Category Archives: Lean Six Sigma

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Does Lean Apply to You?

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Lean Applied to Non-Manufacturing Areas

I am assuming that most management employees have heard of Lean concepts as applied to manufacturing.  At the same time, in my experience, most outside of manufacturing will say that Lean does not apply to them. 

In nearly 40 years of professional life, I have found that some of the largest gains brought about by Lean are in the support areas of manufacturing, not in manufacturing itself.  Manufacturing cannot be Lean without its support functions also being lean.  Lean principles applied to IT, HR, Sales, Engineering and Logistics have a snowball effect on manufacturing and a business as a whole.

COPQ and COW

Let me introduce you to the Cost of Poor Quality (COPQ) and the Cost of Waste (COW).  They are similar in scope and evaluated in the same way.  COPQ leads to COW.  Basically, to measure either, simply ask “What would change in the facility’s financial performance if everything was done perfectly correct?”

Consider the following within the context of the cost of poor quality:

  • What would the financial result be if we never had unplanned mechanical down time?
  • What would the financial result be if we never had unplanned IT related communication down time?
  • What would the financial result be if communication between Engineering and Operations was so tight that Engineering was able to always anticipate Operational problems before they happen?
  • What of Sales and Operation never miss-communicated?
  • What if we never hired the wrong person?

Before anyone gets defensive, understand that each of the considerations mentioned above involves cross functional communication, cooperation and accountability. This brings me to the most important step in the Lean journey to reaching our potential as an organization.  The elimination of silos.

Silo

Silos divide an organization into independent operating groups with their own goals and objectives, that may or may not be in alignment with other operating groups.  Silos sub-optimize an organization by creating competing objectives, poor interdepartmental communication, and interdepartmental conflict.

If you identify more with your department than the organization that contains the department, you are silo’ed.  Where you are meeting your own departmental target metrics, you are probably not meeting the organization’s target metrics.

Things you hear and experience from a silo’ed organization:

  • That’s not my job, or that is someone else’s job.
  • It works fine, or looks fine here. (It is never fine, by the way, if it doesn’t work fine on the production floor.)
  • You have to go door to door (department to department) to get help.
  • Lack of a sense of urgency when the customer is at risk. (a customer can also be another department)

High Performance Teams

There is a adage that you hear in highly successful businesses, “When the ship sinks, everyone gets wet, even if it isn’t their fault.”  High Performance teams have the following characteristics:

  • When things go wrong, or when the team thinks things might go wrong, everyone “runs to the fire” to see if they can help.
  • There is a sense of urgency to do better.
  • Individual and departments see their success as being intimately tied to the success of the organization as a whole.
  • It is easy to hold each other accountable, because it is about performance not personality.
  • Every individual in the organization can tell you where the organization is going and how their department and their own efforts are helping the organization be its best.

Be Your Best

Questions you need to answer to be the best you can be. 

  • What kind of organization do you want to work for, the Silo’ed organization or the High Performance Team? 
  • How well aligned are your objectives, your department’s objectives and the organizations objectives?
  • What can you do to facilitate needed change?

I know what I want and I believe that it is not that different from what you want.

Lean is not for us, as we really want to provide quality to our clients

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Recently, I needed to undergo major surgery. Most staff will ask what you do professionally (probably to calm your nerves). In a haze of sedation and pain, I mostly answered “…something with Lean and Six Sigma”. It was good to hear many seemed to know what I was stammering about. A response I am sure I heard a few times was along the lines of….”Lean is not for us, we are about quality for clients”.

Now let me be clear, the care I received was exemplary, I can only bow my head in deep respect for all the staff in the hospital. The way they care about people, strengthens my faith in mankind.

Evidence of Lean was everywhere

Even on my way to surgery, lying in my bed wearing one of these gowns, which somehow always show more that you want and are really cold, I could see visual management, 5 S and standard work used in their protocols (just in case the confused me for my twin brother). Even the surgeon, just before cutting me open, mentioned stand ups.

So how is Lean not about Quality

After waking up, and the fog lifted, I could not get rid of this paradox, so many lean measures working, but Lean seen as something separate from quality (thus customers).  I decided to see whether the people caring for me could tell me more….?

Most staff I asked, confirmed that their problem with lean is that it interfered with the quality they wished to offer their clients (read patients).

Listening to most of the staff, I noticed shared opinions. Lean is about tools that cost time (e.g. boards, protocols). It is driven by third parties, who know nothing about what really happens. It really is about cost cutting.

Summarizing, Lean was something you do because others tell you to do so and it is really not part of your daily work.

A quiet evening shift

After a few nights, you develop a rapport with some staff. During a quiet evening shift, I offered some of them my view. I asked some staff members whether their work had changed. Everyone said that medical science is developing, (my laparoscopic operation would not have not been possible a few years ago). Also, their patients were changing, growing older and multicultural. As a matter of fact their world was changing at a lightning pace.

A change of mindset

I then asked for their view on these changes. As expected most embraced it and wanted things to change.  They agreed that if their work could be made easier they would have more time to adapt to change and have more time left for quality care for patients. I told them, that is what all Lean tools try to achieve.

The penny dropped. Tools were just tools. We should use them to make life easier and spend more time to really provide quality to patients.

A simple example was walking back to a dispensing unit if my medication i.e. oxycodone was not in the cart. Retrieving it, costs time which could be spent differently. Somehow, we needed to think of a way to enable this instead on relying on memory or patient initiative. It is a shift to a lean mindset, looking for ways to make what do you easier and giving you more time to spend quality time to your patients.

The next day

One staff member came up to me and said, aren’t you the lean guy (as I had lost 7 pounds, my answer was a double yes). She said, I have an idea about changing the activities on the handover between night and morning shift, it saves at least 30 minutes, but I just do it and nobody else. I said mention it during the next meeting. But what do I call it, she said? Well, just show them that it enables you to spend more time with patients.

Leaving and going home

Do you know the sense of relief, of knowing you can sleep in your own bed and not hear 3 other people snoring? In that mood, I was in my wheelchair, when the staff member I mentioned said, thank you for your clarification on lean (my response was, I should be the one grateful for their excellent care). She ended with, I have few more ideas!

Lean; a Mindset

At home I, could not suppress I smile, I really hope at least this one person sees lean as a state of mind, always looking for ways to improve and thus care for your patients. We cannot change the world but let’s start with one person at a time.

 

Michel C. Doppert

Master Black Belt Lean Six Sigma

The Lean Six Sigma Company UK

Estimating Project Timelines

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Statistically Estimating Project Timelines by Walter McIntyre

Statistics

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.

The answer lies in statistics and human nature. Let’s deal with statistics first. When events are independent, like in rolling a pair of dice, all possible results are independent of each other.  For example if I roll a set of two dice 20 times, I will get 20 results that range from two to twelve.  If I plot these results in a frequency plot, I will get a normal distribution (a bell curve for you non-statistical types). If I roll the dice another 100 times, I will get the same distribution. Why? Because the probability of getting a pair of 2’s on roll one of the dice is exactly the same as the probability of getting a pair of 2’s on rolls two, three, four, etc.  I could bore you with a discussion of the central limit theorem at this point, but let’s not.

Instead, let’s change the rules of dice rolling and magnetize the die so that if die one comes up 2, die number two will come up 2 also. Now the result of each roll of the dice is no longer independent. Instead the resulting sum is dependent upon whether one of the die comes up two or not. The resulting distribution of 100 rolls will be skewed instead of normal. What does this have to do with projects meeting time and budget goals?  Let me explain.

If you look at a project map, a Gantt chart for example, you will see that the tasks in the project are not independent.  They depend upon each other. For example, let’s say that task three cannot start until task one and task two are finished. This means that task three’s start time is not independent. It is dependent upon the finish time of tasks one and two. So, a delay in either task one or two will result in a late start of task three. Since there is dependency between the successful on time delivery of these tasks, the central limit theorem does not apply. Additionally, the dependency tends to push the time line to the right (late delivery).  If we were to run through tasks one, two and three 100 times, the distribution would be skewed to the right (late delivery).

The reason dependency, in this case, skews the timeline to the right is related to human nature. Estimators tend to over promise to satisfy the requirement of a bid process (work is rarely awarded to the bidder with the longest delivery time).  Workers tend to wait until the exact start date to begin work rather than start early. Surprises in the task schedule nearly always delay the completion of a task or schedule (how many times have you observed an unforeseen problem shorten the delivery time in a project?).

Practical Approach

So what is an executive supposed to do? Most look at a schedule and apply a 70% efficiency factor to it. In other words, assume the time line will be 30 % longer and more expensive than planned. Of course the more you know about a project, its customers, and the quality of your delivery processes, the better you can estimate.

Another Approach

Another approach for estimating a project timeline is using a tribal knowledge calculation.

(most ambitious completion time + (4 x the most probable completion time) + the worst case completion time)/6

I find this method to actually work pretty good. Typically you will get each of these completion time estimates from different groups.  It is also easy to sell.  One additional plus is the ability to give the results as a  date range instead of a specific date.

Pythagorean Theorem

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Pythagorean Theorem by Walter McIntyre

Pythagoras may have come up with the Pythagorean theorem, or maybe one of his students. It is impossible to know for sure, so I’ll give him credit. We understand the theorem as the sum of the squares of the sides adjacent to the right angle in a right triangle, equal the square of the side opposite the right angle (hypotenuse). a2 + b2 = c2. See below.

Pythagorean Theorem

If you are reading this blog post, you probably already know this. But…can you see the other relationship.  The area of the squares associated with the sides adjacent to the right angle, when added together, equal the area of the square associated with the side opposite the right angle.

This is another piece of number magic. The approach of considering the areas of the squares in the Pythagorean Theorem is used in boat hull and airplane design.

Central Tendency

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Mean Median and Mode in Central Tendency by Walter McIntyre

Before discussing measures of central tendency, a word of caution is necessary. Customers do not feel averages. They feel their specific experience. As a result, while central tendency is an important descriptive statistic, it is often misused. For example, a customer is told that the average delivery time is noon, but his actual delivery time turns out to be 3:00 PM. The customer, in this case, does not experience the average and may feel that he has been lied to.

The central tendency of a data set is a measure of the predictable center of a distribution of data. Stated another way, it is the location of the bulk of the observations in a data set. Knowing the central tendency of a process’ outputs, in combination with its standard deviation, will allow the prediction of the process’ future performance. The common measures of central tendency are the mean, the median, and the mode. Which of these descriptive statistics you need to use depends on the characteristics of the data set.

Mean, Median, Mode

The mean (also called the average) of a data set is one of the most used and abused statistical tools for determining central tendency. It is the most used because it is the easiest to apply. It is the most abused because of a lack of understanding of its limitations.

In a normally distributed data set, the mean (average) is the statistical tool of choice for determining central tendency. We use averages every day to make comparisons of all kinds such as batting averages, gas mileage, and school grades.

One weakness of the mean is that it tells nothing about segmentation in the data. Consider the batting average of a professional baseball player. It might be said that he bats .300 (Meaning a 30 percent success rate), but this does not mean that on a given night he will bat .300. In fact, this rarely happens. A closer evaluation reveals that he bats .200 against left-handed pitchers and .350 against right-handed pitchers. He also bats close to .400 at home and .250 on the road. What results is a family of distributions

As can be seen, the overall batting average of this baseball player does not do a good job of predicting the actual ability of this athlete on a given night. Instead, coaches use specific averages for specific situations. That way they can predict who will best support the team’s offense, given a specific pitcher and game location. This is a common situation with data sets. Many processes produce data that represent families of distributions, like those in the diagram above. Knowledge of these data characteristics can tell a lot about how a process behaves.

Another weakness of the mean is that it does not give the true central tendency of skewed distributions. An example would be a call center’s cycle time for handling calls.
If you were to diagram call center cycle time data, you would see how the mean is shifted to the right due to the skewedness of the distribution. This happens because we calculate the mean from the magnitudes of the individual observations. The data points to the right have a higher magnitude and bias the calculation, even though they have lower frequencies. What we need in this case is a method that establishes central tendency without “magnitude bias”. There are two ways of doing this: the median and the mode.

The median is the middle of the data set, when arranged in order of smallest to largest. If there are nine data points, as in the number set below, then five is the median of the set. If another three is added to the number set, the median would be 4.5 (the mid-point of the data set residing between 4 and 5).

1 2 3 4 5 6 7 8 9 1 2 3 3 4 5 6 7 8 9

The mode, on the other hand, is a measure of central tendency that represents the most frequently observed value or range of values. In the data set below, the central tendency as described by the mode, is three. Note that the median is 4.5 and the mean is 4.8, indicating that the distribution is skewed to the right.

1 2 3 3 4 5 6 7 8 9

The mode is most useful when the data set has more than one segment, is badly skewed, or it is necessary to eliminate the effect of extreme values. An example of a segmented data set would the observed height of all thirty-year-old people in a town. This data set would have two peaks, because it is made up of two segments. The male and female data points would form two separate distributions, and as a result, the combined distribution would have two modes.

In this data set, the mean would be 5.5 and the median would be of similar magnitude. Using the mean or median to predict the next person’s height would not be of value. Instead, knowing the gender of the next person would allow the use of the appropriate mode. This would result in a better predictor of the next person’s height.

In other words, the appropriate method of calculating central tendency is dependent upon the nature of the data. In a non-skewed distribution of data, the mean, median, and mode are equally suited to define central tendency. They are, in fact right on top of each other.

In a skewed distribution, like that of the call center mentioned earlier, the mean, median, and mode are all different. For prediction purposes, with a skewed distribution, the mean is of little value. The median and the mode would better predictors, but each tells a different story. Which is best depends upon why the data is skewed and how the result will be used.

A shift in the process’ output can make a data set seem skewed. In that case, the recent data is evidence of special cause variation. It means that the data set is on the way to becoming bi-modal, not skewed. For example, consider measuring the height of all thirty-year-old-people in a town as above. If females are measured first, there will be a normally distributed data set centered around 5 feet. As the men begin to be measured, the date set will begin to take on a skewed look. Eventually, the data set will become bi-modal. This phenomenon can make statistical decision making difficult. The key is to understand the reason for the data set’s skewedness.

The lesson to be learned here is that things are not always what they seem to be. You have to know what is happening behind the numbers to make the correct decision about how to calculate central tendency.

Understanding the nature of the data is also critical to making good choices about which statistical tools to use. Many poor conclusions find their origin in a lack of data intelligence.

In summary, as a rule, the mean is most useful when the data set is not skewed or multi-modal. Either the median or mode is useful when the data set is skewed, depending upon why it is skewed. The mode is most useful when the data set is multi-modal. Under all circumstances, the nature of the data will dictate which measure of central tendency will be best.

Innovation and Creativity in Motion

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Many of the activities and strategies we use to innovate and manage are actually road blocks to creativity and innovation. Certainly, the enforcement of a time line and being cost conscience, are important, but only in respect to their appropriate place in the life cycle of a product or service.  When applied to the creative and innovative phases in this life cycle, they are disruptive and cause sub-optimization.

Innovation is a creative process that requires open-mindedness and a safe environment.  Creativity and innovation are processes that rely upon failure and the ability to learn from failure. You cannot create or innovate where failure is unacceptable or penalized.

Formatted business meetings and project management meetings are not events for innovation. They are events for business management. Important?  Yes, but not in the innovative process.  In these venues, failure is a negative thing and, “when will the project be completed?”, is the primary question. In the innovative stages of a project “what to do?” or “how to do it?” are the main questions.  Other thoughts get in the way.

What I am about to say will make control oriented managers uncomfortable.  You cannot control creativity, you can only feed it or starve it.  When a work group or team is in the creative or innovative mode, just get out-of-the-way. Command and control must give way to facilitation. You are better off guarding the door to keep creativity starving people and systems out until it is time for them.

When a work group or team is working in the creative and innovative phases of a project, questions like who gets the credit, cost, who is smarter, and how fast can we get done,  take a back seat to collaboration. It is an inclusive environment instead of an exclusive one.

Here are some ideas to support creativity and innovation. First, casual dialogue centered loosely around a topic opens up the possibility of seeing things from multiple perspectives, thus eliminating an error in parallax. This is the way great minds like Einstein’s worked. It is also how high-performance work teams think.

It’s not about discussing a specific aspect of the project so much as it is a general meandering dialogue. There is more storytelling and analogies than would take place in a typical development or project meeting.  Meetings away from one’s work desk or controls are great for this type of thinking.

It is a safe environment where people are allowed to get out of the box. People who are not the exerts on a particular topic get to offer their perspective, forcing the experts on that topic to think through a response to their questions and suggestions. It is a movement away from what we think we believe, to true understanding. The result is innovation and creativity in motion.

Second, there need to be creativity/innovation zones in the work areas.  These are spaces where folks can talk, argue and “sharpen the sword” with each other.  Employees do not go there to work, they go there to think creatively.  This space is divided into group “think tank” areas and individual “thinking out of the box” areas.  They are not anyone’s personal space, they are not scheduled spaces, and they are only for the creative/innovative processes and folks.

Lastly, encourage dialog between workgroup/team members that have little format, other that a place and time.  As a line manager, you may want to stay out of these meetings and be informed by way standing project meetings later. This is definitely a “watched pot never boils” situation.  Manage creativity and innovation by staying out of the middle of it.  This means facilitation instead of control.

You Don’t Know What You Don’t Know

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The Lean Shop does not exist because of cutting costs.  It exists as a result of proven best practices. Sometime you have to spend money to save money.  This Lean bulletin is about determining both the most effective and the most efficient way to perform a task.

The axiom behind “You don’t know what you don’t know” is the same as for “If you are not measuring it, you’re are not managing it”.  There is value in knowing that a vehicle is in pre-loss condition and safe for the vehicle owner to drive.  But how do you know that these criteria are met?  Just guessing will cost you both time and money

On way to understand the best way to do a job is to experiment.  This is as simple as challenging your assumptions.  One approach is to use the Comeback Repair Log in our bulletin a couple of week ago.  Select one of the entries and ask what assumptions may have resulted in the vehicle not being repaired correctly.  Then investigate to find the root cause and correct it.

It isn’t enough to admit that a mistake or bad assumption was made. You have to begin measuring the process and managing based on the results. Once you know a problem exists, you are compelled to correct it and monitor the process to prevent it from happening again.

Here are the take aways:

  • Challenge your assumptions.
  • Evaluate the root causes in your Comeback Repair Log.
  • Once corrective action is taken, measure the process to see that the process is truly fixed and stays that way.

Rolling Out Lean Principles in a Business or Organization

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A brief outline of the steps to rolling out Lean in the work place. Bear in mind that I believe success depends upon leadership and mentoring instead of supervision.
First, listen and teach. Set up brief training sessions using classroom time, Gemba walks, 5S, and identifying waste. Teach the group to use Lean tools to recognize opportunities while walking their work space. Frame what you teach in terms of the listeners’ value proposition. This is to gain trust. As a leader, you should be selling instead of telling. Teach basic tools they can use right now. Have the group document a list of opportunities.
Second, lead the group into a baby step project.  If they haven’t done so already, have the team create a list of opportunities and chose which they want to tackle as a project. At this point they become a team instead of a group of individuals. Teach them tools for use in their chosen project and go out and get it done. As others see the team’s activities, you may see the number of individuals interested in participating increase. Allow this to happen. You may have to create more than one team depending business circumstances.
Third, after a successful project, have the team re-evaluate the list they created earlier. It will change based upon what they have learned. Tackle another project from the list. Get some momentum from successful projects. This increases trust. Encourage the team to take on smaller projects in their own work space. Act as a facilitator and a supplier of resources. Lead instead of supervising. Again, as others see the team’s activities, you may see the number of individuals interested in participating increase. Allow this to happen. You may have to create more than one team depending business circumstances.
Forth, you are now in the midst of a Lean rollout. You may want to christen the rollout with a name that is unique to the team or teams. Be careful about asking the team to follow you in the Lean implementation on a larger scale. You don’t want the team(s) to see the process as a “program” they are doing for someone else. They need to see it as something they are doing for themselves (remember the value proposition they started with). The team(s) need to “own” the initiative. There will come a time for them to see it on a larger scale.
Fifth, you don’t have to use special names for tools and projects. This can create pushback. Listen to the people you are working with and they will indicate when, if ever, it is appropriate to start adding special names. The main thing is to keep in alignment with the overall value proposition of the business and in alignment with the team’s value proposition.
Sixth, “keep the main thing the main thing” by not allowing the effort to become personally yours. The effort belongs to the group and the business as a whole. As much as possible, stay in a leadership mode instead of a supervisory mode.

Net Promoter Score

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Net Promoter Score is a metric that gives an external scoring of the quality of your internal processes. It measures your performance in the eyes of the customer. Like all other quality measures, NPS is only useful when kept in context.

For example, if you survey every shopper that did not purchase from you or every customer with a bad experience, you will have a negative NPS. Conversely, if you survey only successful shopper interfaces, you will get a positive score.

Let’s drill down further. You can obtain an NPS on you sales process by surveying both shoppers who bought from you and those who didn’t. You can obtain an NPS on your overall product or service by surveying all of you customers at various times in their experience with your business. You can also obtain an NPS from your employees.

As in any survey, the quality of the questions used lead to specific results. The vast majority of surveys are flawed in this respect. You can control the outcome by asking questions that lead. Political surveys conducted by the respective parties are particularly bad in this respect. If you are not willing to be brutally honest with yourself and open the door to direct and potentially painful customer comments, you are better off not traveling down the path of establishing an NPS program.

If you are the brutally honest type and you have sampled your shoppers/customer properly, here are some tips for improving your NPS.

  • Low scores can come from shoppers/customers not understanding your product or service.  Educating your shoppers/customer can help to mitigate this.
  • Low scores can come from over promising to the prospect before they are a customer. Actually, shoppers like honesty. It leads to trust and predictability. Promise only what you can reasonably deliver and then deliver it. Winning a sale by hedging, then failing, is not a win at all.
  • Low scores can come from under delivery. The corrective strategy is based upon delivering what you promise. Customers only care about what they experience. The one customer out of 10 that received a late delivery does not care that the other nine customers received on time delivery.  Of the 10 customers, the one that experienced late delivery is more likely to have stronger feelings about you than the 9 who received what they expected.
  • Expectation is the mother of all success and failure. Corrective strategy is to manage expectations.  This comes down to communication.  Don’t make the customer contact you to find out there is a problem. Control the message and expectations by being a “first strike” communications person.

Actually, I don’t like metrics like NPS very much.  They attempt to qualify customer information without statistical evaluation. Additionally, some senior managers will use NPS as if it were telling them “why” customers feel the way they do, when NPS actually only indicates the “What”.

Let’s finish with a story that relates NPS to a compass.  A group of men went deep sea fishing one Saturday.  They motored out 25 miles and began to fish.  At about three in the afternoon, they decided to head back.  Using the boat’s compass the captain pointed the boat eastward and began the trek back to shore. Four hours later, they still had no siting of the shore.  By the next morning, panic had sat in and the captain called the Coast Guard. Using the boat’s locator, the Coast Guard found them150 miles off shore. They also found a soda can with a magnetic lid sitting next to the boat’s compass, rendering it useless. The moral of the story is that a biased measurement is useless (and don’t sit magnetic objects next to your compass).