Batching or Single-Piece Flow?

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One critical aspect of lean thinking that many people have trouble grasping is the importance of moving from batching to single-piece flow.  After all, if improving productivity is one of the things we're ultimately trying to achieve, isn't batching the most logical choice?

WHY WE THINK BATCHING MAKES SENSE

If we're striving for higher efficiencies within an individual step of an operation without regard for the effect on the overall process, then batching tends to make sense.  In fact, batching is a common practice in so many organizations today because of a fragmented approach to setting goals that forces people to maintain an inward focus to improvement.

When following a systems thinking mindset, on the other hand, it becomes clear that local ideas for improvement need to be evaluated - before they are implemented - as to whether or not they result in improvement to the organization.  And in the end, isn't organizational improvement what we're ultimately after?

Although batching often appears more efficient than single-piece flow for an individual task, the practice tends to create waste for other parts of the organization that more than offset the perceived benefits.  Some of the wastes that result from batching include:

• increasing the time between spending money in a process and receiving money from customers due to an increased overall cycle time and inventory that is not yet sold;
• waiting and downtime in one or more steps of the process while previous steps complete work on multiple units;
• larger amounts of inventory between process steps to reduce the likelihood that one step will shut down while waiting for a previous step to complete a batch;
• increased rework and delays when a defect is discovered that affects an entire batch of work rather than a single unit;
• increasing the time required to implement a design improvement because of the need to use up a larger  amount of inventory.

A dilemma commonly associated with a batching mindset is determining the the optimum batch sizes.  It is very likely that the "best" quantity to run for each step in the process will differ, resulting in further increases in inventory throughout the system.

IS SINGLE-PIECE FLOW ALWAYS POSSIBLE?

There are situations where batching is more cost effective because of limitations resulting from tooling, equipment, technology, or process design.  Although producing work in batches under these circumstances may be the most logical and cost-effective choice today, it should never be considered acceptable into the future. Batching must be considered a countermeasure until the process can be improved to the point where single-piece flow (or smaller batches) can occur.

Whether applying lean to a manufacturing process, administrative operation, or drilling gas wells, it is important to understand the effect that batching has on process flow, operating costs, and overall competitiveness of the organization.  To do this requires a systems thinking mindset, as well as a deep understanding of the process and the needs of the customer.

As long as people are evaluated on objectives that are not carefully aligned throughout the organization or do not clearly support high-level objectives, batching will appear to be preferable to single-piece flow.  Like many other aspects of lean thinking, trying to move to single-piece flow before transformation of leadership has occurred will most likely result in frustration among team members and disappointing results for the organization.

Lean Success? Not Without Patience

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It's no secret that virtually all lean deployments fail to achieve intended results. One of the main reasons for this is a lack of patience in the time and effort required for transformation.  Success with lean requires a long term commitment to learning, consistent focus, and patience.  If the company's leaders are not in it for the long-haul, it's probably best not to start the journey.

The Cambridge Dictionary of American English defines patience as the ability to accept delay, suffering, or annoyance without complaining or becoming angry.  When applied to business business, patience refers to the ability to accept delays, setbacks, and periods of doubt without abandoning a chosen direction.  Although there will be benefits along the way that will make many people feel good about progress, there will also be bumps in the road that will make some question whether lean is worth the effort.

Make no mistake that a company will never be "lean." The best you can hope for is to get to the point where continual learning and improvement become so engrained in the culture that lean thinking does not appear to be anything out of the ordinary.  There will always be a need for coaches and commitment to maintaining - even staunchly protecting - the culture because the natural tendency for things to return to the "old way" will never go away.

It may seem strange that the road to continual and rapid improvement requires patience but it's true.  And unfortunately, patience is one characteristic that is sorely missing in Western business.

Lean is NOT Common Sense

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How many times have you heard that lean is “just common sense?”  Over the years, I’ve noticed that those who say this are generally the ones who resist lean the most.  Referring to lean as nothing more than common sense is often an excuse to ignore transformation and continue to do things in the same way.

Depending on your frame of reference, common sense can tell you to:

• build inventory to handle changes in demand or chronically late deliveries;
• set individual goals for people (and tie closely to bonuses and performance reviews) in order to improve performance;
• run large batches to deal with long setup times and continued stockouts;
• reduce costs by pressuring suppliers to drop prices;
• address problems by looking for solutions rather than countermeasures

Lean is a very different way of thinking for most people and requires significant transformation of individuals and the organization in order to be successful.  Before this transformation begins to occur, many aspects of lean thinking will actually appear counter to common sense.  Do not let anyone hide behind the “common sense” shield during the transformation.

The Effect of Structure on Performance

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No one component may seek its own reward without destroying the balance of the system. Each component is obligated to contribute its best to the system as a whole. – W. Edwards Deming

What effect does an organization’s structure have on the ability to be successful?  For years, western business has clung to the notion that a functional organization is the most beneficial, but what effect does this really have on overall performance?

Doesn't the performance of the organization as a whole matter more than the performance of any individual area?  If so, is there a correlation between the two?  If individual functions optimize their own performance, does this automatically improve performance of the larger organization?

A SYSTEMS THINKING PERSPECTIVE

Lean requires a systems thinking mindset; meaning that the success of an individual function is determined by the contribution it makes to the organization.  Over an over again, I have seen examples in functionally-structured companies where individual areas - intentionally or unintentionally - focus on their own goals with little or no regard to the effect they have on other areas.

This tendency toward functionally-focused goals, which is common in western business, is a significant contributor to the construction of silos within the organization that are difficult, if not impossible, to break down without a drastic change in leadership and culture.

The alternative is a process-oriented structure that drives people to focus on the performance of the system rather than an individual area.  Each person uses his or her own special knowledge and skill to optimize the system; and rewards are based on the overall performance of the system.

The common argument against moving from a functional to a value stream (or process-oriented) structure is that sharing between specialists and improvement within the functions will cease to occur.  Although it is possible for this to happen, it is not a strong enough reason to remain in a functional structure.  Systems can  be created to assure that learning and sharing of information within functions occurs.  Since people tend to be inherently interested in their areas of specialization, assuring function-focused learning systems are effective is most likely easier than getting the various functions work effectively with each other to achieve organizational goals.

I have worked with organizations over the years that wanted to deploy lean thinking but were afraid to let go of a functionally-oriented structure.  In these instances, the functional pull toward individual goals and rewards had generally won out over the drive to optimize the organization and led to sub-optimal results.

I once worked with a manufacturing company where the supply chain team directly supported operations by procuring materials used on the production line.  On-time delivery performance for one particular factory was consistently around 60%, which negatively impacted customer satisfaction.  According to operations data, roughly 75% of late deliveries were attributed to material shortages.

Since the product produced within this factory was strategically critical for the company, team members within operations felt significant pressure to improve performance.   Although supply chain team members also felt pressure to improve delivery performance, they reported to a corporate function separate from operations and were primarily driven to reduce material and inventory costs rather than improve delivery.

Because of the situation, delivery performance continued to suffer, motivation was low, stress levels were high, teamwork suffered, and employee turnover increased.  Although from the outside this problem seemed easy to remedy, organizational politics and the natural tendency to cling to a functional organization (i.e., the we've-always-done-it-that-way syndrome) prevented the shift to a process-oriented structure.

Organizational transformation cannot occur without transformation of thought.  Everything that is known must be questioned to determine whether or not it helps the organization move toward its vision.  In most cases, without a significant reduction in the white space between teams, functions, and locations, the ability to sustain any improvement in performance will be difficult, if not impossible.

What is Lean Six Sigma And Why Is It Necessary?

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Several years ago, the term Lean Six Sigma (LSS) appeared on the scene and since then, countless books, seminars, and conferences have popped up referencing the term.  I’ve read books and articles on the subject but continue to have trouble understanding the distinction between LSS and just plain lean.

I've had people tell me that lean is about attacking waste; six sigma is about reducing variation; and LSS combines the two into a complete approach that is more effective than either by itself.  Sorry, but this explanation still does not convince me that LSS adds anything besides confusion.

I have never seen an effective lean deployment – before or after the advent of LSS – that did not include a focus on reducing variation.  Variation causes waste and interferes with flow and, because of this, must be addressed as a critical element to improvement efforts.

W. Edwards Deming wrote extensively about the importance of reducing variation, and Genichi Taguchi based his methods on minimizing variability.  Both Deming and Taguchi heavily influenced Toyota and were integral to the development of TPS and lean.

If we want people to take lean seriously and truly buy into the approach, we have got to be consistent with the message.  Rebranding lean and presenting it as something different risks turning it into just another business fad – which, for the sake of Western business, is something we cannot afford to let happen.

Using Countermeasures - Not Solutions - To Address Problems

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One element of the Toyota Production System that has not gained much attention is the practice of addressing problems with countermeasures instead of solutions.  Although seemingly nothing more than an issue of semantics, I find the focus on countermeasures versus solutions rather significant.

Solutions Thinking

One of the common misunderstandings many people have about six sigma or kaizen is the idea that the tools will lead to the development of a solution to the root cause of a problem.  Organizations are highly complex systems and it is naive to think that any of the problems they face result from a single root cause or can be resolved by a single solution.

When all of the factors and interactions that can influence work are understood, it becomes clear that the best we can do is attack problems by addressing as many of the perceived causes as possible with the idea that we may never permanently fix the issue.  Because of this, remaining competitive requires continually developing and implementing measures to improve processes and accept the fact that some of the problems the organization faces may never completely disappear.

This is a difficult concept for many to accept because of the importance our culture places on solving problems.  Countermeasures can, at first glance, appear to be nothing more than temporary fixes to problems rather than permanent solutions - which is counter to what organizations are trying to achieve with lean.  In reality though, it is just the opposite, because a solutions thinking mindset can give a false sense of security that a particular problem has, in fact, been eliminated.  This can be very dangerous down the road if a problem that the team thinks it resolved returns.

This is not to say that a countermeasure approach focuses on symptoms of a problem rather than the root causes.  The tools and methods associated with an effective kaizen process help a team get down to the root causes of a problem.  The difference with this line of thinking, however, is the concept that there are several potential root causes to any problem and that actions taken to address a problem are based on what is known today with whatever information is currently available.  As the environment changes, the problem can reappear as a result of new or different interactions that were not known at the time it was last studied.  Although the initial countermeasures were valuable to the company, the team needs to continue its efforts to assure performance remains stable or continues to improve.

The Learning Organization

Another significant advantage of a countermeasure approach is the amount of learning that takes place within the team.  Rather than studying the problem, developing a solution, and moving on, the team moves around the PDCA cycle many times as it continues to address root causes with more and better countermeasures.  With each trip around the cycle, the team learns more about the process and the interactions where problems can occur.  As a result of continuing to develop and test hypotheses, team members truly become experts about the processes with which they work.

A Cultural Transformation

One of the critical challenges of lean thinking is changing the organization’s culture so people get the idea that continual improvement is not only possible, but necessary for survival.  Talking in terms of solutions, however, can actually interfere with this type of transformation.

In the most basic sense, the term countermeasure refers to action(s) taken in response to a problem, whereas a solution implies achieving a state where a problem has been eliminated.  [See definitions] Note that the term countermeasure makes no reference to solving a problem.

When the team starts referring to improvements as countermeasures instead of solutions, the culture starts to change.  People begin to believe that problems may never be completely solved and understand the need to continually strengthen processes.   Improvements are celebrated, but only as temporary steps toward the ultimate, albeit unattainable goal of perfection.

Starting at the Top

Adopting a countermeasure mindset within the organization requires a good deal of clarity and consistency from leaders.  There will be frequent opportunities to coach team members on a new way to look at and address problems.  As with any type of culture shift, however, there will be a good deal of inertia pulling the team back to old – and more comfortable - ways of thinking.  Because of this, it is critical that leaders apply relevant countermeasures when progress has slowed.  Like mountain climbing, organizational transformation can take significant time and effort to make a small amount of progress; while any lapse in focus can result in a fairly quick decline.

Strategy Deployment: Hoshin, PDCA & Drucker

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In another chapter from the book of simple concepts that are difficult to implement comes the story of strategy deployment.  Over the years, I have seen some great business plans that failed to deliver because of the inability to stay focused and drive them into the organization.

Hoshin kanri is a process focused on setting direction, developing plans, and managing implementation.  Progress on the plan is continually reviewed to understand when adjustments are needed to achieve success.

There have been many books written about Hoshin Kanri that cover the subject in great depth.  And since I could never adequately cover the topic in detail in a short blog post, I’ll try to hit on what I consider to be the high points of the process.

Hoshin & Drucker

Much of the hoshin process appears to be aligned with Peter Drucker’s method of strategy deployment.  I have always considered the strength of Drucker’s approach to lie in his technique of continually asking a few simple questions to get people focused on what’s truly important.

What are we trying to achieve?
How are we doing?
What are we doing about it?

Hoshin Kanri follows a similar approach through the application of the Plan-Do-Check-Act (PDCA) cycle to business planning.  Deploying strategy requires an obsessive focus on the few high-level objectives that are critical to success.  Utilizing Drucker’s simple questioning technique within a PDCA framework helps maintain focus by increasing understanding of the following:

PLAN:  What are our objectives?
DO:  What are our plans to meet objectives?
CHECK:  How are we doing?  Are our results meeting objectives?
ACT:  What are we doing about it?

Another benefit of PDCA in strategy deployment is that it drives home the idea that business planning is not a once per year exercise.  It is an ongoing process that needs continual reflection and adjustment to succeed.  There is no "new" plan each year - there is only a new revision that has been adjusted to account for progress and changes in the environment.

Deploying Strategy

 The initiatives that are developed from the business plan also go through the PDCA process to assure they continue to progress.  When doing the CHECK on each of the initiatives, the team should follow the general approach listed in the exhibit.  By creating the initiatives, the team is predicting that completing them will result in meeting one or more business objectives.  Because of this, it is important to review whether the initiative is progressing as planned and, if so, whether or not it is driving the desired results.

Although the Drucker questions appear simple, the answers can get fairly complex.  The key is to provide enough time to reflect on the answers in order to keep people focused on objectives.  The effectiveness of leadership, after all, lies in the ability to simplify complexity.  Whether using Hoshin Kanri or some other method, it is critical to utilize some type of framework that enables this to occur.