Opening Our Eyes to Value

When Jim Womack and Dan Jones wrote the seminal work on Lean, Lean Thinking, their key first point of Lean is to understand value, as the customer would describe it. Then, any activity that does not add value is target for removal.

So, what would you do if 50,000,000 of your customers said they did not want something you were offering? Wouldn't it seem to give you a clue about value, or lack thereof?

It would for most of us, but this fact seems to be lost on telemarketers. So, the President just signed into law legislation granting authority for the No Call List to go into effect.

And the telemarketers are screaming.

And all the rest of us are smirking.

But, I don't think we should be so smug. Why try to remove the proverbial "speck" out of the telemarketers' eye without first finding the "log" in our own.

The sobering part of this ongoing saga is that each of us are probably missing similarly loud and conclusive statements by our customers. And while those statements may not attract the attention of the public, Congress and the President, they are every bit as significant to our own company's future.

Customers will tell us what they value or don't value. Will we listen? Will we grasp our customers' view of value any better than those folks who still seem bent on interrupting our supper?

I hope this is helpful. Feel free to forward to a friend. Email me

More on Sustaining

Many thanks to my friend and alert reader John Kelly of Valspar Corporation who mailed me a tear sheet from an industry magazine of painters and coaters.

The article describes the 5S experience of a company and is titled. "Getting Started in Lean Manufacturing. A solid intro to the aspect of keeping the place clean.

Thanks, John. This is helpful to me and I hope helpful to others as well. Feel free to forward to a friend. Email me

Multitasking??

My pal Frank Patrick wrote a crisp blog last week on the futility of multitasking...some very good stuff, which I endorse fully.

So, I laugh as I sit in my basement on a Saturday afternoon, blatantly ignoring Frank's counsel, being a poster-boy for Multitasking instead. One radio has the Cubs playing the second game of a double-header against the Pirates in which they can clinch the division title. On a different radio, I'm tuned into the Purdue-Notre Dame football game, a personal special each year for me since I went to Purdue and my father played football at Notre Dame. And, as I do this, I sit at the computer, writing this blog.

Sorry Frank!! I promise not to do this at work this week...but it sure is fun when both the Cubs and the Boilermakers are ahead!!

I hope this makes you smile...and please, do as I say, not as I do!! Feel free to forward to a friend. Email me

Talking in Public

One of the most useful things about blogging is the public nature of the discussion. Anyone with web access can drop in and comment; as such, learning happens more quickly.

So it goes this week. Earlier this week, I commented on earlier blog by Jeff Angus. Jeff wrote me privately, explaining his point further. He then published the substance of that letter in a subsequent blog.

Is this just a bunch of blather by geeks playing with their computers? Some would say so. But, cynics aside, what is going on? Two crucial things strike me:

• Jeff clarified his excellent point, which was that the only choice a manager has to do more with the same or the same with less...never more with less. Check out the very instructive pseudocode he wrote for this process in his post.
• I can clarify my main point which was not about "more with less" at all; yet that wasn't clear in my blog. My point was about making a habit of scrutinizing assumptions whenever an apparent conflict arises.

See what happens in a public discussion? This is the verbal equivalent of visual management in a lean environment. Just as we make metrics and processes very visible to any passerby, so we should make our discussions public. The size of that "public" will obviously vary...company matters need to stay in the company, not on the web. Conceptual issues like this can happen in a wider setting. And we all benefit.

Thanks, Jeff, for your excellent insight. I hope this is helpful to all of us. Feel free to forward to a friend. Email me

Beware the Assumptions when Conflict Arises

Thanks to my friend Frank Patrick, I recently began following Jeff Angus' excellent blog Management by Baseball. Those of you who know me will immediately recognize it's appeal; two of my favorite subjects, linked closely together!

Thus, I was very surprised and disturbed to read the September 22 post in which Jeff blasts any manager who believes that it is possible for an organization to achieve "more with less." He has some pretty inflammatory language there, ranging from one's disease status to political beliefs. And then linked all of this, by example, to Nomar Garciaparra, the great shortstop of the Boston Red Sox!!

Jeff is an excellent writer; the piece was pretty disturbing; there was conflict. When I see conflict, I immediately start to look for assumptions, knowing that it is usually an assumption, stated or unstated, that gives rise to the conflict. I found it and I think it is insightful for those of us learning about lean.

The assumption Jeff made is that any organization which attempts to do more with less will do so by forcing its existing staff to do all the things the company used to do before, but with fewer people. This drives multitasking, which drives up stress and drives down productivity. If this assumption was true, I would agree fully with Jeff.

In a lean organization, however, one is continuously looking at doing only value-adding steps. All of our companies have tons of waste which the customer does not demand: rework, poor quality, extra movement and transportation. So, when we get rid of these, we stop doing activities and change nothing for the end user.

Can you get more with less? Yes. But only by applying the correct tools. And assumptions. Which is what makes the Lean paradigm so powerful.

I hope this is helpful. Could it even help the Cubs pull out the NL Central this week? Let's hope so. Feel free to forward to a friend. Email me

The Pace of Improvement

In a post a few weeks ago, I mentioned that blogs might be less frequent due to a lot of efforts on kaizen events here. For once, my prediction was correct. Before I let this go to my head and move to a career on The Weather Channel, here are some of the things I've learned in the last few weeks.

• It takes practice. Most individuals and nearly all companies are not set up to change rapidly. The same can be said of an exercise program; you start to jog, your leg muscles let you know something is different. We have paced this recent move to stretch, but not break, our resolve. Not anywhere near world-class yet; sure are moving beyond our usual pace.
• Adapt to local conditions. One practical example: what the rest of the Lean community calls a "kaizen event", we call a "blitz." I don't know why, but our folks here are a lot more comfortable with the Germanic term than the Japanese one. It works; we use it.
• It reshapes your expectations of change The rapidity with which kaizen events can bring about change has affected many of our folks' perspective. "Gee, maybe we can implement that sooner!"
  
• How do you handle the "rest" of your job? Each event generates things to do. We are starting to see how that impacts each person's "regular job"...Especially mine!! Don't have this one figured out yet, and if you looked at my office you'd agree.
• Goal clarity is crucial. The one thing I've been thrilled with is the simplicity and clarity of the goals of the individual kaizen events. As a result, we've hit almost all the goals. Simple is good.
• Simple, real-time documentation is essential. Simplicity extends to the documentation of the outcome of the events. We're not as good on this as we need to be yet.
• Visual tools are critical here too. We're setting up a separate scoreboard just to be visual about our progress (or lack thereof) in doing events. Whereas scoreboards in most of our work areas are tactical in nature, this is more of a strategic scoreboard. Public. In the middle of our office area.

Lots going on. Lots of hours of work. Lots of progress. A brutal business environment. I remain convinced the Lean strategy is central to serving customers well.

I hope this is helpful. Feel free to forward to a friend. Email me

On Sustaining

I wrote recently about the challenge of sustaining process improvement and an example I saw recently in a painting plant. This morning, I gained further insight. And, as so often happens, the simplicity of it astounded me.

At a steering committee meeting of the Wabash Valley Lean Network, the topic of sustaining process improvements came up (and will be a major focus of our programs in 2004). Jim Clark, of Toyota's Fork Truck Manufacturing facility in Columbus, IN described how they do it.

1. Process improvements are written and documented.
2. Workgroup leaders monitor the conformance daily.
3. Managers audit the area weekly.
4. Executives audit one area of the plant monthly.

Boom. Have a system. Audit it daily, weekly, monthly. And, a walk through their plant indicates that this really does work.

I suspect most of us are not anxious to a) clarify the improvements that well and b) do the walk throughs that regularly. Then again, most of us are not anxious to audit our diets all that closely either.

I'm working on some simple forms and visuals to try to make this happen. I'll update this piece on how it goes.

I hope this is helpful. Feel free to forward to a friend. Email me

One Year of "Learning About Lean"

I was surprised to observe that tomorrow marks one full year of this Blog. A few quick thoughts about it.

I first learned about blog technology about three years ago and was immediately fascinated by blogging's promise of rapid-fire, low-cost web publishing. I toyed with the idea for some time and was finally provoked by my friend Hal Macomber into starting it last fall.

What we have here is simply an experiment in learning. I find that when I can write about a subject, I understand it better. Nothing too complicated there. I've kept a personal journal for years...they are stacked up in my basement and may provide some humor for my grandchildren years from now.

The particular experiment of the blog was to see if a broader audience cared to eavesdrop on my musings about the practical issues of implementing Lean systems. I doubted it would be of much interest but decided to try it and open it up to my colleagues, vendors of our company and anyone else in the wider Lean community.

I continue to be amazed that these entries seem to have some interest, way more than I ever anticipated. Just a couple hours ago, the 101st person signed up for an email subscription via Bloglet. Thank you , "broyal at a company known for reliability"!! Plus, there are another 200 hits each week on the site. I don't hear much from anyone about it (except from my friend and colleague Al Schambach...thanks Al for not drooling through these!) yet I hope it is helpful. It certainly is to me.

I chuckled this morning when I reviewed my first entry. It was a humble attempt to capture some thoughts of a long-time friend of our company, Dwight Stoller, on the subject of dealing with change. In a way, I've continued to try to capture useful thoughts on implementing a Lean system. I guess that was a precursor of things to come.

Thanks for reading! Thanks for letting me learn about Lean. I hope you are too.

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Keeping a Painting Plant Spotless

On Tuesday this week, I had a wonderful opportunity to tour Precoat Metal's Northgate Plant near St. Louis. Precoat is a vendor of a vendor of ours; they put paint on the steel that becomes the roof and sides of our suburban, Equine, and agricultural buildings.

John Gardner, the plant's operations manager, gave us the tour. He's a 20 year veteran of the business and exhibited a contagious enthusiasm for his job and his plant. I've seen a number of steel handling facilities and this plant was, hands down, the cleanest, best organized, visually appealing one I've seen. And, mind you, painting steel coils that zip along at over 600 feet per minute with multiple shifts running 24/7 is no small task. Keeping all the material in order and producing a quality product is a mind boggling job.

I complemented John on the organization of the plant. He shrugged and, not surprisingly, gave full credit to his people. He also pointed out it was a journey, not a one-shot deal. "We've been doing 5S for several years now. It sure helps." And it showed.

"But the 5th S, Sustaining, is always the hardest" I commented to him. He agreed fully. "And without everyone involved, you never sustain anything," he added, the voice of experience coming through.

John did get people involved, though, and it showed. I strongly suspect his personal example and involvement also was crucial.

I hope you can pursue 5S in your surroundings. Check out this article on sustaining a 5S effort from a recent SME newsletter.

I hope this is helpful. And that it doesn't clutter your desk. Feel free to forward to a friend. Email me

More on Leveraging Constraints

One of my avocations is baseball. So you can imagine my enjoyment when I recently came across the blog Management by Baseball written by Jeff Angus. If you like sports, you might want to bookmark this one.

In his post last Thursday, Jeff wrote about the folly of linear thinking. While not specifically speaking about constraints, he illustrates a crucial point that constraints also handle. Each system has some "leverage points," places where a little bit of effort brings about a very big result, disproportionate to the effort extended.

Understanding constraints leads you to ways to find those leverage points where a little effort and attention pays off big.

I hope this is helpful. Feel free to forward to a friend. Email me

More on Numbers

While we're talking about financial calculations, take a look at this excellent column on identifying key metrics from Inc Magazine. It is by Norm Brodsky, a great, practical thinker. His summary:

Indeed, the best businesspeople I know all have key numbers they track on a daily or weekly basis. It's an essential part of running a successful enterprise. Key numbers give you the financial information you need to take timely action. Business moves too fast to wait for the monthly, quarterly, or annual statements. By the time you get them -- weeks or months after the end of the period -- you're already dealing with the consequences of whatever problems may have arisen when you weren't looking. You've probably missed out on a number of opportunities as well.

Thanks to my friend and reader of this blog Brian McCory for this link. Brian is an expert on sales and marketing. If you need some help in that area, email me and I'll hook you up with him. He is currently available for consulting or employment.

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Concrete Forms as a Constraint, Chapter 3

I wrote on August 18 about a construction site near my home in which progress seemed slow. I followed up with a post on August 21 in which I discovered the constraint, the limiting factor of this site's progress, was the fact that the concrete subcontractor owned only 45 lineal feet of concrete forms.

Well, today I happened by the site again and noted that they finally completed pouring the entire basement wall. However, they never did get any additional concrete forms; instead, they poured 45 feet at a time, all the way around the basement wall.

What do we do, practically, with this thing called constraints? I propose that we move with simple calculations to figure the value of one day's improvement in speed at the constraint. Stay with me here.

1. From local press releases, I can roughly estimate the value to the owners of the new building, a medical device manufacturer.
   • I'm guessing the expanded facility will generate sales of about $1 million per month.
   • From my prior experience in the medical device industry, I would conservatively estimate their gross margin rate to be about 40%.
   • This means they would generate about $400,000 to cover fixed expenses each month from the new facility.
   • With an average of 21 business days each month, this works out to about $19,000 per day.
   • Therefore, every additional day the plant is operating will be worth about $19,000 for the firm to cover fixed expenses.
2. This figure can guide the contractor in how to spend money to speed the process. In this case, is it possible to rent concrete forms for less than $19,000 per day? Yes! At the high end, they could have doubled the number of forms for $1,000 per week!!
3. As it was, it took them 20 work days to complete the basement walls.
   
4. So, had they had 90, rather than 45, feet of forms it could have taken 10 work days to complete the basement.
5. This would have sped the completion of the building by 10 days, allowing the company to make $19,000 times 10, or $190,000 in gross margin dollars. The cost to the contractor would have been $2,000.
6. The decision is obvious.

DISCLAIMER: All of these numbers represent my estimates. They are not official. However, they DO illustrate how you would go about this process. If my assumptions are wrong, you could arrive at a different conclusion. But don't throw the baby out with the bath. I want you to understand clearly that this is one way we move the seemingly theoretical understanding of constraints into rapid, effective decision making. Note the process.

• It requires clear conversation between the provider and the customer. Somehow, these rough calculations have to come out in the open. But, by using these calculations, the conversation is easier.
• The value of speed can be quantified.
• It only makes sense to do these calculations at the constraint! Speeding up nonconstraining steps will not generate the value to the customer.
• The numbers don't have to be perfect...they only have to be reasonable.
• This framework is marvelously simple and allows a clear framework for decision making.

I sure hope this makes sense. Try it out sometime and see for yourself.
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Labor Day Thoughts

A cool, rainy, fall-like Labor day. Some thoughts on the workforce, from a Lean perspective.

• Why does a company exist? Each has it's own reasons, but I believe there is a common reason.

  To make money now and into the future.

  If a company does not make money, it cannot pay its staff. It cannot innovate. It cannot devote any resources to improvement. To lose sight of the centrality of current and future profits is naive and shortsighted.
• So how does a company make money? By delivering value. That is, a product or service that is worth more to the end user than the price paid.
• So how does a company deliver value? Through its people. And this is where Labor Day comes in. Only when a company sees its people as the vehicle for delivering value does it start to understand how it can excel. Machines don't deliver value...only people. Companies miss this.
• So how does a workforce or union thrive? Same thinking...by delivering value. When a worker or a union sees its longevity linked to how well it delivers value to the end user, the battlelines disappear and the end user wins. Many unions and workers miss this.
• Eliminating non-value adding activities unleashes real value. And it takes a gutsy management and workforce to look at this with a dry eye.

I ran into an acquaintance this weekend whose core political and economic assumptions are considerably left of mine. After the predictable trashing of several of my values, he asked "So, Joe, how many people has your company laid off in the past few months?"

I quietly looked him in the eye and said "None. And we're hiring...just concluded the latest hire two days ago."

Silence.

A Lean workplace should steadily be adding value. It esteems deeply the contribution of each associate. And, as in most ways, it turns conventional wisdom on its ear.

I hope this is helpful.

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