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Lean Management System – The Key to Sustainability

January 24th, 2013 2 comments

Lean Management System is the Key

Lean has wonderful elements.  Two important ones about which we have written on many occasions are that lean projects can be implemented quickly and the tools can be disseminated broadly within your employee population. The result is that you can get traction and a payback the organization can see and measure.  Every level of management and line personnel love those properties.

But like any sort of change initiative, it is still difficult to get true cultural change.  In other words, just because it can be more easily understood and applied more easily than say Six Sigma and the payback is shorter, doesn’t mean its guaranteed to be successful.  Implementation and sustainability are quite different. So how can it be done?

Well let’s first define how sustainability appears.  A lean culture of continuous improvement is characterized by:

  • Daily Application – Ability to apply the tools to improve operational performance on a daily basis
  • Proper Application – Knowledge of where to apply the tools, or a process for continuously refocusing on problems and opportunities.
  • Demonstrated Successes – Extensive knowledge of, and success with, the tools.

To achieve this, organizations need a change model.  It should be a structured process for achieving the discipline and focus needed for any successful change. This process is a Lean Management System, which doesn’t guarantee lean success, but build the foundation skills.

A lean management system is focused on work groups of five to ten people. It provides an integrated set of planning, measurement and problem solving tools to help the work group:

  • Focus on daily performance measurement and improvement
  • Improve effectiveness of supervisory communication
  • Solicit and evaluate employee improvement ideas
  • Assess lean status and define improvement objectives

A Lean Management System is meant to build the new “habits” necessary to develop a culture of continuous improvement with four key elements:

  1. Primary Visual Display (PVD) serves as a central communication point for a work group. The work group members themselves maintain performance metrics, schedules and improvement actions.
  2. Huddles of ten minutes in length which serve as a meeting place to review performance to date, communicate critical next steps, plan progress and solicit solutions to problems.
  3. Performance Metrics which are essential to instill the discipline necessary for standard work and other lean practices to be sustained.
  4. Kaizen Events structured to systematically collect and evaluate employee improvement.  Kaizen events provide a process to capture the ideas, evaluate them and ultimately implement them for operational improvement.

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A Lean Management System seeks to build new work habits.  And, like any new habit-building program, it must be practiced diligently until the new processes gradually become “business as usual.”  Day-to-day, hands-on coaching of work groups and team leaders is essential to ensure acceptance. Initially this is accomplished through process compliance, but ultimately through knowledgeable use of the tools.  And finally, through a deep enough understanding that you achieve process innovation.

A lean management system is focused on improving work group performance.  It is part of a broad-based lean deployment, not a substitute for value stream mapping, kaizen events and other methods to identify and implement lean improvements. Think of a lean management system as the glue that will hold lean improvements in place and gradually broaden the application of lean tools within your organization.
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A lean management system must be linked to higher-level operational management activities within an organization to ensure seamless communication of expectations, feedback on results and review of improvement ideas. As teams and organizations gain experience with a lean management system, work groups become more empowered and the freedom to act increases dramatically. A lean management system will help bind lean changes to the process and build lean thinking into the culture at the intact work group level. A lean management system is the missing link to a achieving a lean culture.  A lean management system is the missing link to a achieving a lean culture.  If you wish to discuss this post, feel free to contact me.

How Lean are You?

November 29th, 2012 Comments off

You’re talking to a friend and they say “I work at a lean company” or “my boss wants me to do lean in my department”.   What comes to mind?  There isn’t a specific measurement for lean.  There aren’t sigma levels.  So what does it mean to be a lean company or to run a lean process?

There is a central theme or definition.  One can describe a lean company or process as a streamlined, high quality system that produces finished goods or service deliverables at the pace of customer demand with little to no waste.  But there aren’t any metrics in that description.    So we have to go further.

First, let’s recognize lean is multi-dimensional.  It encompasses a wide variety of management techniques.  They aren’t interdependent but, in the perfect world, but they are integrated.  Of course, we don’t live in a perfect world so organizations apply different combinations of the techniques at various levels of integration.  Their level of satisfaction with results may be the ultimate determinant of how far they go in introducing and integrating the various techniques.

Download Lean Overview and Primer Kit Our popular Lean Primer Kit …

The point being that while you can’t declare “this service is completed in three hours therefore it is lean (or it isn’t lean)”, there is a level of behavior that evidences lean.  And that behavior can be modeled and, to a certain extent, measured.  In other words, you can act lean and even determine how lean you’re acting and how well you are acting lean.

This isn’t to say you shouldn’t measure performance or that measuring behavior is more important than performance.  Not at all.  You should still hold performance relative to customer expectations, stakeholder requirements and competitor performance as the final report card.  But if you need to close a gap and you wish to either introduce lean or push its use farther, you can examine your application of lean.

So given the number of components and the complexity of any interrelated systems, how can you gauge where you or your organization lie and how you can optimize your next effort?  I’d argue you begin by examining how many of the various techniques you currently apply and how completely you apply them as measured by their various components.

I’d start by creating the categories that all contribute to a lean organization separating them into two spheres – internally and externally oriented lean practices.  Internally oriented practices include JIT, Production Flow, Set Up Time, Use of Quality Tools and Employee Involvement.  Each of these has different practices, tools and techniques and you can evaluate their use.  Then there are the externally oriented lean practices such as suppler and customer programs.  Again, each has their own practices, tools and techniques and you can evaluate their use.

Once you’ve created a master inventory, you can look at any portion of the organization or even process and determine which are being used and which aren’t.  You can also examine the depth to which they are being used.  Thus you have a gap analysis in how lean you are acting.  Once again, the purpose isn’t to be the uber-lean organization.  The objective is to satisfy customers/stakeholder and thereby profit.  So you look at the performance gaps relative to those requirements as the guiding light.  But when you think how to close that gap, you can examine how lean you’re acting in that area to determine if you can move the ball forward by acting or implementing more lean principals.

The point of all of this is to understand that even though there isn’t a measurement to the statement “we are lean”, there is an evaluation.  And such an evaluation, in concert with an examination of performance gaps, will tell you if there is an opportunity to do better by diving deeper into lean.  And a framework of the principals will tell you where the biggest bang for the buck exists for the marginal investment of time and effort.  So in the end, while there isn’t a measurement, there is a way to determine how lean you are and how much more you should be to improve your organization or process relative to expectations.  And that is what you need to improve which is the ultimate goal.  If you wish to discuss, contact me.

Small Steps Lead to Success for Lean in Service Operations

April 13th, 2012 Comments off

Lean - Small Steps for Service OperationsImprovement is about change, and change is tough.  It doesn’t matter if you are trying to change personal health habits or a critical business process, it’s just tough.  But change in Service Operations is particularly difficult because so much is not visible to easy inspection, embedded in individuals, lacking data, in constant flux, and dependent on many variables.  These same challenges apply to deploying Lean in Service and Back Office operations.

A natural path many disciplined thinkers follow for any improvement of any type is to thoroughly understand the total system before embarking on improvement.  But within Service Operations the complexities are so great that to thoroughly understand the system requires so much time and investment that the business gives up on the effort before ever getting improvement activities that yield results off the ground.  This is made even more challenging because of the tight resource constraints we face in this economic environment and the demands of ever more discriminating customers.  As in all businesses these days, Service Operations must do more with less.

Our proposed philosophies at a deployment level, about which we have written often, are things like pulling capability development at the rate the business needs it, building foundational capabilities broadly before developing advanced capability, paying for new capability development by providing hard returns on investments as they are made, and aligning resources and efforts to business and customer metrics (i.e. things that really matter).

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 a short Powerpoint discussing Lean in Service Operations …

We take these philosophies down to a project execution level by building an understanding of the project problem solving roadmap and moving back and forth between tools to validate project assumptions while using a lot of tollgates so as to invest time wisely.  Use a problem statement and simple SIPOC to define goals, owners, team members and the process. Take that to tollgate to ensure alignment before moving to deep process characterization.  Use the SIPOC’s process column to do a preliminary value stream with some simple time and quality assumptions and conduct a tollgate review before moving to functional flow charts or collecting data.  Do a simple fishbone diagram to validate the demographics of the data before moving to a more detailed FMEA or creating a data measurement system.   And constantly validate the business case and alignment.

The point is that the need to use resources wisely and drive change counter intuitively means we should take many smaller steps rather than looking for the big steps.  The complexity and immaturity of the system makes the understanding of the overall system too expensive and the success of a big, top down project too low a probability.   Keep this in mind when trying to deploy Lean in a services operation, and your chances of success improve greatly.

If you would like to discuss any of these points, feel free to contact me .

Lean Process Improvement / Lean Enterprise – A Key Element of a Pay-as-you-Go Approach

September 22nd, 2011 2 comments

I talk to companies every day about how they can best roll out business performance and process improvement programs.  Now, just to level-set, we aren’t zealots here pushing any one-size-fits-all model for programs. We do have some key principles that we adhere to when designing programs though. One of these is that it’s likely not feasible to have a program that builds infrastructure and trains for many months, before ever delivering any quantifiable return. That is simply not the world most of our clients live in these days.   Our philosophy is that it is always advantageous for the program to deliver near-immediate, visible, and quantifiable impact.

When looking at an enterprise, more often than not, we find that basic process management/improvement and Lean (i.e. Lean Enterprise, Lean Process, Lean Manufacturing, Lean Product or any of the other labels floating around out there) can solve a lot of high impact business problems, without incurring high training and infrastructure costs, and are the right place to start.

Lean Process Improvement efforts can yield big results fast, without big investment or big risk …

 

ROI from Lean Program However, I get a lot of questions dealing with how an organization can get started with basic process management and Lean Enterprise, and how to fit in to an overall, enterprise wide process improvement / CI program strategy.    This is a good question in that, in the past, it was almost always preached that Process Improvement deployments (Six Sigma, Lean, etc) had to be top-down.  Start with executives to get support, develop champions, select projects, train black belts, build a 3-year plan, etc, and grow from there.  The challenge with this approach is that it requires a hefty up-front investment and it takes a long time before results are seen.  Read ….. high cost .. high risk!

our new Lean QuickStart powerpoint presentation.

In today’s business climate, this is simply not palatable for a lot of organizations.  For them, an approach that is much less top-down, and much more focused on near term, bottom line results may be far more attractive.  So, here is an approach sequence that I’ve seen effective over and over

  1. Work with business leaders to identify pilot areas of the enterprise
  2. Identify specific focus areas and business cases in that area(s)
  3. Refine those down to a set of well-defined project charters, segmented by the nature of the problem (defect, cost, cycle time, etc), scale, and perceived complexity.
  4. Select a set of low-hanging-fruit projects that can likely be solved in a relatively short amount of time and with basic lean and quality toolsets
  5. Run 1 or more workshops with specific project teams, with specific well-defined projects that can be executed in 2-5 weeks.
  6. Track real savings and ROI on projects, and publicize/promote heavily internally
  7. After one or more workshops, train champions /sponsors and develop a formal project selection and prioritization methodology (see my recent post on this).  Refine continuously.
  8. Continue with more workshops, to a broader segment of the enterprise

Processes are cleaned up, waste and complexity removed, measurement systems are put in place, and real bottom-line results are realized.  Results drive interest and commitment, so it becomes easier to get the broader organization engaged.  For enterprises that have done little formal process improvement work (or a lot for that matter), there will most assuredly be many Lean projects to be executed, yielding fast and consistent results. And, soon enough, larger and more complex problems that require higher level capability (e.g. six sigma) will show themselves.  Then, and only then, do you bridge up to and invest in the next level of capability …. Pay-as-you-go.

These efforts can easily and painlessly run in parallel with and, indeed, support and pay for the broader activities that are required to make the overall process improvement effort successful long-term, namely identifying CTQ measures for voice of the customer (VOC) and voice of the business (VOB), characterizing value streams and establishing process indicators and metrics, building a mechanism to constantly identify high value improvement opportunities (i.e. project pipeline), and constantly defining and executing improvement projects.

Contact me if talk about whether this model could work for your enterprise.