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I have years of experience in operational excellence but if I were to start lean where should I start?

11/12/2018
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Dear Gemba Coach,

I have years of experience in operational excellence and have always assumed that lean is just a more gemba-focused way of improving processes. You seem to think that lean and operational excellence differ widely. If I were to start lean, in your sense, where should I start?

Takt time. If you are already experienced in getting teams to improve what you do, the first large difference with improving production processes is in scheduling to takt time. I was yesterday on the gemba in a company that has significantly improved its reputation due to lead-time reduction (they’re a B2B service company; they show up faster) and quality improvements (their interventions seldom need to be corrected). As a result, they’re being offered contracts with larger companies – and people inside are starting to feel they can’t cope.

From an operational excellence point of view, this would be a capacity problem. Look at the production process, identify the bottleneck or bottlenecks, add people and equipment where needed, and away you go. If we do that, the organization stays the same but gets fatter as we add resources haphazardly.In lean thinking, you start with the people themselves – explore why they feel they’re burning out.

In lean thinking, you start with the people themselves – explore why they feel they’re burning out. The tool for this is asking them the takt time: at what rhythm do they need to deliver output. Looking at the time interval between two deliveries is very different than looking at a production rate – the number of pieces of work that need to be delivered per period.

The lean perspective is not how we fix capacity in the process. It’s how do we learn to better level workloads. By asking each team to compute their takt time, which is their open time divided by the actual demand, we find out that:

  • In many cases, output is vaguely defined and although everyone works hard, it is unclear what is actually demanded by customers and what is required by the organization itself;
  • In some cases, takt time has indeed reduced, so there is a real increase in demand;
  • Some teams have indeed coped by increasing overtime, through either declared overtime or, in many cases, just staying later at work.

Furthermore, managers are always resistant to hire more people because in any spot situation 1/ you don’t know if the increased demand is going to continue and if it doesn’t you’ll be left with people on your arms you don’t know what to do with and 2/ the on-boarding period of bringing new people in actually slows you down in delivering right here, so although it’s a mid-term solution, it might not be an immediate one.

Bad Behavior

By discussing takt time weekly with each departmental manager, the director of operations discovered that:

  1. Large customers were behaving like old-fashioned armies: run, wait, run, wait. Takt time was hard to calculate in some cases because the numbers didn’t add up at daily, weekly or monthly scope. It turned out that when a budget line was opened for large customers, all of their units wanted to get the work done right away (for fear all the budget would be taken by others), which created rushes of demand, and then lulls – and explained that the top management was uncertain about capacity requirements.
  2. A lot of the extra work came from the handling of subcontractors that needed to be pressured to deliver good quality on time, which took a lot of effort from the teams on top of their own work – no one had ever considered contract management as assembly.
  3. Pain from the subcontractors turned out to be largely created by passing on the surges in customer spot customer demand, from the customer work campaigns, onto suppliers who, often even smaller, had even less capacity to deal with peaks of demand.

No one could see any good way of telling customers to stop behaving the way they did, but each manager had concrete ideas on how to better handle it. In some cases, accept the spike of demand, and do the work as if it hadn’t happened, which meant, yes, that some customers waited, but they also find out that in many cases they didn’t really care – what they really wanted was to make sure they were scheduled in the queue, that the resource was chalk-marked against their name.

But many other ideas came out, several about how to better manage the supplier base, and warn them ahead of time when a customer campaign appeared on the horizon.

In some cases, yes, department heads asked for more people, but not as often as one would have through as well – about a quarter of the rough back of an envelope capacity calculation that had been done at the outset by the ops director.

The other surprising aspect is that the departmental managers didn’t interpret the question in the same way at all, which led to all sorts of interesting discussions. The griping about too much work had come, as always, from the people considered difficult, naysayers or lazy so-and-sos, so easy to dismiss – but the director of operations had to face that something was indeed going on, albeit not what they’d expected at first.

Destiny

The key lessons he took from the exercise where:

  1. Be more disciplined about defining production output and visualizing daily targets, as well as measuring overtime, in order to see more clearly what pressure the company was under.
  2. Dive deeper into each manager’s research project, and allow them to research the aspect of the issue they were interested in – kaizen needed to be seen as an education project, not ways to immediately improve production – when people better understand what they do, they’re better at it.
  3. Look more actively for opportunities to support teams, both with a simple “thank you” when they’d found or cracked an issue, but also with resources support when they’d finally expressed their needs more clearly.
  4. Be more vigilant about perceived changes to employment conditions across the board in the company and try to make sure people didn’t face too many changes in their own work habits and lifestyle at work at the same time.

More deeply, we tend to assume that people should find their personal fulfillment within the corporate strategy we’ve laid out for them. But why should it be the case? Lean thinking understands that corporate destiny is the outcome of individual fulfillment – you can’t choose what interests people for them. You can try to steer it by encouraging person-to-person development but this requires:

  1. Motivation to keep to the discipline of production, and making the efforts of reaching for high standards, day in, day out in many mundane tasks
  2. Space to think to reflect upon one’s own knowledge in the job and interests and to deepen one’s engagement and involvement.

Without motivation and space to think people will seek their fulfillment where they can, both interpreting the job in the narrowest, most personal way, and in looking for interesting things elsewhere.

As long as you retain a process-centric view of work, you will try to fix the process and then convince people to make the fix work. In this case, this would lead us to identify bottlenecks and add capacity – whether people 1/ want it, 2/ can cope with it or not.

In a people-centric view of work, you give people tools, such as “takt time” so they can analyze their own work, studyIn a people-centric view of work, you give people tools, such as “takt time” so they can analyze their own work ... and then come up with smart, adaptive solutions. the puzzling, uncertain, volatile parts, and get their heads around them, and then come up with smart, adaptive solutions. Management’s role is then to 1/create the space to think by asking for research projects and teaching analysis tools, 2/ support local solutions through direct help and recognition so that 3/ we can be inspired to larger changes and innovations from the countermeasures people have come up with. Again, not by applying the change, but by promoting the person championing the change. Ask everyone to reflect and improve, advance those who are good at it.

I am not suggesting that all operational improvements are wrong, or indeed soulless. Process theory in terms of both facts and procedural steps (understanding instructions, production, inventory, variability, etc.) is important and necessary. But it’s equally important to realize quite how different the lean perspective is in starting with the development of people. The tools are analysis tools to support people in their self-study projects and in deepening their understanding of their own jobs, which, in turn, will lead to smarter, better performing processes.

 

 

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