Lean Roundup #4

September, 2009

Lean Out Your Communications – Liz Guthridge gives 5 tips on how to be customer-centric in our communications.

It is Time for Hoshin - Lean Sigma Supply Chain covers Hoshin planning with examples of x-matrix and A3 team charter.

Three Risks of Implementing Lean without Policy Deployment – Jon Miller talks about the PDCA cycle for continuous alignment through policy deployment when starting Lean.

Nobody Knows the Trouble I've Seen – Brian Buck encourages your teams to make problems visible so they can begin to solve issues with these tips.

MICUs Go Lean: Result = Happiness – Paul Levy shares some 5s improvements in a hospital with videos showing the transformation.

It's Not About the Board!- Lee Fried reminds us that our visual boards only make information visible and that they still requirement interaction and direction from leaders.

You Gotta Be Original – Bill Waddell talks about the Lean journey being an unclear journey with a unique path not a copied plan.

Use 5 Sequential Whys, Not 5 Random Ones – Mark Graban teaches us the importance of using a systematic series of questioning why to find the root cause.

How to be Lean in a Batch Production Industry – Jon Miller gives examples of several lean techniques to improve an organization in a batch production industry reminding us that Lean is more than single piece flow.

The Coffee Kaizen – Rick Foreman tells a story from the Hitchhiker’s Guide to Lean about everyone being responsible for Lean and what that means.

How do we learn? – Joe Ely shares a view on learning with a perspective rather than going from point to point, the learner comes round to the same things, but at progressively deeper, and more complex levels.

Levels of Empowerment – Lean Sigma Supply Chain displays a pictorial showing different level of empowerment between employees and management from Hierarchical Authority to Fully Empowered.

Production Planning – Connor Shea talks about the importance of production planning and what it means to look ahead so you can prevent fires instead of putting them out.

The Purpose of Lean Tools – Mike Wroblewski reminds us that Lean is about making problems visible and then engaging those to solve them.

Companies Freezing Training Budgets are Going Backwards – Karen Wilhelm talks about the importance of continuing to learn even during tough economic times.

Deciding When To Dig – Jamie Flinchbaugh shares the importance of criteria-based decisions when problem solving to learn when to stop fire fighting.

Problem Solving Rules

Murphy’s law is an adage that broadly states: "Anything that can go wrong will go wrong." It is therefore inevitable that businesses must solve problems. One of the key characteristics of successful organizations is effective problem solving. Many in the Lean community optimistically refer to problems as opportunities for improvement. As I always say TPS is the “Thinking People System.” Lean companies understand that solving problems are expected.

Norman Bodek, author and the President of PCS Press shares some rules to problem solving in a recent article in MoldMaking Technology.

The power of lean manufacturing resides in the philosophy that all employees should be involved in solving problems. Toyota recognizing this philosophy developed a system called Jidoka, which gives all workers the power to stop the line and all other employees from working until the problem is resolved.

When do you train your personnel in problem solving? How do you train them in problem solving? Dr. Ryuji Fukuda, VP of Production at Sumitomo Electrics says "The best time to train workers is when an error is first detected. It also is the best time to solve a problem." He refers to this activity as On-Error-Training (OET).

The following five rules are necessary to make OET work successfully in your shop.

Self Rule – The responsibility of finding the root cause of the problem must be from the worker who first detects the problem. They must stop the line and get their coworkers to help.

Quickly Rule – It is important to solve the problem immediately when the information is right at hand.

Actually Rule – You must replay the process that transpired before the defect occurred and try to re-create the defect. Management must challenge and empower the worker who detected the problem to take the prime role of problem solving in order to learn.

Support Rule – Everyone must stop working and support the primary problem solver in the process of finding the root cause and determining appropriate countermeasures.

Don’t Speak Rule – Management (supervisors and managers) must not come up with all the answers. Allow the discoverer and coworkers the time to discuss the problem and a chance to solve it. If they get stuck then management can offer suggestions.

This simple process will help you reduce quality defects, empower your work force, and create a learning organization. It can only be effective if people are allowed to stop line and eliminate the root cause of the defect. I like to use the phrase “You, Me, Now, at the Source.” In the long run you will be much better off resolving issues as they occur.

Visual Board for Production Supplies

In our work environments it can be far too easy to be complacent in our surroundings. Many companies are trying to find ways to manage their production or service costs. We need supplies to do our jobs and many times we are unfamiliar with the cost of these supplies. Unfornuately ordering of supplies is usually done by some central procurement function removed from production. Below is visual board from a recent factory visit where the production supplies, part numbers, and their costs are displayed.

This is a quick and easy solution to get employees familiar with the cost of various items in their work place and involved in managing the cost of these supplies. Information is empowering in this case.

Some may say that with standard work the exact usage of these items may be better regulated. I would agree they are right. The issue is not every organization implements standard work on the first day of their Lean Journey. This visual system can help where standard work is not yet in practice.

What methods do you use to involve employees in the cost and usage of consumable production or service supplies?

Lean Resources from LMSPI – Breakthrough Newsletter

Today we are going to highlight a consulting firm from Tennessee called the Lean Manufacturing Solutions Partnership, Inc (LMSPI). LMSPI seeks to be a Lean manufacturing resource that establishes a lean enterprise within each manufacturing management team. They define a Lean Enterprise as one that aligns the efforts of entire company leadership and staff to focus on executing value add activities.

They have created a newsletter called Breakthrough where their staff can share some proven resources to destroy global manufacturing obstacles. The topics in the newsletter include:
1) A 5 part series on the steps to create breakthrough in your environment.
2) A 3 part series on getting a handle on cost
3) A 3 part series on beginning your lean journey and hoshin
4) A 4 part series on the daily principles of Lean implementation
5) A 6 part series on Six Sigma and the DMAIC methodology

The newsletter is short and focused, usually describing a specific topic in a couple of pages. The publication is more a comprehensive overview than a detailed explanation but this can be effective for teaching managers and executives the basics of these concepts.

The Importance of Going to the Gemba

The other day while working with a team on a rework reduction activity the team leader learned a great lesson. He learned “Genchi Genbutsu” which literally means “actual place, actual thing”. It is commonly referred to as “Go See the Problem”.

The team had made several improvements to reduce manual entries of data to reduce reworks related to documentation errors. While following-up with the team on a pareto of loss codes it was found that a new category of defects had increased. These new reworks were packing errors which was not part of the original current state characterization.

As we were analyzing the data a rework came back for this packaging error. The team looked at it and noticed right away that the product was not completely wrapped. One team member said the usual “That is just operator error.” Obviously the data did not indicate that. It was a new problem. The team leader said “I think this is only an interdepartmental rework” but the data did not show that either. I said “Let’s go see”. To that he said “What do you mean?” Let’s look at the actual process of packaging the product.

We watched three people including the team leader perform the packing step for the product. All three did this process differently. The team recognized the need for a repeatable process that everyone would do. This is what we call “standard work” in the lean community. As we observed this process we noticed there we several different packages all of which require a plastic wrap. The product package size had increased in width by a factor of 3 about three months ago. The plastic wrap had not and this caused a number of new issues. Now there was more variation in the process from where to start wrapping, the method of wrapping, and the number of wraps. The smaller wrap and the wrapping variations was the root cause of the reworks observed since all the product packages were fixed by simply re-wrapping.

This issue is not something the team could see from the rework data. The only way to determine the wrap was too small for the package was to observe the process and ask questions at the source. This is the principle of “going to the Gemba”. Gemba is the Japanese word for “actual place.”

This is a simple story but a typical example probably in many companies. No matter what your position is or what you are working on you can not underestimate the importance of going to the Gemba. You can’t solve problems at your desk. Going to the Gemba is a great way to get the entire team involved in identifying and solving problems. It is grounded in fact finding using actual conditions from the actual workers who perform the work. This activity creates energy within the team solving the problem leading to experimentation, ideas, and discussion on improvements.

Next time you are working on an opportunity remember to go to the Gemba and the results will surprise you.

The Roots of LeanSigma

The other day I came across an interesting video called the Roots of LeanSigma. This video was done by the TBM Consulting Group who claims to have coined the term LeanSigma in 1997 with Maytag after a successful improvement effort including both Lean and Six Sigma.

I am not sure how many people are familiar with TBM Consulting Group. I was not so I checked them out. They define their mission as:

We rapidly transform enterprises worldwide for increased responsiveness to achieve growth in sales and earnings.

They have been helping organizations with business improvement for over 15 years with what they call LeanSigma. This is the fusion of today’s most powerful improvement tools Lean and Six Sigma.

The TBM website also features some useful information worth perusing like Lean terminology, articles and news stories, and a video archive. I have found it beneficial when doing training sessions to use short videos during breaks as a way to get people back together and focused again on learning. They have a collection of videos on LeanSigma learning and application, various manufacturers, and service and business processes ranging from a few seconds to 12 minutes in length. If you like the video above then you will most likely find these others interesting as well.

How Can Making Toast Teach You About Lean?

What simpler, more familiar, process is there than making toast? No matter your background, education, or culture everyone has made toast at some point. Why not use this process to explain kaizen and teach people how to “see” the eight wastes? Well that is exactly what the Greater Boston Manufacturing Partnership (GBMP) has done in a video called “Toast Kaizen”.

GBMP is a not-for-profit corporation whose sole focus is to help companies become more productive, GBMP is a not-for-profit corporation whose sole focus is to help manufacturing companies become more productive

This is #1 selling Lean training tool in the world and is the perfect introduction to Continuous Improvement. This video teaches the 7 wastes: Defects, Over-Production, Waiting, Transportation, Inventory, Excess Motion, and Over-Processing.

Narrated by and featuring Bruce Hamilton, Shingo Prize Recipient and GBMP President, this 27-minute video highlights the seven deadly wastes found in both administrative offices and in manufacturing processes. In this training tool, the process of making toast is used to represent the before condition and the target condition of a manufacturing or transaction-based process and helps your people to identify with the process of Kaizen (small and continuous improvements). Whether you are already on the Continuous Improvement journey or you are just beginning to realize the power of continuous improvement implementation, this video is an essential learning tool for your entire workforce.

This video can be a great tool to train customers and suppliers in continuous improvement as well. It doesn’t matter the language or industry or even their level of lean knowledge, all can relate to the activity in this video.

http://www.gbmp.org/Toast_Kaizen_Short.mpg


In many cases our organizations are not as simple as making toast. Our factories and businesses are not confined to a relatively small space like a kitchen. The situation many of us find is more complex, more interconnected, and more difficult to see as a whole. A method that is used to “learn to see” this waste is the Value Stream Map (VSM). GBMP has followed up the “Toast Kaizen” video with a video series called “Toast VSM”. Here they teach you how to map out the material and information flow through direct observation of the current state. Then they show you how to find the waste, create a target condition, and an action plan using an A3 to achieve the target condition.

In 2004, GBMP released Toast Kaizen, a short video to demonstrate the importance of direct observation in continuous improvement. It is now used around the world (in 14 languages) to help explain the true meaning of Kaizen. In reality, as viewers observe the 2004 toast-making process, they are witnessing an already improved process, one where much Muda, Mura and Muri have already been remove as the modern-day kitchen is fairly well organized already. But this is not so in most other endeavors.

According to Bruce Hamilton (the Toast Guy), “If our kitchens were organized the same way as our factories, offices and clinics, then the refrigerator would be in basement, the toaster would be in the attic and the bread would be stored anywhere there was an open space. We would be making huge batches of toast that spent most of their existence being moved and stored. And we’d see isolated departments that each added a little bit of value and a whole lot of waste, working out of sync, rarely communicating and often displeasing the customer. Just like most business environments.”

So, watching "Toast Kaizen", it’s easy to separate the wastes from the work, and in doing so make the whole job easier, better, faster and cheaper. But what if the process is not self-contained as in a kitchen. What if the process is laid out like most factories and offices? Then those material, information and production flows would be spread out all over into functional areas that would hide most of the waste. In fact, almost none of us see the whole process in our daily work, just the little piece we do ourselves. So now, GBMP offers "Toast VSM", a 2009 sequel to the original - a DVD no Lean Training Library should be without.

Come along on a toast odyssey that mimics the more typical conditions employees encounter when they attempt to value stream. Divided into two half-hour training segments, Part 1 of the lesson examines the current condition (or state) as we follow the toast-making process to understand the material and information flows. Viewers will participate in the observations and the sometimes contentious discussions about what has been observed as GBMP team travels the process upstream to expose system and process problems. You’ll learn how to capture both numeric and anecdotal information on paper, and how to achieve a consensus regarding the key points of the current condition.

Part II details the target condition (state) demonstrating how orders of magnitude improvement can be systematically identified, achieved and measured. Viewers will be introduced to a VSM Action Plan in A3 format that provides a complete analysis, reflection, improvement plan, measures and milestone tracking on a single 11x17 sheet.


Whether your process is pure factory or administrative or service-related, "Toast VSM", offers a realistic, day-in-the-life experience for lean implementers who wish to gain the full benefit of Value Stream Mapping.

Make Failure Acceptable

I visited a plant recently that was struggling to implement Lean. This plant was having difficulty keeping up with the customer demand. They were operating like a traditional push factory producing large batches utilizing all available resources. What you observed was lots of material and product on the factory floor not moving, poorly utilized process, and general chaos. While talking with the plant management about this obvious deviation from lean thinking to this current thinking a couple insights made it clearer. First, the management has some lean knowledge but really did not understand lean and how to implement it. Second, they were so afraid of doing anything that would affect their output they basically were doing nothing. They were afraid of making a mistake and suffering the ramifications of failure from executive management.

What do you think of failure? How does your organization or manager treat failure? Failure can be good for you.

Fear of failure is the main reason why more than 80% of people in the world are not prepared to change their circumstances. Why do people fear failure so much? The reason for this is because people don't understand the dynamics involved in success and failure.

Everything we do in life has either a right way of doing it and a wrong way of doing it. When we do it the right way we meet with success. Needless to say that when we do it the wrong way we are unsuccessful. Understanding this is important because it puts failure in its proper perspective and removes the fear around it.

Every failure teaches a man something, if he will learn – Charles Dickens

Past failures prepare you for future successes. It’s the old adage, “Learn from your mistakes”. Failures help you realize what didn’t work, so you can find what will work.

Sir James Dyson the inventor of the Dyson vacuum has been famously quoted as saying:

I made 5,127 prototypes of my vacuum before I got it right. There were 5,126 failures. But I learned from each one. That's how I came up with a solution.

Jon Carroll a daily newspaper columnist says failure is a good thing because this is how we learn.

Success is boring. Success is proving that you can do something that you already know you can do, or doing something correctly the first time, which can often be a problematical victory. First-time success is usually a fluke. First-time failure, by contrast, is expected; it is the natural order of things.

Failure is how we learn. I have been told of an African phrase describing a good cook as "she who has broken many pots." If you've spent enough time in the kitchen to have broken a lot of pots, probably you know a fair amount about cooking. I once had a late dinner with a group of chefs, and they spent time comparing knife wounds and burn scars. They knew how much credibility their failures gave them.

The management at this plant needs to understand that failure is part of success. The real failure is trying nothing to improve your situation. Lean is about thinking and making improvements. Some ideas work and some ideas don’t. What management needs to do is create a safe environment where it is OK to fail.

But to have success, you have to create an environment where it is safe to fail. Failure is an expected part of the process of finding solutions. If workers feel that they have to “hit one out of the park” every time they come up with an improvement idea, they will be reluctant to provide their ideas. In a Lean environment, failure and success should be met with the same level of enthusiasm and support.

As a supervisor, you should work to create an environment where improvements are encouraged and failures are embraced. An environment where ideas are continually tested and then those that work are adopted. This cycle of continually learning and improving is at the heart of Toyota’s success.

Failures can either destroy or advance our goals, but it's our response to them that truly determines the outcome. If we are too afraid of failure to try then we will never know if we can improve our situation.

Creative Safety Supply

Along your Lean Journey it is helpful to have resources at your disposal to aid in your transformation. Mike Wilson, a reader of A Lean Journey, wanted to share his company with others in the Lean community as a resource.

Creative Safety Supply specializes in Facility Floor Marking, Aisle Marking, 5S Products, and Ergonomic Solutions. Finding lean and efficient ways of doing business are what drive us every day. We know and understand that quality products and timely delivery are important to our customers. So if you need to implement a 5S system and create a visual “Lean” work place, or stay ahead of OSHA and put aisle marking tape throughout your whole facility we can help. www.CreativeSafetySupply.com 866-777-1360 – Mike Wilson


They offer a wider variety of products to support visual factory and 5S implementation. There are a number of free guides that can be helpful and upon request they will provide samples of many products.

Avery Dennison Shares Thoughts on Lean

Some of you may be familiar with Avery Dennison. I have been fortunate to visit a couple of their facilities looking at their Lean implementation over the years. For those of you who are not familiar with them you can find a brief description below:

Avery Dennison is a global leader in pressure-sensitive technology, retail apparel ticketing and branding systems, consumer and office products and self-adhesive materials. Every day millions of people all over the world see Avery Dennison innovation in thousands of products. From beverage labels and personalized binders to retail tags and vehicle graphics - Avery Dennison products are everywhere you look.

Recently, Dean A. Scarborough, President and CEO, took time to explain Avery Dennison’s view of excellence and service (2 of their 6 values) in a video. This is what they call Enterprise Lean Sigma. It is defined as process and execution excellence, delivering exceptional quality and service that exceeds customer expectations everyday.

They seem to have a strong understanding of Lean and give a wonderful overview. It makes you wonder how your company defines it’s values.

Are We Investing Wisely for Our Economic Future?

Some recent data suggests that the U.S. lags in the global race to invest in production technology and research. Since this economic downturn has taken profits away it is not surprising that companies are not investing as much. Many companies are focused on reorganizing and rebalancing to a newer lower revenue. With all this excess capacity there is little motivation to invest in production.

In the last two quarters, investment in equipment and software, key factors in our high-technology industrial economy, fell by 28% and 34%, respectively, at annual rates. Production of industrial equipment has fallen by 21% since its high in 2007, the biggest decline since the 1950s. This contrasts sharply with an investment boom in China, where fixed asset investment already averages more than 40% of GDP and grew by 33.6% in the first half of 2009. India, too, invests nearly 50% more than the United States in terms of the proportion of GDP. In the tough year of 2008, even Germany increased investments in machinery and equipment by 6%.

The US government is immersed in massive policy changes that are bound to ultimately affect businesses. This spending in excess will certainly be paid for in part by businesses. It is unfortunate that much of the money they will likely forfeit will not support them.

The massive stimulus bill in the United States was billed as an investment, but the amount going to infrastructure and industrial investment in areas like alternative energy production, amounts to around 0.5% of GDP in 2009 and 2010. Again contrast this with China, where its stimulus package led to increased infrastructure investment of 57% at an annual rate in the first half of 2009, according to economist Ed Yardeni.

If we want to continue to be a global leader in manufacturing we must change this short term aversion to invest in sophisticated capital goods and technology. This investment is what is needed for new products and technologies to be developed which will spur on the next growth cycle in our economy.

If we are to compete with the rising economic powers, and traditional ones like Germany, we must do better in the short and longer run. We need to think more carefully about how we spend "stimulus" dollars and pay attention to the fiscal imbalances that constrain future investments. We must create anew a policy environment that favors investment in technology and productivity-enhancing processes, which are key not only to manufacturing, but also to improving our quality of life.

Lean Accounting at Watlow Electric

Many organizations are having success implementing Lean practices but very few have accepted lean accounting. Orry Fiume, who led The Wiremold Company conversion to lean accounting in the early 1990’s before retiring, now spends time sharing the virtues of lean accounting at the Lean Enterprise Institute.

Fiume shows how a standard cost-based P&L statement penalizes a fictitious manufacturer for reducing inventory, because the labor and overhead costs associated with the production of that inventory have been deferred to the balance sheet until the year the inventory is sold.

"When we reduce our inventory, or improve our inventory turns -- which is a good thing -- we have to take some of that labor and overhead from prior years that was capitalized on the balance sheet and we have to take it off the balance sheet," Fiume explains. "And the only place it can go is through the P&L."

Unfortunately, those deferred labor-and-overhead costs are buried on a standard cost-based P&L (usually showing up as an unfavorable overhead variance) -- which often prompts corporate brass to question the value of lean initiatives taking place in the company.

While lean accounting can provide a clearer picture of a company’s lean improvements it has been slow to adopt for several reasons.

"Traditional accounting systems reward overproduction, and overproduction is a very common way for manufacturers to make their results look better," Hourselt says.

Hourselt points out that public companies have been particularly resistant to adopting lean accounting, in part because "the world of public [companies] thinks quarterly earning first."

"Until the academic world starts telling the accounting profession that lean accounting is a legitimate way of looking at your financial information, people are going to be reluctant to adopt it."-- Orest "Orry" Fiume

Watlow Electric has found that lean accounting or what they call “value stream management” has given them a better understanding of its cost structure. Ed Grinde, business unit controller for Watlow Electric Manufacturing, offers 9 tips and best practices for implementing lean accounting.

1.Upper management support is critical.
2.Everyone must understand that lean is a growth strategy-not a cost-cutting strategy.
3.Properly identify your value streams.
4.Don't try to attain perfection before setting up your value streams.
5.Keep metrics and methods simple and manual in the beginning.
6.Do not set hard goals.
7.Value stream leaders need autonomy to be "little general managers."
8.Put as much of your costs as possible directly into the value streams.
9.Use the five principles of lean as your criteria to make decisions.

Grinde provides some more insight on these tips in the article worth reviewing in your own organization. These are even good strategies for implementing lean thinking in your organization.

I wonder how many organizations are practicing lean accounting. We will do an informal survey of readers. Send a comment if your organization is practicing lean accouting. If you care to share your experience, include that as well.