concepts of lean through life’s regular and everyday activities.
Imagine the Possibilities
The concepts of lean have been credited with high levels of success in the workplace, so why can’t the same concepts be beneficial in other areas of life as well? The truth is, they CAN! Creating a generation of innovative thinkers, ready to add value to society sounds like a pretty wonderful idea to me. Many of us have not been introduced to the concepts of lean until later in life, and unfortunately our minds have not had the opportunity to truly expand and grow with the concept. However, we can change that with the introduction of lean.
How to Start the Lean Mindset
The first thing we have to remember is that children are just children. We cannot expect them to act like adults. However, one of the benefits of starting lean concepts early is that when children are young their minds are very malleable. If children are taught to reduce waste and participate in value added activities early in life, that mindset will usually follow them through into adulthood. The key is to really start out simple and introduce the obvious and most tangible ways to reduce waste. This may include engaging in activities such as reusing and recycling. Instead of simply throwing out old clothing that does not fit, teach children that it can be reused and given to places such as the “Goodwill” or “The Salvation Army” so other children can wear the clothing, thus adding value for another person. Engaging in activities such as this puts the act of reducing waste into terms that children can understand. Furthermore, children can also be involved with activities such as household chores to practice lean. In fact, lean can be weaved into even the simplest task such as dish washing. For example, loading a dishwasher by putting all forks in one compartment and all spoons in another takes less time to unload since the flatware has already been separated. Doing this reduces wasted time.
The possibilities are limitless when it comes to the lean mindset. The truth is that lean can be implemented anywhere and everywhere; it is not just strictly for business use. When lean concepts are implemented and practiced at an early age they become just a normal part of life. Providing children with the tools necessary to be independent thinkers, who are capable of seeking improvement and reducing unneeded waste, will help to create a society of endless possibilities and opportunities.
Have you ever sat in a meeting where the discussion is about the high (sometimes low) inventory levels? Do you frequently hear the answer of, “Once we get our better forecasting tool in place our inventories will be better.”?
This is a strong sign the company has not fully embraced lean thinking.
A lean company would not even have a discussion where forecasting tools are the solution. A lean company is closely connected to their customers. The goal is to make one product when one product is bought by the customer. I know this isn’t easy for all companies, but the discussion would be around how to move in this direction. Not how a better forecast can be generated.
There is one thing I can guarantee about a forecast. It is WRONG!
I have never heard anyone say, “Man, I nailed that forecast! I hit it right on the nose!”
Don’t misunderstand me. I do believe there is a use in looking forward and understand what is coming. A company would like to understand if a peak or a valley of the product sales might be coming. This can help set and adjust maximum kanban levels for that period of time.
A forecast is good to understand directionally where volumes are heading. Forecasting is not a good basis for your entire inventory strategy.
It is a difficult mindset to change. When you do and act on that new mindset, the dividends it pays are enormous.
A question that I get quite often is “What does lean say to do?”
My short answer, “Do the right thing for your situation at this time.”
When lean is not understood people think lean has magic answers for them. This is easy to do when the mindset is lean is a bunch of tools and concepts that just need to be put into place.
They think lean can answer their questions. Lean does not answer your questions. Lean helps you to be able to answer your questions.
When lean is understood to be a way of thinking, a set of principles to help guide how you go about solving a problem then it is easier to understand that lean says, “Do the right thing for your situation at this time.”
A popular example is when people think “Lean says I have to have level flow, because I have to eliminate waste.” If their business does not allow level flow or it does not make sense at that time they can get discouraged and believe lean is not for their business.
Hospitals are a great example. Early on they tried to implement level flow, but they couldn’t because people getting sick is out of their control.
When it is understood that lean is about creating value for the customer, people have a different lens. One way to deliver value is to eliminate waste so I have more capacity to do value added activities. Level flow is one way, but in a hospital there are many other ways. Once the thinking was understood, hospitals started to embrace lean.
The next you you hear someone ask, “What does lean say to do?” Answer by saying, “Think in a different way and do what is right for your situation at this time.”
“Give a man fish and he eats for a day. Teach a man to fish and he eats for a lifetime.”
This quote comes to mind when thinking about my role as a lean transformation leader. Lean is about how we think and behave. I don’t want to just do things differently. I want to teach and coach others how to think and behave in a way that aligns with the lean principles. There are two major reason for this.
I want the changes that I make to be sustainable. If the people involved in the changes don’t think in a lean way then at some point the changes will not be sustained. The metrics/results/process will slide backwards. In my experience, it slides at least to the previous state if not even further backwards.
The best example is a manufacturing facility that Joe and I worked at together. At one point, the facility was in the red with revenue over $100 million. The company decided to “go lean”. Joe and I, as well as another friend of ours, were tasked with leading the lean initiative in our facility. We became part of the plant staff. The plant manager and the department managers listened to what we had to say. They let us lead the lean initiative. Joe and I did a lot of great things from a lean perspective. In three years, the plant was in the seven figure profit range while revenue had dropped 25%.
This was a collaborative effort to use lean. Everyone played a part in the success. But in a big way, Joe and I failed. We both moved on to bigger and better opportunities. During the turnaround of the facility we did not change the way the plant manager and department managers thought. When some traditional mindsets started to creep back in, we were there to guide back to a lean mindset, but we never really changed their beliefs. We hadn’t taught them to fish. Within a couple of years, the facility was back in the red and back to traditional batch-and-queue mass production manufacturing. The results were not sustainable.
The second reason overlaps with the first. When you transform another person’s thinking, not only will results be sustainable, you have another person who can educate and transform the thinking of others. The lean thinking allegiance starts to spread. Instead of one person trying to transform thinking, you now have two. And so it spreads.
Transforming people for traditional ways of thinking to lean ways of thinking is not easy. The better the support system that is built the easier it is to continue to transform people’s thinking. There are times when a great support system is very reassuring.
These are the two biggest reasons why transforming the thinking is just as important as delivering the changes, driving results.
Have you heard that one before?
Lean thinking says the inverse is true. “The lower the inventory on-hand the better the serviceability rating and on-time delivery rate.”
How can this be?
I have read studies and heard others talk about the lean perspective. Even more compelling, I have implemented and witnessed the lean thinking perspective be proven right time and time again.
Traditional thinking of more inventory is better seems to make sense, but what happens is the inventory is never of the right product needed at that time. The economic scales of mass production says to produce a lot of the product when running it to minimize setup and overhead costs. Following this thinking means the company does not switch over and start to produce Product B early enough and is out of stock on Product B when ordered but there is an abundance of Product A in the warehouse.
Lean thinking produces just the amount of each product needed so when it is ordered there is enough and overall there is less inventory.
I watched as assembly line employees got upset because we took 80% of their component inventory away from the assembly line storage. The assemblers thought they would never have enough product to keep the line running. We explained they would have only 2 hours of component stock at the line and the line would never shut down. By the end of the third day, the assemblers were happy with the new inventory system because they had more space, but more importantly they had the right components at the right time. They reduced the time the line was down waiting on components by 90% compared to when they had a ton of inventory at their finger tips. This occurred one-by-one across all five assembly lines in almost exactly they same manner.
Less inventory does deliver better serviceability and on-time delivery rating.
This does not mean just go out and reduced the inventory without a plan just to reduce it. It is being mindful of what is needed, when and how to get it there on-time. It is easier to see what is there when there is less.
What is your experience with reducing inventory?
Over the last decade we have seen lean start to permeate many different industries. Healthcare is one of the most prominent areas. Another more publicized area lean is permeating is government work. A challenge was even given to all the Presidential candidates. This is a great start. It shows that more and more people are starting to understand lean is about the way we think and see things. It is not about tools such as: 5S, Standardized Work, Quick Changeovers, or level loading.
There is one industry that has been slowly adopting lean, but rarely gets mentioned. That is the construction industry. More and more construction companies are trying to adopt lean principles and thinking into the work they do. Lean construction is more than just the building phase of construction, but also includes the design phase. Lean construction involves owners, architects, designers, engineers, constructors, and suppliers. It is all inclusive from end-to-end.
There is even the Lean Construction Institute. It was established in 1997. This isn’t a new concept to the industry. It just doesn’t seem to get well publicized.
There is a good article from 2007 about Lean Construction. In the article it says:
Lean construction provides a solution that works for all three groups-the owner, the contractor and the worker-because it’s founded on collaboration, communication and mutual respect. Not only does the conventional design-bid-build environment not produce the best results for any of the three groups, it actually pits each of them against each other and creates a downward spiral of lose-lose. Lean construction works because it focuses on maximizing value and eliminating waste.
It is a win-win for everyone with a focus on what is important to the customer.
Therefore, lean construction focuses on identifying and delivering products or services on which the client places high value. A few things that clients often place high value on are:
- No change orders
- High quality-meaning conformance to requirements
- On-time delivery
It is great to see industries outside of manufacturing and healthcare understanding the lean principles and embracing them.
If anyone works for a lean construction company, I would love to hear from you and ask you questions about implementing lean in the construction industry.
The focus of lean is first and foremost on the customer. What is of value to the customer is the first question that should be asked? A lot of organizations do a good job of asking for feedback from their customers. What usually is missing is the feedback loop back to the customer.
While visiting an offsite location of the company I work for I saw this book in the cafeteria.
This is left by the company that services the cafeteria. Not only does the company ask the customers fore feedback and suggestions, the fourth column is a feedback loop to the customer. It is a reply letting the customer know what if the suggestion is possible or what work they are doing on the suggestion. The company is completing the loop.
Too many times companies ask for the feedback do not complete the loop back to the customer. This is good example of giving feedback to the customer so they know they are being listened to.
If you want feedback from customers, then make sure you they know you are using it.
If you are a regular reader of Beyond Lean, you may know that I am a very big supporter of U.S. manufacturing. I believe it is the foundation for economic prosperity for our country or any country for that matter. Lean thinking and principles can help guide any business to success and overcome many economic and governmental situations.
Recently, the Harvard Business Review Blog has had posts talking about much of the same. Here are a few of the posts.
The authors break jobs into two categories.
But we were able to classify all jobs as either creativity-oriented or routine-oriented. And within the routine-oriented classification, there are three distinct types: routine-physical (e.g. an auto assembly plant worker); routine-service (e.g. an accounts payable clerk); and routine-resource (e.g. a coal miner).
The authors explain that creative-oriented jobs pay more and pose a great question.
…the real challenge for the U.S. economy is what to do with routine-oriented jobs in dispersed industries.
And their response to this:
There is no quick fix for this problem. But my view (and Richard’s) is that we have to rethink how we utilize workers in our advanced economy.
…But I believe that America can influence the slope of the line of increasing creativity-oriented jobs by leaning toward creativity; giving workers the encouragement and space to innovate; utilizing the most of their brain, not the least of it. That would be the grass-roots way out of America’s economic doldrums that everyone is looking for.
I interpret this as engaging everyone in the organization, even those doing what is considered a routine-oriented job, in innovating the business. Innovating is also about how to change the process to be better. Engage the minds and hearts of the employees not just the hands and feet.
The U.S. competitiveness debate too often devolves into a cry for more Apples and more Ciscos on American shores, when what the country really needs is more Hospiras.
Hospira is an advanced contract manufacturer.
The author talks about the importance of manufacturing for innovation. Something I believe to be true and how we must open our mind to what the definition of innovation can mean.
In the U.S., “innovation” typically means just one thing to people: novel gadgets. Few policy makers realize that much of the innovation that has propelled China’s economy, for example, is of the incremental or process type. Many of us admire Apple for its originality but tend to forget the importance of its power-supply innovations, all of which were done in China by a Taiwanese company.
When it comes to process improvements, American companies are stagnating at best, and in many cases slipping backward. Policy makers need to appreciate the value of keeping incremental and process innovation in the United States.
I don’t agree that the U.S. needs policy makers to give tax breaks and help U.S. companies realize the importance of manufacturing to all types of innovation. There are U.S. companies that have realized that on their own. I’m sure even Apple has realized the importance of the innovations from their suppliers. It is the companies that need to realize the benefits of this and make the effort to change their thinking around this.
A growing number of executives of U.S.-based companies are repatriating their manufacturing capabilities — moving some production operations back from overseas.
Many companies have been moving manufacturing back to the U.S. In fact, enough have done it the movement has a name…reshoring or onshoring.
The post talks about governmental help to support this movement. While, the governmental help would be nice it is not necessary. There are plenty of companies that have made the move without help from the government.
Here are three bullet points the author says the governmental help recognizes:
- Companies compete on cost and responsiveness, and this balance shifts dramatically when labor costs rise and the locus of demand shifts.
Labor cost has nothing to do with responsiveness. Quick lead times and location has to do with this. When total cost is looked at from end-to-end companies usually find that cheap labor really isn’t lowering their cost either.
- Local talent and skills are essential to productivity and innovation. Long-term depletion of manufacturing skills will make it hard to reverse the trend.
I think this is right on. It will be hard to reverse the trend but I think with more companies bringing manufacturing back to the U.S. this is helping to keep the skills from depleting.
- Research and development incentives provided by the U.S. government must be tied to manufacturing operations. Otherwise, whatever is developed with taxpayer money could easily be moved to other regions associated with low-cost manufacturing.
I don’t agree with this. This comes down to a company’s morals and beliefs. If they want to move some innovation out of the country they will do it. Their are companies innovating and manufacturing in the U.S. It just may not be the high profile company like Apple.
It is great to see more and more discussion about the importance of manufacturing in the U.S. That was not the case just a couple of years ago. Especially on a high profile site like HBR. The authors there are still spouting off too much about how the government needs to change regulations. They need to start asking how all the companies that have already moved manufacturing back to the U.S. did it. If they did, they might start writing more about Lean and end-to-end value stream thinking.