Author: Mark

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Audits vs. Leader Standard Work

5S audits, standard work audits, and for that matter ISO-900x audits, are a frequent source of questions in various online discussion forums. At the same time, the topic of “leader standard work” comes up frequently, as it did in a recent question / comment on “Walking the Gemba.”

I think the topic is worth exploring a bit.

Let’s start with audits.

Typically the purpose of an audit is to check compliance with a standard. The auditor has a checklist of some kind that defines various levels of compliance. He evaluates the current situation against the checklist, and produces a score, a report of discrepancies, a pass/fail evaluation of some kind.

So, for example, a typical 5S audit would assign various criteria in each of the 5 ‘S’ words, and assign a 1-5 scale against each of them. Periodically, the person responsible for 5S will come into the work area, do an audit, and post the score. Often there is a campaign to “get to level 3” or something.

Although there are fewer boilerplate checklists out there, “standard work audits” tend to be pretty similar, at least the ones I have seen.

Further up the scale is something like an ISO 900x audit, or an “Class-A MRP II” audit or a corporate “lean assessment.” These are often done by outside agencies to certify the organization. There is a lot of work up front to pass the audit, a plaque goes on the wall, and everybody is happy.

So what’s the problem? (this is turning into one of my favorite questions)

The key is in the difference between a “check” and a “countermeasure.”

A countermeasure is a change or adjustment to the system itself so that the root cause of a problem, or at least its effect, is eliminated.

Audits, on the other hand, actually change nothing about the underlying system. All they do is assess the current state against some (presumed) standard.

Yet so many organizations try to use “audits” as a means to alter the system.

What an audit is good for (if it is planned and performed well – a big assumption) is to CHECK to see if the other things you are doing are working. But, by itself, it is “management by measurement.” People will do what they must to pass an audit (if it even matters that much to them), then go back to what they were doing before.

Leader Standard Work operates at a much lower level of granularity, and looks for different things. Think of the analogy in a previous post about cost accounting:

When dieting, standard cost accounting would advise you to weigh yourself once a week to see if you’re losing weight. Lean accounting would measure your calorie intake and your exercise and then attempt to adjust them until you achieve the desired outcome.

So, to paraphrase, audits are weighing yourself once a week (or once a quarter!) to see if you are losing weight. Leader standard work, on the other hand, is a process to continuously verify that the calorie intake is as specified, and the exercise is as specified, while those things are being done.

That, in turn, implies that there is a daily plan for calorie intake, and a daily plan for exercise. Without those specifications, there is nothing to check.

Leader standard work defines what the leader will check, when it will be checked, and how it will be checked. It also defines how the leader will respond if there is a problem.

He is looking for solid evidence of control.

Are things going as planned?

Is anything disrupting the work cycles or flow of material?

Are quality checks being made as specified?

And, in my opinion, the most important: Are problems being handled correctly, or worked around?

This is important because a culture of working around problems is one in which problems are routinely hidden, often without malice and with the best of intentions. But hidden problems remain, come up again tomorrow, and become part of the routine, adding a little waste, a little friction, making the system a little worse every day.

The typical effort to “pass an audit” reinforces this – it actually hides problems, and the auditor’s job is to ferret them out. This is the exact opposite of the kind of problem transparency we need.

It is human nature to work around problems, and it is the default behavior, everywhere. It takes constant leader vigilance, coaching, response to prevent it.

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Learn how to Learn

John Shook’s latest column on lean.org is titled “Was NUMMI a Success?” He adds some interesting thought to the mix of the ongoing post-mortem on GM and NUMMI.

John argues (successfully, I think) that Toyota’s objectives for NUMMI were to learn how to take their system outside of the safe cocoon of Toyota City in Japan; and that GM’s objectives, aside from getting an idle plant going again, were to learn how to make small cars profitibly, and learn Toyota’s system.

So both companies were in the game to learn.

But Toyota had a huge advantage.

And if there’s one thing Toyota knows how to do it is how to learn, especially where it’s important down at the operational levels of the company – a characteristic that is the embodiment of the learning organization. Toyota’s biggest strength is that it [had] learned how to learn, and it was that approach to learning that defined its approach to NUMMI from day one.

Just as strong as Toyota’s advantage here, was GM’s deficit. While they clearly learned about the system, and indeed implemented pieces of it in new plants, there is no objective evidence that GM ever really “got” that this is much more than an industrial engineering model.

It is a model about continuously challenging your understanding and beliefs.

We start teaching it deep down in the process, “Why did the machine stop?” but the intent is for this thinking to find its way to the very top and learn how to ask “Why are sales 12% under projection this month?”

Toyota has learned some hard lessons about what they did not understand in the last year. I only hope we will be able to say the same about our public gamble on GM’s learning.

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If you want to go faster, stop.

Mark’s post on The Whiteboard tells a pretty common story. The good news is that this company has more business than they can handle. Pretty good results in these times. The bad news is that they are having problems ramping up production to meet the demand. In Mark’s words:

I’m working for a company that is very, very busy. They developed a new process that is the first of it’s kind and have taken the market share away from their competition. But they have not spent enough time making the process robust enough to handle the increase demand and the scrap costs are going out of the roof. Currently about 65K a day. Any suggestions? Our number 1 scrap producer is a machine that can not perform at the same capability as when Engineering did their run off…

At the risk of coming across as flip, the very first thing to do if a machine starts producing scrap material is to shut it down.  It is better to make nothing because that is a cheaper alternative than making stuff you can’t use.

However, it goes deeper than that.

Engineering had done a “run off” (which I presume was a test on theoretical speeds). Now actual performance isn’t meeting expectation. This is a problem.

But let’s rewind a bit and talk about how to manage a production ramp-up. Hopefully it is a problem more people will be having as the economy begins to recover.

Although this is in the context of the machine, exactly the same principles apply to any type of production. Only the context and the constraint changes.

Presumably there was some speed for this machine where it didn’t produce scrap, or the scrap was minimal. Going back to that time, here is what should have happened.

Promise production at the rate the machine is known to support.

Now crank up the speed a bit and see what happens. In the best case, you are overproducing a bit, but you are learning what the machine is actually capable of doing.

Crank it up a little more. Oops, scrap.

STOP!

Because you have been running a little faster than required, you have bought a little time. Understand why that scrap happened. Try to replicate it. Dig into the problem solving. Try to replicate the problem under controlled conditions. LEARN.

Hopefully you can find the cause and fix it.

Try it. Run the machine again, at the faster speed. Scrap? Back around to the “problem solving” cycle. Repeat until you can reliably run at the faster speed without scrap.

Then, and only then, promise the higher rate, because now you can reliably deliver it.

Then notch it up a bit until you encounter the next problem.

This cycle of promising only what you can actually deliver protects the customer while you are pushing the envelop internally to discover the next problem.

The alternative? Make a promise knowing you actually have no clue whether or not you can meet it.

But that’s what they did. So now they are burning a lot of money every day making scrap material.

The same principles apply, however. They are already not delivering what they promised. So throttle things back to the point where they can predict the results, and go from there. Pretending they can run faster than they can is not accomplishing anything other than burning money. Deal with facts, no matter how uncomfortable.

If you make a schedule based on what you wish you could do, you will have a schedule you wish you could meet.

No matter what, each time scrap is produced, the fact must be acknowledged. That allows the immediate response that is framed around a simple question:

“How the hell did this happen?”

Put another way, “What have we just learned about the limits of this process?”

It is only within that framework that you actually get any better. Anything else is relying on luck, and in this case at least, that didn’t work.

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The Lean Manager: Part 3 – People, Purpose, Problems, Process vs. “Systems”

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This is Part 3 of a multi-part review. Part 1 is here.

Before I get into it, I will break the rules of blogging and acknowledge a time gap here. I did finish the book shortly after I wrote part 2, in fact, I didn’t want to put it down. So now I am going back through and bringing out some key points, intermixed with some other stuff that has caught my interest lately. Anyway – back to what you came for…

Steve Spear has described the TPS as a “socio-technical system.” Put in less formidable terms, it is a system that uses the structure of the work, the work environment and the support systems (the technical part) to create an organizational culture of problem solving.

Jenkinson, Andy’s boss in the book, describes it:

“You need to organize a clear flow of problem solving, explained Jenkinson one more time. “Operators need to have a complete understanding of normal conditions, so that whenever there is a gap, they know it’s a problem. Go and see is not just for the top management, It’s for everybody. This means operators as well, in particular how they learn to see parts and see the equipment they use. How can all operators recognize they have a problem? [emphasis added]

The simple statement, and following question posed by Jenkinson sums up a great deal that is left out of lean implementations. I see it everywhere, and will be commenting on it more shortly.

We talk about “go and see” (or “genchi genbutsu“) as something leaders do. I think this is because traditional leaders aren’t naturally out in the work areas, on the shop floor, in the hangars, etc. We don’t think about the workers because they are there all of the time.

Yes, they are. But what do they see? Do they see disruptions and issues as things they are expected to somehow work around and deal with? Or do they see these things as something to call out, and fully participate in solving?

And if they do see a problem, what is the process for engaging it?

Just saying “you are empowered to fix the problem” does not make it so. When are they supposed to do it? Do they have the skills they need? How do you know? Is there a time-based process to escalate to another level if they get stuck? (Or do they just have to give up?)

And indeed, as the story in the book develops, Andy turns out to be taking a brute-force approach. He is directing staff to implement the tools and to solve problems. But in spite of nearly continuous admonitions from his boss and other experts, he is not checking how they are doing it. He has put a “get-r-done” operations manager into place, and while the guy is getting “results,” in the long haul it doesn’t work very well. Yes, they end making some improvements, but at the expense of alienating the work force.

It is only late in the story (and I won’t get into the details to avoid playing the spoiler to a pretty good plot twist) that Andy finally learns the importance of having a process that is deliberately designed to engage people.

Commentary – it is amazing to me just how much we (in the “lean community”) talk about engaging people, but never really work through the deliberate processes to do it. There are explicit processes for everything involving production, administration, etc. but somehow we expect “engaging people” to happen spontaneously just because we believe it is a good thing.

The message in this book is loud and clear. This is about leadership. The tools are important, yes, but only (in my opinion) because they are proven techniques that allow people to become engaged with the process.

But the tools alone do not require people to get engaged.

Permission to make input is necessary, but not sufficient. If you want people to be engaged, you have to deliberately engage them. Otherwise you are just asking them to become nameless cogs in “the system.”

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Clarity for the Customer

I have come to expect very little from most airlines, especially for the parts of the “service” that doesn’t involve actually sitting in the airplane. Still, some airlines make their policies more clear than others. Alaska Air, for example, is explicitly clear that I can hold a reservation for 24 hours and cancel with no penalty. They say so on the web site during the online booking process.

NWA (soon to be Delta), on the other hand, is somewhat less transparent. Thus, I had to call the “Elite Reservations” number, and talk to a human being to confirm the 24 hour cancellation policy. Of course I could have gotten this from their web site, I suppose. Maybe it is somewhere in here. Could this be any less clear if had been deliberately obfuscated? What purpose is served by serving up confusing information in the most difficult-as-possible to read format? How does this help their business? Or do they feel they have to trick their customers into buying the product?

I often wonder about things like this. Some companies just seem to get a thrill out of making it difficult for their customers to do business with them.

Penalties

CHANGES ANY TIME CHARGE USD 150.00 FOR REISSUE. NOTE – DOMESTIC TICKETS ARE VALID FOR ONE YEAR FROM DATE OF ORIGINAL PURCHASE. THE TICKET MUST BE EXCHANGED AND THE NEW ORIGINATION DATE MUST BE WITHIN ONE YEAR OF THE ORIGINAL PURCHASE DATE DESIGNATED ON THE ORIGINAL TICKET. . TICKETS MUST BE REISSUED WHEN ANY VOLUNTARY CHANGE IS MADE. THE NONREFUNDABLE VALUE SHOULD BE PLACED IN THE ENDORSEMENT BOX ON THE REISSUE TICKET . IF MULTIPLE CHANGES ARE MADE AT THE SAME TIME ONLY ONE CHANGE FEE WILL APPLY. IF FARES WITH DIFFERENT CHANGE FEES ARE COMBINED ON THE SAME TICKET THE HIGHEST FEE OF ALL THE CHANGED FARE COMPONENTS WILL APPLY. . GDPR – GUARANTEED DAY OF PURCHASE RULE DECREASE IN FARE AFTER TICKET PURCHASE. . IF A DECREASE OCCURS AFTER A TICKET IS PURCHASED AND PRIOR TO ANY TRAVEL ON THE TICKET OR A NEW FARE FOR WHICH THE PASSENGER QUALIFIES BECOMES EFFECTIVE THE DIFFERENCE IN FARE MAY BE CREDITED. FOR COMPLETE DETAILS SEE PARAGRAPH VI BELOW. . I. PRIOR TO DEPARTURE A. CHANGES TO DEPARTING FLIGHT ARE PERMITTED FOR APPLICABLE CHANGE FEE PROVIDED THE CHANGE IS MADE TO THE SAME ORIGIN/DESTINATION AND SAME TICKETED TRAVEL DATE AND SAME BOOKING CLASS. . B. CHANGES TO DEPARTING FLIGHT INVOLVING A CHANGE TO ORIGIN/DESTINATION OR DIFFERENT TICKETED TRAVEL DATE OR BOOKING CLASS ARE NOT PERMITTED. SEE CANCELLATIONS . II. PRIOR TO DEPARTURE – CHANGES TO CONTINUING/ RETURN FLIGHTS WHEN THERE IS NO CHANGE TO ORIGIN/DESTINATION OR STOPOVERS. . A. CONTINUING/RETURN FLIGHTS MAY BE CHANGED TO A LATER DATE FOR THE CHANGE FEE WITHOUT REGARD TO THE ADVANCE RSVN REQUIREMENTS PROVIDED THE CHANGE MEETS ALL OTHER FARE RULES. . CONTINUING/RETURN FLIGHTS MAY BE CHANGED TO AN EARLIER DATE FOR THE CHANGE FEE PROVIDED THE CHANGE MEETS ALL FARE RULES. THE ORIGINAL TICKET ISSUE DATE MAY BE USED TO MEASURE THE ADVANCE PURCHASE REQUIREMENT. . B. IF A CHANGE IS MADE TO A BLACKOUT DATE OR THE CHANGE VIOLATES THE DAY/ROUTING/ FLIGHT /SEASONALITY/TRAVEL DATES OR BOOKING CODE REQUIREMENTS TRY THE FOLLOWING OPTIONS . B.1 RE-PRICE THE CONTINUING/RETURN PORTION WITH FARES IN EFFECT ON THE DATE THE ORIGINAL TICKET WAS ISSUED. ANY DIFFERENCE IN FARES PLUS THE APPLICABLE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE NO RESIDUAL VALUE APPLIES AND THE FULL CHANGE FEE SHOULD BE COLLECTED. . B.2 THE ENTIRE TICKET SHOULD ALSO BE REPRICED WITH CURRENT FARES. ANY DIFFERENCE IN FARES PLUS THE CHANGE FEE SHOULD BE COLLECTED. IF THE TICKET PRICE IS LOWER WITH CURRENT FARES THE DIFFERENCE IN FARES LESS THE CHANGE FEE MAY BE CREDITED TO THE PASSENGER IN THE FORM OF A NONREFUNDABLE MCO. THE MCO MUST BE EXCHANGED WITHIN ONE YEAR OF THE MCO ISSUE DATE. . B.3 IF THE RESULTS OF B.1 – B.2 ABOVE RESULT IN MULTIPLE PRICING SOLUTIONS THE LOWEST SOLUTION WOULD APPLY. . III. PRIOR TO DEPARTURE – CHANGES TO CONTINUING/ RETURN FLIGHTS WHEN THERE IS A CHANGE TO ORIGIN/DESTINATION OR STOPOVERS. . A. REPRICE THE CONTINUING/RETURN PORTION WITH A CURRENT FARE. ANY DIFFERENCE IN FARES PLUS THE APPLICABLE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE THE DIFFERENCE IN FARES LESS THE CHANGE FEE MAY BE RETURNED IN THE FORM OF A NONREFUNDABLE MCO. THE MCO MUST BE EXCHANGED WITHIN ONE YEAR OF THE MCO ISSUE DATE . B. THE ENTIRE TICKET SHOULD BE REPRICED WITH CURRENT FARES. ANY DIFFERENCE IN FARES PLUS THE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE THE DIFFERENCE IN FARES LESS THE CHANGE FEE MAY BE RETURNED IN THE FORM OF A NONREFUNDABLE MCO. THE MCO MUST BE EXCHANGED WITHIN ONE YEAR OF THE MCO ISSUE DATE. . IV. AFTER DEPARTURE – CHANGES TO CONTINUING/RETURN FLIGHT WHEN THERE IS NO CHANGE TO ORIGIN/ DESTINATION OR STOPOVERS. . A. CONTINUING/RETURN FLIGHTS MAY BE CHANGED TO A LATER DATE FOR THE CHANGE FEE WITHOUT REGARD TO THE ADVANCE RSVN REQUIREMENTS PROVIDED THE CHANGE MEETS ALL OTHER FARE RULES. . CONTINUING/RETURN FLIGHTS MAY BE CHANGED TO AN EARLIER DATE FOR THE CHANGE FEE PROVIDED THE CHANGE MEETS ALL FARE RULES. THE ORIGINAL TICKET ISSUE DATE MAY BE USED TO MEASURE THE ADVANCE PURCHASE REQUIREMENT. . B. IF A CHANGE IS MADE TO A BLACKOUT DATE OR THE NEW DATE VIOLATES THE DAY/TIME/ROUTING /TIME/FLIGHT/SEASONALITY/TRAVEL DATES OR BOOKING CODE REQUIREMENTS TRY THE FOLLOWING OPTIONS. . B.1 THE CONTINUING/RETURN PORTION SHOULD BE RE-PRICED WITH AN APPLICABLE FARE IN EFFECT ON THE DATE THE ORIGINAL TICKET WAS ISSUED. ANY DIFFERENCE IN FARES PLUS THE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE NO RESIDUAL VALUE WILL APPLY AND THE FULL CHANGE FEE SHOULD BE COLLECTED. . B.2 REPRICE THE CONTINUING/RETURN PORTION WITH A CURRENT FARE. ANY DIFFERENCE IN FARES PLUS THE APPLICABLE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE THE DIFFERENCE IN FARES LESS THE CHANGE FEE MAY BE RETURNED IN THE FORM OF A NONREFUNDABLE MCO. THE MCO MUST BE EXCHANGED FOR WITHIN ONE YEAR OF THE MCO ISSUE DATE. . B.3 IF THE RESULTS OF B.1 – B.2 ABOVE RESULT IN MULTIPLE PRICING SOLUTIONS THE LOWEST SOLUTION WOULD APPLY. . V. AFTER DEPARTURE – CHANGES TO CONTINUING/ RETURN FLIGHT WHEN THERE IS A CHANGE TO ORIGIN/DESTINATION OR STOPOVERS. . A. REPRICE THE CONTINUING/RETURN PORTION WITH A CURRENT FARE. ANY DIFFERENCE IN FARES PLUS THE APPLICABLE CHANGE FEE SHOULD BE COLLECTED. IF THE REPRICE RESULTS IN A LOWER FARE THE DIFFERENCE IN FARES LESS THE CHANGE FEE MAY BE RETURNED IN THE FORM OF A NONREFUNDABLE MCO. THE MCO MUST BE EXCHANGED WITHIN ONE YEAR OF THE MCO ISSUE DATE. . B. IF THE CHANGE IS TO A CO-TERMINAL THE DIFFERENCE BETWEEN THE APPLICABLE FARES MUST BE COLLECTED IN ADDITION TO THE CHANGE FEE. FOLLOW- THE POLICIES LAID OUT ABOVE ON HOW TO RECALCULATE THE DIFFERENCE IN FARES. . VI. GDPR – GUARANTEED DAY OF PURCHASE RULE . DOMESTIC PASSENGER TRANSPORTATION IS SUBJECT TO RULES/FARE/ROUTINGS AND CHARGES IN EFFECT ON THE DATE/TIME THE TICKET IS ISSUED/PTA PURCHASED UNLESS SPECIFIED IN THE FARE RULES. . DECREASE IN FARE AFTER PURCHASE . IF A DECREASE OCCURS AFTER A TICKET IS PURCHASED AND PRIOR TO TRAVEL ON THE TICKET OR A NEW FARE FOR WHICH THE PASSENGER QUALIFIES BECOMES EFFECTIVE THE DIFFERENCE IN FARES WILL BE CREDITED PROVIDED . 1. THERE ARE NO CHANGES TO ORIGIN/DESTINATION/ STOPOVER POINTS/FLIGHTS/DATES. . 2. ALL CONDITIONS OF THE NEW/REDUCED FARE MUST BE MET. THE ORIGINAL TICKET DATE OF ISSUE MAY NOT BE USED TO SATISFY THE ADVANCE RESERVATION/TICKETING REQUIREMENTS. THE BOOKING CODE OF THE NEW/REDUCED FARE MAY DIFFER FROM THE BOOKING CODE ON THE ORIGINAL TICKET. . . FOR TICKETS ISSUED ON/BEFORE 11NOV08 THE PASSENGER WILL RECEIVE A NONREFUNABLE MCO LESS A 50.00USD ADMINISTRATIVE SERVICE FEE. . FOR TICKETS ISSUED ON/AFTER 12NOV08 – THE PASSENGER WILL RECEIVE A NONREFUNDABLE MCO LESS A 150.00USD ADMINISTRATIVE SERVICE FEE . THE MCO CAN BE USED FOR FUTURE TRAVEL PURCHASE. THE MCO MUST BE EXCHANGED FOR A TICKET WITHIN ONE YEAR OF THE MCO ISSUE DATE. CANCELLATIONS TICKET IS NON-REFUNDABLE. NOTE – 1.CUSTOMERS FIRST POLICY. . 1. WHEN RESERVATIONS ARE MADE AND TICKETS ARE PURCHASED ON THE SAME DAY REFUNDS EQUIVALENT TO THE AMOUNT PAID WILL BE PERMITTED UP TO 1 DAY AFTER THE TICKET IS PURCHASED AT NO CHARGE. ANY CERTIFICATE OFFER WILL BE DEEMED USED AND WILL NOT BE REPLACED. 2. FARES ARE SUBJECT TO CHANGE AND NOT GUARANTEED UNTIL A TICKET IS PURCHASED. . B.WHOLLY UNUSED NONREFUNDABLE TICKET POLICY. . A WHOLLY UNUSED NONRFND TKT MAY BE APPLIED TOWARDS THE PURCHASE OF A NW/KL DOMESTIC/ INTERNATIONAL FARE/TICKET. -PROVIDED TRAVEL ON THE NEW TICKET ORIGINATES WITHIN 1 YEAR OF THE ORIGINAL PURCHASE DATE AND THE TICKET IS EXCHANGED NO LATER THEN 365 DAYS AFTER THE ORIGINAL TICKET ISSUE DATE. . -ANY NONREFUNDABLE VALUE IS CARRIED FOWARD IN ALL SUBSEQUENT REISSUES. THE NONREFUNDABLE VALUE SHOULD BE PLACED IN THE ENDORSEMENT BOX ON THE REISSUE TICKET. . -LIMIT OF ONE TKT MAY BE APPLIED TOWARDS A NEW TICKET. -APPLICABLE CHANGE FEE APPLIES. . C. TICKET VALIDITY AND CANCELLATION FEE . 1. TICKETS WILL BECOME INVALID/EXPIRED 366 DAYS AFTER THE DATE OF THE FIRST UNUSED COUPON AND MAY NOT BE USED OR EXCHANGED FOR TRANSPORTATION AFTER THAT TIME AND DATE. . 2. ONCE THE TICKET BECOMES INVALID – THE FARE AND RELATED TAXES AND FEES WILL BE REFUNDED. SIMULTANEOUSLY WITH THE REFUND NW WILL IMPOSE A CANCELLATION FEE EQUAL TO 100 PERCENT OF ALL AMOUNTS COLLECTED BY NW FOR ISSUANCE OF THE TICKET – INCLUDING – THE FARE AND APPLICABLE TAXES/FEES AND ANY OTHER CHARGES. – SEE GENERAL TARIFF RULE 105 – . D. EXCEPTION TO FEE COLLECTION. . IN THE EVENT OF THE DEATH OF THE PSGR A REFUND IS PERMITTED. THE CHANGE FEE WILL BE WAIVED.

This, of course, is the example of communications they let the customers actually see on their “award winning web site.” Therefore, I have to assume this is communication at its very best. I wonder what the pilots and crew have to deal with – and how much it distracts them from getting the job done safely and efficiently.

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The Lean Manager: Part 2 – The Basics

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This is Part 2 of a multi-part review. Part 1 is here.

In my review of Kaizen Express back in May, I took LEI to task for two things – First, I didn’t feel Kaizen Express contributed anything really new to the body of knowledge. I would have been satisfied if it had more clearly explained what had been said before, but it didn’t do that either. Second, and more importantly, I felt that Kaizen Express, and the LEI in general, were propagating the conception that the tools were what defined “lean” and that “the tools” were “the basics.” I disagreed on both points, and still do.

I am now about halfway through The Lean Manager, and I believe this book is addressing those issues – and hopefully challenging some of the thinking within the publishers. In other words, in its content, this book is everything that Kaizen Express isn’t. Get it. Read it. Do what it says, and you will actually be implementing the basics.

What makes this different? Instead of revolving around technical descriptions of the tools, this book clearly shows the proper relationship between the tools and the two most important aspects of what makes the Toyota Production System work:

  • Leaders (and how they lead and what they lead – and it isn’t implementing the tools)
  • People (yes, other books pay lip service by mentioning shop floor engagement, but The Lean Manager is all about shop floor engagement)

The authors start to hammer home the point in Chapter 2, Everybody, Every Day. In one of the many lecturettes they use to convey the key points via their characters, Amy, a corporate consultant, sums it up:

“Everybody, everyday solving problems, that’s the only answer to the Pareto dilemma. You’ve got to visualize two flows in the plant. One: the product flow[. . .].  Two: the problem flow to the person who finally solves the problem. [. . .] you shouldn’t funnel all problems to your key technical people. You should protect them to work on the really difficult issues. What you have to organize is the problem solving in the line!”

And with that, the rest of the story follows – this fictitious plant manager under fire in this fictitious company sets out to do that.

The subsequent chapters (so far – remember, I haven’t finished the book yet) are Go and See, which hammers home the importance of the leaders – all of the leaders being present, not just to witness problems, but to ensure they are being solved by the right people, in the right way. Further, they must break down any barriers which impede that flow. And it’s not just the leaders. Ultimately, the entire shop floor is organized so that everyone is immersed in genchi genbutsu every time a task is carried out or work is performed. This becomes the check in PDCA.

Chapter 3 is titled Managing is Improving and begins the confront the psychological and organizational aspects of the changes that are now coming to a head in the story. This part requires the most creativity on the part of the authors, as it is an entirely human process. Because it is a human process, not a technical one, it is impossible to write a technical manual on how to do it. It requires knowledgeable, dedicated leadership that is humble enough to stake out a position that might be wrong, knowing that doing so improves the chance of learning something.

And that has been the issue in our industry. It is far, far easier to describe the tools in excruciating detail than it is to confront the leadership and organizational change issues. And because the technical descriptions predominate the literature (including, and especially what has come out of LEI for the last 10+ years), it is far easier to believe that “implementing the tools” is something that leaders can delegate to specialized technical staff.

This book, so far, is (rightly) turning that thinking on its ear.

Continued at Part 3.

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The Lean Manager: Part 1 – Customers First

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I just started reading this book, and my initial feeling is that it is a winner. Rather than producing a batch review of the whole thing at the end, I thought I would employ “one chapter flow” and share my impressions with you as they are formed. As I write this, I honestly do not know where it is ultimately going.

I am excited about this book because it is challenging the decades-old paradigm of kaizen events run by specialists (while simultaneously trying to justify the change activity to the people who hired them in the first place). In its place is a leader who knows what he is doing, and appears to be starting to lead by asking tough questions.

Even with that initial endorsement, this book appears to be following the standard formula established by Eli Goldratt in The Goal.

  • Manager finds out factory is being closed. News is devastating to his personal life.
  • The Jonah character emerges and teaches him how to save the operation.
  • He applies what he learns and saves the day.

While there is nothing wrong with this structure, it is wearing a bit thin, at least to me. So I hope that the authors are going to find an interesting twist that surprises me. Still, because this is a novel with a point, vs. an attempt at classic literature, I’m not going to spend much time on the literary style.

The two main characters (so far) are Andrew Ward, the manager who finds out his plant is being closed, and Phil Jenkinson, the new CEO, with the double role of bringing the bad news (closing the plant) as well as filling the role of the Jonah (or sensei in this case, I suppose).

In the opening chapter, Jenkinson’s style is authoritative, bordering on confrontational. Without knowing the culture of this fictitious company, I can’t say whether his blunt, direct approach is from necessity or because he simply doesn’t have the skills to ask tough questions without pushing people back. I’ll hold judgment on that part. My hope is that the book doesn’t teach this approach as how it has to be done, because in my experience, it doesn’t have to work that way.

The message, though, is crystal clear. The old way isn’t cutting it. Leaders, not staff, are responsible for results (safety, quality, delivery, cost). Leaders are expected to know the hot spots in their operations. Leaders are expected to be involved in the details – not to micro manage, but to develop the capabilities of others. (That last one is a bit of an extrapolation on my part.) “Lean” is not a program, not projects run by a staff of specialists, it is how we will manage the company.

The notable quote from this chapter comes in a shop floor lecture given by Jenkensin and nicely sums up the relationship between process and results.

“Results… are the outcome of a process. What we want are good results from a controlled process because they will be repeatable. Bad results from an uncontrolled process simply mean that we’re not doing our job. Good results from an uncontrolled process…only mean we’re lucky. Today, bad results from a controlled process just says that we’re stupid: We expect different results from doing the same thing over again.”

Based on that, I sketched out this little matrix that captured my response and the key points.

process vs results

But the technical nuances aside, this story is clearly developing into one about leadership. The key issues, so far, are:

  • Safety, quality, delivery, cost, are line leaders’ responsiblity, with assistance from technical staff – who are also experts.
  • Though it is certainly a culture shock, the leader is teaching by asking questions.
  • The various character’s reaction to the confrontive authoritative style is predictable. I am uneasy, at this point, with that approach being held up as an example of the best way to get this done. But it is only Chapter 1.

GO TO PART 2

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First: Define Value

A couple of days ago, in “The First Steps of The Lean Journey,” I said that there really is no first step, only the next step from where ever you are right now.

I admit that I left out a big assumption there – that you know where you are trying to go.

More specifically, that you really know the value you create.

Bas Mathijsen has posed the question here on The Whiteboard, as well as in a post in the LEI Forums where asks (paraphrasing) “Who defines customer value?” and “What is customer value?”

Good questions, and we don’t spend enough time there.
I have seen a lot of “improvement” effort dissipated because there was no clear idea of what the process was supposed to actually deliver.

As obvious as it seems, customer value is defined by no one but the customer. The transaction need not be monetary, or even commercial. A volunteer for a non-profit organization gives up time (and possibly money) and gets something in exchange. Usually that is some level of emotional satisfaction. A nonprofit that needs to attract volunteers needs to be conscious of this.

Since it is subjective, different customers are going to define “value” in different ways. Dan Sullivan once put it really well with this analogy (paraphrasing):

My neighbor has a really nice lawn. When he buys a lawnmower, he is interested in features like evenly cutting, ease of starting, how well it manages the clippings. But maybe I am looking for different things in a lawnmower. Maybe I hate mowing the lawn. I might be looking for a lawnmower that cuts the grass just below the roots.

Clearly these customers define “value” in different ways.

The other factor to keep in mind is that this isn’t a black-and-white thing. The value the customer finds in your product or service can be enhanced or diminished by an almost infinite matrix of circumstances. These include the magnitude of the (customer’s) problem you are solving, the degree of emotional satisfaction that is gained from your product or service, how easy (or aggravating) your sales and customer support processes are, the customer’s perception of your quality and a host of other intangibles. All of these translate into what (if anything!) the customer is willing to part with to get your product or service. Indeed, we have all heard of things that couldn’t be given away, or that had negative value.

The only real way to know what the customer truly values is to be the customer. This great little piece by Dan Markovitz on Evolving Excellence clearly shows how not to do it. Read the article, then do the opposite.

So, the customer defines what is valuable to him. What does the company do?

The company has to take their best information about customer value and translate it into specifications for the product and service they are going to provide. QFD is one formal way (though not the only way) to do this. Ultimately that becomes the product design. It is now up to production to actually deliver it at the target cost.

All well and good. Where this comes apart is (as always) at the seams.

Marketing and engineering “know best” and provide the “voice of the customer” when the customer actually isn’t even in the room.

The product may be specified, but the details aren’t worked through. There is only the most casual system to ensure that what is specified is actually what is built and delivered. Do you have a specified go/no-go outcome defined for each intermediate step in your process? Does that go beyond the product, and into the conditions required for success?

Delivery dates are given in terms of a range of time. In the USA the “cable guy” is famous for telling you he’ll be there between 9:00am and 4:00pm. We all laugh at how aggravating that is. But then think nothing of quoting “4-8 weeks” for a delivery window. WHEN is it supposed to be there?

Is your product support “leave it on the doorstep and run?” Do you follow-up with the customers and see what is, and is not, meeting their expectations? Do you solicit complaints (not simply collect them)?

All of these actions (or lack of them) will diminish your customer’s perception of value. Reputation and brand can carry past some transgressions, especially if there is really good follow-up. But even a 100 year old brand can be damaged, and the company is likely the last to know (not for want of clear signals).

The first step is “define value” but, to be clear, that means understanding what each and every step is doing to provide value to the next step in a long chain that both begins, and ends, with the customer.

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Reducing Inventory

Yesterday’s post on vendor managed inventory touched on a couple of things about “lean” and reducing inventory that I’d like to explore further.

All too often “inventory reduction” has been a way to “sell” a lean manufacturing implementation. The reduction of inventory becomes the objective. While this isn’t inherently a bad thing, it is all to easy to get caught up in the trap of “management by measurement” and do it the wrong way.

Reduced inventory is a result of good kaizen, but it isn’t the justification for doing it. The purpose of kaizen is to solve problems, specifically the problems that disrupt the smooth flow of work and creation of value. Solving those problems saves time – worker’s time, customer’s time, leader’s time because everything runs more smoothly and predictably.

The primary reason that inventory is there is because things aren’t smooth and predictable. Once they are, you can take some of it out.

The necessity to have inventory at any given point in the system is evidence of a problem that has not yet been solved. (Including, sometimes, simply having poor inventory management, which is another way of saying “overproduction.”)

By asking “What must we do to live without this piece of inventory?” you can uncover the next problem to solve, and then make a decision to solve it.

If it is solved, then inventory can be reduced. But it doesn’t happen automatically, you have to actually take it out of the system and keep it from coming back.

But in any case, this is a lot different than just shoving the ownership of the inventory onto someone else.

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October 8: Speaking at Seattle ASQ Meeting

correction: I had typed “October 10” for the date. That was my mistake. It is October 8th.

I will be speaking at the October 8 meeting of the Seattle ASQ on the topic of “The Continuous Improvement Ideal: Principles to Engage Your People.”

From the ASQ event page:

You may have heard of Toyota’s principle of stopping the line when an anomaly occurs, and you know that an engaged workforce is an asset to any organization. During Mark’s presentation, “The Continuous Improvement Ideal” on October 8th, you will take a deep dive into how these two seemingly separate concepts are actually intertwined and can drive day-to-day continuous improvement. This process of continuous incremental improvement engages people in ways that are more powerful than chartered process-improvement projects. You will come away with the common denominators that make these concepts universal in manufacturing and in service environments.

If you would like to attend, you can register here. The event is open to all.

Agenda:

  • 5:45 – Dinner and networking
  • 6:45 – Section Announcements
  • 7:00 – Speaker Presentation

Location:

Coast Bellevue Hotel
625 116th Avenue Northeast
Bellevue, WA 98004
View Map

Public thanks to my long-time friend Mike Bresko of General Physics, and Program Chair for the Seattle ASQ for this opportunity.