Gemba Panta Rei

At the core of Lean Enterprise Transformation are the fundamental principles of customer focus, getting rid of the 7 wastes and creating flow. What follows is the alphabet soup of Lean tools in order to achieve this, including but not limited to 5S, TPM, 3P, QFD, 6, SMED, JIT, VSM, etc.

This alphabet soup can be bewildering, but fortunately most Lean practitioners agree on starting with 5S. Many companies start 5S programs by red tagging to get rid of unnecessary items (1st S – Sort), followed by setting things in the right place at point of use (2nd S – Straighten) and continue by cleaning and eliminating the source of filth (3rd S – Sweep). The 4th and 5th steps are Standardize and Self-Discipline, which create standards and sustain the well organized workplace.

When 5S is done without a focus on flow, you can actually create waste by doing work that is unnecessary. Take the example of an aerospace company who started their 5S program in the machine shop. Convinced that they were not ready for one-piece flow, the trained the machinists and inspectors in 5S and began red tagging and straightening. Although their intention was good, their Sorting was less than effective because they were doing batch and queue. They did not include in the “unnecessary items” category many of the large tables for storage of WIP, the personalized work benches, large tool boxes, and many pallet jacks from moving WIP from station to station. These things would be unnecessary after doing some simple things with flow. Instead, they mostly threw out trash, broken tools, etc.

In addition, the definition of “point of use” was very loose, since many tools were shared, the machine or workstation where a particular process was performed was not well defined (no cells were in place) and tools were often the property of individuals. Most tools placed at “point of use” were consequently four or five feet away at a shadow board instead of on or in the machine, literally inches away from the point of use.

A first attempt at flow would have identified the need for set up reduction (SMED). This would have made the need for point of use and dedicated tools much clearer. In addition, by reducing set up times and cutting down lot sizes, WIP would have been reduced drastically and the pallets, storage space, and inspection tables would have been red-tagged.

Although there is probably no harm in proceeding with a 5S program before attempting flow, the definitions of “unnecessary items” for Sorting and “point of use” for Straightening take on a much different meaning the closer to Lean (one-piece flow) you are.

Posted by Jon Miller at 9:40 AM | Permalink | Comments (0)

A continuous improvement manager at a mortgage processing firm told us how their Risk Assessment team was struggling. Their sales force consists of mortgage brokers who are independent, and their job is to sign up people looking for loans. There is a hand off to Risk Assessment for review. The Risk Assessment people do their best to approve or deny the loan application. Their function is to weed out the high risk loans. This firm measures success on the volume of mortgage requests approved. There is tremendous pressure to OK these loan applications, since volume is what drives the company. The pressure to approve the loans and make the volume reduces the quality of the loans. The pressure to turn around the applications makes it harder to do a correct analysis. This results in some questionable applications being approved. The volume driven metric looks good, but the costs increase. The large volume of loan applications causes the need to hire more people in Risk Assessment. People are hired, volumes are increased, yet costs increase. This is an example of a “push” from sales (overproduction) resulting in loans in process (inventory) at the Risk Assessment stage. This results in poorly analyzed loans (defects). The metrics were optimizing across a limited part of the process rather than through the entire Value Stream. The metrics used to judge success, volume through one process, must be revised to reflect the value through the whole system (profitable loans). This is an example of how expanding Lean thinking into a purely service company can streamline a process, improve customer service, and the quality of work life for the people in the firm.

Posted by Jon Miller at 1:36 PM | Permalink | Comments (1)

There are 7 types of waste, according to Taiichi Ohno. Attacking these 7 wastes is what makes a company Lean and able to create more value faster. This is also true in the office. Most waste in the factory is easy to spot. Things such as inventory, motion, and defects are visible. Waste can be harder to spot in the office environment, be it engineering, purchasing, or administrative functions. The toughest of the wastes to identify is the waste of processing, where the process itself is waste. So processing is the toughest waste to see, and seeing waste in information flow is harder than in production. This must mean that processing must be nearly impossible to find in the office? Actually, the opposite is true. Just ask the question, "What would happen if we stopped doing X?" with X being the particular engineering, administrative, or knowledge work process. If the answer is "nothing" then you have found an example of waste of processing. The customer of that process does not value that step, and it is therefore waste and should be removed. You have just done Office Kaizen. Try this out! It is more common than you may think.

Posted by Jon Miller at 3:59 PM | Permalink | Comments (0)

The idea of an orchestra is sometimes used to explain Takt Time (the beat of production paced to customer demand). While an orchestra makes sense that the instruments (processes) should be playing music (doing production) to the same beat (customer demand), it doesn稚 make sense in terms of a flow layout. In an orchestra, all of the violins are in one section, all of the horns are in another, etc. This can be compared to functional departments in traditional manufacturers, where the layout is by machine or process type. This creates local sub-optimization which results in wasted inventory, transportation, etc. and a general lack of flow and velocity. Rather, a Lean factory should be like a 4-man band. Think of the Beatles with John, Paul, George, and Ringo. Each plays or sings a different part. The band is like a cell or a flow line. They serve a very particular customer (rock 創 roll fans). Their product (sound) would be lost in an orchestra. In a Lean factory, you need to identify your customers and break up the orchestra into value streams, and organize the process into many small, quick flows (4-man bands).

Posted by Jon Miller at 6:07 PM | Permalink | Comments (0)