Monthly Archives: August 2013
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.
When we think of lean, most people’s minds go straight to the business sector of manufacturing. While lean has been incorporated particularly well in industrial settings, lean has also experienced quite a bit of success in regular, everyday endeavors, not to mention in travel as well. The concept of lean was alive and well during a recent vacation I took. My last vacation went especially smooth due to a few lean practices that have been put into place to save time, money, and people’s sanity while visiting unfamiliar places.
Lean Airport (MSP – Minneapolis, MN) – The first inklings of lean processes were evident right at the airport before I even embarked on the actual vacation. After I made my way through ticketing and security, I set out to find my gate. Once I located my gate, it only took a second or two to notice the abundance of technology just radiating around me. There I stood in a sea of mini iPad stations just ripe for the picking. To put this into perspective, there was basically a built-in iPad station for every seat in the gate area. Not only were these iPads free to use but their use was actually encouraged. Sitting down at a station, I soon realized that these iPads were equipped with a multitude of different functions from checking flight statuses all the way to ordering and paying for various food items or supplies. As I was navigating through the iPad, I noticed that a person next to me was being served a drink right at his seat that he had ordered via the iPad. This is truly an excellent example of how an airport has utilized technology to make traveling easier and more pleasant for the customer.
Lean Rental Car Experience – My next encounter with lean happened shortly after I arrived at my destination. I’ve always considered obtaining a rental car to be one of the most tedious and dreaded parts of many of my previous vacations, however this time it wasn’t. A couple of weeks before I was set to leave for vacation, I called the car rental company Hertz and became a “gold” member which was quick and easy, and not to mention free. Being a gold member opened a whole new door of perks. I didn’t have to wait in any lines or deal with any sort of messy paperwork. Instead, I simply stepped off the shuttle at the rental car location, looked up at an electronic board to identify my name and stall number and simply walked to that parking stall. Once I arrived at my car, the trunk was open and the keys were in the ignition. Needless to say, I was thrilled with this efficient service and it took less than 10 minutes from start to finish and I was out on the highway enjoying the beginnings of my vacation. By signing up for the “gold” membership not only did I have an easier and faster experience, but I did not require any further help from Hertz employees which in turn helped to streamline the experience for them as well.
Lean Parking Ramp – I bet you think I’m going to say the parking ramp was lean because the entrance and exits were completely electronic and required no parking assistant and while this is true, it goes quite a bit deeper. The parking ramp I utilized was equipped with a fairly new technology known as “Park Assist.” Ok, I’m just going to say it, I love park assist. Any large and busy parking ramp could make their customers much happier with the help of parking technology. Park Assist features little green or red lights which are illuminated on the ceiling directly above the path where cars drive. If a parking spot is open the light will illuminate green, but if the spot is taken it will illuminate red. This type of technology increases more effective parking but also enhances safety. Instead of drivers constantly trying to look side to side while driving looking for the next open spot, all the driver needs to do is look for an illuminated green light and pull into the corresponding parking spot. Wow, this was impressive. Parking ramps can be pretty dangerous as there always seems to be people bobbing in and out between parked cars. This technology allows drivers to keep a greater focus on driving safely, but also helps them to find parking spots quicker.
The implementation of lean into daily life and travel has led to some monumental improvements which have helped to make once dreaded tasks much more palatable, and maybe even actually enjoyable.
Lean thinking is about creating flexibility in the manufacturing process in order to deliver the value that customer wants at that time.
In agile, this is also true. The beauty of using agile to develop software is the work can be prioritized on a daily or even more frequent basis. As the development team completes a requirement and it moves to the “complete” pile, the product owner can determine which of the remaining requirements is the most important to complete next. The product owner is closely linked with the customer of the software so they are the voice speaking directly for the customer.
If new requirements come up during development, no problem. Add that requirement to the back log on the kanban board. The next time it is time to pull a new requirement the product owner can prioritize the new story at the top or not.
This creates a lot of flexibility in the development process that a waterfall process does not. Usually, with a waterfall development process all the requirements have to be determined up front and then frozen because adding any after that can cause issues. Then the customer doesn’t see anything until the development is completely done. The agile process allows to release pieces of functionality as it is ready.
This increased flexibility allows the team to deliver more value sooner to the customer, creating a happy customer. Which is what lean is about. Customer first.
I wanted to try to understand how lean is working for the readers of Beyond Lean. This is not a highly scientific poll just three quick questions to see what size company the readers work in, how they are trying to implement lean and if you believe your company is sustaining and growing the results from lean.
Thanks for continuing to read Beyond Lean.
My wife saw a post by a shop owner on Etsy this week that just drove us both absolutely crazy. The shop owner posted how you should determine your wholesale and retail pricing.
The first step was to determine your costs. What are your costs of materials? Even what is the cost of your time? While I agree with that logic, the cost of my time can be very subjective, but it makes sense. There was a exhaustive list of what to include in determining the cost of a product. A very large portion of it we agreed with.
After this is when it got interesting.
According to the shop owner, your wholesale pricing should be double your costs. Your retail pricing should be double your wholesale pricing.
The shop owner was very firm that this is the only way to price.
Based on this logic, you are entitled to a 75% profit margin when selling it in retail and a 50% margin when you are selling wholesale.
So why are people going out of business?
Because, this is not correct at all. The price is set by the consumer. If the consumer, sees value in your product at that price then they will pay for it. If they don’t, they won’t.
As a shop owner, it is your responsibility to control your costs to help control your profit. If your costs are low and the market is willing to pay a very high price then you will get a large profit margin, but if the opposite is true then you may lose money.
If everyone deserved a 75% profit margin then no one would be going out of business. Just because you are in business does not mean you deserve a profit. If you want a profit…earn it. Know your market. Set the price appropriately and then control your costs.
This is the heart of entrepreneurship.
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.
The A3 is a great communication tool. It can help tell a story succinctly and clearly making it easier for people to understand your thought process. An A3 will contain some background information, the current state, what the desired or future state is and an action plan to get there or measurements showing the success of the work.
Putting together an A3 can take some time. It isn’t actually putting the A3 together as much as it is truly understanding the issue and stating it clearly and concisely.
When your manager doesn’t understand the time it takes to truly understand how to put together an A3 it can be frustrating. As a lean learner, I encourage you to fight through that frustration and use the A3 to communicate with your manager or other managers. Show them the power of tell a good story on an A3.
The A3 won’t be perfect, but this is OK. If the others you are sharing it with understand your thinking then they can better add input. This better input leads to quicker high agreement and quicker resolution.
Think of using an A3 correctly as taking your time to do something right the first time, like setting up a machine. It may seem like it takes a long time but done right there isn’t as much rework because everyone understands quickly and you don’t have to have conversations over again because of the lack of understanding. Just like the machine being set up right the first time and not having to make tweaks over and over. In the long run, it is shorter to take your time upfront.
Eventually, others will see the benefits and the effects will spread.
My family and I had a nice day at Schlitterbahn waterpark a couple of weeks back. It was a lot fun and the rides were great. While waiting in line for each of the slides, I couldn’t help but think about the very poor value stream management for the rides.
For one set of three slides, the line was split in two. For two particular slides the line was to the right and for the third slide the line was on the left. When you got to the top the lines then crossed each other causing a ton of confusion and a park employee trying to keep the lines separate and correct. See the diagram below.
Also, if one of the first few didn’t want to ride one of the two slides from the line on the right then that slide would sit idle for a few minutes until the riders on the other slide unclogged the line. It was a waste of time and use of the one slide.
There was a second group of three slides at another part of the park. At this group of slides, two of them needed mats to ride down and the third needed a tube to ride the slide. They didn’t mark this line with two separate lines so people had to tell you there were two lines. Also, the mats for two of the slides were not stored at the entrance to the slides but at the exit. You had to fight people through the exit, get a mat, then walk back around to the entrance. All the tubes were stored at the entrance for the one slide. This caused over an hour wait for the one slide but only a 10 minute wait for the 2 slides with the mats.
The way the park handled the value streams for the slides caused unbalanced lines and confusion for anyone that had not been there before. It was a great lesson in making things visual and easy to understand in order to make a better experience for the customer.
Lean organizations work to develop people. Continually, helping people to improve their skills and give them new experiences. When you do this well, these people will shine and really make you shine.
This isn’t just managers that have people that report directly to them. This is also for project managers that are managing people for a short period of time. By fostering the development and encouraging them to make choices with coaching and guidance, you surround yourself with good people. This makes work and projects go smoother and deliver the outcomes you desire.
What are you doing to foster the people around you? How are you helping to surround yourself with good people?
When working with an area, department or organization to implement lean people like to focus on implementing a specific tool or concept, but it’s not that easy. The concepts and tools are so intertwined that focusing on one is really difficult to do.
An example would be implementing SMED (or quick changeover) across a facility. A vast majority of the time a large opportunity for improvement is through organization, having the tools you need where you need them and knowing when and where to be for the changeover. Immediately, other concepts that come to mind are visual management to understand when and where to be without having to ask. Also, 5S which can help with organization and having the right tools at the right spot. 5S is also a component of visual management.
A second example is implementing strategy deployment. There is standard work to how to cascade catchball down through the organization and it should be documented to be repeatable. Then the strategy is usually documented on an A3 to help communicate the message and most companies use visual management to show progress to the entire organization as time progresses.
As a person working to help others implement lean, it is OK to let them believe they are only focusing on one concept to start. Sometimes thinking about the intertwined concepts can become overwhelming. Let the customer focus on the one concept and introduce the other concepts through the backdoor. There is no need to call out the lean concept. Just discuss what a way to help them solve their problem in further implementing the concept the are focusing on.
At a later date, you can show them how they have actually implemented other lean concepts successfully. This helps build their confidence, shows further progress then what they believed and builds momentum to continue moving forward and taking more on.
Don’t get hung up on explaining all the intertwined concepts. Delivery on the needs of the customer and it will all work out.