Category Archives: Strategy

Strategy A3 Downloadable Template

If you look at the page links above you will see that a new page that has been added labeled Downloads.

This page will have files you can download to keep and use.  The initial thought is these will mostly be templates that can be used, but I am not limiting it to just templates.

My intent is not for it to be a template just to fill in but a way for people to learn.  I want it to be a tool that can be helpful to understanding lean and facilitate conversations.

Here is the template.  There are three worksheets in the template.

  • SWI – Intent of Use – This is meant to explain the best way I have learned to use the strategy A3.  It tries to answer the questions of what is the purpose of the strategy A3 and how to use it.  It also, gives a standard operating procedure to go about using it.
  • Strategy A3 – This is the template to start with.  It leads you through several discussions on what is your mission, metrics, targets, current business conditions and actions to take to reach your targets in the upcoming year.
  • Goal 1 Tactics – There are 6 of these sheets.  Only use the ones that you need.  It is based off the number of high level goals you have on our Strategy A3.  These sheets help take the initiatives from the Strategy A3 and go another level deeper to develop a tactical plan to complete the initiative and achieve the goal.

Please feel free to download and use it.  Any feedback on the ease and clarity of use would be appreciated.

NASCAR, Toyota, and Economies of Scale

In honor of the upcoming Daytona 500, I’m going to touch on a couple stock car topics this week.

In 2007, Toyota began racing its “Camry” in the top NASCAR series.  A year later, Joe Gibbs Racing switched brands and began racing Toyota branded vehicles.  For the first 4 years of the partnership, JGR built their own engines while TRD made the rest of the engines for the Toyota teams.  That arrangement is changed and TRD will now supply the engines for the Gibbs teams.

That, in itself, is not particularly interesting especially as it relates to Lean.  The part that I find most interesting is in a quote about the change from TRD’s president Lee White who says in this article, “Building for three teams or less is extremely expensive and inefficient. We’re hoping to recognize the tremendous economies of scale by spreading these costs across six or more teams in the future.”  As ‘Lean Thinkers’, one of the things we initially try to cut out of our vocabulary is the phrase “economies of scale”.   The phrase carries a stigma of filling warehouses with product to satisfy an outdated accounting metric.  What this highlights is that there is some real value to the thought as long as we aren’t using it to justify avoiding changeovers and over producing to keep machines busy.  The reality is that there is a significant investment to obtain a facility, outfit it, and hire and train the people that work in it.  A company can be the most Lean operation in the world in terms of their variable costs, but if the fixed costs are too high at the volume they run there isn’t much left to work with in looking at the ‘Profit = Price – Cost’ equation.  Instead of banishing the words “economies of scale”, maybe we should just move them out of the micro level (process and operation) and in to the macro level (overall customer demand).

There is another Lean theme that comes up in the article.  Both TRD and Joe Gibbs Racing representatives talked about the impact of this change on the people that work for them.  Both went out of the way to say that it would provide stability for the employees and that there wouldn’t be any layoffs as a direct result of the change.  I can only take those statements as face value, but it was refreshing to read about a move like this that wasn’t directly correlated to layoffs.

Determining What Problem to Work On

When teaching someone about problem solving methodologies, the question that most commonly comes up is “How do I prioritize what problem(s) to work on?”

The good news and the bad news is there is no defined way to determine which problem to work on.  Some people do not like that answer because they can get paralyzed by so many problems they don’t know where to begin.  If that is the case, the person can pick a method they like to prioritize and use that to help them.

In reality though, there are many different types of environments, cultures, and situations so being flexible in how you prioritize can a great advantage.  Some ways are straight forward such as your manager prioritizes the issues to work on for you.  But others aren’t.

Most people tend to prioritize by the problem that will have the biggest impact on the metrics or process when it is solved.  Most of the time this can be a good way to prioritize.  The “bang for your buck” factor.

What if you are in a situation where people are skeptical that things will work or can even be fixed?  Choosing a problem that isn’t the biggest but can be solved quickly and convince people to join in and help may be a better way to go.  Get the quick win and build momentum.

If there is work that is done on a consistent basis that causes problems, the way to prioritize may be to fix what is bugging you the most.  Fix something that relieves the pain points for people allowing them to add more value to the process quickly.

Quick summary on ways to determine what problems to work on:

  • Biggest impact to the business
  • Solved quickly and get a quick win
  • What is bugging you the most
  • You manager assigns the problem

None of these ways is better than another.  There are different ways to choose and being flexible can help you pick the way that is best for the situation you are in.

Are there any other ways that you may prioritize problems to work on?

Discussions are What Is Value Added

Before anyone understood the thinking behind the tools used by Toyota, people copied the tools.  There are many examples of companies trying to copy the tools and not succeeding.

Today, many more people are starting to understand it is about the thinking and not the tools that makes lean successful.  Yet, because it is human nature we still rely on tools and templates.

Last week, Jamie Flinchbaugh had a great video post about focusing on the discussion and not the template when developing a lean strategy.  I would extend that thought to be the same same when creating value stream or process maps or A3’s.

Too many times I have caught myself as well as colleagues worrying about the format or template use of a map.  I would get questions like, “Why didn’t you follow the normal standards for the map?”  or “That doesn’t look like the A3 I was taught to use.”  These questions are missing the point.  The discussions we have around, “what is the problem and how did we fix it,” or “what is the lean strategy and how do we execute it” are what is important.

Discussions are where we can gain clarity and come to agreement on what is the issue and how to go about resolving it.    When you have an issue at home to you ever talk with your spouse about what template to put the information on?  I bet it is safe to assume no.  It is the discussion you are concentrating on.

Templates are tools to help facilitate and draw out the discussion.  Not hinder it.  Next time you use a template, make sure you use it to enhance the discussion, because the discussion is what adds value.

Guest Post: Lean and Guitar Building

Joe Wilson has worked in a variety of continuous improvement, problem solving and engineering roles in manufacturing and distribution functions  in the automotive, electronics, and food/grocery industries. He was responsible for site leadership of Lean implementation during the launch and ramp up of becoming a supplier to Toyota and was able to work directly with their personnel and the Toyota Supplier Support Center.  His training background includes courses in Lean/TPS through TSSC and the University of Kentucky’s Lean Systems program.  He is a Six Sigma Black Belt and a Shainin Red X Journeyman in addition to training in Kepner-Tregoe problem solving techniques.  Joe also has a BS degree in Engineering Management from the University of Missouri-Rolla. 

Every now and then, you find someone singing the praises of Lean in a place you’d least expect them.  That happened to me last week.

I was reading called “Guitar Lessons” by Bob Taylor.  Taylor is the co-owner and for a long time main guitar builder and designer for the company that bears his name, Taylor Guitars.  The book is partially an autobiography but more so a history of the 35 plus year old guitar company.  I was reading along about the early days of the company when I hit a passage on page 84 that nearly knocked me out of my chair.  Here’s an excerpt in his words describing a conversation that he had with another luthier, Augie Loprinzi:

    “We were talking about production flow and the fact that I was having difficulty getting my guitars done on time.  He explained how he made his guitars ‘one at a time’, so to speak. In other words, every day he’d set up the jigs and make the parts he needed for that guitar that day.  I argued with him that it was more efficient to set up the jigs once and make all the parts for a batch at a time-heck, even to make enough for six months.  I told him how we made our guitars 10 or 12 at a time to take advantage of the setup times.  He cross-examined me and got me to admit that we never actually finished those batches of guitars on time….

“Augie asked me, “Bob, which would you rather have, one done guitar or 10 half done guitars?”

“It only took a moment for me to get the idea….I immediately recognized this as being a way to help solve everything from cash flow to training new craftsmen.  I would be able to go home and make guitars every day rather than every week.  This became the backbone of the production at Taylor Guitars.”

He goes on to add:

    “Everyone is exposed to some truth, some solution to the puzzle, some overarching concept that could change their working lives, or some idea that they could make their own in order to drive a lifetime of fruitful work habits and improvements.  That is the role this particular principle assumed in my life.  Since then, I’ve had other guitar shop owners ask for advice and I tell them about this, but I haven’t seen anyone take the bait.”

My favorite part is the timing of this conversation…it took place in 1978.  At the time, Taylor was making on average 8 guitars a week.  Taylor refers to the importance of Lean several times (he actually uses the term, although more as a common language point than a technical one), as being critical to their survival and growth to now producing 900 guitars a day in two factories.

I wanted to re-tell his example for a couple of reasons.  First is that it can give us all another example of a company that has adopted Lean to help it survive and grow and become something bigger than it may have ever become without it.  The second reason is that it helps provide a simple reminder of what a Lean mentality should do for us…help us find better ways to do what we do so we can keep doing it.  For academics who want to debate which is the correct 9th waste, the information won’t be satisfying.  But for the more pragmatic, it’s a nice reminder of the value of Lean and the magic of the moment that it became the truth that changed their working lives.

Dilbert – Six Sigma and Lean

This is the time of year where everyone is (or just finished) planning for the new year.  One of the biggest topics, I hope, is what are the improvement strategies for the new year.  The pointy-haired boss is tackling that same issue.

(click on image to enlarge)

I hope it wasn’t a waste of time at your company.  Good luck in 2011!

Be Proactive in Your Capital Investments

One difference I have seen between organizations that are leading and ones that are lagging in continuous improvement efforts is proactive versus reactive capital investment plans.

Most organizations that I have worked with are reactive to most of their capital investments.  The organizations realizes it needs equipment or needs to move equipment now (or this year).  Organizations like this usually have a small capital budget, relatively speaking.  Justification becomes a daunting gauntlet that must be run each and every time capital is needed.

The contrast is an organization that sets a 3-5 year vision, including layout and growth opportunities.  When working with these organizations, they plan capital investments a few years out based on a larger plan.  This allows the organization not to rush research on what the best or most appropriate equipment needed is.

Also, when looking forward to the next 3-5 years the organization only presents one proposal that gets reviewed for capital expenditures.  When results are shown in the first year, the subsequent years become an easier review to make sure everything is still on track and make any tweaks that may be needed to the longer term plan based on what happened in the previous year.

My personal experience has shown it is much easier to get larger amounts of capital, if needed, than is usually planned.  It also helps in selling the growth ideas the organization has.  It becomes a lot more realistic and achievable when there is a longer term, proactive plan to point to.

If you are struggling to get the capital you need, my suggestion would be to try and be proactive through a longer term vision and execution plan.