Lean Roundup #11 – April, 2010

Selected highlights from the Lean Blog Community from the month of April, 2010.

Cats and Dogs in Manufacturing – Mike Wroblewski shares Ohno's advice on outsourcing those typically small volume, hard to make, mainly less profitable parts.

Fastest Way to De-motivate Employees: Don't Train – Ankit Patel explores the de-motivational effects from a lack of training and retraining employees.

Lean Leadership Soft Skills – Jeff Hajek lists some of the greatest challenges—and opportunities—for many Lean leaders.

Management Magical Mystery Tour – Mike Wroblewski talks about the wasted opportunity of executive level plant visits.

Ted Video: Dan Pink on Motivation – Mark Graban highlights a TED video on Motivation by Daniel Pink.

MBWA is not a Gemba Walk – Kevin Meyer explains why walking around (especially undercover) is a lost opportunity for executives to make real improvements.

Executive Engagement - The Lean Thinker's Approach – Adam Zak shares 3 steps to get leadership engagement in your business.

How a Simple Office Kanban System Works – Mark Graban explains a kanban system in the office that anyone could use in their organization.

Company Purpose and Shareholder Value – Gregg Stocker shares his thoughts on why a company's purpose matters and money isn't everything.

What Data Do you Need – Dragan Bosnjak talks about why we collect data and what makes a good metric.

Defining Corporate Culture – Pete Abilla defines a company's culture by what is present as well as what is missing.

Chasing Rabbits - Process Unimprovements – Bryan Zeiglar explains process control and process improvement with Demming's marble and funnel experiment.

The Remarkable Gift of "Start Over" – Evan Durant talks about why it is necessary to stop and start over again because of the importance of redefining value.

The Toyota Way - Two Pillars – John Hunter explains the two pillars of TPS being continuous improvement and respect for people.

Sugarcoat Pills, Not Communications! – Liz Guthridge shares her thoughts on why straight talk is the way to go and that is shows respect.

Think Outside the Box or Inside the Silo? – George Rathbun talks about silo organizations versus lean organizations and the importance on thinking outside the box.

Building Coaching Capabilities – Lee Fried discusses how and why purpose of coaching is to build capability into the leadership line.

5S Thinking – Bryan from TWI shares thoughts on 5S from John Miller's post A Tracking Method for 5S Programs.

Standard Work is a Verb – Mark Hamel explains the importance of reviewing and revising standard work as part of continuous improvement not just kaizen events.

What to Do When Your Lean Implementation is like a Chicken – Jon Miller talks about a skill matrix and some things you need to consider before you start.

Undercover Lean – Tom Stoffel shares two truths from the show Undercover Boss that relates to Lean Healthcare.

Organizational Design Solves Lean Challenges – Jamie Flinchbaugh pens a great article on how organizational design can be used to solve problems or enhance lean methods.

Lean Quote of the Day, April 30, 2010

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

Feel free to share some of your favorites here as well.

"Continuous improvement is not about the things you do well - that's work. Continuous improvement is about removing the things that get in the way of your work. The headaches, the things that slow you down, that’s what continuous improvement is all about." ~ Bruce Hamilton


The things that get in the way of your work are those non-value added tasks or headaches.  These headaches can be characterized by eight wastes which make up the acronym DOWNTIME. 

Defects
Over-production
Waiting
Non-utilized Resources/Talent
Transportation
Inventory
Motion
Excess Processing

By focusing on reducing or eliminating the Eight Wastes associated with DOWNTIME we can make our work easier.  This gets us back to those things we do well.  That is the essence of continuous improvement.

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Lean Blamed for Perils at John Deere

An article at Bloomberg Businessweek entitled low inventory angers John Deere customer caught my eye this week.  The article's author writes of the perils of running lean, claiming that lean is the cause of John Deere's customer service problem.  This strikes me as another unfortunate example of L.A.M.E. not Lean. Mark Graban coined the term "L.A.M.E." — Lean As Misguidedly Executed. L.A.M.E. includes stuff that people call "lean" but really isn't a good representation of true Lean mindsets and practices.

The article states that while lower inventories have helped the company meet short term financial results it has led to shortages in the supply chain.

In recent years, Deere has been focusing on becoming a build-to-order company. That bolstered prices and profit because keeping smaller stockpiles on hand reduces the amount of materials and working capital a company needs. But production cuts and the tightest inventories in the industry have led to a shortage of Deere equipment as the farm economy is strengthening. And that's pushing customers ….toward competitors.

Unfortunately the lower inventory levels will result in lost profits and market share.

Deere shrank its inventory 28% in the 12 months ended on Jan. 31. As a percentage of sales in the most recent reported 12 months, Deere's inventory was just 12.3%, the lowest among 15 farm and construction equipment makers, including Agco and Caterpillar. Fewer products have big implications for the company's dealers. "It means I am losing market share," says Larry Southard, co-owner of a central Iowa dealership that gets 90% of its sales from Deere gear. He figures his dealership's sales would be up to 20% higher this year if it had enough inventory to meet customer demand and products were shipped more quickly. "I suspect we can lose at least half a dozen deals a month," Southard says.

It appears the company has used their resources to focus on innovation.

Ken Golden, a spokesman for Moline (Ill.)-based Deere, says the manufacturer's "intense focus" on managing inventory has improved its financial performance and has allowed it to design better products for customers.

The company seems to have misjudged the market by not understanding the voice of the customer.

Deere Chief Financial Officer James M. Field said on a Feb. 18 conference call that the company had been too pessimistic about the effect of the global recession on North American farmers. In November, Deere predicted its net sales would decline about 1% in the year ahead after dropping 19% in the 12 months ended Oct. 31. Deere expected production tonnage to decrease 3%. In February the company revised its outlook upward, forecasting sales to increase up to 8% in 2010 as gains in farm cash receipts rise far more than expected.

It is not clear whether the author only or whether the author and John Deere doesn't understand Lean.  Lean is often mistakenly to blame for poor performance.  Low inventories are commonly linked to Lean because many organizations are able to reduce inventory level due to practicing Lean Thinking.  But "true" Lean Thinkers understand lower inventories are a resultant of a process improvement not a solution to a problem.

Now, we all understand that high inventory levels hide problems.  The same is true in this case.  While higher inventories might have met some short term demand at a higher cost, the real issue is related to poor understanding of the market.  John Deere did not fully understand what they needed to produce.  I think it would also be safe to say that the cycle time to produce their product is too long compared to the level of inventory and changes in market demand.  They simply can't keep up.  This is not a failure of Lean but rather a failure on not using Lean.  Lean is about understanding the customer demand, building to that demand efficiently via binary connections in your supply chain, and recognizing abnormalities so you can quickly react and solve problems.

Time will tell whether John Deere understands Lean and how they choose to react to this opportunity for them to exceed their customer's expectations.  For now, this can serve as a lesson for all of us to learn from.  Low inventory levels are not Lean.  Making your customers happy by meeting their demands is Lean.

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10 Tips for Good Listening

The first step in becoming a good communicator is to learn how to listen.  You think that you already know how to listen, but many people have more trouble with this seemingly simple activity than you realize.  They may hear the words, but that isn't the same as listening.

Here are ten useful tips that can help you become a good listener:

1. Take time to listen.  Obviously there are times when you're busy for extended discussions.  But you need to set aside times when you can listen carefully to employee's problems, reactions, concerns, and suggestions.

2.  Let employees know that you're approachable.  Adopt an "open door" policy.  That is, communicate your willingness to hear what employees have to say.  Demonstrate that it's safe to talk to you.

3.  Put the other person at ease. Give them space and time and "permission" to speak their peace.   Watch how you look at them, how you stand or sit, it makes a huge difference. Relax, and let them relax as well.

4.  If people don't come to you, go to them.  Some employees may take advantage of your "open door" by approaching you with their concerns.  Others will be reluctant to do so, for any of f variety of reasons (shyness, fear of being judged, unwillingness to complain about others, and so on).

5. Set-up multiple means, both formal and informal, for communicating with employees.  Some employees are comfortable talking face to face.  Others would rather send a note by email.  Some will speak up during a formal team meeting.  Others will reveal their concerns only in casual conversations around the snack machine.  Make multiple possibilities available so that you hear from everyone.

6.  Pay attention to nonverbal signals: tone, vocalizations (such as "um," "uh," laughs, and sighs), body postures, and gestures.  Often a person will say one thing but signal nonverbally that the true meaning is different.  For instance, "okay" said with a deep sigh does not really mean "okay."

7. Remove distractions. Good listening means being willing to stop working computer, close a door, stop reading your email, or only answer emergency calls.. Give the speaker your full attention, and let them know they are getting your full attention.

8.  Avoid anticipation.  Don't jump to conclusions or assume that you understand a person's comment before he or she has finished talking.  You may misunderstand, or you may discourage people from saying what they truly mean.

9.  Suspend judgment.  Don't decide on the spot whether the speaker is right or wrong.  Wait until you have a chance to think the matter over.

10. Use active listening techniques.  Active listening mean taking an active part in the conversation to make sure you are grasping fully what the speaker is trying to say.  Active listening involves techniques such as these:

• Attending. Focusing closely on the speaker and maintaining eye contact.
• Paraphrasing. Repeating what the speaker has said in your own words, giving him or her an opportunity to correct you if you have misunderstood: "You're saying that the procedure seems too complicated, is that it?"
• Summarizing.  Offering an occasional summary of the main points made so far: "Let's see, you've mentioned three problems…"
• Interpretation checking.  Stating your interpretation of what the speaker is conveying – both ideas and feelings – and asking if you're correct: "It sounds like you're upset that you didn't get earlier feedback on you handling of this project, is that right?"
• Using clarifying questions.  Asking questions that attempt to make a point clearer or more explicit:  "Are your suggesting we change our procedures?"
• Using probing questions.  Asking questions that encourage the other person to expand or elaborate on what was said: "I think I see the problem, but why do you think it happened?"

Probably the best advice I could anyone who wants to be a good listened is to 'Stop Talking".  It is difficult to listen and speak at the same time.  God gave us two ears and only one tongue, which is a gentle hint that we should listen twice as much as we talk.

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Lean Quote of the Day, April 23, 2010

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

Feel free to share some of your favorites here as well.

"The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year." — John Foster Dulles, Former Secretary of State

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 it comes to problem solving, how and when do you train your personnel?  I like to use the phrase “You, Me, Now, at the Source.” This has been refered to as On-Error-Training (OET).  This post details 5 rules for effective problem solving everyone should learn.


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Laws of Manufacturing

Manufacturing operations are governed by a series of laws.  Wallace J. Hopp and Mark L. Spearman, developed and mathematically proved a series of fundamental relationships in manufacturing.  These were captured in their book Factory Physics.  The "laws" of Factory Physics describe the underlying logistical behavior of manufacturing systems, including the fundamental relationships between basic performance measures such as throughput, Work-In-Process, manufacturing cycle time, and process variability. By understanding these relationships, and using the powerful analytical tools described in the text, managers can diagnose their manufacturing systems and make major improvements in throughput, cycle time, customer service, and quality.

In particular, these laws of manufacturing give managers a way to identify the largest sources of waste and variability and to compute the effect of alternative improvements before implementing them. 

Here, the top ten laws of manufacturing by Hopp and Spearman are summarized:

1. Little's Law: Work in progress = Throughput X Lead Time.  This is the basis of Factory Physics.  So if the throughput is 100 units per week and the lead time is 2 weeks, then the WIP is 200 units.
2. Law of Capacity: In steady state, all plants will release work at an average rate that is strictly less than the average capacity.
3. Law of Inventory: In an unconstrained system, inventory builds relentlessly.
4. Law of Bottleneck: Accumulation of inventory is not necessarily an indication of a bottleneck (or a constraint).
5. Law of Variability: Increasing variability always degrades the performance of production system.
6. Law of Corollary: In a line where releases are independent of completions, variability early in a routing increases cycle time more than equivalent variability later in the routing.
7. Law of Conservation of Material: In a stable system, over the long run, the rate out of a system will equal the rate in, less any yield loss plus any parts production within the system.
8. Law of Utilization: If a workstation increases utilization without making any other changes, average WIP and lead time will increase in a highly non-linear fashion.
9. Law of Move Batching: Cycle times over a segment of a routing are roughly proportional to the transfer batch sizes used over that segment, provided there is no waiting for the conveyance device.
10. Law of Variability Buffering: Variability in a production system will be buffered by some combination of inventory, capacity, or time.

For Lean, the implications of these laws are profound.  Variation is the enemy of planning and control systems must recognize these laws.  The laws of manufacturing are of prime importance for a deeper understanding of scheduling.

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Lean and the Rhode Island Experience

This past week I had an amazing trip to Rhode Island.  It started with visit to VIBCO, who manufactures high-quality, low maintenance industrial vibrators, construction vibrators and other vibratory equipment.  VIBCO practices lean manufacturing and is committed to True North which they characterize as quality, throughput, innovation and same day, next day service.

During my visit to VIBCO I met some really great people including Karl Wadensten, president; Linda Kleineberg, marketing manger; and Paul Cary, Lean Sensei.  VIBCO truly understands the people aspect of Lean manufacturing.  While walking the plant, their friendly and outgoing team was more than happy to tell me about all the ways they are improving their job.  There was an enormous sense of pride in the work they do to service the customer.  Yes, they relate all activities in terms of value to the customer.

Karl and the team had been successful in breaking down the walls of the traditional organization physically and literally.  There isn't a typical management hierarchy to stifle improvement.  The culture is open and so are the work spaces.  It creates an environment of collaboration and team work.

Mark Graban just wrote about a recent trip to VIBCO where he learned what makes you want to do better.  I would recommend any lean practitioner taking the time to visit or learn more about VIBCO.  They are probably the best example of employee engagement I have seen.

Later in the day Karl, the VIBCO Team, and I went to the Rhode Island State House to broadcast The Lean Nation Radio Show live from inside the rotunda with a Tax Day Tea Party in the background.  As the guest on the show we discussed Lean leadership, government waste, and the call for engaging those within the system to work on improvement.  If you missed the radio show you can listen or download here to listen to the Lean revolution, complete with a visit by RI State Governor Carcieri.

One last story really speaks volumes to the VIBCO teams' lean culture.  During the preparation for the radio show there was trouble with Karl's microphone.  It kept dropping down because of a lose clip.  With only a few minutes to air the VIBCO team stopped what they were doing and jumped in to help Karl fix the microphone.  They tried some impromptu solutions in a trial and error fashion.  Working together they were able to tighten the microphone with only seconds to spare.  After the fix the team went back to what they were previously doing.  It was natural and in the moment but nonetheless a great example of Lean, where working together to solve problems is common place.

I had a great visit to Rhode Island where I experienced lean the VIBCO Way.  I am looking forward to my next visit to learn more about workforce engagement.