Lean Management: The Art of Asking the Right Questions

Posted on26. Apr, 2009 by carolesf.

How is Lean Management distinct from Lean Manufacturing and Lean Office?  If you have Lean Manufacturing, don’t you automatically have Lean Management?  If Lean is all about cutting out wasted time, then shouldn’t Lean Managers act quickly and decisively?  The faster a decision, the better — and more Lean — it must be, right?

Well, not exactly. 

How is Lean Management Different?

The difference between Lean Manufacturing / Lean Office and Lean Management is the same difference as between personal excellence and leadership. 

Lean Manufacturing and Lean Office are all about performing to high standards.  Lean Management, by contrast, is all about inspiring and enabling others to perform to equally high standards.  This is the mark of a true leader.  In the sense of inspiring and enabling excellence in others, all teachers are leaders, and all leaders are teachers.   

Consider a concert pianist honing his skills to the point where he can give a world-class performance.  Yet this same pianist might not be a very good teacher.  Why not?  He has achieved personal excellence of the highest order.  Shouldn’t that qualify him as an excellent teacher?  Not necessarily.  He may not relate well to beginners.  He may lack patience with those less skilled.  He may be a poor communicator.  In other words, he may not be able to inspire and enable others to achieve their own excellence. 

It’s all about leadership. 

Paradoxically, true leadership, the kind that inspires and enables fast, Lean production, does not necessarily come from quick decisions.  It’s not about finding fast answers, it’s about finding the right answers.  And you can’t find the right answers without asking the right questions. 

And to ask the right questions, it may take some time to assess, analyze, and apprehend the meaning of a given situation.  It takes trying, perhaps failing, and learning from that.

Lean Management means being free to fail?  What?  Wouldn’t that be wasteful?  Who wants to be wrong — and be seen to be wrong?  Don’t we all know someone (or know of someone) who has been fired for screwing up?  And now we’re supposed to believe that world-beating management should be given permission to fail?     

It may seem counterintuitive, but then didn’t the banishment of inventory stockpiles seem counterintuitive at first too?  How could a system that lacked the “padding” of a safety margin actually be more robust?  Yet that is the essence of Lean Manufacturing — and it has proven its worth. 

Lean Management will prove its worth too. 
 
You’re not allowed to learn from your failures because you’re not allowed to fail?  That just means you’re not allowed to be caught failing; no one is perfect.  Another way of saying that is, “Sending only good news upstairs.”  This is SOP in, well, just about any company you can think of.  Yet this is a recipe for destroying the morale of your best workers, and giving your competition a chance to blindside you — and both of these contribute to driving your customers elsewhere. 

The proper role of true leadership — Lean Management — is to find and expose your company’s problems, before your competition can exploit them to your detriment.  To ask the right questions.  To learn from failure.  To find an answer that you’re sure is the right one — not just the fastest one.  When you can do that — then you’ll know you’re a leader.  And your company will be one too.

Welcome back to Lean Six Sigma Source! Thanks for your continued support.

Continue Reading

Lean Office: The Next Frontier

Posted on26. Apr, 2009 by carolesf.

Okay, you get the whole Lean Manufacturing thing.  But what the heck is Lean Office? 

The Lean Office Concept

Lean Manufacturing is starting to make sense to you.  Though a part of you really wants to hang onto that safety margin of inventory “just in case,” your data-driven brain accepts that Inventory Equals Waste.  Fine.  You understand the value of Lean Thinking as it relates directly to what you sell, even if that’s a service and not a widget.

But can you really apply Lean Thinking to your company’s administrative functions?  HR?  Accounts Payable?  IT? 

None of these departments are directly related to producing what your customers want to buy, yet it’s difficult to imagine how a modern company could operate without them.  It’s even more challenging to imagine how to observe, map, and quantify the value streams associated with them.  And changing these departments will be more difficult still, since these areas are even more strongly influenced by local company culture and “the human factor” than is the manufacturing environment.

So how does Lean Office work?  First of all, let’s be clear that Lean Office is not about cutting people or departments.  It’s about getting the most value out of the people and departments you have. 

The main idea is the same as in all Lean efforts:  Cutting out wasted effort or time. 

In the office environment, that could be the time files or other work items spend sitting around waiting for someone to work on them.  That’s the entire process of getting useless rubber-stamp signatures for some routine purchase.  It’s having a staff meeting on Wednesday mornings just because there’s always been a staff meeting on Wednesday mornings — even though half the time no agenda is prepared, the boss is late, and there aren’t even any doughnuts. 

Lean Office follows the same principles as Lean Manufacturing, but you may have to get a little creative to figure out what some of these terms mean in the office environment.

For instance, in an Accounts Payable office, the “customer” could actually be seen as the supplier who is waiting to be paid, the “product” is invoices, and the goal of “going Lean” would be to reduce the number of days an invoice goes unpaid. 

In an HR department, the “customers” are other departments internal to the company; the “product” is willing and qualified workers; and the metric for success of your Lean efforts might be to reduce the number of days an open position goes unfilled.

To succeed at Lean Office, you need to map the current process in terms of flow.  How does paper flow (or the equivalent in electronic forms)?   How does information flow, and is it the same as the paper flow or not?  (If not, think hard about the value of some of those forms.)  Map the value-add and non-value-add costs. 

Once again, the Lean principles are:

(1) Specify value — as the customer sees it, however the customer is defined for your function.

(2) Map the value stream, identifying value-add and non-value-add costs — and minimize the latter.

(3) Make the remaining process steps flow.  This usually means empowering the workforce, pushing down responsibility for a decision to the right level in the organization.

(4) Let the customer pull the desired product through the production process.  Don’t do work until someone has asked for it.

(5) And finally, don’t stop there.  Pursue perfection through continual improvement.  In other words, the job is never done.

Now look around your workspace.  Can you put your hands on any piece of information you need in under one minute?  Could somebody else walking into your office find the needed info in under one minute if you weren’t there?  

If not, then we apply the 5S process to HQ: Sort, Straighten, Sweep, Standardize, and Sustain.  The goal is, “A place for everything and everything in its place.”  

The fact is, if you’ve already achieved Lean production (whether of a service or a widget), there’s no need to let flabby practices in the office keep you from world domination.  You owe it to yourself to give Lean Office your best shot.

Continue Reading

Lean Thinking Generates Value — And Profits

Posted on24. Apr, 2009 by carolesf.

The Value of Lean Thinking

What does the “Lean” in “Lean Six Sigma” stand for? And what is “Lean Thinking”?

Both Lean and Six Sigma have their roots in manufacturing process improvement. Over the past decade or so, they have been integrated into a combined approach that has been applied to the full range of business processes, not just manufacturing.

The term “Lean” originated in “Lean manufacturing.” This is a manufacturing method which was famously pioneered by Toyota, as documented in the 1990 book “The Machine That Changed the World” by James Womack, Daniel Jones, and Daniel Roos. Womack and Jones later released another influential book titled “Lean Thinking” (1996) which sets forth the basic principles of the lean model of business.

The core concepts of Lean could be summed up as: (1) Add nothing but value. (2) Value is in the eyes of the customer. (3) Therefore, the enterprise should be oriented along lines that enable the customer’s needs to “pull” raw materials, services, and information along the most-efficient, least-wasteful path or “flow.” At the end of this flow, the customer has received the product or service he or she wanted.

Clear enough, but what does a Lean Thinking company look like in practice? And can it work in a non-manufacturing firm?

In the simplest terms, a Lean organization has a short order-to-delivery cycle. The shorter the cycle, the leaner the company.

It doesn’t really matter what the customer is ordering. It could be rapid transportation to a distant city (airline tickets). It could be showerheads (Home Depot). It could be the opportunity to buy or sell something at the best possible price (eBay). A sense of connectedness to friends and family (Twitter). In all cases, the customer wants to obtain something that he or she values, and some organization is trying to deliver whatever that something is.

What adds value to the order-to-delivery cycle? The activities of receiving the order, preparing the product or service to fulfill the order, and delivering the order.

What does not add value? In other words, what would customers not be willing to pay for, if they knew it was going on behind the scenes? How about stockpiling raw materials to enable the company to produce someone else’s order (inventory)? How about not having enough capacity to fulfill the customer’s order right away (backlog)? (A non-manufacturing example of this: Overbooking an airline flight.) How about an order entered incorrectly? Or a lost shipment? What if a particular webmail service kept crashing your web browser whenever you tried to check your email?

Lean Thinking is a mindset that doesn’t so much seek to avoid wasteful mistakes in a step as to eliminate a wasteful step entirely.

For example, if an order is entered incorrectly, the Lean approach would ask, “Do we need to do order-entry at all?” Maybe if the customer orders on-line, then we automate the order-entry process and eliminate that wasteful step in the process. On the other hand, maybe your particular customers want to “be taken care of” and would resent an expectation that they “do it themselves.” If that is the case, then, yes, we must continue to do order-entry and moreover, it should provide a personal touch to these customers. This is why understanding the customer’s wants and needs is so central to designing Lean processes. One customer’s trash is another one’s treasure — and you need to know which customer you’re dealing with.

In embracing Lean Thinking, a company is dedicated to discovering what their customers want, and providing it to them in a way that adds nothing but value — that the customers will pay for. By doing so, the company will create value (profits) for itself as well.

Continue Reading

Reduce Cycle Time in Your Process Map with Concurrent Activites

Posted on07. Jan, 2009 by Monique.

Yesterday, I was traveling on the highway, listening to my favorite CD when I made an observation.  I took note of the tractor trailers on the road and noticed the majority had tractors with single trailers.  Interestingly, the UPS and FedEx tractors had double trailers.  I thought to myself, “Why are UPS and FedEx using double trailers?” 

I had to put on my Lean Six Sigma goggles and observe that this was a deliberate business strategy.  I thought about a single large trailer sitting at the  dock with one crew of people to load items.  Imagine how much time that would take.  Now, picture the scenario where you have two crews on two separate dock doors loading the smaller trailers.  If loading a trailer is my process, I have tapped into the opportunity to reduce my overall cycle time by implementing concurrent process steps.  Concurrent engineering or process mapping is not a new concept to Lean Six Sigma practitioners, but I think it is often overlooked.  When reviewing the As-Is process map, it’s natural and expected to immediately focus on the non-value added steps, such as delays and loop backs.  Cutting non-value added steps will ultimately reduce your cycle time, but it is also important to take advantage of opportunities to turn sequential steps, into simultaneous process steps. 

The pit crew model is often implemented for setup reduction projects in manufacturing facilities and operating rooms.  This team divides the work and helps prepare the tools, die, equipment, or surgical instruments for the next job, while the current job is in process.  The pit crew is a wonderful application of implementing a process with concurrent activities to overlap setup and processing time.   Cut your cycle time by multi-tasking.

Continue Reading

Voice of the Customer: Do you have super Sonic hearing?

Posted on01. Jan, 2009 by Monique.

The Voice of the Customer is the primary reason for engaging in continuous improvement efforts. Happy customers are critical to long term growth and profitability.  As Lean Six Sigma practitioners we must always make sure the Voice of the Customer (VOC) remains paramount in the evaluation of existing processes and the design of new processes.  Challenge yourself to listen to the customer.  Does the customer have any frequently asked questions or challenges?  What can be done to improve the customer’s experience?

During my last visit to Sonic America’s Drive-In, I noticed some really great things about the new menu design.

Healthy Meal Selections

As a parent of a pre-schooler, I really appreciated the new side options for the kid’s meal.  The kid’s meal now includes a choice of a fresh banana, string cheese, or milk.  Fresh fruit and dairy sides for kid’s meal is a trend that has been adopted by other fast food restaurants such as MacDonald’s, Wendy’s, and Subway.   This new menu selection will enable Sonic to compete with other chains that market to health conscious parents.  In addition, Sonic now offers fresh bananas on the Dollar Menu for customers who may want a quick snack with a beverage.

Happy Hour Drink Specials

During my visits to Sonic’s happy hour, I have often asked myself, “Which drinks are half-price?”  In response to a frequently asked question, Sonic has an answer in it’s new menu layout.  Beside each happy hour drink there is an icon on a clock.  The icon represents that this is a happy hour drink.  I no longer have to ask or wonder.  This is a great example of how we can use lean and visual displays to improve customer experience. 

Placement of the Treat Menu 

The treat menu is now located above the main menu on the driver’s side.  The treat menu used to be on the bottom right-hand side with a darker blue background.  Now, it has a lighter blue background and is easier to see than the passenger side menu board.   I used to have a difficult time seeing the passenger side menu when I was sitting in the driver’s seat.  This simple placement change is most likely the result of visual display research with the goal of drawing attention to the meal options because the meal options take up most of the menu board.

So, are you listening? 

The changes implemented on Sonic’s new menu are responses to customer frequently asked questions and business metrics.  I can’t help, but recognize how much putting bananas on the dollar menu will help Sonic reduce costs related to perishable good storage.  From a business prospective, people feel good about making healthy food choices and it would not hurt to reduce your perishable good waste.  The more people that order bananas as a side that’s fewer bananas to trash because they go bad.  It’s a win-win for the customer and Sonic.  So the next time, you go to Sonic think about all the hard work and effort Lean Six Sigma practitioners make to keep customers happy and want to come back.  It’s simple, listen to the voice of the customer.

Continue Reading

Generate multiple Pareto charts – It’s EASY with SigmaXL!

Posted on30. Dec, 2008 by Monique.

Why use the Advanced Pareto chart function?

To help prioritize your efforts to reduce/eliminate defects. The Pareto principle indicates that approximately 80% of process defects are caused by 20% of the problems. Separate the vital few from the useful many.   The SigmaXL function helps draw comparisons between similiar categories.

Used in DMAIC Phase(s). . . .

• Measure
• Analyze

Type of Measure

• Input
• Process
• Output

Type of Data

• Discrete

To learn more about Six Sigma certification or to view a course demo, visit the Six Sigma Training page.

Continue Reading

How to Create a Basic Pareto chart using SigmaXL

Posted on30. Dec, 2008 by Monique.

Why use a Pareto chart?

To help prioritize your efforts to reduce/eliminate defects.  The Pareto principle indicates that approximately 80% of process defects are caused by 20% of the problems.  Separate the vital few from the useful many.

Used in DMAIC Phase(s). . . .

• Measure
• Analyze

Type of Measure

• Input
• Process
• Output

Type of Data

• Discrete

To learn more about Six Sigma certification or to view a course demo, visit the Six Sigma Training page.

Continue Reading

What is Lean Six Sigma?

Posted on25. Dec, 2008 by Monique.

Lean Six Sigma is the merger of two methods that aim to improve and maintain customer satisfaction. 

Lean is a system that uses visual tools and data to identify waste in a process.  Lean projects are often called kaizen (continuous improvement) events.  Any process has steps in it that either add value or do not add value from the customer’s prospective.  So you have to follow the money and think, “Is the customer willing to pay for this?”  If not, then we can call that waste.  We want to make what the customer wants using the fewest number of resources and effort to increase the profit on the product or service.  The acronym commonly used to put waste into categories is TOM-D-WIP.

• Transportation

Imagine. . . Ordering a Big Mac, the sandwich is prepared,  the cashier takes the sandwich and runs outside around the MacDonald’s parking lot twice before handing you your burger.  Are you willing to pay for that?  NO!

• Overproduction

Imagine. . . Gas prices are through the roof, consumers are desperate to find ways to reduce their fuel consumption, the demand for SUVs has dropped dramatically, but an auto manufacturer continues to build SUVs. . . ”Just In Case”.    Alternative:  Make items when needed

• Motion

This mainly refers to ergonomics.  Design work processes to use a minimal amount  of energy to complete the task.  This can apply to designs for humans and animals.

• Defects

Anything that is not supposed to happen in the process.  Imagine. . .You go to the video store to rent “Dark Knight” and you get home and find a Beyonce CD inside the case.  That’s a defect!

• Waiting

Nothing is happening in the process.  Are you willing to pay for that? NO!

• Inventory

Imagine. . .An inbox full of service requests to be processed or the number of 2- liter bottles of Coke on the shelves at Wal-Mart.  Inventory ties up cash for storage space and prohibits process flow.

• overProcessing

Doing more processing than the customer requires.  Example: Overcooking a rare steak or duplicate process steps

Six Sigma is a method of using math to determine how much variation is in your process.  Variation is considered a waste that the customer is not willing to pay for.  You want to provide a product or service as consistently as possible.  Six Sigma projects can be broken broken down into distinct phases called the DMAIC (duh-may-ic) process.  DMAIC is normally used for existing processes and DMADV is for DFSS (Design for Six Sigma) projects that are creating a new process, product or service.  DMADV stands for Define, Measure, Analyze, Design, Verify.

Define – What is the problem? Why is this important?  Who will be involved in the project? When will the project start and end?

Measure – What is the current process? Collect data to describe the process.

Analyze – What is the real source of the problem?  Use data to identify root causes.

Improve – How can we make the process better? Use data to prioritize solutions with immediate results.

Control – How can we prevent the problems from re-occuring or detect the undesirable changes in the process sooner? 

The six sigma method uses an wide number of tools for each phase, but the important thing to realize is that this is cycle of steps that you follow every time. 

Lean and Six Sigma go hand in hand because variation is a waste that should be eliminated in a process.  Six Sigma helps you close the loop to keep the process in control by continuous monitoring of the process after the proposed changes are implemented.   Lean Six Sigma is the bridging of two very powerful methods to improve customer satisfaction and design processes that result in long term growth and profitability.   I also feel that that tools are relevant to ANY process, so you will see more examples of what I mean on later posts.

Continue Reading