During some recent blog reading, I was spurred to think about a past situation when a company I worked for was buying new equipment and how WRONG this decision was.
I had been with the company for about four weeks when I heard about a capital expenditure my director had just approved to buy nine more of a patented machine. My company owned the patent. That would give us a total of 99 of these machines.
First question I asked, “Why are we buying more of these machines?”
The response was a typical one, “We they need more capacity because we are meeting the demand.”
I didn’t ask anymore questions at that point. I decided to go and see for myself. This was easy because the corporate offices we were in was part of the main manufacturing building. I had to walk about 100 yards.
During my observations I found two things:
- The overall OEE of the 90 machines was around 35-40% when it was running.
- At anytime I never saw more than 50 of the 90 machines running. This was because we never had enough people to run all the machines.
After a few hours of direct observation, it was clear there was no understanding of what was really going on.
First, attack changeovers and downtime to get the OEE of the machine up to the 75% range.
Second, why buy more machines if we can’t staff them?!
By my calculations, if the OEE was raised to the 75% range, not only would we not have to buy more machines we could get ride of about 20-25 machines we already had. That would mean our current staffing would be pretty close to what we needed.
I presented this to my new boss and the director, but by this time it was too late. The money had been cut and were pretty much crated and on the road to our facility.
This is why companies should question any new capital expenditures. Companies should be maintaining and using what they have first. The OEE should be at least 70% if not higher before considering adding more capacity through spending.
Do not make any decisions about capital expenditures until the current state is thoroughly understood. The best way to do that is to go and see for yourself.
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 2013. Enjoy!
5. Making Leader Standard Work Visual (June 2011) – Previous Year Ranked #9 – An example of a visual board from a group I worked with. The board makes the tasks and if they were completed by the managers visual.
4. Don’t Over Complicate the Formula (October 2011) – Talks about simplifying formulas to get you directionally correct especially with calculating kanbans.
3. Need the Mental Toughness of a Navy SEAL (February 2012) – Previous Year Ranked #4 – Inspiration of a Navy SEAL got me thinking about the mental toughness it takes to create change.
2. Keys to Sustaining 5S (September 2011) – Tips to help sustain (the 5th ‘S’) the gains made from implementing 5S.
1. 5S in the Office (September 2010) – Previous Year Ranked #3 - 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.
I hope 2014 is a great year!
At the end of the year, John Hunter does a great job of facilitating an annual roundup of business and lean blogs at Curious Cat Management. The roundup is a review of blogs by other bloggers. This year I have the honor of participating in the Blog Carnival Annual Roundup.
A blog that I discovered a couple of years ago was Lean Blitz written by Chad Walters. I like Chad’s unique way of relating lean and continuous improvement to the sports world, because there are plenty of examples throughout sports to do this.
Take the respect for people as an example. The NFL was ripe with instances of disrespect this year, from the Miami Dolphins’ handling of the bullying in their locker room to the Tampa Bay Buccaneers’ unclean locker room leading to three players getting MSRA infections. Not only in the NFL but in college also. This post talks about Coach Kelly at Notre Dame not listening to his players when something was wrong with the gauntlet machine. Chad tackles the issue head on in his posts.
Another topic on the blog is error proofing. Chad talks about how Clemson and Notre Dame handled a color out night at their school for a football game. Clemson was a huge success while Notre Dame not so much. He shows some of the differences. Another favorite is how sprinklers popped up in the middle of an NFL game at the end of last year.
Chad has created a unique blog at Lean Blitz. It is a fun and different way to demonstrate lean principles in action in any environment.
Last week, I mentioned that I would talk more about the lean forum I attended. The theme of the forum was leading lean. Several speakers presented and they all did a fantastic job. One of the speakers was Jamie Flinchbaugh of the Lean Learning Center. Jamie outlined five leadership moves that demonstrate lean leadership.
- Apply Lean to Your Work
Over the next few posts, I thought I would share the message and how I personally have exhibited the behavior positively and negatively, because we all must learn from our mistakes.
Apply Lean to Your Work
As leaders it isn’t good enough to just talk about lean and how it can apply elsewhere. Leaders apply lean thinking to their own work in order to help themselves improve continuously. Structuring the day or week using standard work and learning ways to eliminate waste from their own work show a commitment to lean and how it can apply to anyone doing any kind of work.
Applying lean to my own work has helped me grow as a lean leader and gain credibility over the years. I had standard work that I followed when I was working in the manufacturing facilities that called for dedicated observation or waste walk time. This really allowed me to understand what work I was falling short in and make corrections.
Also, I have standard work for how I conduct lean improvement (kaizen) events. I have it down to the minute for each section. Because of this, I have been able to try new techniques to see if they allow me to reduce the time for a given section without sacrificing the quality of the event.
The biggest change was seven years ago when I added 45 minutes every Friday morning to reflect on my week. This has helped me better understand things I have tried and why they worked or didn’t work. Adding planned reflection time every week is probably the single most important thing I have done to learn.
With all the positives, I still don’t have standard work that I use for the week in an office environment. This has caused me to not be as effective in high work volume times. I have gotten so busy at times that I haven’t taken the time to reflect and improve. We should always create time to reflect and improve so during the next heavy workload maybe it isn’t so stressful.
There are plenty of opportunities to apply lean to our own work. We just have to take the time to do it as leaders.
How are you applying lean to your work?
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.
On a recent project, some senior leaders were asking for an update on the development of an app the team was building. The team is using the Agile methodology, so there is progress and changes every day or two to the app.
Instead of trying to explain the progress, the team invited the senior leaders to the work space for a demo.
The demo went incredibly. As soon as they saw the app, there was great understanding of how it worked. Everyone was able to see not only the customer interaction, but also the aesthetics of the app.
The senior leaders asked some really great questions about the customer experience and how the app worked. Because the team is using the Agile methodology, they were able to quickly add the changes to the app for a better customer experience.
If you want to understand something, go and see it. It seems so simple. Yet, that is not the first instinct of most.
By the team asking the senior leaders to come and see, they are setting an example of this behavior. Hopefully, the senior leaders left with a sense that it was great they saw the app and the work environment and next time they have questions they just go and see. Then it starts to carryover to other projects. Slowly, the behavior starts to change because the benefits are seen.
Next time someone asks you for an update, take them to the work and show them. Help change the behavior.
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?
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.
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.