3 Principles and 4 Rules to Remember that Will Guide Your Lean Journey

Lean manufacturing is the continuous improvement methodology of choice for companies around the world. It’s a people-oriented practice that focuses on reducing production lead times within your operations. These practices create a framework that emphasizes eliminating activities that do not add value for the customer, and focuses on reducing cycle, flow, and throughput times.

These Lean principles can be applied to any team, in any organization, in any industry. Practicing Lean effectively hinges on knowing how to apply Lean principles effectively in your business environment. The main thing to remember: Lean management principles focus teams on driving continuous improvement. When Lean is implemented effectively, teams and the processes they use to deliver value to customers grow stronger over time.

For me there are 3 key principles that guide the Lean Philosophy:

Lean Principle #1 – Make to Use (the ideal Target Condition, “True North”)

A Lean process emphasizes getting the right things to the right place at the right time in the right quantity.  These Lean ideals are a vision for your organization. They provide ‘True North’ direction toward which every member of your organization is commonly striving, and yet may never fully reach.

• 1x1

•        Process parts one at a time ( i.e. not batch processing )

• On Demand

•         Make the exact amount the customer ordered, when it’s ordered.

• Defect Free

•        Product conforms to customer’s specifications and expectations.

• No Cost

•         Look for simple low cost solutions.

• Immediate

•        The “system” should tell you immediately if there is problem.

• Safe

•        Physically AND emotionally

Lean Principle #2 – Eliminate Waste

Lean principles aim to identify the waste found in nearly every business and minimize or completely eliminate it, if possible. Using the acronym “DOWNTIME” reveals the 8 types of waste Lean Manufacturers target:

• Defects can lead to rework/salvage and scrap. It is arguably the most costly type of waste, especially if a defective product makes it to the customer.
• Overproduction is making more products than that which is ordered, potentially causing an inventory shortage and wasting labor hours that could be used elsewhere. Additionally, the manufacturer runs the risk of having obsolete inventory if the customer that generally uses the product decides not to order more.
• Waiting comes in several forms. The most obvious, perhaps, is a line shutdown while waiting for parts or equipment repair. Finally, there is in-process waiting that occurs when an employee has to wait for a machine to process before he or she can take the next step in the process.
• Not using people’s talents is a waste of their abilities, and it could hold a manufacturer back when it comes to innovation.
• Transportation happens throughout the manufacturing process, from the supply chain to material delivery and specific production areas.
• Inventory has five major categories: finished goods, sub-assembly, raw component, office supplies and Maintenance, Repair and Operations (MRO). Obsolete or overlooked inventory can build up in all of these areas, taking up valuable space.
• Motion includes bending, reaching, lifting and walking. Something as simple as sharing a tool between workstations can lead to a lot of wasted motion in retrieving it.
• Excess processing happens whenever time is spent on product features that do not impact part functionality. For example, painting a part that won’t be seen is non-essential and excessive, provided it still functions properly without paint.

Lean Principle #3 – People are the Cornerstone

Empowering employees is the ongoing process of providing the tools, training, resources, encouragement and motivation your workers need to perform at the optimum level. When you show an employee you trust them and give them timely information and the authority to find solutions, they will be able to solve problems and provide solutions more rapidly than someone without that empowerment.

• Engage all human resources toward the effort of reaching True North
• Provide information:  lack of knowledge is a limiter to waste elimination.
• Knowledge = Speed (Knowledge is the limiter to waste elimination)

Lean management derives from the Toyota Production System (TPS) where a set of rules provide a structured approach to improvement. They create structure in our systems. Without rules there would be in chaos. Lean rules provide the guidance needed to implement improvement, explaining the “why” behind lean tools and the Six Sigma methodology. Lean rules also help develop new solutions to problems. For everyone in an organization, these rules help structure activities, connect customers and suppliers, specify and simplify flow paths, and bring improvement through experimentation at the right level.

The Principles of the Toyota Production System can be summarized into four basic rules.

Rule 1: All work shall be highly specified as to content, sequence, timing, and outcome.
Specify in advance the exact Content, Sequence, Timing, and Outcome of work.

• Content (what is being done?)
• Sequence (in what order?)
• Timing (how long should it take?)
• Outcome (what clearly defined measurable results are expected?)

 Establish predictable outcomes for each process so shortfalls and over production are immediately apparent.

Rule 2: Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses.
Interaction between Humans, Materials, and Information should be Clear, Direct, and Binary. No ambiguity.

Create a workplace that is:
     Self-ordering
     Self-improving
     Self-regulating
     Self-explaining

What is supposed to happen, does happen, on time, every time.

Rule 3: The pathway for every product and service must be simple and direct.
Organize for uninterrupted flow with simple, direct paths for work flow. The pathway should not be subject to interpretation on a case-by-case basis. Build in self-diagnostics so when a path is not being followed, it should be obvious and immediately correctable without too much time passing or outside intervention required.

Rule 4: Continuously Improve
Develop leaders who can apply the scientific method to improve anything. Allow improvement to come from the source by those doing the work - as close to the problem as possible. Respond directly to any problem that arises with clear helping/coaching chains. Whenever possible, start as an experiment supported by a coach.

When it comes to using Lean principles in your organization, let these Lean management principles guide you. Embrace the Lean mindset. Consider your options carefully – even if it means making organizational changes to fully support your initiatives. This will lay the foundation for a successful Lean experience.

Exposing The Common Myths of Standardized Work

A couple days ago I posted an article on standard work as a mechanism for facilitating and empowering improvement. By documenting the current best practice, standardized work forms the baseline for kaizen or continuous improvement. As the standard is improved, the new standard becomes the baseline for further improvements, and so on. Improving standardized work is a never-ending process. Standardized work is one of the most powerful but least used lean tools.

Unfortunately, there are many myths regarding standardized work that if followed create a flawed system. To prevent you from falling into this trap I will attempt to debunk several of these myths.

Standard Work Is Permanent

A common misconception is that ‘standardized’ is assumed to be permanent. This is not the case. It’s just the best way we know how to do the work today. Continuous improvement is always encouraged, once the current best method is understood and practiced in order to establish a stable foundation for further improvement.

Standard Work is Self-Created

Some think employees develop their own standardized work. The initial work standard should be developed by engineers (process owners) working with operators who are part of a team. Group leaders and team leaders then have responsibility for training employees on the standard work and soliciting their input. Once the process is operating at some level of stability, employees are challenged to develop better methods, but the methods are always reviewed by others, including management.

Standard Work is a Rigid Framework

Another common myth about standardized work is that many think of a rigid work environment where workers aren’t required to think. This is totally the opposite as I said above. Operators are part of the creation of the work standard and then are challenged to improve these methods. The standard creates a baseline by which improvement can be measured. Ideas should be discussed with group leaders and considered depending upon the consensus and buy-in from other members and shifts. Once consensus is reached then experimentation can be done to determine the effectiveness of the improvement. If it is deemed an effective change then the standardized work can modified and everyone trained in the new method.

Standard Work Reduces Training Needs

It is also believed that with standard work you will know everything about the job and therefore be able to train anyone to do the job. Standardized work is the process used by operators to define their work method through documentation and visual postings. This is often misinterpreted as a fully detailed description of the work and associated standards. Anyone who has read the standard work sheets would see that the work description explains the work elements in basic terms - not nearly enough information to read and fully understand the job. Job Instruction Training (JIT) is the method commonly used in Lean to transfer complete knowledge of a job to a team member. In my experience anyone who believes that a job is simple enough to distill down to a few sheets of paper underestimates the competency level necessary of their employees.

Standard Work Prevents Deviations

Another myth is that with standard work and visual postings employees will not deviate from the standard. This couldn’t be further from the truth. There is nothing in standardized work that will prevent deviation by the operator except the visual awareness of others. The visual reference is utilized by management for monitoring adherence to the standard which is done through periodic and regular audits of the standardized work. To ensure compliance to the standard, it’s necessary to poka-yoke or mistake proof the process to prevent deviation and make excursions highly visible.

Standard Work Only Applies to Shop Floor

Lastly, there are those that believe standard work is only for the shop floor. Standard work has been proven effective in many industries from the military to healthcare and everything in between. In particular, I think this is a technique that management teams must adopt. How we run the business should not be any different than how we do business. In my experience, those organizations that use standard work at the management level are more productive and effective.

Standardizing the work adds discipline to the culture, an element that is frequently neglected but essential for Lean to take root. Standardized work is also a learning tool that supports audits, promotes problem solving, and involves team members in developing poka-yokes. While standard work can be an effective foundation for continuous improvement it is important to recognize that it is not a one-stop shop for all that ails you.

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Standard Work Enables and Facilitates

Standard work is a written description of how a process should be done. It guides consistent execution. At its best, it documents a current "best practice" and ensures that it is implemented throughout a company. At a minimum, it provides a baseline from which a better approach can be developed.

The definition of standard work is "the most effective combination of manpower, materials and machinery". Standard work is the method, and thereby you have the four Ms of manufacturing (manpower, material, machinery, methods). Standard Work is only "the most effective" until the standard is improved.

Standards to a company are like scales and sheet music to a musician. Our team members help develop and maintain standards, which are not static. Standards change as we get better, just as a good band will incorporate chord and melodic variations if they sound good. Thus, standards do not constrain creativity – they enable it, by providing a basis for comparison, and by providing stability, so we have the time and energy to improve.

Standardized work comprises:

• Content
• Sequence
• Timing
• Expected outcome

It should also contain tests, or red flags, which tell you when there’s a problem. That way, you won’t ship junk. The tests could be physical, such as a torque check on a bolt, or it could be administrative, like a blacked-out template that fits over a standard form and highlights the critical information.

Standard work enables and facilitates:

• Avoidance of errors, assuring that lessons learned are utilized and not forgotten
• Team learning and training
• Improvements to make the work more effective
• Reduction in variability
• Creation of meaningful job descriptions
• Greater innovation by reducing the mental and physical overhead of repetitive or standardized work

Standard work does not preclude flexibility. You can still do a lot of different jobs, and be able to address new problems. Standard work just takes the things you do repeatedly and makes them routine, so you don’t waste time thinking about them.

Standards are an essential requirement for any company seeking to continuously improve. All continuous improvement methods leverage learning to get better results from their business efforts. Standards provide the baseline references that are necessary for learning. A standard operating procedure supplies a stable platform for collecting performance measurements. The standard and its profile of performance yields the information people need to uncover improvement opportunities, make and measure improvements, and extract learning.

The Foundation of Lean Organization – Purpose, Plan, People, Process, And Performance

The Lean business process improvement methodology is a way of planning and measuring the long-term success in our organization, focused on improving safety, quality, delivery, cost, and employee morale. It seeks to eliminate waste and streamline the delivery of value to the customer. There are dozens of tools associated with the practice of Lean, such as value stream mapping, Kanban, and Gemba walks, all of which are useful and effective.

However, it is important to keep in mind that these tools are deployed within the context of purpose, people, and process. True innovation and value-creation in execution are powered by sharing purpose, careful planning, creative mindsets, dynamic processes, and proven performance. Together they enable both agility and adaptability in today’s complex environment. Together they drive execution excellence.

Purpose: (Task Vs. Mission Driven)

Task driven environments are very checklist heavy, compliance oriented and top-down leadership centric. Purpose driven environments are where team members are inspired by a common mission, vision and values.

Plan: (Individual vs Alignment)

To be successful we need a clear, well-defined plan that everyone knows and knows how their efforts towards that plan will drive success and meaning for themselves and the business as a whole. 

People: (Collaborative vs. Competitive)

Collaborative environments are highly integrated team efforts. Competitive environments are highly independent. Lean starts and ends with people. We seek to create the conditions under which people can achieve their maximum potential. We recognize that great ideas for improvement can come from every level of the organization and that everyone should be provided with the tools that help them contribute.

Process: (Status Quo vs. Innovate)

Status Quo environments live by the motto, “if it ain’t broke, don’t fix it”. These environments are highly predictable and stable. Innovative environments on the other hand are highly flexible and encourage failing fast. Innovative cultures understand the importance of quickly adapting to change.

Performance: (Results focused vs Process Accountability)

Performance is what your team must do to delight customers, both external and internal. We must make sure everyone understands what’s expected, how we’ll measure and monitor it, celebrate the successes and hold ourselves accountable when we fall short.

Purpose, plan, people, process, and performance are the best assets to develop and focus on to drive execution excellence. Purpose drives commitment. Plans fulfills our purpose. People's mindsets and behaviors determine the effectiveness of collaboration. Processes guide interaction forward towards meaningful objectives. Performance is how we hold ourselves accountable and deliver on our commitment to our customers, shareholders, and employees.

The 10 Rules of Continuous Improvement

The most successful companies are never satisfied with the status quo. They constantly have their eye on the next innovation, the next level of performance. They know the importance of continuous improvement in all areas of the business.

Even if things are going really well, people at successful organizations are looking at what could be improved upon so that they can perform better. They are finding ways to work smarter, not harder, in order to be more efficient and profitable. The most successful companies are always innovating and developing new ways to deliver top-notch quality to their customers.

But this kind of behavior doesn’t just happen. Sure, some people have a natural drive to keep improving their skills and the results they produce at work. But many people prefer to stay in their comfort zones, never questioning the way things are done.

Continuous improvement is an ongoing process of identifying, analyzing, and making incremental improvements to systems, processes, products, or services. Its purpose is to drive efficiency, improve quality, and value delivery while minimizing waste, variation, and defects. The continual improvement process is driven by ongoing feedback, collaboration, and data.

Let’s look at 10 rules for effective continuous improvement:

1. Be Open Minded

An open mind leads to new possibilities. New possibilities lead to new thoughts and experiences. To have an open mind means being flexible and adaptive to new experiences and ideas.  Having an open mind doesn’t mean accepting everything as truth, but rather being open to new possibilities. New thoughts and experiences lead to growth.

2. Start with the 3 “Actual” Rule

Continuous improvement starts with the three “Actual” Rule.

        Go to the actual place where the process is performed.

        Talk to the actual people involved in the process and get the real facts.

        Observe and chart the actual process.

All too often, attempts are made to solve problems without knowing anything about or are not being familiar with a particular area or process -- resulting in a misdiagnosis or failed solution. Answers come from the floor, from the Gemba, where the condition occurs. You need to go to the real place and experience these conditions for yourself before being able to take the next steps.

3. Focus on Process Over People

The most successful organizations understand that the problem is not people failing to deliver, but that their organizational processes or systems need to be improved. If an organization really wants a continuous improvement effort focused on improving its business, it must celebrate the mistakes and errors that result from inadequate processes or systems so they can be analyzed and corrected. Enlightened organizations don’t look for someone to blame; they identify the problems that inevitably arise and encourage their people to expose these issues, rather than cover them up.

4. Don’t Seek Perfection, Try-storm

Don’t spend too much time talking about a solution, try it!! Try-storming encourages the rapid development and test of an idea rather than merely thinking about the possible solutions. It allows people to visualize, touch and further improve on an initial idea. It also models action rather than talk. Often in our desire to design the perfect Future State we forget that the best way to build a process that works is through the iterative process of trying, adjusting/correcting, and trying again.

The process is built on three basic principles:

• It is not important to create perfect solutions.
• Be action-oriented.
• Keep solutions simple.

5. Creativity Before Capital

Don’t substitute money for thinking. In other words, before spending money on a typical solution (buying equipment, hiring staff, working overtime), try using existing equipment and employees.

In reality, even creative solutions may require some investment. Yet, often that investment is quite small in comparison to more traditional approaches. As Lean practitioners, it is our job to minimize waste in all that we do – and that includes the cost associated with solutions.

6. Problems are Opportunities

The workplace is full of problems and we are expected to solve them. Problems often stir up the emotions of everyone involved. When a problem occurs, instead of first exploring how to get the problem to go away, first stop and ask yourself: What is the opportunity here? This is the key to innovative problem solving. It’s understanding that the problems you face are opportunities — no matter how frustrating they appear to be at first. Innovative thinking on how to solve a difficult problem begins when you view problems as opportunities — when you break the barriers of limited thinking that we all have.

7. Focus on the Root Cause, Not the Symptoms

It’s very easy to get caught up in the symptoms of the problem and most problems are incorrectly attempted by suppressing these symptoms. We should resist this temptation! When we encounter a symptom, it should serve as a prompt to dig deeper to get at the real root causes for an issue. There are a number of methods of root cause analysis, including failure mode analysis, fault tree analysis, and fishbone diagrams. For diagnosing performance issues, one of the simplest and most effective methods is the "5 Whys," which is attributed to Taiichi Ohno and his Toyota Production System. This technique simply requires us to ask why repeatedly until root causes are uncovered.

8. Rely on Data, Not Opinions

As the legendary engineer W. Edwards Deming put it, “Without data, you’re just another person with an opinion.” Without insight into data, people make decisions based on instinct, speculation, or prevalent theory. People are at risk of acting on biases or false assumptions. Now, data driven decision making involves collecting data, performing analysis, and basing decisions on insights derived from that analysis. This provides for accountability and transparency. Basing decisions on data allows the logic behind determinations to be transparent and provides stronger evidence to support those decisions. Data provides context and knowledge.

9. Practice Respect

Show respect” is perhaps the most valuable rule, as people are the goal, not simply the means to an end. Improvements are accomplished by people, not processes. Processes ought to be designed to support people in their accomplishment of specific objectives. Ultimately this means developing people to be who they can be. One tremendous side effect of that development is greatly increased capability in fulfilling their roles, which leads to greater efficiency in accomplishing improvement.

10. There is no destination on the road to improvement

Continuous improvement is a journey that never ends. There will always be a gap between where you are (current state) and where you would like to be (True North). Since there will always be a gap, there will always be an opportunity to improve. The road to continual improvement can be a rocky one with many ups and downs. Failure will occur. It’s ok, the purpose is learning, and we learn through experimentation. Trying new approaches, exploring new methods and testing new ideas for improving the various processes is exercise for the mind.

Adopting a culture of continuous improvement can benefit both you, your team and your business. Finding a suitable way to begin your never-ending quest toward it doesn’t need to keep you awake at night. Why don’t you start by implementing these 10 rules in order to set yourself up for all the benefits that come hand in hand with improving continuously!

5 Ways to Keep Focused on Lean Productivity Improvement

Admit it or not, all companies face challenges. In today's competitive market, Lean is turning out to be "the solution" to manufacturing industries across the spectrum for survival and success.

Lean manufacturing helps organizations to achieve targeted productivity and more by introduction of easy-to-apply and maintainable techniques and tools. Its focus on waste reduction and elimination enables it to be engrained into organization culture and turns every process into a profit center.

In a nutshell, lean manufacturing is all about driving toward achieving profitability and productivity through continuous improvement and resource waste elimination. With all of the day-to-day tasks folks need to take care of, it is common that productivity improvement takes a backseat despite great intentions. To avoid that, consider some of these methods to spotlight Lean productivity improvement.

Goal alignment: Perhaps the most powerful aspect of goal setting is its potential use in building an aligned workforce, equipped, empowered, and motivated at all levels to work together to achieve its vision for the future. Setting goals can provide purpose and challenge to energize people to apply their efforts in a specific, planned direction. Well-set and monitored goals that are aligned holistically can put your organization on track for increased employee engagement, productivity, and progress toward achieving its vision.

Visual data management: Use visual boards to display its goals, targets, and performance metrics. The look and feel of the visual board should be standard across your system, with each board including the standard metrics as a designated space for discussion and prioritization of improvement ideas. The visual board in each department should be located in an accessible area in the Gemba so that the data and metrics stay in front of everyone.

Daily huddles: Daily huddles take place at the department level and last for about 10 to 15 minutes. Huddles are led by the staff and are attended by all members of the department Huddles take place directly in front of the visual board so that the metrics that are displayed on the board can be discussed and updated as needed.

Problem-solving: It is recognized that staff cannot implement all solutions or process improvement ideas alone and that process changes often involve other departments or functions. For this reason, part of the daily huddles should be dedicated to problem-solving. This portion of the huddle includes a review of improvement ideas submitted by staff, a progress update on ideas that have been selected for implementation, and feedback received from senior leaders on ideas that have been submitted to senior levels for implementation and/or resourcing. Accountability is achieved through review of progress on implemented ideas with use of a simple WWW (What, Who, and When) form. This process of problem-solving (idea generation), reviewing progress, and providing feedback is key to sustaining team engagement.

Employee recognition: The impact of recognizing employees who engage in Lean productivity improvement can't be understated. It is essential for the individual employee and helps cement a culture that values improvement and signals to the entire organization that leaders care deeply about efforts to implement positive change.

Each organization is different and so are the productivity challenges for your company. You’ll find, however, that even the most basic tools can really hone in your organization’s ability to eliminate waste and focus on continuous improvement.

10 Reasons for Unnecessary Costs that Lead to Poor Value

There is little doubt that engineers and designers are well aware of the need to minimize cost, and in most instances, they are anxious to receive and use better cost information. However, there are other reasons why unnecessary cost occurs in the products they are specifying.

The most frequent reasons unnecessary cost is found in a product or system will normally fall into one or more of the following categories:

Lack of an Idea: Unnecessary cost can be built into a product or service  simply because of our failure to utilize creative ability in developing alternative solutions. In many cases, we accept the first workable solution that comes to mind.

Lack of Time: Speed to market demands often produce short product development cycles. Aggressive deadlines can sometimes prevent the optimum design from emerging. Decisions we are forced to make, perhaps due to an urgent delivery, or tight design, or product schedule, can force us to initiate a temporary circumstance or satisfy a requirement without regard to cost. Many times, these temporary measures become a fixed part of our product or service, resulting in unnecessary costs year after year.

Lack of Information: Lack of information on exactly what function we are trying to perform. Lack of information regarding what the customer wants or needs. Lack of information on new materials, products, or processes. Lack of cost information or what is necessary cost that is needed to generate a profit.

Reluctance to Seek Advice: Some people are not willing or able to look beyond the current horizon and are reluctant to seek or ask questions, feeling embarrassed or inadequate if they admit they do not know something. This often drives the inability to utilize new technologies and materials. The “Not Invented Here” syndrome does not allow people to tap into ideas from other outside sources.

Temporary Circumstances  or Emergencies: Most companies are faced with emergency measures at some time when a material, machine or supplier readily available is accepted as a temporary solution regardless of cost and continues in use after the emergency has been overcome.

Honest Wrong Belief: Unnecessary costs are often caused by decisions made on what is believed to be true, and not on the facts. We let ourselves believe that there is a good reason why we should not do something: The tools are too expensive; a particular material is not good to work with; that plastic is brittle. “Honest Wrong Beliefs” can stop a good idea that may provide a more economical product or service.

Habits or Inertial Thinking: Doing things almost by rote, each time a similar problem occurs that has been addressed before. We must face the fact that some of our habits need review. We must recognize that old habits can be changed, that new habits can be developed, and more importantly, if we are to eliminate the unnecessary costs, we will have to base our business decisions on fact and not on our habits and attitudes.

Negative Attitudes: Failure to recognize creativity or innovation.

Obsolete Specifications: Some specifications used today are outdated. Testing specifications, codes, material specifications, and specification from previous projects are used unquestioningly.

Poor Human Relations: Lack of good communication, misunderstanding, interpersonal relations between people are a frequent source of unnecessary costs.

These reasons for unnecessary cost probably apply to most aspects of human activity. They will and do occur in well-organized companies having skilled management and technical staff, and do not necessarily reflect on any one individual or group of individuals.