Lean Six Sigma Academy

If you had one story to “sell” lean or six sigma to over 1,000 employees what would you say?

Well, that’s precisely the situation our friend Gail is facing Down Under. To get the full history of Gail’s story please check out part one of this mini series.

I’ve thought about this question for the better part of two days. It’s an interesting situation to say the least and I’ve actually started and stopped this article several times.

Beyond Storytelling

Rather than explaining how to write a story I’d actually prefer to speak about some other aspects of a lean or six sigma deployment that are, at least to me, far more important than well written prose.

Please don’t take me wrong, I do think communicating before and during a lean or six sigma deployment is very important. So, for storytelling or writing tips I’d recommend Gail study the works of Plato and Hollywood. Both are masters at crafting and telling stories.

The Successful Deployment

Assuming an organization has someone able to write a story the most important question is what should this story be about? Well, here are some of my personal thoughts and I’d love to hear yours.

1. Respect for People.

First of all, no matter where you live or work being respectful of people must become a priority. Does this mean we must all sit around and sing kumbaya all day long? No. Of course not. But it does mean listening to our employees and challenging them to be the best they can be.

2. Results is a Four Letter Word.

Next, while respecting people is very important getting results – real results – from any continuous improvement deployment is mandatory. And in the end, the word results could be summarized with fours letter – cash.

I’ve actually written about this before when I contrasted activity based programs with results based programs. Sadly, most organizations are trapped in activity based program hell. If this is you… please save yourself before it’s too late!

3. Go to Gemba.

The thing that separates the pretenders from the contenders is the willingness of management to get up from their big office and comfy chairs in order to head to the place the actual work is done.

This place, called the gemba, is where real value is added. As such, the leaders of the organization must be there are often as possible.  So, when there is a problem the leadership should go to the gemba to help solve the problem.  And when things are going great, the leadership should go to the gemba to see how to make it last.

And even better yet, whenever a kaizen is occurring the leadership should be right down there on the floor with the employees helping out.

And here’s a tip for Gail. When your leaders are out there helping snap a picture and include that in your story. This normally catches the attention of a few skeptics.

4. Go Slow to Go Fast.

Ah yes, my favorite – go slow to go fast. I’m actually being sarcastic as this is not my favorite part of lean leadership. But it’s something I’m working on and plan to work on forever.

What does go slow to go fast mean? Well, it means to realize that all of our problems won’t be solved overnight. No ridiculous bail out program will solve the big 3’s issues. And no lean or six sigma program will take you from last to first in the next 60 days.

Toyota has been at this for over 50 years and they are far from infallible. But last time I checked no Toyota representative was flying in on private jets asking for their allowance to be increased. Private jets? Are you kidding me? I digress.

5. Be Speedy.

Now this, my good friends, is indeed my favorite leadership aspect! And while it may seem to contradict the previous point of going slow to go fast it really doesn’t. Let me explain.

You see, to be speedy means to make things happen fast. In other words, instead of attempting to improve on time delivery for your entire plant… try to break this project up into 5 or 6 smaller, more manageable pieces.

This is precisely why there are two types of kaizen – system kaizen and point kaizen.

This is the Story

So, I suppose my best advice for Gail is to start focusing on these five aspects of leadership before worrying about writing  the story. After all, the best stories are true stories… so win a few battles before attempting to explain how we plan to win the war.

I’m curious if you have any other advice or thoughts on the matter.  If so, please share.

Here’s how cool blogging is. A week or so ago I got an email from Petri, a lean practitioner in Finland. His question was so good it inspired this post which stirred up some excellent discussion.

Last night we received another comment to this same post from Gail who is learning about lean in Australia! Gail’s question was also excellent and has inspired me to write this article.

Here is Gail’s comment and question(s). Oh, and in case you don’t know what TAFE stands for (I didn’t) here is an explanation.

Hi Ron

I am new to Lean and work for a public TAFE here in Melbourne, Australia. I am extremely interested in how you measure the success of Lean. I am a project leader in charge of implementing Lean Principles. We commenced our journey early this year and I have been given the task of writing an evaluation strategy and evaluating our success to be delivered to our Executive Team.

I was not sure where to start, thanks for your measures it is a good place to start. Do you have any suggestions on how to present this information effectively (e.g. A3 or Graphs)?

Another question. I am in the process of writing an organizational story about Lean. Any suggestions? It will be used to ’sell’ the idea to over 1,000 employees.

All the best from Down Under.

Presenting the Information

No matter what type of data you do decide to measure the manner in which it is presented in very important. With this said, there are a plethora of ways you could go about this and a lot of it will depend on the maturity of the organization.

Personally, I am a big fan of line/trend charts. As such, at a minimum, my advice is to ensure the following things are always accounted for when drawing line charts.

• The trend. Somehow we need to determine whether the overall trend is up, down, or sideways. A simple MS Excel line chart can accomplish this. Also, a simple arrow pointing up or down on the graph is useful so anyone can quickly determine if up is good and down is bad or vice versa.
• A measure of central tendency. In addition to the trend it’s important to note either the mean or the median on the graph. This simple line down the middle of the data helps add context to the picture.
• The goal. Finally, at a minimum, the goal or target for this particular performance metric should be noted on the graph.  This helps us determine if we are doing well, not so well, or somewhere in between.

If you only had these three points covered you would be better off than many organizations.

For the Over Achievers

Now, if you really want to blow the doors off of things you can take the next step and put this same data into a control chart which adds control limits to the situation. This provides another level of “context” to the situation.

But be careful… if you do use control charts make sure everyone in the organization understands what they’re looking at. There is nothing more damaging than fancy charts no one understands.

If you’d like to learn more about control charts you may want to check out this series I wrote: part 1, part 2, and part 3.

Other Approaches

In addition to trend charts there are a plethora of other techniques that can be used to present data such as balanced scorecards and/or bowling charts (popular with the hoshin kanri crowd).

Now then… I’m interested, as I’m sure Gail is, in how you present key performance metrics within your organization.  And since I estimate this article will be read by more than 2,500 people within 24 hours of me posting it… if just 5% of you respond with a comment or suggestion we should be able to create quite the learning environment.  So please… don’t be shy!

Next Up

Since I only answered one of Gail’s question we’ll save the other part (how to sell lean within the organization) for part two of this mini series.

I recently received the following question from Petri, a reader of LSS Academy.

The issue I wanted to contact you about was if LSSA has ever done work on measuring lean success? I am not sure if there are any tools which are used in this area, or if “Lean companies” have i.e. key KPI’s which are used to track this?

I know that there are auditing systems which measure the level of how far 5S is implemented etc, but I am interested in broader measures.

I find the topic of KPI’s with most successful companies fascinating, and was wondering if there is reference material one could learn from?

Your thoughts on this would be appreciated.

Best regards,
Petri
Finland

This is a great question and one I wanted to put some thought into. I am a believer that you must measure it to improve it. With this said, here are some of my personal thoughts on the matter.

The Wrong Measurements

First of all, I believe many companies get caught measuring the wrong things.

For example, some feel like they can measure the success of their continuous improvement initiative by tracking the number of people trained or certified.

Please don’t get me wrong, I think it’s good to measure these things. But to think that the number of people trained or certified equates to guaranteed success is a gigantic fallacy.

In fact, this type of behavior is the definition of an activity based program.

It’s about one thing: Results

The opposite of activity based programs are results driven programs whereby things like quick wins and bottom line impact rule the day.

But how can one go about measuring this? Is there a magic scorecard we can all download? Unfortunately, at least as far as I know, the answer is no.

With this said, here are some ideas I have for excellent indicators of the health and vitality of a lean or six sigma initiative.

1. Number of improvement initiatives complete (higher is better)

I’d track this monthly and count any documented (even a one page summary) improvement as an initiative.

2. Average time to complete improvement initiatives (lower is better)

I’d also track this monthly. I despise long, drawn out projects that take ages to complete. If an improvement initiative cannot be done is less than 4 months I say it’s over scoped.

Further, the reason I am such an advocate of kaizen events is the speed at which they are done. When done properly, these quick events become contagious and begin to spread throughout an organization like wild fire.

3. Number of improvement suggestions submitted (higher is better)

Tracked monthly, this metric simply allows an organization to measure how motivated the work force is to make improvements.

4. Number of improvement suggestions implemented (higher is better)

The reason most suggestion box initiatives fail is simple. The employees submit ideas and never hear back from management so they stop suggesting things! So, in order to combat this, management should make it clear how many suggestions – as well as what the suggestion was – were implemented. And for the suggestions that were not implemented a clear and honest explanation with the employee should occur.

5. Sales per Employee (higher is better)

In the end, finishing projects and offering suggestions are great… but if you are in a for profit business one thing is clear – cash is king.

We lean and six sigma bloggers can wax poetic about respecting people and all the rest of it… but if an organization is not profitable the doors will be shut… simple as that.

With this said, my favorite productivity metric is sales per employee. Of course some will think I’m advocating cutting heads in order to drive this metric up. I’m not. I am, however, interested in making sure all employees understand whether the business is making money and whether things are trending up or down.

What metrics do you use?

These are just a few ideas I have for how to measure the success of a lean of six sigma initiative. I’m sure I’ve missed a plethora of metrics so if you know of any I missed please share in the comments section below.

I have the honor of hosting the 46th edition of the management improvement carnival.  So without further delay here are some of my favorite articles from the past few weeks.

• Kevin Meyer, of Evolving Excellence fame, recently traveled to Japan and was kind enough to write up some amazing summaries of what he saw and experienced.  The company tour reports are here: Toyota, Saishunkan, TOTO, and an electronics company.
• My friend, Mark Graban, broke one of his personal blogging rules and wrote while he was mad.  You can check it out by reading This WSJ Article (as do Many Organizations) Misses the Point of 5S.
• I’m never quite sure how he gets these ideas… but Jon Miller managed to tie leadership and mountain goats together in 7 Leadership Lessons from a Mountain Goat.  Great stuff!
• John Hunter offered up some interesting data showing that the US is still doing OK when it comes to manufacturing in Global Manufacturing Data 2007.
• A blog I’ve recently started to follow and quite enjoy is The Lean Thinker.  Be sure to check out A3 by PowerPoint for an example of what I mean.
• If you are interested in being more productive I have a must read article for you, and I really mean it’s a must read.  So be sure to check out The Ultimate Productivity Toolbox for Creative People.
• Finally, I leave you with one of the best marketing minds on the blogosphere as Seth Godin tells us about Reacting, Responding & Initiating.

My friend Kevin Meyer is on the Gemba Research Japanese Kaikaku Experience this week.  He just posted his first article that summarizes his thoughts about one of Toyota’s top plants - the Kyushu operation.

I also had the good fortune of making this trip with Gemba Research last year.  Here are the articles I wrote.

• I’m Leaving on a Jet Plane! 
• JKE Day 1: Toyota and Harmony
• JKE Update: Information Overload
• JKE Update: One Million Spark Plugs per Day
• JKE Upate: Reflection and 122 degree sand

Kevin has a way with words so you will definitely want to follow his posts.  Here is the first article and if you want to subscribe to Kevin’s blog to make sure you don’t miss the rest simply click here.

Sunil, a reader of LSS Academy, recently asked me several value stream mapping questions via email.

I have been to your site and was quite impressed by your e-book on Lean Manufacturing. I need your guidance related to VSM as per below. I will be grateful for your help.

• Q1: How do we calculate the waiting/processing time for the inventory which is build between two workstations? Does it depend on the cycle time of the process before it is build or does it depend on the customer demand per day or exit rate per day or takt rate?

Generally speaking, the standard way to calculate the days of supply for a certain amount of inventory is by dividing the number of pieces on hand by the average daily demand for the product.

So, for example, if a given product had a daily demand of 100 units and we counted 50 pieces of inventory between process A and process B, we would have 0.5 days of supply between those two process steps.

• Q2: If a particular workstation has 90 minutes of tool change time which happens once in a shift, how do we account for this in the process lead time?

This is an interesting question. If we consider tool change time as non value added we could simply include it on the VSM timeline as non value added time similar to the way we note days of supply.

Another technique, and something Jon Miller and I recently discussed, could be to include this changeover time in our takt time calculation. In other words, we would deduct this change over time from the net available time which would then adjust the overall takt time accordingly.

With this said, one thing is for sure, no matter how we “account” for this changeover time we’ll definitely want to attack this 90 minutes of non value adding changeover time with a strong dose of SMED.

• Q3: If a particular workstation has 200 minutes of tool change time which happens once in a 7 days, how do we account for this in the process lead time.

Again, as stated above you could add this to the VSM timeline although it’s trickier since you don’t deal with it everyday. You could “level load” the time over the week or have different lead times depending on the day.

One of the things I’m interested in is whether or not this long changeover only happens once a week since the organization likes to set things up and run long batches since the changeover takes so long.

If this is the case you’ll want to attack this changeover time in such a way that it no longer takes so long. And when this happens you may be able to level out your production using the concept of heijunka.

I am definitely speculating a bit and would need to know more details in order to really help.

In the end, dealing with things like calculating production lead-time and days of supply is not as important as dealing with things like long changeovers, poor scheduling, and waste in general.

What do you think?

Would you offer Sunil any other advice?  If so, please share it in the comments section below.

To view a larger version of this video click here.

In this video I demonstrate how to use this free takt time calculator.

Feel free to download the calculator and use it however you see fit.  As always, comments and questions are not only welcomed… they are much appreciated!

Here’s the situation… the cycle time to produce one unit in our widget making factory is 300 seconds and the takt time for this product is 50 seconds per piece. In other words, in order to satisfy customer demand we need to produce a finish unit every 50 seconds.

How Many People?

OK, this is straight forward enough… but the next question is how many people do we need in the cell? One of the team members remembers hearing about some formula that looked at the ratio of cycle time to takt time to come up with the, so-called, optimal crew size.

Well, by taking 300 seconds (cycle time to produce one part) over 50 seconds (takt time) the team figured they needed 6 people in the cell. Is this correct?

Not So Fast

Well, as Lee Corso often says… “Not so fast my friends.” You see in order to accurately determine the optimal crew size the team needs a little more information.

Instead of stating the cycle time is 300 seconds, the team must first understand how much of that 300 seconds is “manual” cycle time – or the time an operator is actually needed – and how much is “automatic” cycle time – or the time the operator is technically not needed (such as when they hit the start button and commence reading their newspaper).

The Real Calculation

Now then… back to our widget factory. After some quick time studies the team learned that the manual cycle time is 100 seconds and the automatic cycle time is 200 seconds.

So, when they divided the sum of the manual cycle time – 100 seconds – by the takt time – 50 seconds – the optimal crew size came to 2 people (instead of 6 when the total cycle time was used).

Moral of the Story

So, the moral of the story is to calculate the optimal crew size of a work area by dividing the sum of manual cycle time by takt time. Of course, at this point the fun has just begun as the team must now determine what those 2 people will actually do! But let’s save that for another discussion.

Is this how you calculate optimal crew size in your organization?

One of the best ways I’ve found to explain various lean and six sigma topics to others is to use examples from real life.

After all, not everyone makes cars or the mirrors that go on cars… so many of the examples we read about in the various lean and/or six sigma books mean next to nothing to most of us.

Along these lines, one of the concepts many folks seem to struggle to understand is single minute exchange of dies, or SMED.

I’ve written about SMED before… so in case you missed that article you can find it here.

As a quick review, one of the key tenets of SMED is to do as much prep work as possible while the machine is running… that way when the machine has stopped producing product you can quickly get it going again.

I am over simplifying things here… so again please read this article if SMED is new to you.

So tonight I thought I’d discuss some real-life examples of SMED principles most people can relate to.

1. Laying clothes out before going to bed.

When I was a kid my Mom used to always make me lay my clothes out before I went to bed. Whenever I have a super early morning I still follow this rule!

Who needs old Japanese guys yelling and spitting at them when their own Mom is there to teach them lean principles.

2. Washing dishes while dinner is cooking.

Instead of standing around watching the TV, why not wash up as many of the dishes as possible before dinner. You’ll still have the plates and glasses and things like that to deal with after dinner… but taking care of some of the “preparatory” pots and pans will save you lots of time.

3. Pre-sorting dirty clothes before washing.

Inspired by my awesome wife, I recently wrote about this idea here. It is definitely a brilliant idea and massive time saver when it comes to doing laundry.

Let’s hear from you…

Can you think of any more real life examples where some of the principles associated with SMED apply? If so, feel free and empowered to shout ‘em out in the comments section below!

I just skimmed through a short white paper that attempted to provide a checklist to help an organization decide if they were ready for lean.

It was written by a person who works for a “human capital management solutions” company. Yeah, you can probably guess where I’m headed.

Rather than tell this person what I really think about the fancy technology they are pedaling… which wouldn’t be practicing respect for the individual… I’ll instead offer my own checklist to help people decide if they are ready for lean. Ready? Here goes.

1. Are you ready to admit you are sick?

First off, chances are, if you are operating as a traditional mass producer you probably have inventory piled up everywhere. You probably live by your forecasts, which are never right. And you probably spend most of your time in meetings talking about how you are going to make things better. Problem is you are always in meetings talking instead on the shop floor making things better. In short… you are sick and you must admit it.

2. Are you ready for some pain?

Getting lean isn’t easy. Once you begin to bleed down all that inventory inefficiencies you never dreamed existed will begin to appear.

Further, if you get to the point to where you are implementing one piece flow… oh dear me… get ready. You are in for real pain my friends. You see, the minute an operator pulls the andon and the whole line stops… yeah, that’s when the real fun begins. Oh, and this is also precisely when deeply seated and real improvements begin to happen.

3. Do you hate the status quo?

Finally, before you decide to go down the lean (or six sigma) journey you must develop a deeply rooted hatred for the status quo.

You should get sick to your stomach when you watch Cindy take those 12 extra steps each time she assembles that part. Why can’t we reduce it to 8 steps?

You should despise the fact your lead time is 12 weeks while your chief competitor offers their solution in 10 weeks. In summary, you should hate the way things operate today.

So that’s my list. What would you add or subtract from it?