Lean

Lean manufacturing and similar systems are (maybe surprisingly) about making work easier. And, inversely, they are about making not-working more difficult. All those systems (although to different extent) aim to make people more engaged in their work. And, of course, by doing so we increase the profit, almost as a side effect.

Let’s imagine the best possible place for work. It is not about “oh, such a nice office” or “oh, my colleagues are really friendly and my boss respects me” – it helps, but it is not the key. The key is how engaged you are in what you are doing. And the maximum engagement provides the best place for work, as simple as that.  You come to your office or to your factory floor full of ideas, you stay late, immersed in some exciting opportunity, and sometimes even your pay is low – but you are doing it anyway. Because that’s the best place. And that’s our aim.

Now, how do we do it?

We come to every man in the organization, from the very top all the way down to the front line, to the very people who are in everyday contact with the goods and with the clients. And we work together to improve the existing management process and then work within the newly established management process. That’s the first step. We are not doing it for the client, we are doing it with the client – and that BTW is already a good way to increase people’s engagement at all levels.

Performance improvement in a nutshell: management system should be based on performance indicators (rather than result indicators) and on formalised action planning. When the whole system is up, running and accepted, it works like a charm:

Continuous-improvement-system-2015-ideas4biz

But before it is up and running and accepted, there are five big management system flaws to take care of:

The five big management system flaws

 

  • Flaw number one: Monitoring profit instead of monitoring efficiency. Profit is easy, it is a simple formula, something like Profit = (Price – Cost) x Volume. And, of course, price depends on quality and cost largely depends (at least in resource intensive industries) on yield, so let’s add those two and monitor the five profit factors – price, cost, volume, quality and yield – at every stage all the way down to the factory floor, right? Wrong! There is a significant drawback: people closer to the factory floor do not see their performance, they see only the cumulative result – which naturally makes them disengaged from their performance. To correct this mistake we develop so called local performance indicators (LPIs) – they are controllable at respective operation, they are measuring efficiency and they are immune to performance and conditions at other technological steps. So far so good,
  • Flaw number two: Flaw number two is to have a budget. There is nothing wrong with a budget but it puts the profit factors back in the center of attention – and while the budget is met you do not have to worry about anything, right? Wrong again! It’s not the best strategy to ensure engagement and it should be corrected. So we develop new targets – and those are targets by each LPI, and all of them are set at a level of “when everything goes absolutely right”. The goal here is to make people aware of their underperformance every time there is a potential for improvement.
  • Flaws number three and four: There is a tendency to do the checks not often enough and to punish for bad results while the better way would be to check often and never punish. Short feedback chain allows to react quickly as well as to address all acting causes of underperformance. That’s what I call a better working environment – it is very friendly for those who work, and it is very unfriendly for those who create excuses.
  • Flaw number five: The focus should be shifted from “fire-fighting” (addressing superficial causes after something went wrong) to the root causes of underperformance (addressing deeper causes in advance). In simple words, it is OK to produce 75 units today instead of 80 if the rest of the time you really work on ensuring production of 100 units tomorrow and all days after.

Do you see a big bump on the road? It lies between the #4 and #5 and it is about problem solving. Sometimes you are not able to dig deep enough to reach the root causes. Sometimes you do not know what can be the ways to deal with the root causes. Sometimes you cannot reliably chose the best way out of numerous options available. And sometimes you just lack the necessary attitude – to dare to deal with the root causes. So we continue – to what is problem and what is solving.


 

If you want to know a bit more about Lean, continue reading and follow the links:

The approach of Lean is to focus on DOWNTIME waste elimination where the DOWNTIME stands for:

  • Deffective production,
  • Overproduction,
  • Waiting,
  • Non-used employee talent,
  • Transportation,
  • Inventory,
  • Motion, and
  • Excessive Processing (i.e. move value than the customer needs).

Lean and Lean Six Sigma tools include:

  • 5S+ (sort, straighten, shine, standardize, sustain, safety, security)
  • Value Stream Mapping (business process mapping)
  • Kaizen (continuous improvement)
  • Takt (rate) time analysis
  • Jidoka (intelligent automation) in supervisory functions
  • Kanban (inventory control)
  • Poka-yoke (mistake-proofing))
  • SMED (single-minute exchange)
  • OEE (overall equipment effectiveness) analysis
  • Genba (being close to where the value is created)
  • FPY/RTY analysis (first pass and rolled throughput yield)
  • DMAIC (Define, Measure, Analyze, Improve, Control)