Gemba Panta Rei

For the next 31 days there will be no mention of the word "Lean" in the posts on this blog. There will still be discussion on the subject, but no mention of the word itself. It will be an experiment with other ways of expressing or explaining what is commonly called "Lean".

What brought this on? While in Brazil a few weeks ago I was humbled by a wise man who pointed out how we had failed in communicating the benefits for the Toyota system to his team. Fortunately they are still trying to learn ways to copy the Toyota Production System, but at the moment not from us. One of the perceived root causes was the use of the word "Lean" and the many associations that come with it.

We have never thought of ourselves as Lean manufacturing consultants. Lean may be a short cut to explaining what we do to a market that looks for labels, but it is insufficient. Kaizen as an action and as a philosophy has always had more currency for us. As the words "Lean manufacturing" have come into mainstream use, we have become lazy in thinking about what it really is that clients really need and what we really have to offer. That was the humbling lesson from Brazil.

So for the month of October 2006 there will be no mention of the word "Lean" on this blog and there will be deeper reflection of what people who use this world are really trying to acheive when we use the word Lean. I have no idea what this exercise will yield. Perhaps some new insights, no doubt an awkward circumlocution or two. Tune in to find out and to contribute to the discussion.

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There's a bit of Scottish blood in me from my father's side and it makes me proud of every drop whenever I hear of the Lean government work Scottish public servants are doing. The September 28, 2006 edition of the Scotsman correctly reports Copying Toyota Would Put Scottish Public Sector in Front.

ANDY Kerr, the health minister, yesterday called on the public sector to improve services by adopting business techniques pioneered by Toyota, the Japanese car maker.

That's all the details I have from the article, I'm afraid, since my Scottish frugality helped me resist the offer to read the full article now subscribe to "scotsman.com Premium" from as little as £29.95 a year.

Don't be fooled by the Sign Up Free! in big red letters. Apparently this literally means you can SIGN UP for free but not actually read until you pay. I'm signed up, for what that's worth. It's a good but slightly deceiving way for the Scotsman to get my name and contact information, I suppose.

If you subscribe to the Scotsman or you know the contents of this article, please share.

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The September 28th post on the VerySimple Dev Blog offers a solution to one particular time waster in the office: visiting the Digg.com website. Turning e-mail or your cell phone off to avoid interruptions is relatively easy. Not surfing the internet during office hours can be harder, and the batch file this blogger created is a good example of pokayoke (error proofing) through software code, as it blocks you from visiting certain websites during certain hours (work hours) of the day.

I suspect that surfing the internet aimlessly or in search of amusement and distraction from work is a colossal source of wasted time in the developed world. People who work in the office or at computers with internet connections have been given a very powerful tool to do their work. This tool can also be used to troll the internet for interesting information. It is a double-edged sword.

How is using the internet to waste time any different from a factory worker using a CNC machine to machine bits of metal for their personal projects during work hours? People don't expect to flip on a television at their desk and watch a show for 30 minutes, but don't hesitate to watch videos online or read the news.

One of the characteristics of Lean systems is that visual, manual methods are preferred to gee-whiz IT solutions. Even if you can create a kaizen newspaper on a spreadsheet, it is better to do it by hand on a big piece of paper. Even if you can see the production status on your computer screen from your office, it is better to see it on a whiteboard at the line. The idea of visual management is to see the abnormality or problem so you can take action immediately. Not only that, but you should have to "go see" the current condition by visiting the actual place - gemba - rather than relying on a report or a remote monitoring system.

I wonder if the "convergence" of technologies such as mobile phones, music players, computers, PDAs, etc. is a good thing or if it will simply make wasting time easier. Just because we can, should we? When we can play, chat, shop, pay bills, and even video-conference with people on the same device that is your primary work tool, we make visual management of office work much more difficult.

It may be wise to look at the work that needs to be done in the office and identify smaller, cheaper, single-function machines that can do the job rather than almighty personal computers. That would be Production Preparation Process (3P) for office equipment. As long as the producers are technology-pushing in the direction of more power and more features in one box, and as long as we continue to be "catalog engineers" buying the latest technology without considering if it is the minimum necessary for the job, the issue of time wasting office automation will exist.

Canon is one company in Japan that has taken a hard line on the computer as a work tool and not a toy. The Lean transformation story at Canon is an interesting one and I will share more details at a future date.

I might seem a curmudgeon for taking this position, but what concerns me is the work culture that internet enabled work tools / toys are creating. This creates a permissive attitude towards wasting time or at lest a selective viewing of what is waste and what is not. This attitude that certain types of waste are ok will erode respect, team-focus and customer orientation. That ultimately leads to failing companies, fewer good jobs, and a weaker society. We reap what we sow.

If this was your introduction to the potential time-waster that is Digg.com, load the batch file and experience the power of pokayoke to prevent waste where human discipline fails.

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Thirteen years ago this month I nervously stepped into the lobby of the Sheraton at Hartford, Connecticut airport. It was the first day of my first Shingijutsu kaizen event. I did not know what to expect. I remember the first words out of the mouth of Mr. Nakao to me were something to the effect of "You gonna be able to cut it, greenhorn?"

I remember being so nervous standing up there while the sensei was giving his opening speech that I stared at the ceiling in an effort to concentrate on his words, rather than look at the audience full of managers and directors. We accomplished a lot that week. The comments at the closing presentation by the team members and the sensei were very moving. The week was a blur but by the end my head was as clear as if it had been dunked in cold water. I was hooked on kaizen.

Perhaps the biggest lesson I learned in my early kaizen days was not one of kaizen but of basic communication. I learned to economize my words. Interpreting can be tiring, and we're not paid by the word. So I learned to say it in fewer words. I learned to stop and ask "Do you understand?" before going on and on, and risk repeating the whole thing if the listener said "Huh?" at the end. My customers were the people that were talking through me, and my breath was my limited resource. So I learned to kaizen how I used my words.

I was called "the quiet consultant" shortly before being kicked out in favor or a more vocal and energetic consultant at industrial conglomerate "P" a few years ago. It can be better to over-communicate rather than be spare with words. Even if what you are saying is spot-on, there is much more to communication than words. Body language and facial expression alone can by 80% or more of what people actually hear. That was a different sort of lesson in communication.

Why reminisce about my early kaizen days? I received an e-mail today from a Lean Six Sigma Kaizen Master at the Ford Motor Company who figured out that we had worked together in my early kaizen days. He correctly remembered me as the guy who asked for water without ice, and not receiving it had to pick the ice out, at the dinners with the kaizen sensei.

This is an odd thing to be remembered for. But there's a good reason for this. Ice-filled glasses annoyed me because interpreting makes you thirsty, and when the glass is 70% ice you run out quick and end up crunching ice, which annoys the sensei. The other thing I learned quickly in my early kaizen days: you don't annoy the sensei.

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"Seiri (Sorting) is throwing out what you don't need and Seiton (Straighten) is arranging items so that they are ready when you want them. Arranging things neatly is only Seiretsu (lining up in rows) and proper shop floor management requires Seiri and Seiton."

Taiicho Ohno goes on to tell a story of when he visited a warehouse that was a mess. There was no order there and all incoming parts were stored so that even obsolete designs were kept for a long time. Ohno told them to do 2S and when he came back he found that they had done Seiretsu (lining up parts in neat rows) but they had not thrown anything out or put items in their proper place. So he scolded them.

Ohno further explains the correct meaning of Seiton. The "ton" part of that word means "right away" or "immediately" and suggests that when you do the second S (Straighten or Set in order) this means it is in the place where you need it and accessible immediately.

If you need to move other things out of the way to get at it, you have not done Seiton. Chances are, you haven't really done Seiri either and there's more there than you need.

Ohno says that people who spent time as soldiers may have a habit of Seiretsu or lining up in rows. Ohno denies that drawing lines on the floor to mark boundaries or lines for marking height limit has anything to do with true 2S.

Even at Toyota there was confusion in the beginning. They had 4S competitions (Seiri Seiton Seiso Seiketsu) once or twice per year where the areas of the factory with the best examples of 4S were given awards. But people did not understand and they lined things up in neat rows. Ohno told them this was no good since stacking things neatly or lining things up just made first in first out harder to do since it required re-stacking to get tot he first item.

Seiso (Sweeping) and Seiketsu (Sanitary or Spic and span) are not the same as making things look better. "If you do Seiso and Seiketsu wrong it can cost you a lot of paint." Says Ohno. Many companies on the Lean journey today could heed these words.

The true meaning of Seiketsu is to create and maintain a cleanly and sanitary workplace. Sweeping away the dust and chips on the floor of a machine shop and keeping it clean is the original meaning, but Ohno says that Seiketsu is sometimes misunderstood as "color coordination" of machines and making things pretty.

Ohno explains that the idea of "clean" is not something that is the result of a janitor cleaning up after you. It is a question of attitude and of creating a healthy work environment. If your attitude is that "the janitor will clean it" you will not have a clean or sanitary workplace and it will always be dirty.

Ohno goes on at length about the added 5th S of Shitsuke (Self-discipline or properly Discipline) and how it is lacking in the schooling system of today. The way Ohno talks about Shitsuke (Self-discipline) the meaning is closer to "upbringing" or the kind of discipline that comes from being properly socialized in school, a sports or military organization.

After further criticizing the lack of discipline being taught in Japanese society Ohno says "Somebody needs to say these things. And the person that says them definitely has to practice what he preaches." Ohno ends the chapter with these wise words:

"These days not so many people point out these things. That is the biggest problem. Discipline is taught when the senior ones scold the junior ones. This is not only in work but also between elders and youth. There must be scolding and correction, and not just talk but it must be followed by action."

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I had lunch yesterday with a local client of ours. He owns a small factory that employs about 30 people. The products they make are fairly simple and the processes are not complex. They have made some big changes in the factory layout to improve workflow, they have removed some walls and everyone has gone through at least 8 hours of training in Lean principles and some hands-on exercises. They are doing good things and their business is growing. They are still a long way from Toyota.

One comment made at lunch today sounded to me like an encouraging sign of a Lean culture developing at this company. The workers have started to use participation in problem solving as a criterion for evaluating their new team members. In short, the workers have a policy of what I call "kaizen or get out" for new hires.

One of the first things we taught them was the Kaizen Newspaper tool. Each week they have what are called Kaizen Newspaper Meetings. Throughout the week everyone is free to identify problems and write them on a big piece of paper. These are located in a visible place in the shop. There are rules for what you can write and how you describe the problem. It should be clearly identifiable as a waste, so it requires some training and thought.

This system can be learned quickly and applied anywhere. This system works well so long as it's followed. It takes perseverance and discipline for a small company without a lot of resources to keep finding and addressing problems while taking orders in and getting product out the door each day. As a sign of a Lean culture beginning to form, our client said that now when new workers are hired, the other team members watch carefully to see how the new person contributes to the Kaizen Newspaper process.

When a new worker is change averse or unwilling to participate in identifying and solving problems it becomes clear quickly. After a week or two of not participating in the process, the rest of the team asks them to "kaizen or get out".

This is a fair statement since when they are hired they are asked to come to work willing to work flexibly and as a team. A lack of input or participation in the Kaizen Newspaper process comes from an attitude of "it's not my job" or cynical attitudes such as "this is just another program" or "I've seen this tried before and it will pass". Neither are true at this company and if people can't recognize that and bring the right attitude to work after a week or two they are asked to "kaizen or get out".

Still a long way to go, but I took this as a sign that our client has taken a sure step towards a Lean culture.

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Last week I had a chance to fly GOL, the Brazilian low cost airlines billing itself as the "intelligent airlines" and an airline having one of the most modern fleets. They are in fact a smart airlines and it was a pleasant flight. Once the Brazilian landscape fell away below, I was left looking for reading material in the seat pocket in front of me and unexpectedly found a lesson in Visual Management or sorts.

Here's a cutaway pocket where the in-flight magazine would normally be. What percentage of the time does the stewardess ask you to review the safety information card on take off? One hundred per cent. What percentage of the time do I review it? Maybe 3%. GOL makes theirs hard to ignore, so I pulled it out.

There was a lot of information on this two-sided card, no more than 10 inches by 10 inches.

Here it is clearly explained what to do and what not to do in an emergency.

But why no high heels? This part was not so clear to me.

And this one instructs you in case of a water landing to leave your high heels, your shoes, fasten your seat belts, no smoking (is this not a non-smoking flight anyway?) and further more not to jump into the roaring flame below (far right). Certainly sounds advice, but roaring flames?

Here are useful instructions for exiting the airplane. This exit looks more orderly and efficient than many exits I've experienced from safely landed airplanes.

And the card instructs in the case of a landing on a wavy green surface (presumably the green hills, jungles or fields) to fasten seat belts and leave behind one's briefcase, shoes, lit cigarettes, and high heel. And certainly don't jump into the roaring flames or on the sharp rocks.

The lesson in Visual Management here is that instructions should be unambiguous and clear. As much as possible both "what" and "why" should be obvious so there is no room for questioning in the critical moment. Instructions as visual management tools should make the abnormal condition very clear.

In the case of the high heels and shoes it is not clear if merely possessing them is bad or if wearing them is bad. Common sense, you might say but what about sandals, or boots? Briefcases are not good, but what about purses? If space allows, it would be better to depict what action with these items is prohibited. The message with the lit cigarette is very clear. Take your cigarettes with you but don't light them until you are well past the roaring flames.

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A classroom that encourages movement gets good grades. One of our team members recently spotted this article during a Northwest Airlines flight in the September 2006 in-flight magazine. According to a study done by the Mayo Clinic with a class room of fifth grade students in Rochester, Minnesota, getting rid of chairs and encouraging motion helped them learn.

Students were given "standing desks" on wheels as well as mobility tools such as laptops in an effort to encourage movement and reduce obesity. The results were that the children were happier, more focused and better able to learn. This may have been due as much to the novelty of the moving tables and the electronics they were given to work with as to the movement during the class, but the Mayo Clinic folks are still crunching numbers.

I had a high school American history teacher who was great. He would tell us not to sit in the same desk each class. It was interesting because some students got into a routine and always sat in the same desk, while others like me would sit in different parts of the class room each time. I don't know if that helped me learn, as he was an excellent teacher and the subject was interesting to me anyway.

Other experiments have shown that exercise promotes better results on school tests. Giving the learner more control over how they learn (standing or moving versus sitting at a "one size fits all" desk) is an example of empowerment, a key part of kaizen. Asking people to change their seat changes their point of view (literally) and keeps people from getting set in their thinking.

In a similar way, a workplace that encourages movement gets good results. Movement for movement's sake can simply be wasted motion, but movement to facilitate a smooth workflow improves performance. The natural end result of a desire to give the customers what they want, when they want it, in the right quantity is a flow. Flow is the continuous movement of value-adding activities. A workplace that encourages this type of movement gets good results.

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The Toyota Production System principle of genchi gembutsu is often translated in English as "go see". This rolls off the tongue a lot easier than genchi gembutsu, but it doesn't quite capture the essence. The word "genchi" means "actual place" just as "gemba" does, though "genchi" is not used to mean "factory" or "workplace" like gemba is. The word "gembutsu" simply means "actual item / object / product / thing". So "go there and see it for yourself" would not be a bad translation, though wordy.

There is a clear difference between the words look, see and observe in the English language. Looking is opening your eyes and letting the light from you environment ente. Seeing requires that you are conscious and that the light is processed in your brain to become an image. Observing is directing your conscious attention on a phenomena in an attempt to somehow frame what you are seeing within your cognitive context.

"Go see" is certainly better than "Go look" but "Go observe" is a more accurate description of the spirit of genchi gembutsu. Whenever you are making improvements you must go to the actual place and observe what is really happening to understand the phenomena so that you can categorize and collect meaningful data as a first step to taking action.

When observing a process it is a good idea to try to put what you are observing into a frame, such as:

1) What is value added and what is an example of the 7 types of waste?
2) Eliminate, Combine, Reduce, Simplify?
3) Dirty, Difficult or Dangerous?
4) Why here? Why now?

In other words don't be a neutral observer. Have an agenda. Go look for something in particular, wait until you see it and observe further to understand. Davelop a theory that you can try to disprove (null hypothesis) according to the scientific method.

Bad decisions are made when people become ideological or stubborn or too single-minded for genchi gembutsu. We could all benefit a lot from a bit of "go observe" from time to time. That's why we encourage everyone to spend more time on your gemba.

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Healthcare cost can be cut. So says a Pittsburgh Tribune-Review article by the same title on September 14, 2006. The examples from Virginia Mason Medical Center do demonstrate that healthcare costs can be cut, but is this enough?

The article cites statistics from Robert Mecklinburg of Virginia Mason Medical Center, that half of all health care dollars spent is wasted. This is $1 trillion wasted on poor quality care, safety issues and an incentive plan that rewards mistakes. This is waste that can be cut out through kaizen.

The ideal condition of a society is not to have the degree of illness, trauma and poor health as we do in the U.S. Our healthcare institutions are focused on firefighting rather than on fire prevention (healing the ill rather than preventing illness). This is by nature a very expensive way to keep a society healthy, with or without the 50% waste.

If we think deeply about the goal of healthcare organizations, it is to keep people healthy. This is not a question of cost. It is not a question of the quality of patient care. It is to avoid the need for patient care. It is a question of prevention. Yet if healthcare organizations succeed in this mission, their revenues will decline. I have heard hospital executives talk about applying the savings from Lean toward providing more indigent care or community outreach programs to promote daily good health, yet none of them considered the latter as a revenue model.

A Shmula blog titled The Profit Tree raised the point that the combination of increasing revenue and cutting costs is ideal. Mark Graban at the Lean blog said about the situation at the Ford Motor Company:

Lesson for me -- don't EVER be part of a company that isn't growing. Shrinking is painful. As management, don't let it get to that. It all falls apart if you're not growing, no matter what the business.

Healthcare should be more about prevention than about medication and surgery. Of course like the poor, the sick will always be with us. The lesson for me is that if I were a healthcare organization my long-term plan would be to shift a large part of my revenue towards services aimed at prevention. It's something that by nature you can provide at a much lower cost, and what customer wouldn't prefer preventive care to surgery?

Posted by Jon Miller at 3:03 PM | Permalink | Comments (3) | TrackBacks (0)

Anyone can be taught to do kaizen in 30 days.

If you're wondering how to learn the fundamentals of the Toyota Production System in 30 days (or how to teach it) you can take a hint from the June 23, 2006 article in Nikkei Joho Strategy titled Drumming in the Fundamentals of TPS in 30 Days: This is Toyota's New Hire Training! The literal title is somewhat more sensational than my translation, and reads "Beating the fundamental thinking into them in a month and a half, this is Toyota's new hire training!" ( 1カ月半で基本思想をたたき込む，これがトヨタの新人研修だ！). It's boot camp, but the article mentions no beatings.

The author of this article documented the experience of two of nine new workers who joined ALSO (Advanced Logistics Solutions, a subsidiary of Toyota Loom Works, in Nagoya, Japan) in April 2006. ALSO handles the logistics for automotive parts, not parts used to make automatic looms.

The two new hires were taught the fundamental principles of the Toyota Production System because as people working in a logistics and distribution operation, they would be working within the Toyota Production System. ALSO is not a manufacturer, they are a distributor and a logistics company. Yet the Toyota Production System is applied there just the same.

The article says the new workers immediately started their education in TPS after their morning orientation on the first day of work at Toyota. This included lessons in TPS and a review of videos of the principles. The first month was a repetition of class room learning and watching videos in the "dojo" in the morning followed in the afternoon by going to the gemba to observe and document processes and do kaizen. They had to demonstrate their learning by genchi gembutsu (go to the workplace, see the actual process) every day during this month.

In the first month these new hires study the following topics: kanban, abnormality detection and andons, material flow and transportation, material and information flow, Standard Work, productivity improvement, tools for quality control, and more.

Their assignment after the month of study to spend 3 days in a distribution center doing kaizen. They are required to find 30 improvements per day and ultimately reduce manpower by one person through kaizen. At the end they are to report the results.

Here is a photo of the two brand new Toyota employees showing off the work they did in the first month and a half of studying the work processes and learning the Toyota Production System fundamentals. Note the color-coded yamazumi board (operator cycle time analysis by work element) on the right side of the picture.

In this picture a new employee demonstrates the wastes he found in distribution center processes by studying the process and documenting it in detail on a material and information flow diagram (value stream map).

Here new employee points out the work analysis they did to create Standard Work and the Standard Work documents and kaizen results summary they created during their 3 day activity on the floor of the distribution center.

The author of this article was impressed by how much these two brand new workers had learned about the Toyota Production System in a short time. To the author, this new employee training demonstrated the idea of "developing people". The author suggested that Toyota should make a business out of selling this new hire training program to other businesses. That's a great idea. We'll get to work on it right away.

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"What experience do you have in my industry?" I heard this again today for the nth time, with n being a number sufficiently large such that n x $1 would buy a nice lunch for everyone who reads this today.

The "industry experience" objection to taking help from consultants is a common one, but not a very good one. There are many more important questions you should be asking when evaluating consultants. At best this question relies on the individual experience of the consultant in question being sufficient so that you don't lose valuable time educating the consultant about your business while paying their exorbitant fees. A better question would be:

"What processes do you have in place to insure that you will not lose time in becoming familiar with our processes, terminology and unique conditions of our business when you first start working with us?"

Even if I had experience in your industry, business changes all of the time. Is my experience from 5 or 10 years ago as relevant as the experience and knowledge of your people today? Is it more valuable that the consultant already knows it, or that they are good listeners? Do you really want the Lean or process improvement consultant as a change agent (as opposed to technical or industry knowledge consultant) challenging your best people on their company-specific industry knowledge?

Another related question that should be asked, but isn't, is this:

"How much and what type of things do your learn with each new client?" You would be amazed at what this can tell you about the person you are considering hiring as your teacher and coach.

Perhaps the most valid reason the "industry experience" question is asked is when there is doubt that Lean or the consulting service in question applies to your industry at all. If you have concrete doubts as to why Lean might be challenging to apply to your industry, ask specific questions and evaluate how the consultant is able to respond with specific, relevant examples, not generalities.

The half cousin of the "industry experience" objection is the "we're different" or "our business unique" comment. Of course every business and every institution is unique. That is a truism, in that no two are exactly alike. However, unless you are trying to create an exact replica of another organization, this point is irrelevant. A better question to the consultant would be:

"What evidence do you have that your processes or products can deliver the results you claim to businesses similar to my own?" If the evidence can't be provided, the meeting is over. If you're not prepared to consider and accept evidence that comes in response, you shouldn't be wasting the consultant's time asking.

A process is a process is a process. Just as the human body is composed of 60% to 78% water (this varies by age, weight and sex), over 95% of any process is wasted time, space and energy. This is easy to measure, and the evidence is scientific, so long as you can agree on a definition of value, and that everything excluding value is waste. With numbers like that, it doesn't matter what industry you are in. Lean still applies.

As a consultant, it's tempting to ask the non-consultant customer "What experience do you have in my industry?" but that would be the wrong question.

Posted by Jon Miller at 11:08 AM | Permalink | Comments (0) | TrackBacks (0)

We toured a tier 1 automotive supplier recently with a group of our customers on our Japan Kaikaku Experience. Our customers learned many things but there was one main lesson.

First, the General Manager who took us on the in-depth gemba walk advised us “as a manager, don’t be afraid to throw yourself into the gemba”. What he meant was that managing the workplace and people was a physical and not an intellectual activity and that it was important to physically be out in the actual workplace. As the General Manager, there was no more important work for him than to be out on the factory getting a feeling for the problems of the day and helping to coordinate the resources to solve problems and improve performance. The factory is often a hot, loud and dirty place and you will earn the respect and trust of the people who work there if you physically demonstrate that you are willing to be there with them solving problems.

He said he started out by asking people to clean up and met with resistance. Afterwards he himself got a rag and cleaned up and after a while his employees started saying "no boss, I'll do that." As a person who goes through many machine shops, this one was one of the cleanest I had ever been in.

It was a very good lesson in "just do it" instead of endless planning.

Posted by Brad Schmidt at 9:14 PM | Permalink | Comments (0) | TrackBacks (0)

What is flexibility for Lean manufacturing? There's the beginnings of a good discussion on flexibility and what it means for Lean manufacturing on the Lean blog, posted Thursday September 7th. Blogger Luke Van Dongen notes that flexibility is sometimes used interchangeably with Lean. Flexibility refers mostly to a traditional philosophy on capacity and capital equipment and Lean philosophy more on ability to respond to customer demands through reasonable customer service policies and leveled production schedules.

What is flexibility? Flexibility is the opposite of stiffness. Flexibility is the ability to expand or contract in response to pressure. Flexibility is the ability to adapt to new, different or changing requirements. Flexibility is measure of the ability of a company to respond to changes in demand. Flexibility is one of those metrics that gets added on but rarely defined in concrete terms by manufacturing executives, as in "We need to focus on quality, cost, speed, and flexibility." Flexibility is usually snuck onto this agenda by marketing and sales folks, if the said executive is not one herself.

I've seen examples where flexible meant the exact opposite of Lean. A particular client had a management philosophy of being "flexible" which meant to them that they could make whatever the customer wanted, whenever they wanted. Their customer service policies and sales philosophy of "being flexible" resulted in demand swings like Figure 1. As a result they kept a certain amount of work in process in one step in their manufacturing process, from which they assembled final product according to customer specifications, on demand.

Because they wanted any of their 50 assembly lines to be able to make any product any time, none of the assembly lines were particularly suited to making any product very well. Productivity was low, cross training was limited, and errors were high for some products.

Our client's philosophy of flexibility made them very sales-driven and over the years their customers learned to change their minds at the last minute and get away with it, so the planned versus actual schedule on the shop floor fluctuated wildly. While they do a good job of flexing with customer demand changes, their supply chain struggles mightily at times. In an ideal world production capacity would be completely scalable and you respond flexibly to demand as in Figure 2, but unless your entire supply chain can do this, you will have big problems, otherwise known as the Bullwhip Effect.

When you have fluctuating customer demands and you want to have a leveled schedule (heijunka) you need to either keep finished goods stock as in Figure 3 (which this company did not do) or have enough equipment capacity to be able to ride the peak waves (which this company did do). So flexibility meant lots of idle equipment and people on some days, as you can see in figure 1.

Teaching Lean was tough because there was an entrenched philosophy of "flexibility" as defined by well-meaning marketing and sales people. In the case of our client there was initially a desire not to identify product families and create assembly cells with takt times and timed material delivery routes to support each cell or group of cells by product, because the management believed that they would lose their flexibility, or the ability to make anything anywhere any day for any customer. In theory this is true. If certain assembly lines were designed around processes for product family A, these cells may not be ideal if all orders in the factory were for product B the next day.

To some degree we were able to Defend with Data and demonstrate that the "all B" situation almost never happened and that 99% of the time they ran their shop inefficiently "just in case" they needed all B. When sales trumps manufacturing, and sales trains customers that they can get whatever they want, whenever they want, this is not always a good thing for manufacturing. Yet this company is very successful, so perhaps sales is king after all.

In another example of flexibility not meaning Lean, just today I was talking with Joe Jud of Gemba about the irony of the naming choice of the machines known as FMS - Flexible Manufacturing Systems. This label is typically attached to a big machine (actually a combination of machine tools, material handling equipment, computer hardware and software) that is used for metal machining. From a technology standpoint the FMS is a marvel. Load the part, push a button, remove finished part. No more unload, load, unload, load.

Machine tool salesmen friends won't like me saying this but there's nothing flexible that I can see about FMS from a production system standpoint, since you have one machine that does everything (as opposed to a cell with many single function machines) and the only way to scale up or down in capacity is to add or subtract the number of FMS machines. Figure 4 shows what happens when you can only make step increases in capacity by adding blocks of capacity via FMS or other means, versus by incremental capacity additions through lower cost single-function machines.

These systems aren't cheap, so companies aren't casually flexing the number of FMS units very often. You need a step increase in production volume to justify a new FMS. If you are a tier 1 automotive supplier relying on the marketing forecast of the automobile manufacturer in making your investment plan, cost estimation, etc. to win the business you can be left with expensive, idle, inflexible capacity since you can not scale down an FMS or move just part of it into another machining line to free up space and capacity.

Consider what would happen if the cost of a "step" addition in capacity was $10 million ("Initial Capital Investment" line) in the Figure 4 example. By the time you learned that the marketing forecast was wrong you would already be committed to selling parts costed based on a certain volume, but you're stuck with the higher equipment depreciation costs. The business solution to this is to get better marketing information and better pricing agreements with your customer based on actual volumes, which is not easy to do if you are an automotive supplier.

The Lean solution to this is to practice Production Preparation Process (also called 3P) and design equipment that is scalable, flexible (can be quickly changed from one set up to the next and is on wheels and can be moved around to where it is needed quickly) and low cost so that the "step" additions of capacity seen in Figure 4 can be $50k or $100k capital investments to add 5% or 10% capacity rather than 100% capacity in one jump.

What is flexibility for Lean manufacturing? True flexibility should be a measure not of a machining system or an assembly department but of an entire value stream from the end customer through the supply chain and back to the end customer (from request to fulfillment) and this system's (value stream's) ability to deliver Every Product Every X with X being months, weeks, days, hours, etc. Planning and building capacity based on forecasts results in false economy of scale thinking, which reinforces customer behavior that volume is cheaper and lead-times are long. Being able to make only what the customer is truly buying right now is a Lean measure of flexibility.

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Busy, busy days. It's days like these that it becomes more important to avoid working harder, longer and instead take a precious moment out of your day to examine whether what you are doing is really adding value towards the ultimate goal, or not. Crisis creates focus, so long as panic is held at bay.

Someday I'll write more on this idea, but it occurred to me that Hoshin is 5S for your head. Hoshin Kanri forces you to define your top long-term objectives (value to you) and then identify the bare minimum actions you need to achieve them (strategies). All other activities should be supporting strategies and tactics toward to top-level goal. At a micro level this is true for daily work, whether by executives or clerks.

Books have been written about getting more done, being more effective by forming 7 or 8 habits, etc. and 5S as Hoshin for your head is the same idea in a different skin. Sort out the things you don't really need to do to achieve your personal or team Hoshin objectives, Straighten or put in order actions in sequence of need, Sweep away any clutter (interruptions, leaks in your attention) and then Sustain your focus. So perhaps Hoshin is 4S for your head.

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Here’s a follow up to a previous post of the one point lesson on operational availability vs. rate of operation. A reader pointed out that pictures and not just words would be helpful, so in answer to a related question about multi-process handling, here are a few words plus two pictures.

Multi-machine handling is when a single operator runs multiple machines of a similar type. In this example of shaft machining, the lathe operator will produce turned parts. The mill operator will then mill all of the turned parts, etc. One operator is running 4 lathes, another runs mills, another drills, etc.

Multi-machine handling is also called horizontal handling, as you can see that the operators’ responsibilities on the chart are assigned horizontally (side to side on the chart) by machine or process type.

In multi-process handling the equipment would be arranged in process sequence (10 > 20 > 30 > 40) by product family. In this example one operator runs four machines, one lathe, one mill, one drill and one tapping machine and makes a completed shaft.

Multi-process handling is also called vertical handling, as you can see that the operators’ responsibilities are assigned vertically (top to bottom on the chart) for a particular part or part family.

This idea applies not only to machine work but any process, whether it is assembly, bill payment, or patient care. The thinking behind this is to look at the whole process from the viewpoint of what is best for the customer instead of from what is best for the functional unit or department performing the process. The more that processes are connected one-to-one, the shorter the time is through the process safety, quality, delivery and cost are improved.

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The September 4, 2006 Japan Times reports Toyota allies warned over low pay by Labor authorities in Japan.

Twenty three Toyota suppliers in Toyoda, Japan have been caught cheating their Vietnamese workers of pay by paying below minimum wage. Two hundred workers have been underpaid by nearly $500,000 over 5 years.

Let's do a little averaging. The 23 Toyota suppliers saved $500,000 so that's just over $21,000 per company over 5 years. This is about $4,000 per year per company. Even over five years, this is hardly significant cost savings.

On the other hand $500,000 to the 200 Vietnamese workers is $500 per year. The average per capita income in Viet Nam: $638 according to the US Department of State.

That's not cost reduction, that's stealing. It's stupid, and wrong.

This is the sort of thing that Darius Mehri experienced and wrote about in Notes from Toyota-land, Japanese managers in supposedly Lean companies behaving badly.

If you believe Toyota PR, "kaizen" and "respect for people" are the two pillars of the Toyota philosophy. This philosophy doesn't yet extend too far into their supply base, it seems.

Happy Labor Day, ironically.

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As summer officially comes to a close in the United States this weekend with the kick-off of the American Football season and something Americans call Labor Day, I find myself thinking about heijunka (averaging of both your demand volume and product mix to smooth out production). As a small business owner I find summer a disruptive time with clients taking vacations and factories shutting down. Consulting work is generally slow in July-August. This is compensated for in September-December. This is not Lean.

A certain amount of seasonality of business is caused by nature. There are the four seasons which change the weather and therefore consumer buying patters. We buy air conditioners in the summer, leaf blowers in the autumn, heavier clothes in the winter, bulbs for your garden in the spring.

The producers who build and ship product to meet the demand during these peak periods either have to ramp up equipment and labor capacity to meet peak demand or have enough year-round capacity, some sitting idle in the slow seasons. Unless you can find southern hemisphere markets or other offsetting business, nature-caused seasonality is inevitable.

Then there is seasonality caused by humans. The demand peaks include chocolate in February, Easter bunnies in April, fireworks in July, school supplies in September, candy in October, turkeys in November, and a whole lot of stuff in December. These are just some of the examples based on U.S. holidays and traditions.

So here's a big idea: study the macroeconomic effects of the various human-caused demand spikes in the United States economy. Identify the impact that smoothing out these demand swings would have on the overall economy in terms of factory capacity utilization, inventory reduction, reduction of costs associated with hiring and training seasonal workers, utilization of aircraft capacity of airlines, and so on and so forth. In order to achieve a heijunka economy there may be a business case for a national policy to observe holidays on different dates by region, for example. Stranger things have happened.

These holiday buying patterns are good examples of "fixed ideas" or paradigms that we encourage people to bust through when doing kaizen. If you ask "Why do we as consumers buy so much __ on __?" many times you will find that this is simply learned behavior and has little or nothing to do with things we hold dear, such as values or beliefs. A study of history will show that many of these seasonal buying patters were intentionally fabricated by the people who are selling to us. We can change this, and get closer to a heijunka economy.

The practical lesson here is to first examine your strongly held assumptions whenever you are doing kaizen. Toyota calls this "thinking deeply". Taiichi Ohno said that you need to think of ten-fold improvement, not 10% improvement to really get the picture of the current condition and find ways to do kaizen. This forces you to question certain "fixed ideas" you may consider untouchable when looking only for 10% improvement.

How many of us who are salespeople intentionally or unintentionally cause non-leveled buying behavior on the part of customers? The so-called "hockey stick" or month-end / quarter-end rush of demand isn't caused by nature. I'm still thinking about how to kaizen Boxing Day... but I think I'm getting closer.

Posted by Jon Miller at 11:30 PM | Permalink | Comments (0) | TrackBacks (0)

At the center of the Toyota Production System, and therefore of Lean manufacturing, is the fundamental principle of creating flow. For example in a machine shop this means connecting processes so that an operator can be a multi-process handler and not just a multi-machine handler. In multi-process handling the work piece advances from process to process in sequence while in multi-machine work may be done in several batch operations.

Multi-machine handling is simply multi-tasking by making more full use of the operators' time by having them run several machines. Individual processes may appear efficient, but the overall efficiency is not significantly better. Multi-process handling is working in a flow so that the work steadily converts raw materials into sellable finished product.

One benefit of creating flow and multi-process handling is reduced work in process inventory. Another benefit is that this requires cross-training of workers so that they can operate many types of machines and processes. This not only increases the skill level of the workers, it makes the process more flexible and scalable.

Working in a flow also improves teamwork. At some point (when takt time comes) a multi-process handler will need to "hand off" the part to the person in charge of the next process. This requires cooperation, rhythm, and in some cases actually helping out the person next to you to get their job done in time (e.g. when there is an abnormality).

This is possible because in a flow process the work is much more visible. In order to create flow, physical barriers must be removed. Naturally occurring barriers (work in process inventory) are also eliminated due to one-piece flow. The first step to solving problems is seeing them, and flow and visual management enable this.

Creating flow improves productivity, quality and response times. We have seen too many cases where improvement will focus first on equipment improvement, later on people's work. This may be due to a lack of education in TPS, or simply because machines don't complain when you change them. It is important to always design the work around the process factors of man, material and machine, in that order. This is a bigger problem for office work.

Recently we've been guilty of violating this rule in the Gemba office. We have been building desks and attempting to create an office that better supports flow. We built the desks based on a design concept, but did not think about the manual work flow and material flow first. Our office is already very visual, and we have succeeded in many areas in flowing transactional work but much of the work we do in the office is still in "batch" mode.

Let me give an example. One of our projects involves sending out direct mail to promote one of our products to potential customers. One member of our team is in charge of selecting 100 names of target prospects from a database, using a certain criteria. This person is doing his work in a batch.

When he has selected 100 names he will hand them off to the next person who will print the letters (perhaps 20 per day so it doesn't interrupt her regular work flow). Then these letters will be signed by me. Once the letters are printed and signed, another person assembles the direct mail packages and ships them, 20 at a time.

Why not do this one name at a time? Select one name, print one cover letter, sign the letter, assemble the package, mail it. I have no doubt in my mind that this could be done with 30% fewer man hours and space, and with better quality than today.

We would need to move our desks closer so we could flow. We would need to cross-train each other so if one person was on the road we could still work in a flow. We would have to put our materials within arm's reach so we wouldn't have to walk to the supply area for each package. We may need to redesign our desks again. These would all be good things that people working in a Lean office should do.

Whatever type of work we do, periodically all of us should look up from our work and ask "Could we flow this?" You would need to understand something about cycle time measurement, takt time calculation and process design to make your work flow. Those of us who are Lean practitioners have no excuse.

Posted by Jon Miller at 12:01 AM | Permalink | Comments (2) | TrackBacks (0)