Defining Value Added

In the lean lexicon there is a lot of talk of removing waste from processes.  Waste is anything that is not value added.  There is the problem.  What is value added?

In my work, I ask people to define value added for me.  It seems like a simple question, but I get numerous blank stares and answers rarely match across the team or organization.

So if can’t give a standard definition of value added, then what is waste?  How do you look for it?  How do you know what to keep and what to eliminate?

Here is the definition I learned long ago and it never fails me:

1. The customer must be willing to pay for it
2. It changes the form, fit, or function of the product or service
3. It must be done right the first time

ALL THREE MUST BE MET TO BE VALUE ADDED!!!

A customer may find something interesting but isn’t willing to pay the extra price for it.  An example may be an optional built-in DVD player in the mini-van.  Some may find it of value and pay extra for it, while others may not.

A change must be made to the product or service.  Inspection stations on an assembly line are a good example of something that violates the definition.  It may be needed because that is better than a bad product getting out.

Which leads to the last point.  If it isn’t right the first time then it is a defect which is one of the seven types of waste.

Next time you are looking for waste, bounce it against this definition of value added.  You may be surprised to find waste that you haven’t considered before.

Who is Your Real Customer?

Lean is focuses on adding value for the customer.  But, who is your real customer?

Many groups will talk about supporting another group within the organization.  The focus is on making the internal customer happy.  Delivering what they need and want.

Internal customers are important.  As a supplier, the focus should be on delivering what the internal customer wants.  But, they are not your real customer.  The real customer is still the end user or the consumer of the organizations product or service.  That never changes.

Even if a group never touches the value added processes making the product or service, the group should be focused on the end customer.  As the group works with the internal customer, questions should be asked if what the internal customer needs/wants lines up with adding value for the end customer.

Common thought is it’s not the support group’s job or position to ask because the internal customer group is assumed to already know what is being asked for is adding value.

Amazon.  Zappos.  Danaher.  Safelite.  Organizations that have figured out it is EVERYBODY’s job to focus and ask questions about what adds value to the end customer have a significant competitive advantage.

It’s Not Always About the Big Improvement

With any improvement philosophy, people always want the BIG improvement.  When there are none to be had a re-organization or a shift in direction is implemented.  This may work for a short period of time, but eventually the results normalize back to their old levels.

A uniqueness with lean is creating a focus on getting better each day.  Even it if is just a second or two better.  Saving 1 second each day while maintaining the savings from the previous day will yield 8.7 hrs of savings after a work year.  What would you do with a full extra day of capacity?

Paul Akers has called this 2 second lean.  It is extremely powerful.

Focusing on small improvements means focusing on what bothers you and your customer and fixing it.  It could be as simple as always having to search for a stapler when doing paperwork.  Or moving the placement location of a label.  This saved a group I worked with 1 second per label…we timed it.  Over the course of the year, that was a savings of over 30 hours for the team!

People don’t like to focus on small changes because it isn’t “sexy”.  Guess what?  Sexy falls apart quickly and usually has no substance.

Build lasting change a little at a time.  It takes patience and understanding but two years from now you will have better actual results than people chasing only the “big” improvements that never get completed.

How to Observe

Last blog, I talked about the most important lean tool being the eyes.  The eyes allow a person to the reality of what is happening and gather facts.

So, if direct observation is important then how should a person go about doing it?

Here are a few pointers I have picked up along the way:

• Have a purpose before you go out to observe.  Are you going out to see a particular problem?  Are you going to audit a specific process?  Is there a process you trying to improve?  A specific type of waste you are looking for?  Whatever your purpose, understand it before you go out to observe.
• Explain what you are doing.  People get cautious and worried when someone is just standing to the side watching their every move.  Tell them why you are there and ask them to explain anything they feel is important.
• Be in the moment. Don’t answer the phone.  Don’t start other conversations.  Just observe.  Stand in one area and watch what is happening with scrutinizing intent.
• Ask clarifying questions.  If you need to better understand something, ask the person doing the work questions.  Don’t leave without having answers to your questions.
• Take notes.  You are there for a purpose, so write down what you need to remember.  Notes of what you observed are your facts.
• Take prompt action.  Don’t wait days to do anything with the facts you have gathered.  Things change quickly so use what have you seen before the facts become outdated.

Good luck and happy observation!

Customer Focus Eliminates Waste

Recently, my wife had an experience with supplier that wasn’t focused on us as a customer and it created great waste for the supplier.

The shop was low on a particular candle that we buy from a local handmade supplier.  The product is great and it sells really well.  My wife emailed the owner to order more candles.  In the email, she asked if the owner could send a list of spring related scents as we phase out the holiday related scents, so we could pick out what we think our customers would like.

We didn’t hear from the owner for about a week or more.  Then the owner shows up with the candles we ordered plus three new spring scents.  We didn’t like one of the scents.  We said we wouldn’t take that one and discussed other possibilities to choose from.  A different scent was picked and a few days later the owner returned with the new scent.

When the issue of not responding was brought up to the owner, the reply was they were so concerned that we needed the candles right away that they just made them as quick as possible and brought them over.  My wife explained that we don’t need things immediately, especially after the holidays and if there is ever any question to just ask.

The owner wanted to please us, but didn’t focus on what was truly important to us which is the scent selection.  The owner ended up causing waste of defects/rework (making new candles she hadn’t made), waiting (us waiting longer to get the order filled) and transportation (driving to our store twice).

Have you or your company ever rushed a product or service to market because YOU thought that was what the customer needed and then if failed?  What were you focused on?

If you aren’t sure what your customer needs are…ask.  Be clear and focus on what they need, not what you think they need.

Get Rid of the Email Distractions

Note: I want to give a big shout out to Dan Markovitz, author of A Factory of One.  It is an excellent book on how to gain efficiency in your personal work.  Dan outlines things you can do in regards to email that will help with efficiency.  While I have been doing almost all of the suggestions for a few years now, Dan did have one suggestion that was new to me and helped me with a problem I was having.  I have implemented the suggestion and it works very well.  I will point it out below.

On with the blog post.

We all want to improve our efficiency and free up time.  In my personal work and in observation, one of the biggest culprits of causing inefficiencies is email.  Here are three things I have done to help eliminate some of the distractions and inefficiencies email causes me.

1. Turn off Email Notifications: In Outlook, I have turned off all notifications of incoming email.  Nothing popping up in the bottom corner showing a new email has arrived.

Result: When I am working on something I don’t catch the notification out the corner of my eye distracting me causing the back of my mind to have to know what the email was about.  I stay focused on my work and can finish what I was doing.

On my phone, I have turned off the lights, sound and vibration of new email notification.  There are two reasons: 1) if I am in a meeting and it is making noise or vibrating it is distracting me and others from the meeting and 2) if I am working at my desk is acts the same as the Outlook notification as it beeps or vibrates or flashes on my desk next to me.

Results: I am not distracted by incoming emails at all during meetings or while working at my desk.

2. Open Mail Software to Calendar: This was the new suggestion I found in Dan’s book.  Thanks, Dan!  When I open Outlook, it opens to my calendar.  Not my Inbox!  Most mornings, I have a quick email I thought of on the way into work that I have to send when I get in, but I was getting distracted by waiting email in my inbox.  I might even forget to send the original email I went to write.

Results: I am able to send an email from the calendar view by selecting New Items –> Email Message from the menu at top.  I always finish the email I intended to send out and I am not distracted by the other messages in my inbox.  I don’t check email first thing in the morning and get off on the email tangent.  I am able to complete something off my personal kanban board before checking email.  I feel more productive and less distracted.

3. Use the 4D’s: I have been doing this for a few years, but never had a name for it until I read Dan’s book.  When I decide I have time to process my emails I do one of four things: 1) Do it: reply back if it is a short reply or completed the action if it is less than 5 minutes, 2) Delegate it: delegate the work to someone that can help, 3) Designate it: for me this means if it is a larger task I add it to my personal kanban board or 4) Delete it: I have read it and don’t need it.

Results: My inbox is not cluttered with messages that I lose.  I know what I have to process when I go into my inbox.  I don’t loose track of requests made of me via email.

One last thing.  Just because someone emails you doesn’t mean you have to read and respond immediately so don’t feel like you have to be hovering over your email waiting for it.  If the person needs an immediate response, they can call.  That is what a phone is for.  We all have one in our pockets nowadays.  Note: I do know some jobs require constant monitoring of email, like an order processor. 

How have your improved your efficiency with your email practices?

My Continuous Improvement: Personal Kanban – 5th Revision a Success!

In the past, I have posted several times about my experiments with kanban boards for my personal work.  Below are the links to past posts.

• Original
• 2nd Revision
• 3rd Revision
• 4th Revision

The last post shows my failed experiment using Trello.  I kept hearing other people say how much they liked Trello and how it well it worked for them.  It has been about a year since I last tried Trello, so I thought I would give it another shot.

First, I reflected on why Trello didn’t work the first time so I wouldn’t make the same mistakes.  There were two things that caused me quit using Trello.  The first was how I separated my work.  I had a board for each project.  I had three projects so that would put my total WIP at 6 (max of 2 for each project).  I had a hard time prioritizing my work and I was flipping between boards constantly.

The second thing I couldn’t work out was a way to include my weekly blog posts.  I got tired of writing the exact same kanban card every week (“Write Blog Post”).

If Trello was going to work for me, I had to be able to deal with these two situations.

In the end, I realized I was making it too complicated.  One board and using the labels would work for me.

New Trello Kanban Board – Click image to enlarge

I create five columns to organize my work.

• Posts to Be Written: This is a list of blog posts with the idea for the post written on each card.  I can move this over to my Doing column when I am ready to write.  It is a visual reminder to mix in my blog posts with my other work.
• Queue: A list of work to be done.  The color labels in the top left-hand corner signify the type of work or the project.
• Doing: This is what I am currently working on with a WIP limit of 2
• Pen: This is a kanban card that is blocked from moving because I am waiting on work or information from someone else.  I put a WIP limit of 3 on this and it seems to work for me.
• Done: When the work is complete the kanban card goes in this column.  I archive the cards at the beginning of every week.

It’s not fancy, but it is effective.  I now have access to my board at anytime, either on my computer, phone or tablet.  So, if I remember something I can add it right away.

Are you using personal kanban?  If so, how do you have yours set up?

Lean at Home…by My Nine-Year-Old Son

The other day my son came up with a great improvement at home.  It saves only a few seconds but it is in the true spirit of continuous improvement and kaizen.

A few weeks ago, I bought a DVD player with WiFi and the internet apps to watch through Amazon, Netflix, MLB.TV, etc…  I set it up so it is plugged into Input 2.  Our cable is plugged into Input 1.

Over the first few weeks of using the new DVD player we have found that if when you turn on the DVD player it automatically switches the TV to Input 2 without hitting any other buttons.

My TV has a total of 8 inputs.

That led my son to ask if we could switch the cable and the DVD inputs.  When I asked why?  This was the response he gave me, “Because it makes the easier.  When I turn on the DVD player it switches to Input 2 automatically but when I turn it off I have to hit the input button seven times to get the TV back to Input 1.  If we switch them then I only have to hit the button once to get to the TV when I am done with the DVD player.”

HOLY SMOKES!  That is simple and easy to change.  It is the true spirit of kaizen.  Keep make small improvements and they will add up.  Yes.  This was for watching TV, but it is such a great example.

How are you making small changes to improve?

Seconds Matter…So Save Them

Paul Akers at FastCap talks about the 2 second lean.  Everyday we should be working to save two seconds.  Just two seconds.

All too often, this aspect of lean is missed.  Most people are looking for the BIG savings.  They don’t deem 2 seconds worth the savings.  People miss the value of a bunch of 2 second savings adding up quickly and creating a lot of capacity and savings.

Recently, I was working with a group that found several 2 second savings in their area and it added up to over 200 hrs of gained productivity over the year.

The picture below is an example of a 2 second savings they found.

The box on the right shows where the label was outlined to be placed.  The label is low and is blocked by the lip of the shelf.  Every time a person has to put something in the box they have go scan the label, so they have to push it back to scan the label and then pull it forward to put the item in the box.  Several people doing this over 300 boxes with upwards to 20 items per box.

The box on the left shows where they moved the label.  Now a person does not have to push the box back and pull it forward saving about 2 seconds per box per item.  This alone saved over 28 hours of time during a year.  That is over a full day’s worth of worked that can gained from this simple change.

All savings are important.  Seconds matter.  Save them every chance you get.

Lean for Small Businesses

If you have followed my blog for awhile you know that my wife started a hand-poured soap and bath and body business a few years ago.  One of her suppliers sends out a monthly newsletter with different kinds of articles: how to make new products, different recipes and in the most recent newsletter an article on lean for the small business.

Though turning to “lean” operation processes may sound like a complicated undertaking best left to large corporations, small businesses are actually ideally equipped to leverage the advantages of a lean business model.

The author is correct.  Being a small business makes it easier to create change more quickly as long as you are dedicated to it.

There are some good points in the article and some that are not even close.  I know lean is a the en vogue thing to discuss but that doesn’t mean everything is always a good point of view.  Better to have it mentioned and start a discussion though.

Some of the good.

You probably spend a lot of time in a day communicating with your clients, vendors, and staff. But have you ever taken a close look at why you have so many of those conversations? If the topics of your business conversations tend to involve a lot of the same questions, standardizing your operations could present a huge opportunity to save time, and eliminate such redundancies. Take detailed notes of the email and phone conversations

…get creative about how you might develop a standardized system for addressing such recurring issues. If customers tend to email or instant chat with similar questions, develop various email templates that you can send to them in a matter of seconds could prove a real time saver. Better yet, incorporate clear language onto your website that answers the questions so they donʼt even have to contact you.

I am more of the thought about trying to get to the root cause and better incorporate the clear language onto your website.  This is a clear way to help eliminate waste and create more time to serving your customers specific needs.

Dave Kerpin suggests that you can improve the efficiency of every [meeting] (and save 900 hours a year) with a simple shift: Donʼt end the discussion until everyone clearly understands their next steps, and you actually begin your own. Kerpin insists this eliminates the odds that miscommunication and confusion linger (which will only lead to further conversation), and reduces the amount of time youʼll spend trying to fi gure out how you need to move forward.

Dave is talking about getting high agreement on what will be done and how it will be done.  This is one of the core lean principles.  He is right.  It helps reduce confusion and communication that comes later from it so the work can be done more quickly.

Some of the not so good.

To adopt the common principles of lean management known as the 5 sʼs (Sort, Straighten, Sweep, Standardize, and Sustain), start by taking a look at your business routine…

This is a smaller issue in that 5S isn’t really a principle but more of a concept or tool to help highlight quickly when something is abnormal.  The author never mentions this.  Just that it can help “clean up” and organize your routine.

This is the one comment that truly gives me heartburn.  It shows the engrained misunderstanding of economies of scale.

If you find yourself ordering inventory frequently, could you forecast more appropriately, to reduce the frequency and possibly, realize cost savings from placing one larger order?

Oh where to start with this one.  First off, you can’t forecast “more appropriately”.  Overcomplicated MRP systems have shown that repeatedly. If you are a small business and growing this is no way to forecast more appropriately.  Understand your lead times and put in a visual reordering system that will trigger with enough time to get your orders in.  You may need to adjust over time as you grow, but it is more efficient and cost effective.

More importantly, don’t just order in bulk to get savings.  This is not a smart move.  You need to understand what your demand is, how much space you have, how much materials cost and how long the inventory would sit around.  If you order a larger quantity to get the savings but it takes 8 months to go through the inventory, you have tied up your cash so you can use it to grow in another area.  As a small business, cash flow is extremely important.  Another factor is the space you have.  If the material is going to take up a lot of space that you don’t have, it is better to not have it spilling over in your work area.  This is something to consider the long term savings in space and cash availability versus the immediate savings of a one time buy.

It was good to see lean talked about in a different arena besides manufacturing.  The message may not always be perfect but it is better to start the conversation than not have it at all.