Getting real before the chips are down!

Many companies set out on their own Lean journey only to find they are up to their necks in stuff. Why is this? It is because most companies are totally unprepared for their Lean journey. In fact, research suggests that over 90% of companies who embark on a Lean journey will fail within two years. This is an astounding number!

Most companies don't think about implementing Lean principles until it's too late. The business has taken a turn for the worst and things are looking pretty bad. I call this scenario the "Oh Crap Factor."  How can a company in this state begin to stack the deck in their favor?

They can start by using the 5P's. Prior Preparation Prevents Poor Performance! To prepare, a business must clearly define its purpose for implementing a Lean program. Next, it must determine the outcome it is trying to achieve, this could be to increase market share, improve profits, save jobs, etc. It must be able to define a measurement of success or a Key Performance Indicator (KPI). How will it define success? This is very important, without this the business will not know if it is on the correct course or not.

Training its employees to understand the Lean tools is another important part of preparation. I would suggest using an online training program such as Lean Certification Online. This will allow employees to receive their training during non-production hours.

Applying Lean Principles in a Business!

I get lots of comments about applying Lean principles in a business when the economy is down and troubled. I say "Listen up people! Nothing is easy at any time but now is the time to suck it up and make your business as effective as it can be at delivery products to your customers on-time, every time."

To many business owners are focused on what is not happening in Washington DC to turn the economy around rather than trying to get their businesses prepared for when things do change. I can only give this piece of advice "Stop looking over their for solutions, they are not coming from that direction, start looking at your own business today!" Try to improve your processes by teaching your employees about how to use and  implement Lean principles. Empower your employees to come to work and turn on their creativity. Allow the to finds simple ways to work smarter and not harder. The myth is that everyone will get out of trouble by working harder. Not true! People have to work smarter and only then will the magic happen in every business.

Doing business in a down economy

It seems like you can't get away from the news about the state of our economy these days. It's amazing how everyone has a different opinion about how to get out of it. I do know one thing and it's happens to be true! Of all the companies suffering at the moment, the ones that are suffering the least are those companies that adopted lean manufacturing principles into their business model over the past several years. Just look at the severe state of GM and Chrysler compared to Toyota, Honda and Nissan to name a few. It's really a sad comparison when you base it on their ability to create a quality car at a fair market price. The American Automobile Industry has been heading over the cliff for several years with no one telling them to pull back or re-evaluate their business goals and objectives to re-calibrate their organization.
What ever happened to their strategic planning? Did they have one? I'm not really sure if anyone understands the words "Hoshin Kanri" in Detroit these days.
I continue to wonder if they understand the key reason for their failure, in that it was a lack of flexibility in their business model to meet the changing demands of the market. The ratio of big gas guzzling vehicles to small economical cars was totally out of whack. It's highlighted a major problem with getting their "products to market" timeline, starting from research and development to get a new design of vehicle off the drawing board onto the production lines and out to the dealerships.
I hope GM and Chrysler make it because so many peoples jobs and our economy are dependant upon a competitive and viable American Automotive Industry. Only time will tell and in the twilight of history I hope the lessons learned will echo in every business sector.

Step 2 - Value Stream Mapping.

In Step 1 we defined and prioritized specific focus areas to give major breakthrough using a road map. In Step 2, we start to change and improve each of these areas identified along the route. It’s necessary to ask more questions.

• How can we change this area?
• Which activity do we improve first?
• What resources do we need?

Until you can answer these three questions, you can’t be sure you’re improving things to deliver the best results. Many organizations use a shot gun approach when deciding what to improve first. They don’t back up their decision making with data, instead they use opinion. When you’re taking employees away from their jobs to be involved in an improvement project, it’s very important to know their time is value added and not being wasted. The process we use to identify and prioritize any opportunities for improvement is “Value Stream Mapping”. It’s a process for demonstrating graphically how materials, products and information flow between suppliers, through your business operations and your customers.

Value Stream Mapping allows you to view an organization from several vantage points. It’s like looking down at the business from high up i.e. 10,000 feet. As look down at the structures, you notice some problems areas, so you move down to 5,000 feet to get a closer look. Then you move down to 1,000 feet, and so on. As you drop down lower you lose the big picture view but see a smaller part of the organization and in more detail.

1. Choose processes identified and prioritized in the Strategy Deployment Plan. Start by drawing a high level map of your company processes. Show the main departments and their activities. Try to define as many value and non-value activities with supporting data as possible. Identify any constraints throughout the process and prioritize them based on the level of impact to achieve breakthrough.
2. Draw a Current State Map of the process showing details of all value and non-value added activities. Collect process data to show inputs and outputs for each step of the operation. Typical types of data collected are; number of people, process quality, production throughput, inventory levels, and equipment uptime.
3. Using the 8 wastes as a guide, identify all non-value added activities. List all of the potential opportunities for improvement and prioritize them based on cost to implement, impact to the bottom line and the level of effort required to implement them. Start with the easy changes first, then slowly work up to the more difficult ones as you gain more experience. Next, you will convert your Current State Map into a Future State Map by making all the changes necessary to improve the process.
4. Create a Value Stream implementation plan. Determine the specific actions required to implement any of these improvements and determine who is responsible for each of these actions and the date they will be completed.

Remember, Value Stream Mapping is a journey of discovery, it is never ending. You must be open to change and willing to remain objective when uncovering the hidden waste as you work through this process.
"A good traveler has no fixed plans and is not intent on arriving. A journey of a thousand miles must begin with a single step." - Lao Tzu

Step 1 - Strategy Deployment:

An explanation of Strategy Deployment is to think of your company as being on a journey toward a specific destination. When its founders created the company they had a certain vision in mind. Their vision defined how the company would be organized, who would manage it, what type of customers it would serve and where they would take the business in the future. Hopefully it’s heading in the same direction they wanted it to go. Strategy Deployment helps to define the destination and how to get there! We start the process by creating a road map to chart the journey, clearly identify any potential problems and define the best route for your business to reach its destination.

Everyone in the organization needs to understand the task at hand and what’s expected of them. It’s of the utmost importance to have total alignment between all sectors of an organization. You will start the process by asking questions. Where does the company need to be in the next 3 to 5 years? Where does your company need to focus first to achieve major breakthrough? Answer these questions and you’ll discover a pot of gold. Yes, that’s right, gold, and its hidden away deep inside your business processes. I know what question you’re asking at this point. How can I know this for sure? Well, because I have experienced it many times. It’s really simple, if your business paradigm had allowed you to see the amount of money that’s wasted by maintaining non-value activities hidden inside your business model, you would have removed them long ago. You need to breakthrough your current business paradigm and create a new one that embraces positive change.

Strategy Deployment is a great tool to help you create and manage change by strategically aligning your Continuous Process Improvement process with your business goals and objectives. By doing this you give a clear message, purpose and create leverage for all levels of management to get fully engaged in the change process. If a CPI implementation is not aligned with business goals and objectives it will be very difficult to sustain it.

Leadership has five obligations to manage effectively:

1. To clearly define goals and expectations to all employees.
2. To make available the necessary resources for everyone to do their job. People can only become successful at work, when they are given the best training, right equipment, and are allocated the correct amount of time to perform a task, etc.
3. To remove barriers, allowing employees to stay focused on the task at hand. It’s not value added for employees to get embroiled in political or personal agendas which forces them to take time away from their job or involvement in the improvement process.
4. To create and maintain a system for tracking and trending critical process data.
5. To create a system for reporting Key Performance Metrics (KPM’s) to give feedback to all employees.

If any one of these five obligations is not followed, then Strategy Deployment or Lean Implementation will be a much more difficult process.
Strategy Deployment utilizes the Deming or PDCA Cycle ( Plan. Do, Check, Act). This is very helpful to ensure all necessary aspects have been incorporated into the Strategy Deployment process. The model itself is a relatively simple concept; however it’s much more difficult in its application:

Plan: Identify focus areas, prioritize improvements, create an implementation plan
Do: Implement the plan. Follow the requirements of the plan.
Check: Gather feedback/data from the process to determine if the plan is working.
Act: Plan not working. Identify corrective action and change the plan.

The cycle is repeated over and over to improve, standardize and sustain a process.

“If you don’t know where you’re going, any road will take you there.” – Lewis Carroll, Alice in Wonderland.

Lean Enterprise! What’s it all about?

Is your company meeting the demands of customers while increasing market share and profits?
It’s amazing how many companies actually gloss over the obvious. Many businesses are moving through each day, dealing with one crisis after the next. They’ve become addicted to using fire fighting techniques to maintain the status quo, Anyone who can consistently step up to put out the fire to save the day is declared a hero. However, the same problems still occur day after day.

How many companies are willing to admit they're failing to meet customer expectations? I’ve not found many who will say it outright during my years of experience. Most are happy to live in absolute denial and oblivious to the facts until they hit that "pain point of realization". Many companies are facing the most crucial challenge to their very survival. Business and manufacturing technologies of the 20th century are no longer capable of meeting the challenges of the 21st century. Customers are now demanding more from their suppliers. There are many more choices available when deciding if a company is capable of meeting their supply needs.

Many organizations still hold fast to the belief that if they just work harder, they can improve things. This belief is not true. Hard work alone will not cut it in today’s global economy. Only when an organization starts to energize its employees, by unleashing their creativity to work smarter will they start to see massive change. Companies, who continue to focus their most valuable resource on survival tactics, by forcing them to work harder, will lose them faster.

Finding solutions to challenges requires a business to find answers to these key questions:

• What is the core skills capability within your company that sets it apart from others in your field?
• How can you best utilize these core skills to focus your business processes?
• How does a company grow in a highly volatile world market and still meet customer demand?
• How do you deliver a product or service faster and still maintain an acceptable level of quality?
• How do you reduce excessive inventory levels and continue to maintain customer satisfaction?
• How do you reduce operating costs, allowing you to become more competitive?
  

There is a simple solution to address all of the above questions and it can put your business way ahead of the competition: Become a Lean Enterprise by implementing and integrating lean techniques into your business model. It does not matter if you’re a manufacturing or non-manufacturing company. Anyone can use lean techniques to improve their business processes.Lean is a journey. Enjoy the trip.

Chris Turner

Lean Enterprise in 10 Easy Steps

The way to successfully implement some thing is to break it down into smaller chunks of activity. In doing this the brain can come to terms with what is being asked of it and how it all fits together. Implementing Lean principles falls under the same process. It's to big for most people to get their heads around, so I break it down into easily understood steps. Here are the 10 implementation steps to become a Lean Enterprise.

Step 1 - Strategy Deployment.
Step 2 - Value Stream Mapping.
Step 3 - Workplace Organization.
Step 4 - Process Flow.
Step 5 - Quick Changeover.
Step 6 - Pull System.
Step 7 - Balanced Workload.
Step 8 - Standard Work
Step 9 - Continuous Improvement.
Step 10 - Extend Lean into Supply Chain.

Over the coming weeks I will be going into more detail with each step. Enjoy the blog. Don't forget to visit our website...click here