Making the Workplace Speak

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Do your processes speak or are they too shy to bring problems to your attention?  When it comes to the workplace, you want processes to be as loud and obnoxious as possible when something isn’t running exactly as planned.

Moving toward lean thinking often requires transformation. This means a significant shift in thinking, leading, systems, and general approach to operating the business. Although there are elements that are common to most transformation efforts, organizational differences make it difficult to single out one or two that apply in all circumstances.  One of the most common but often overlooked elements involves making the workplace speak.

Processes must be designed so they sing out when problems occur enabling issues to be identified and addressed quickly.  Without the ability to speak, a process can hide problems until they become such a normal part of the operation that they are no longer recognized as problems.  When this happens, the process moves further away from the ideal state and countermeasures, when applied, consist of throwing money at symptoms.  Examples include increasing inventory, lot sizes, and inspection – all of which increase costs while giving a false sense of security that a problem is effectively addressed.

Clarifying Objectives


Clarity of objectives is the foundation for encouraging processes to speak. When objectives are clear, it becomes much easier to create signals that communicate problems immediately when something puts an objective in jeopardy.  Examples include takt time, inventory levels, and problem boards.

Takt Time
If we can identify the optimal pace for a process and focus attention on maintaining that pace, setting up a signal that identifies when a problem occurs should be fairly easy. This can consist of a takt board or dashboard that shows when a process step is unable to keep up with the rest of the process.

Inventory Levels
Setting up visual cues regarding inventory levels can make it obvious when a process is overproducing.  As an example, installing a bin system between two processes that only holds a maximum or minimum number of parts will signal when the prior process is producing faster or slower than the following process.  Whether the problem lies with one area overproducing or another failing to keep pace will not necessarily be known, but it will be clear that something is wrong.

Problem Boards
Making the process speak can be done as easily as setting up a board in the workplace where problems can be recorded as they occur.  Parts that don’t fit properly, instructions that aren’t clear, or equipment breakdowns can be easily recorded using a checksheet, free text, or both to bring problems to the attention of those who are able to address them.  Without an easy way to record these types of issues, however, they can continue to occur due to a lack of visibility.

Andon
A common signal used in assembly lines is the andon cord, which is pulled by workers whenever something interferes with doing their work as planned.  Even without an assembly line, however, the andon concept can be used by providing people with the ability to signal when a problem occurs.  Whether it's an audible alarm in the factory, a signal light that goes off in an office, or a text message that is automatically transmitted to those who need to know, the andon can be a valuable way for the process to speak.

Make the Workplace Scream

Very few of us like to work with people who are loud and obnoxious, yet these are the exact traits we should desire in our processes.  Processes should be designed in a way that they scream so loudly when a problem occurs that we never feel it is acceptable to let them go on for very long.  The workplace should be quiet only when things are running smoothly and all objectives are being met.

Success With Kaizen Requires Thinking Small

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I read a whitepaper recently that touted the benefits of a kaizen process. The paper presented an example from a British company where an improvement project resulted in an annual savings to the organization of £1.2 million.  The point of the paper was to demonstrate the type of improvement that companies could achieve with an effective improvement process.

The unfortunate part of a story like this is that it creates the expectation that implementing a kaizen process will lead to million dollar improvements.  This is not the essence of a kaizen process and often leads to skepticism or disappointment and eventual abandonment of the effort.

Small Improvements by Everyone, Everyday

To be successful and sustaining, an objective of a kaizen process must be to get everyone involved in identifying and attacking waste. This means focusing on - and celebrating - the small improvements that result from the effort. Daily improvement will not happen, however, if the company's leaders are expecting and driving for the million dollar improvements.  People will not invest the time or effort necessary to implement a small improvement when it is not considered important by the company's leaders.

Will you ever get a million dollar improvement from a kaizen process?  Maybe, but it will be the result of a culture that enable ideas to flow and improvements to occur.  Keeping the process alive long enough to reap the benefits, though, requires celebrating the small improvements as much as the large ones.

In reality, a million one dollar ideas are much more likely to occur than a single one million dollar idea.  Because of this, the focus needs to be on coaching people to identify problems, address root causes, test countermeasures, and change standard work at a rapid pace.  Leaders need to be kaizen experts in this type of environment, and able to effectively coach team members in the improvement process.

Practice is the Best Training

As more improvements are made, people get better at solving problems.  The pace quickens, ideas get better, and morale improves.  When the focus is on large improvements versus the small ones, there are fewer projects and fewer opportunities to teach people how to solve problems.  The culture does not change because learning, if it does occur, it is at too slow of a pace to make much of a difference.

Small improvements are generally made very quickly, and tend to cost very little – if anything – to implement.  Large improvements, on the other hand, can take weeks or months, cost significantly more, and are riskier because of the difficulty to test before adopting.   So while you’re waiting for that million dollar improvement to occur, think about the number of small improvements that could have been implemented and the benefits that were lost during the wait.

Applying PDCA to a Lean Deployment

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Anyone who has read many of the posts on this blog will probably notice that I'm a little obsessed with the Plan-Do-Check-Act (PDCA) cycle.  There is good reason for this. I believe that understanding and internalizing PDCA is an absolute necessity to have any chance of achieving a sustained lean transformation.

It surprises me when I see a lean deployment plan that doesn't incorporate PDCA at its core. When this happens, the implementation often lacks the flexibility to address the unforeseen issues that can stall or even kill the effort.

Although there are some elements common to virtually every lean transformation, there is no magic formula.  People, organizations, and business environments differ, and it's impossible to understand and take them all into account when developing the deployment plan.  Also, since people internalize and adopt the philosophy at different rates, flexibility is necessary to continue moving forward.  The PDCA cycle naturally builds continual checks and adjustments to assure the effort succeeds.

 

HOW TO DO IT

 

Besides increasing the probability of a successful transformation, applying PDCA to a lean deployment is an excellent way to demonstrate how the cycle is used to accomplish a major business initiative.  The steps, based on a Hoshin Kanri approach, include:

PLAN As with any improvement effort, a lean deployment plan must begin with clarifying the objectives and vision, as well as an idea of the current state of the organization to understand the gaps that need to be addressed so a plan of action can be developed;

DO  The plan must include clear steps, responsibilities, and timelines in order to be implemented effectively;

CHECK  Understanding whether the action plans are proceeding on schedule, as well as their effectiveness in enabling the stated objectives to be met are necessary to keep the transformation effort on course;

ACT  Based on the results of the CHECK step, the plan continues as designed or adjustments are made to address areas of weakness.

Modeling and coaching behavior are perhaps the most important aspects of leading a lean transformation effort. Attempting to get people to adopt PDCA thinking in their daily work without utilizing it as part of the plan will lead to frustration, confusion, and disappointment with the deployment altogether.

PDCA: Improvement Tool or Mental Model?

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“Management is prediction.”  – W. Edwards Deming

Much of the literature about the Plan-Do-Check-Act (PDCA) cycle focuses on its application to kaizen activities.  This is unfortunate because PDCA has a much wider application across a business and can be used to clarify direction, increase learning, align efforts, and improve results.

The benefits of PDCA begin to appear when people recognize the cycle as a mental model for managing the business rather than merely a tool for kaizen.  Getting to this point, though, requires a lot of coaching, reflection and practice.

Linking Activity At All Levels

The figure below shows how the PDCA cycle applies to different levels of the business and how, even though different in scope, each relates to the others in providing direction and assuring results.

The application of PDCA thinking to a typical organization

Business Planning

At the highest level, Hoshin Kanri applies the PDCA cycle to business planning.  The cycle involves:

• PLAN:  Determining objectives (including key performance indicators-KPIs), identifying barriers and market opportunities, and developing action plans (predictions) to address the barriers and take advantage of the opportunities;
   
• DO:  Implementing the action plans;
   
• CHECK:  Reviewing progress of the action plans and determining whether the plans are leading to accomplishing the objectives;
   
• ACT:  Making appropriate adjustments based on the CHECK activity (e.g., adding resources to get action plans back on schedule or adjusting the action plans to better align them with objectives).

The catchball process helps clarify the objectives and make sure they are understood by more than those at the organization’s highest levels.  Catchball is the thread that connects actions at different levels and helps assure that there is clear alignment throughout the organization between activity and objectives.

System/Area Improvement

Clear and consistent objectives help assure area leaders are focusing on the right things.  In most organizations, there are a virtually unlimited number of areas that can be improved, but since time and resources are limited, it is critical to focus on those things that are the most closely related to objectives.  This is what Pascal Dennis refers to as the “right things” in his book, Getting the Right Things Done.
At this level in the organization, PDCA involves:

• PLAN:  Understanding objectives (through catchball) and setting clear targets at the process level.  For a production process, this could include targets for safety, quality, delivery, and cost (SQDC).  The PLAN stage also includes assuring standard work is deployed for the process, including work instructions and the proper WIP and buffer inventory levels to assure the process can meet takt;
   
• DO:    Assuring the process is operated and managed in accordance with standard work;
   
• CHECK:  Reviewing the KPIs, possibly at the individual process and team level, to determine the gap between current performance and ideal condition.  For any gaps, the general issues that are causing the gaps are identified;
   
• ACT:  Initiating kaizen activities to address the gaps.  This could involve providing direction to a team to assure improvement activities are focused on the proper gaps or creating teams with specific objectives to address gaps.

Kaizen / Daily Improvement

This is what comes to mind for most people when they think about kaizen– the daily activities that result in small, continual improvements to a process.  At this level, PDCA consists of:

• PLAN:    Understanding the ideal condition and gap between current and desired performance (through catchball).  Identifying the root cause(s) of the gaps and developing countermeasures that may help close the gaps;
   
• DO:  Testing the countermeasures to understand whether or not they result in closing the gap;
   
• CHECK:  Reviewing the results of the test to determine whether the countermeasure did, in fact, result in expected improvement;
   
• ACT:  Adopting the countermeasure and updating standard work; adjusting the countermeasure based on test results, or abandoning the countermeasure if it did not result in improvement.

The Learning Organization

One of the most critical aspects of PDCA thinking that is often ignored is the amount of learning that each trip around the cycle provides.  Whether an action results in the desired improvement or not, proper testing can provide valuable information for future activities, as well as increasing the knowledge of team members.

As with much of a lean deployment, the benefit lies in transforming thought rather than implementing tools.  Thinking of the PDCA cycle as a management model rather than a tool is critical to a successful and sustained lean effort.

Fighting Organizational Complacency

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Applying lean requires a significant shift in thinking for most of us.  One aspect that I have found to be particularly difficult for people is the notion that anything less than perfection is acceptable. There seems to be a natural tendency to accept that things are good enough - and when people in the organization reach this point, complacency sets in and the improvement process begins to die.

One of the warning signs of organizational complacency is a passive resistance that shows up in statements like, "we can always improve, but . . . "  The "but" is the tip off that a person does not truly feel things can get much better.

Believing Your Own Press

Over and over again, I have seen periods of significant improvement followed by a return to mediocrity fueled by a belief that the most significant problems facing the organization have been solved and further improvement is not necessary.  In one instance, I worked with an organization that, over a period of several years, achieved marked improvement in product quality while increasing inventory turnover fivefold.  As the company became recognized as the industry leader, however, arrogance began to creep into its culture - which was not surprising given the remarkable turnaround that occurred during the previous period.

As is often the case, the arrogance was accompanied by complacency, and signified that people were satisfied with the current level of performance.  Within two years, the company's improvement efforts stagnated as inventory levels increased, quality declined, and profitability suffered.  The CEO who led the company during the period of growth (and was since promoted to a higher position within the parent company) returned to the organization to re-establish a continual improvement mindset.  After several years, humility and a drive for perfection began to return to the culture.

Some of the articles on the problems faced by Toyota a few years back point to organizational complacency as a potential cause.  Although much of the accelerator issue was eventually blamed on driver error, the company's rise to number one in such a short period of time, along with the significant increase in stock price, caused a loss of focus and made it difficult to maintain the motivation to improve.  Recognizing this as a problem, Akio Toyoda has said on several occasions that the company's future success requires a return to the basics - something that, at least from the outside, it seems to be working.

Perfection is the Only Acceptable Result

People in companies that appear to sustain the process over long periods of time tend to exhibit an obsession with improvement.  The drive to improve is integrated to the point where any resistance to change is quickly identified and repressed to prevent it from creeping into the culture.

As written in a previous blog (link), the notion behind the use of the term countermeasures rather than solutions is meant to keep anyone from thinking that there is an end to improvement efforts.  When the goal is perfection, there can be no such thing as a “solution” to a problem.

Continually striving for perfection can be tiring, so it is important to celebrate successes along the way.  While recognizing achievements, however, it is important that everyone understand that achieving and sustaining success requires never letting go of the idea that perfection is the only acceptable result for the company.  And a culture that continually strives for perfection has no room for the word, “but.”

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.