All management strategies and paradigms, from old school to Lean, have one element that is the same. That element is people. People are not pawns on a game board, they are not machines and they don’t always follow management’s vision.
Why is it that projects more often than not come in behind schedule and over budget? This question drives business executives crazy. Why shouldn’t there be an even split between on time project delivery and late project delivery? These are valid questions.
One of the problems with Lean applications, Six Sigma, Kaizen, 5-S, etc., is that they get applied without an adequate understanding of the target business. The result is a failure of the tool to “take”, and any improvements gained are short lived. Within a few days, things start sliding back to what the “normal” used to be.
The missing step is a readiness assessment. A thorough understanding of the business and its culture must be coupled with a thorough understanding of the Lean tool being used, in order to provide the best chance of success. This readiness assessment takes time to develop, requires good listening skills, and business acumen.
Waste can take many forms. There is waste of time, material, human resources, etc., all of which result in a waste of money for the business and its customers. Time and material is easy to understand, even if not always easy to see. The waste of human resources is more insidious.
Everything is interconnected and waste is usually found to be both the result of other waste and the cause of other waste. The ability to see both the big picture and the little picture at the same time is important. Fixing waste in one area that creates waste somewhere else is called sub-optimization and is counterproductive. Solid leadership and a shared vision will save the day in any waste reduction initiative.
In order to improve my on-time delivery of service, do I add resources to my process, or do I try to improve my process cycle time? The first consideration is that increasing resources increases your cost of operation. Improving cycle time does not. Another way to look at this is to compare your process cycle time with percent utilization of resources.
There is a relationship between variability in cycle time and percent utilization of resources. The source of this variation can be found in quality, rework, employee issues, etc. When variation is high, the percent utilization of resources reflects that variability and can impact on-time delivery, cost, and knowing how to allocate capacity (hiring, capital equipment, etc.).
Lean principles apply to any process based operation. I cannot think of any process that does not have non-value added components in it that create the opportunity for waste production. In fact, by definition, a non-value added component in a process is waste.
Let’s take marketing for example and do something called lean marketing. Please remember that in a post of this size, I am leaving a lot to the imagination. Some businesses have marketing programs that start with the product/service and move outward to the customer. They call this customer focused because they do eventually think about the customer. This is not all bad because the customer is a part of the equation. The problem with this approach is that it is self-limiting. In effect, it allows the product/service to define the target customers and, as a result, becomes growth limited by this boundary. This is the waste of missed opportunity
Value stream analysis is an examination of the sequence of activities required to design, produce and deliver a product or service. It involves an analysis of way pieces of the value stream interact with each other. Some of these pieces are:
– The people who perform the tasks and their knowledge and skills
– Tools and technology used to perform and support the value stream tasks
– Physical facilities and environment in which the value stream resides
– Organization and culture of the enterprises which owns the value stream
I have been working on a value stream analysis case study. I believe that you will find it useful and thought provoking. We used the VSA to define weaknesses in a process’s work flow, made changes, and documented the improvement that resulted. Cycle time was the metric we were pursuing.
Unfortunately, due to a death in the family, I will not get it finished this week. I apologize, but family does come first. We’ll take more next week.
Typically, the most suspect processes or process steps for introducing variation are manual or judgment oriented in nature. For example, if an individual applies personal judgment within a process you would expect to see bias or higher variation in the process output. Automated processes will typically have more consistent performance and lower variation.
One of the best ways to find these manual or judgment steps in a process is through the use of a process map. As a process is mapped, decision points are represented as diamonds. This becomes the first place to look for variation.
Lean and Mean Process Improvement is now available on CD as a PDF along with an assortment of Six Sigma Tools. Email me at firstname.lastname@example.org for details on how to purchase this CD.
Work started last week on converting Lean and Mean Process Improvement to an audio book. This work is in progress. I will post notification about availability as soon as it is ready. If you email me at email@example.com, I will notify you when it is ready for distribution.