Gemba Panta Rei

On a recent trip to Dallas I had the chance to reflect on two different companies facing similar issues with poor on-time deliveries. One was an aerospace company and the other a consumer electronics company. Their production processes were very different. Both are fairly early in their Lean journey but have considerable Six Sigma resources. Both suffered from poor delivery performance to customers because of a lack of trust between internal customers and suppliers.

For the electronics company it was a case of sales not trusting production. This resulted in sales making changes on the floor daily, orders being placed so that salesmen could guarantee that production was holding capacity for their customers. Unfortunately this resulted in daily schedule changes. This cracked the bull whip all the way up the supply chain, causing material shortages and lost sales opportunity. This fed the mistrust of sales for production and the cycle continued.

The same problem had been happening in the inspection process at the aerospace company. Due to a past problem the customer had mandated 100% inspection off-line for certain critical components. The batch and queue nature of production at this shop meant that parts arrived in large quantities, and usually were needed right away by the next process. Again, the managers from the downstream process would reprioritize and negotiate to make sure their parts were inspected first. This created chaos in the inspection department and delays downstream, fueling the behavior of the managers.

In the case of the electronics company, the solution to this problem is still in the works. Production capacity will have to be increased through kaizen and production lead-times shortened through one-piece flow and quick changeovers so that sales can get what they want, when they want it, within reasonable parameters. Once there is a certain level of stability, Heijunka scheduling needs to be introduced to level the mix and volume and dampen the bullwhip effect on the supply chain.

In the case of the aerospace company who is further along in Lean, a kaizen in the shipping area created FIFO (First In First Out) lanes and made the status of all parts in the area visible. Carts of parts were moved through the lanes strictly in FIFO sequence. Because inspectors were not starting and stopping in response to constant rescheduling from managers, they were able to inspect more parts. Because the managers could see when their parts would leave the FIFO lanes, they could schedule their departments and did not meddle with the sequence.

We often say that Lean transformation is more about changing behaviors than changing things. Sometimes it is necessary to change how things are done and to create the basic conditions of stability and visibility before trust between the internal customer and supplier can be rebuilt. It should be the aim of every kaizen activity to identify the root causes of non-Lean behavior, stabilize processes, set standards, and make status visible so that there can be trust between internal customers once again.

Posted by Jon Miller at 11:03 PM | Permalink | Comments (0)

by Charles Lukey

What is OEE and what can it do?

OEE stands for Overall Equipment Effectiveness. Done correctly, it can show you where your machines are losing money and what you can do about it.

OEE is a powerful metric, calculated from three simple numbers:

Equipment AVAILABILITY
Equipment PERFORMANCE
QUALITY of Product Produced On the Equipment

Those measures, defined as percentages, are multiplied together to create the machine’s OEE. Getting started is a challenge, but once you know a machine’s OEE, you’ve got a management tool that can be used by everyone involved machine operators right on up to the CEO.

Recently, I spent a week in Holland learning about OEE and a new software product designed to simplify OEE calculation and reporting.

OEE Toolkit is a software package designed by FullFact Bv of Aarle-Rixtel, Holland. Gemba Research has partnered with FullFact to bring OEE Toolkit to the US.

Arno Bouten, a lead consultant for FullFact, was my teacher.

I will assume you can know nothing about OEE so we start with the basics, he said, but of course you probably understand more than you know. With this Zen-like introduction, we began. Arno uses a series of one-page word problems (Here we call them Challenges) to teach the novice.

Since we’re in Holland, let’s use the example of a beer bottling plant.

This plant, Venlo Brewing, uses a bottle & packaging line known as a BP-4. The bottling line can run 40,000 bottles an hour. Though they try to stay inside a one day shift, VB frequently runs into overtime.

So let’s calculate an OEE for one day on the BP-4.

First, determine Equipment AVAILABILITY. The day shift starts at 6:00 am and ends at 5:00 pm. One 15 minute break in the morning, a half hour lunch, another 15 minute break in the afternoon. That’s 11 hours of machine availability. Hey, the machine doesn’t need breaks, right? So that’s 660 minutes.

The crew worked 10 hours, or 600 minutes. So, 600 minutes actual divided by 660 minutes available makes 90.9 percent. There’s our first number.

Equipment AVAILABILITY: 90.9%

Now, let’s measure Equipment PERFORMANCE. The BP-4 is rated at 40,000 bottles an hour. That’s known as the Name Plate Capacity. One of the main reasons Venlo bought a BP-4 was that capacity. On this day, however, the machine produced 24,800 bottles an hour. So, smaller divided by the larger, 24,800 divided by 40,000, is 62%.

Equipment AVAILABILITY: 90.9%
Equipment PERFORMANCE: 62.0%

Finally, let’s measure QUALITY of Product Produced on the Equipment. The BP-4 produced 248,000 bottles of beer today. Of that total, 24,800 bottles were rejected. Now, 24,800 divided by 248,000 is 10% which gives us:

Equipment AVAILABILITY: 90.9%
Equipment PERFORMANCE: 62.0%
QUALITY of product produced on the equipment: 90%

Multiply them together (.909 x .620 x .900) and you get an OEE of 50.7%.

I looked up at Arno. Is that good?

He replied, Well 85% is considered world class.

So Venlo has a way to go.

It would seem so, yes.

So now that we know, what can we do with an OEE number beside post it on the wall?

Well, Arno replied, we can start by doing a little root cause analysis - start asking why.

Why do we lose an hour’s production to breaks every day? Can we split the breaks up and keep running?

Why can’t the BP-4 run at 100% of Name Plate Capacity?
What issues do we need to address to get to 100%?
Why don’t we establish an acceptable reject rate?
Is 10% high or low?
Can we really shoot for zero?

All these questions and we’d only done one Challenge. And really, it was a pretty simple problem. I needed a break. Arno and I walked into the village for a cup of coffee. As we walked, he explained how OEE Toolkit created actionable data. This afternoon you’ll see how the software really makes it easy in the early going it’s all about commitment.

Commitment - and making sure you do the math.

Posted by Jon Miller at 7:12 PM | Permalink | Comments (5)

One of the most frequent questions we encounter form our customers and prospects is the issue of how to sustain the gains made through kaizen and other continuous improvement efforts. In a recent discussion among our consultants, we came to the agreement that the three traditional answers were inadequate and did not really get to the root of the problem.

First, management attention and commitment are essential. With the pressures to produce competing with the need to take the time to make sure improvements are being sustained, supervisors and managers often opt to make their numbers first. This is a case of 'you improve what you measure'. You must measure the sustaining of kaizen results.

Second, workforce involvement is a must. Human beings resist change when it is done to them or imposed upon them. Human beings embrace change when they are involved in making the change and it is meaningful to them. Simply, you value what you create. Kaizen events must be designed and managed for this.

Third, there must be a clearly defined answer to "what's in it for me?" for all of the stakeholders in the process where kaizen is done. The whole point of kaizen is to reduce Muda (waste) in a profitable way, making the job safer and easier. Quantifying and communicating these benefits is key element to helping people see the need for sustaining the gains.

Yet even when all of this is in place, kaizen will not always sustain. There may be a variety of reasons for this but in our experience one stands out most. Too often improvements are being made in environments where there are no clear standards. The process method may vary, depending on the person. The settings for a machine may vary between work teams and between shifts.

We have encountered organizations which are afraid to establish clear standards for fear that it will limit creativity among their best employees. This is particularly prevalent in engineering organizations, sales teams, and highly skilled machine operators. What these managers are really saying is that "My processes are out of control. I must rely on the in-depth knowledge and skill of very smart people to make it work."

This creativity needs to be used to set and improve standards, not to meet them. It is a misuse of skill and creativity to solve problems that are preventable through the establishment of standards. Once the variables are scientifically understood through a kaizen team effort or a six sigma process, this creates a basis for breakthrough improvements by these creative and skilled people.

Taiichi Ohno said "Where there is no standard there can be no kaizen." Part of every kaizen activity must be the establishment of the new standard or "the best known method at this point". The standard is not fixed forever, and becomes the basis for future improvement.

For repetitive processes this takes the form of Standard Work (aka Standardized Work) defining Takt Time, Work Sequence, and Standard Work in Process. For less repetitive work it may be a clearly defined process with visual work instructions and Pokayoke (error proofing) to ensure built in quality.

The insistence on standards is the fourth element for sustaining kaizen. Like the other three elements, it is a deeply human issue and often requires a cultural shift in the organization. In the end, successful and sustained kaizen is more about changing behaviors than changing physical things.

Posted by Jon Miller at 11:54 AM | Permalink | Comments (10)

Visiting a plant tour at a Midwestern cold rolled steel mill today, I had the chance to reflect on what makes a 5S effort sustained and successful. The owner took me through the mill and showed me a line at the start of the tour that was clean and well organized. The 5S deteriorated rapidly from there. He was quick to point out to me cabinets that needed organizing, items that needed to be thrown out, and machines that needed to be cleaned. I only had to walk and nod.

The workforce had been through JIT training in the past which included 5S and workplace organization. Due to turnover, a tight job market, and rapid growth there had been a lot of change in personnel. Many of the newer workers were not aware of 5S. The owner recognized that the Lean effort needed to be re-energized and 5S was a good place to start.

During a question and answer session with the management team we talked about why just the one area had sustained good 5S and the rest of the shop had not. We needed to understand what the success factors were before launching 5S training. What kept us from sustaining 5S? All of the usual suspects were raised, from lack of training to differences in personality to the grimy nature of the process to the location in the plant (out of sight, out of mind).

I could not tell them which of these (all? none?) were the specific reasons why they only had one area that had good 5S and the other areas all needed help. Based on our experience, I was able to share with them what we have learned are the 3 key factors to sustaining 5S successfully:

First, people have to be motivated to change. As many Lean Champions have learned, human beings resist change when it is done to them. Human beings accept change when they are involved and the change is meaningful to them. This is no different with 5S.

Imagine if someone else did 5S for you in your area, throwing things out you have been saving 'just in case' and putting your tools in new locations. That would be an unwelcome change. On the other hand, if you were able to take the time to clear out what you did not need, make space to properly locate the items you need, fix the machines so they don't leak oil, etc. you might feel a lot better about your work space.

I gave the example of a wrench that kept migrating from the "correct" position on a shadow board to laying flat on a small workbench near the machine. When asked why the operator did not return it to the shadow board, the answer was "That's not where I use it." This is basic stuff, but too often forgotten in the eagerness to do 5S according to pictures in the text book. Let the machine operators decide where the wrench goes and it will stay there.

Second, 5S activity should clearly be linked to the team's performance goals. Help everyone see how good 5S reduces set up time and increases pounds produced per labor hour, and good 5S will be sustained. Lack of performance goals or lack of interest in them is a separate organizational issue that needs to be addressed prior to Lean or 5S.

Third, audit. For some of us the natural state of our desk or workstation is clutter. The universe tends towards entropy (disorder). It's human nature to let a little bit of clutter go unnoticed, especially if productivity numbers are good and we make sure to look sharp when customers come through.

Toyota did not get to be the number 2 automobile manufacturer and the most profitable automobile company by leaving details like 5S to chance. Use the 5S check list to go through each area at least monthly and post scores with recommendations for improvement. Have managers take an interest in this and recognize the top performers. Take 5S seriously, and show that you do, in other words.

These are basics, but teams win championships by sticking to the basics and executing simple plays flawlessly. The same is true in manufacturing and 5S is just as important as making sure you run onto the field with your shoelaces tied.

Posted by Jon Miller at 11:27 PM | Permalink | Comments (7)

With the increasing commitment of major firms to TPS-based Lean initiatives, Value Stream Maps are increasingly becoming items seen in board rooms as well as kaizen team rooms. George David, Chairman and CEO of United Technologies is said to have created a minor storm of activity across UTC divisions when he mandated that he would review Value Stream Maps on all visits to UTC sites. One can imagine the calls of "What's a Value Stream Map?" and "Where do I get one?" by panicked General Managers.

While this is a wonderful thing on one hand, it creates problems for the people to whom Value Stream Mapping has been delegated. Lean Manager at Parker Hannifin, another fine company pursuing Lean in a serous way, bemoaned to us the fact that he had spent nearly a week "rolling up and typing in" Value Stream Maps for each and every value stream at his division's sites to fulfill a requirement to submit digital evidence of Current State maps to Corporate. This is time not spent improving things on the factory floor.

It is time consuming and awkward to put Value Stream Maps in a digital format. Lean Champions must essentially create Microsoft Visio or PowerPoint diagrams which are woefully inadequate for the size and scope, much less the embedded data, of Value Stream Maps.

Digital photos of value stream maps are of course impractical to edit and can be very large to store and share via e-mail. I have yet to find an application for my PDA that lets me doodle effectively. A elegant (yet pricey) solution is the tablet PC which allows you to write and take notes directly on the laptop computer screen. One of these days these will be as affordable as laptops are becoming, but until then, back to the debate.

Because of this difficulty with digital VS Maps, there has been a running debate on the comparative benefits of creating Value Stream Maps (VSM) by pencil and paper versus on computer using software. Most trainers and VSM gurus will insist on paper and pencil. Most Lean Champions and practitioners hate the task for taking a 15 foot by 4 foot piece of paper and sitting in front of a computer screen for yours typing and clicking until the map is in digital format. "Can't we just create the VS Map in the computer to start with?" the Lean Champions say. "No." the VS Mapping trainers say. The debate goes on. Both sides of this debate have merits.

The fact is that there has until recently been no good way of capturing the maps created by hand on computer for the purpose of storage, presentation, and sharing. If maps could quickly and easily be converted, then it would be no trouble to draw them in pencil and store them digitally. Thankfully, the recently released iGrafx suite of products from Corel (Flow Charter, Process for Six Sigma) do an elegant job of mapping not only Value Stream Maps but Flow Charts, Business Process Maps, and other tools. Gemba Research not only openly endorse these products, but we are a reseller and provider of training for these products.

Let me clarify that what I mean by Value Stream Mapping is Toyota's 'Material & Information Flow' diagrams as introduced and adapted in the book "Learning to See". Even to this day some use Business Process Mapping, Flow Charting, and Value Stream Mapping interchangeably, even though each is different in both look and function. There have been good tools for creating flow charts and BP maps for quite a while, so this debate does not cover them.

I have to admit that I am of the "pencil and paper" school, but one who has always wished for a good way to copy the paper maps into digital value stream maps. "If there is a good digital method of creating maps, why bother with pencil and paper?" you may ask. There are several good reasons for drawing maps first with pencil, by hand.

First, it is a good idea to keep people away from computers for much of the time during a kaizen event or any rapid improvement session. A training room with laptops and wireless connections to the internet is not the best learning environment. If you are sitting at a desk with a computer this means for most of us in manufacturing that we are far away from the Gemba (the place where you add value, i.e. the factory).

This is why Japanese consultants berate kaizen team members who are quick to leave the Gemba and work on their presentations rather than on improvements on the factory floor. One of my less patient Japanese teachers made his point by using a permanent marker to draw a large "X" across the screen of a CAD machine as a way to tell the engineer to go see what was happening on the factory 'genchi gembutsu' style. Although it was effective, I do not recommend this approach.

I recently heard the most compelling reason for starting with pencil and paper from Cindy Jimmerson of Lean Healthcare West. Drawing the sketches of trucks or warehouses, arrows, boxes and people on a Value Stream Map is a creative activity that uses the right hemisphere of the brain. Studies have shown that right-brain activity helps people come up with creative solutions during problem solving. Much of Lean can be reduced down to left-brained, linear, mathematical principles, if we are to be honest. However, helping people make the cognitive leap to recognizing that there is a problem with the Current State and that another way is possible requires help from the right brain.

A final reason is that kaizen activity and Lean improvements must be done as a team rather than as individual projects in an office with a computer. Value Stream Maps should be created by involving as many people from a wide, cross-functional range as possible so that different perspectives are taken into account and polarizing and limiting "group think" can be avoided. Value Stream Maps should allow many people to get their measuring wheels, stop watches, pencils, and post-its out so that they can use their eyes and hands to learn.

At the end of the day what is most important is that you map your value streams and that you make use of the maps you created to kaizen the processes in your value streams. Exaclty how you do it is secondary, but a decision you must consider ahead of time so that digital storage and sharing of vital Value Stream data does not become a stumbling block to improving.

Posted by Jon Miller at 4:27 PM | Permalink | Comments (0)

From time to time the question comes up, as it did again this week, or where an organization should start their Lean journey. Should they do 5S first and remove the obvious clutter or should they Value Stream Map the entire process and identify key improvement areas and develop a share vision of the future?

Both 5S and VSM are essential tools and both are good starting points. This debate usually centers on the question of which tool should be used first when building a Lean Enterprise. A good analogy is remodeling a house. Should you have a blueprint of the house you want to build first, or should you empty the house and tear out some of the old fixtures to see what structures are worth keeping, which walls are load-bearing, etc.

Both 5S and VSM are necessary. Just like in remodeling a home, both can happen at once. The plan changes based on what you find. The Value Steam Map should evolve as you learn more about Lean and more about your changing business and the people who work there.

The question of '5S vs. VSM?' seems to miss the point that IT'S ABOUT THE PEOPLE (excuse me for shouting). Back to the remodeling example. If you start with VSM and no 5S then it is like having a crew standing and watching the architects and designers. The crew is getting impatient. If you start with 5S only with no blueprint (VS Map) then you risk having an eager crew spending time tearing out material that could be salvaged or didn't need to be removed.

But most of us are not running a remodeling business. What does this mean for company in the early stages of a Lean journey? Practically speaking, there are two considerations when deciding whether to go with 5S or Value Stream Mapping:

First, consider what type of business you are in. If you are a steel mill, a chemical facility or fall into the category of “process industry” then an approach that is focused on 5S, TPM, OEE, SMED and quality tools makes more sense than looking for flow opportunities through Value Stream Mapping. This is because your assets are probably not as easily moved and the uptime of the equipment is the key thing rather than flowing one-piece at a time. If you are a discrete manufacturer then you first need to understand and see the wastes using VSM before you start doing 5S otherwise you might 5S an area that goes away or is drastically reduced in space, WIP, etc. through flow creation.

Second, the choice of starting with 5S or VSM depends on whether you want to create buy-in by showing impact, or if you already have buy-in and really need a plan (if you have neither, then a hands-on flow simulation and training may be the place to start). VSM and 5S are not really comparable in terms of Lean tools. VSM is diagnostic and doesn’t really improve anything by itself. While it raises awareness, there’s no feeling of accomplishment other than “wow, there’s a lot of waste”. On the other hand 5S gives you immediate results, visual impact, and a sense of accomplishment that gets people motivated, but does not necessarily lead you to what is next. So consider what you want to get out of it before deciding where to start.

It is not wrong to start with either VSM or 5S. One may be better than the other for your particular situation. The only wrong approach is to do nothing or to do something that is not properly supported and sustained. They key thing is to have a Value Stream Map, do 5S, start kaizen, and never stop.

Posted by Jon Miller at 3:23 PM | Permalink | Comments (1)