Monthly Archives: February 2013

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.

Lean_Turnaround_CoverName 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.

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Aligning Your Business

In today’s tough economic climate, it is even more important the work we do is aligned with the company’s goals and priorities.

As companies reduce headcount while still driving towards revenue growth, decisions have to be made about what are the top priorities for the company.  If you cannot strongly link your work to one of the company’s priorities then you should really question yourself and/or your manager about the validity of finishing that work.

Everyone in the company should know the priorities and should be asked to understand how their work is linked to achieving success on the priorities.

One good way to do this, is through strategy deployment.  This is process by which the priorities of the company are used to determine the priorities of the division and then those are tied to projects and/or initiatives for the current year.

In a good strategy deployment process, catchball is used to get input from the layer of management below.  This helps drive accountability and alignment throughout the organization.

If you cannot link your work to one of the projects/initiatives that is part of the strategy then you have to ask if it needs to be done.  Sometimes the answer may be ‘yes’.  An example might be updating your servers or you won’t be able to run some of your IT systems.  This may not be one of the priorities but it must be done in order to keep the business running.

It is good to capture the linkages on an A3 document and use that as your guide throughout the year.

It is amazing the power of alignment has on driving a company to achieving its top priorities.  Are you aligned?

Whitepaper – Comparing Lean Principles & 14 Toyota Principles

In 2010, I segmented a whitepaper (part 1, part 2, part 3) I had written comparing the Lean Principles I have learned from the Lean Learning Center to the 14 Toyota Principles.

The whitepaper explains how the 14 Toyota Principles bring to life one or more of the Lean Principles.  It breaks down each Toyota Principle and shows which Lean Principles are brought to life and how.

The whitepaper is available fore download in the Downloads section of the Beyond Lean.

H&H Color Lab – American Company Growing Through Lean

HHLogoH&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.

Dilbert’s Pointy-Haired Boss Wants Innovation

This is a great Dilbert cartoon from Scott Adams earlier in January.

Cartoon by Scott Adams

Cartoon by Scott Adams

I have heard a lot of people or company’s say they need to act like a start up to get innovation.  I find this to be alarming.  At one time, the company had to be innovative or it probably wouldn’t be in business today.

Somewhere along the way, the company hit on a big innovative idea and migrated from innovation and trying new things to care and feeding of the big idea that put them on the map.  It is an easy trap to fall into.  It isn’t about acting like a start-up, it’s about never losing your roots as a start-up company.  Innovation and care and feeding must happening at the same time.  It isn’t one or the other.  It should be both.  The ones who do both well…win.

Visual Management at Home

I received this picture from a guy I worked with and coached for a couple of years.  I am sharing this with his permission

Lean visual materials management at home

(click on image to enlarge)

He and his wife would go to the store and if there was a sale, they would buy meat.  They never knew what they had at home.  When they got home from a recent trip they had bought meat they had plenty of…again.  So my friend decided to get visual.  He sorted out the meat that had gone bad and then created this visual board to better understand when he needed to buy a particular type of meat.  He likes to barbeque so he keeps a variety of meat on hand.

The board is simple.  Conveys one type of information.  And anyone can understand it by looking at it.

What visual management have you used at home?

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

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?