Parents know how important the question “Why?” is to their young children.
It is also the favorite question employed by continuous improvement disciples.
There is a technique in the Lean Toolbox referred to as the ‘5-whys’. An example of how with this tool can be used is embedded in a recent story concerning the Monuments in Washington DC. A few years ago, 50-pound blocks of Granite and Marble were beginning to fall off Monuments like the Jefferson and Lincoln Memorials along with the iconic Washington Monument.
For months, the obelisk known as the Washington Monument was encased in scaffolding and wrapped in plastic while they repaired the surface. When asked "why?", the answer was; that for decades, harsh chemicals and high-pressure water had been used to clean the monuments of bird poop. A second ‘Why?’ was asked: “Why do the birds choose the monuments to poop upon?” Because birds eat spiders, and the monuments have many spiders. “Why?” because spiders eat gnats, and the monuments are covered with gnats. “Why?” Because we turn the lights on at dusk and it attracts gnats.
Why not simply turn the lights an hour later, after air temperature had cooled enough to discourage the gnats? Problem solved.
So, how can we apply the 5-Whys to the issue of Adoption of Lean as a way of life?
Why do we need to immediately begin adopting operational excellence (lean)?
Because our competition has outpaced us in adopting waste elimination through lean thinking.
Because we have not displayed the same sense of urgency
Because our parents and grandparents had no competition.
Because after World War II no one else could manufacture product.
Because their manufacturing capability had been destroyed or modified to support the war.
Because our parents and grandparents had little or no competition, there was no motivation or urgency about eliminating waste from their processes. They practiced ‘breakdown maintenance’ (running machines and people into the ground) with little regard to the ultimate cost of poor ergonomics, safety, downtime, excessive inventories, wasted labor, distance traveled or lead times.
In the years following the war, Japan, Germany and other countries slowly rebuilt their manufacturing system and infrastructure. They had to do so utilizing significantly limited natural and financial resources.
They could not compete with the U.S. in throwing money at the common problems related to manufacturing. They had to develop close working relationships with their supply chain partners, they needed to carefully manage their inventories, they had to find innovative methods to eliminate defects and rework, waiting, storage and transportation.
Desperation being the mother of invention, they had to work together as teams to streamline their processes, promoting a culture of “If we pick it up, we should finish it”. Here in America the mantra was more like “Make as many as you can; regardless of whether the next process needs them or not!”
This culture led to huge inventories, enormous levels of non-value added activities related to counting, redundant inspections, obsolescence, handling damage, not to mention the millions of square feet of space occupied just to store material that no one could use.
One of the driving forces behind all of this over-production was that companies had to cover the cost of machine changeover. It often took US companies hours to set-up machines that the Japanese teams had found a way to set up in minutes. Like a well-disciplined Indianapolis race-car team, the competition was beating us in the pits.
When they had the chance to learn from continuous improvement icons like Dr. Deming, the U.S. auto manufacturers arrogantly refused to recognize the opportunity. For over a decade, the competition quietly and steadily improved their processes and quality, until what surely seemed to the U.S. automakers like an overnight transformation, Japanese automakers began taking market-share and profits.
A government bailout soon after the turn of this century provided U.S. Automakers a chance to change their behavior. The result? They took the money and moved out of the country. As of the writing of this text, there is no longer a major U.S. auto manufacturer building U.S. branded trucks in the States. Rather than learn from the competition, they have chosen to focus on lowering labor cost by moving to Mexico or other countries who pay workers less than a living wage. As of the writing of this text, General Motors has announced the closure of five manufacturing sites in the U.S. They cannot compete with their foreign competitors for small and mid-sized autos.
It is a sad commentary on the arrogance, shortsightedness, greed and overall state of big business in America. We will likely not have a meaningful manufacturing legacy to pass on to our children and grandchildren if we do not make significant changes, and quickly.
Therefore, that is why; why we need to adopt Operational Excellence, Lean Thinking or whatever label you want to apply to World Class Operational Principles.
I just went back and re-read the last few paragraphs. In doing so, I realized that the message might initially seem harsh, and might be interpreted by some as dogmatic or negative. Nevertheless, I cannot in good conscience minimize or soften the message. Immediate change is more than necessary.
My wife’s cousin Joe is a drug addiction intervention therapist. At a family gathering a few years ago, I asked him why people could not just quit drugs on their own if they get tired of living with addiction. His response was graphic, but unforgettable: “Trying to beat addiction on your own is like trying to overcome diarrhea with willpower.” An ugly mental picture for sure, but it makes the point.
Unless organizations are willing to admit that transformation is necessary and are willing to seek help from experienced lean practitioners. Trying to apply Operational Excellence by trial and error may take years (if ever fully implemented) to recognize significant improvement.
There are over 150 tools in the Operational Excellence toolbox; where do you start?
Just like a trained therapist helping someone deal with the many root causes of their addiction, a trained and experienced lean consultant can suggest the appropriate intervention technique to help accelerate the transformation (healing).
Unfortunately, many organizations wait until they; ‘hit bottom’ and by that time the level of pain is significantly increased and they find themselves at the precipice (or bankruptcy).
It is not complicated
I have the easiest job in the world. To be clear, living out of a suitcase is definitely not the best job in the world. Take it from someone who has been on no less than 3,000 airplanes. However, being a lean disciple is the easiest way to find un-mined gold, and that has been a very satisfying and rewarding way to make a living.
After facilitating close to 1,500 kaizen events, I am hard-wired to see waste. I see it everywhere. Having been through virtually through every US airport, I would love to have a chance to apply lean to the airline industry. Cutting inventories, reducing set-up time, organizing work-spaces; any lean consultant can tell stories of how easy it is to find money just lying on the floor waiting for someone to pick it up. It is not complicated. Anytime there is transportation, motion, waiting, excess inventory or any other form of waste there is opportunity.
The most satisfying aspect of my career has been seeing the 'light' (realization) go on in other people’s eyes. I have actually had the remarkable privilege of seeing staff members in client companies become skilled consultants in their own right (in some cases, becoming my competitor).
Is there any greater honor than participating in coaching someone and seeing them blossom into a role that they might never have had a chance to experience without your help?
I can imagine no greater sense of accomplishment than to see a protégé soar.
Why not Theory of Constraints, why not Re-engineering the Organization, why not J.I.T. (just in time), why not one of the dozens of other TQM (Total Quality Management) tools or techniques rolled out over the years? Simply put, Lean is a term somewhat familiar to the majority of the twenty-first century audience.
To tell you the truth, I am not particularly enamored with the term ‘Lean’.
I prefer the term ‘World-Class’.
First, because it is timeless, some of these other blended, repackaged and re-labeled programs are really just a way to freshen up the material after adding one or two new techniques to the 150 or so already in the toolbox. Contributing a new tool or two does not necessarily constitute the need for a new book. This is true about the book you are reading right now as well. There is really, nothing new under the sun.
My hope is to ‘simplify’ the process, enabling a greater number of people to become proficient at adopting and adapting time tested tools.
Why should I care?
I hope that I have already addressed the reason and urgency for making real and sustainable change, but if not, then I will add this quote from Dr. Deming: “This is hard work, and you don’t have to do it. Survival is not mandatory!”
Dr. Deming used that phrase in frustration when talking to the arrogant U.S. auto manufacturers who refused to admit that their competition had begun out performing them.
In 1990, to produce eight million automobiles, General Motors had over 800,000 employees; Toyota produced the same number of vehicles using 79,000 employees. More than an order of magnitude fewer staff.
While some of this disparity was related to Toyota’s use of automation, the main competitive advantage was enabled by driven yet open-minded managers who worked with small, enfranchised teams chartered (and expected) to continually attack waste in all its forms.
These managers saw themselves as stewards and advocates of the people who they served.
The managers did not serve their bosses, they served the people doing the work, listening, clearing away barriers, finding ways to fund and implement ideas from the people doing the work. It has had the effect of turning the typical Organizational Chart upside down.
Why should my customers care?
We live in an environment where everybody wants instant gratification. We can order something from Amazon in the morning, and have it show up in the afternoon. We are becoming accustomed to mass customization and instant response to our demands.
You should care because your customers care.
There is a new metric on the horizon. I would wager that in the near future customers will ask you “What is your value added ratio?” In mathematics, a ratio is expressed as 1:10, or 1:100.
If you are making salad dressing you might use a ratio of 1:3; one part vinegar to 3 parts olive oil.
Just as a doctor might check your blood pressure and temperature to determine if either of these indicate an unacceptable variation from the normal baseline, people who understand lean can quickly determine the value added ratio of a process by simply dividing time spent in actual value added activities into customer wait times.
For example, if a customer drives his car into the shop for a mechanical repair, and is told that the one-hour procedure cannot be accomplished until the next day (24 hours later) then the value added ratio is 1:23 (one hour of value to 23 hours of waiting).
Value Added Ratio describes the percentage of value in a process. Having worked with hundreds of organizations across the US and Canada, I can tell you that most of the time the value added ratio is somewhere around 1:300.
What does that indicate? One minute of value is offset by 300 minutes of waiting. From the customer’s perspective, the clock starts ticking the minute an order is placed. However, in most offices the order is going to sit in someone’s email backlog or in a basket on someone’s desk until all the orders ahead of it are processed. 1:300 means ‘one time unit’ of value, ‘300 time units’ of non-value.
For something to be value added, it must meet three criteria:
1. The activity must be something that the customer is willing to pay you to do.
2. The activity must physically change the part or service into something the customer can use.
3. The activity must be performed correctly; the first time.
The only way to reduce the value added ratio is to eliminate or minimize delays in the process.
Organizations seeking world-class status are focusing on the objective of a 1:10 Value added ratio. What is your value added ratio? What is your competitor's value added ratio.
If you do not know how to calculate your value added ratio, give us a call or send us an email and we will describe how value stream mapping your processes will define your value added ratio