An Inflection Point
by Ken Snyder, Shingo Institute Executive Director
A few months ago, I had the chance to visit two companies that the Shingo Institute uses as “benchmark” companies. Both of these companies started their Lean journey about 20 years ago. Both companies received the Shingo Prize about 10 years ago. And both companies have continued their journey seeking perfection since receiving the Shingo Prize. We hope all Shingo Prize recipients follow their example in continuing their own journeys.
At both benchmark companies, I heard a similar story. It caught me by surprise. Let me explain.
In my career, I’ve had four to five Lean implementation opportunities that were either start-ups where we had the opportunity to build the culture from scratch, or involved a transformation of an existing culture. After being with an organization for seven to eight years, typically another professional opportunity came up and I moved on. I’ve never seen a Lean journey first-hand past seven to eight years. In my experience, I’ve always thought the highest productivity gains come in the earlier stages of the Lean journey. In many cases, there are so many opportunities that it’s easy to cherry-pick and find places where the application of Lean can make a big difference.
This is not the report of these benchmark companies. Both companies report that they experienced steady productivity gains of 10% or a little more, compounded year-over-year over a 10-15 year time period. This is amazing enough. But then, they both reported that in the past two to three years they experienced an inflection point, where the productivity gains jumped from the steady 10% or a little more to 15-20% productivitains the past two to three years. This is astonishing!
After verifying their reports, I asked them a series of questions so I could better understand how they could experience such astonishing results – especially after so many years of steady, great, results. Independently, both companies reported the reason for this inflection point is due to the level of training achieved by their associates. In short, their associates are now so well-trained that they can identify problems, solve problems, and implement changes so quickly and independently that the associates drive the productivity gains.
Both companies operate in-house universities where they teach lean tools and systems – things like SQC tools, error-proofing techniques, time-motion studies, TPM systems, and other problem-solving skills. Associates spend a significant amount of time on regular intervals training in these in-house universities. Over time, the skill level of associates is such that they can implement profound changes quickly and independently, without needing significant support from management or engineering.
After hearing these stories, and realizing how similar they are, we decided at the Shingo institute to offer a Master Track at our annual conference in the U.S. this year. During the Master Track, we will have these benchmark companies share some of their story about how they achieved this inflection point.
I learned something. I think all of you will, too.
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Want Different Results? Change the Right Behaviors.
by Luc Baetens at Möbius
A supply chain director recently expressed to me his frustration that his new integrated business planning was ineffective. “We have spent so much time and money defining the new process, the reports we were going to use, and the monthly meetings we would hold. Even after all that, the only people who use the new system seriously are the supply chain team. Everyone else keeps doing things the old way.”
The Shingo Model™ describes in a holistic and coherent way what the most successful companies do to reach exceptional levels of operational excellence. After more than 15 years working with companies to improve their supply chains, I became a certified Shingo facilitator. I wondered how the Shingo Guiding Principles could help make the efforts of supply chain improvement more effective.
I found my answer in the first of the Three Insights of Enterprise Excellence™:
Ideal results require ideal behavior.
Behavior is at the very center of the Shingo Model. When we learn it we ask ourselves, “What behavior do I want to see?”
As I’ve worked in supply chain improvement, I have seen professionals spend considerable time and effort go into design and implementation of ever more sophisticated tools and processes, often with uncertain results and far less than the desired impact. Yet I’ve rarely heard supply chain leaders ask:
• What behavior do I want to see in an improved supply chain?
• How do the processes, systems and tools we use help promote that behavior?
As we learn in the Discover Excellence workshop, a behavior can be observed, described and recorded. So when we hear people complain about their improvement efforts, behavior is always at the core. We hear statements like these:
• “They spent a fortune on tool X but the people who ought to be using it keep doing everything in Excel instead.”
• “We defined a detailed playbook for sales and operations planning but still we see our associates coming to meetings completely unprepared.”
Using Excel instead of a more customized tool is a behavior. Coming to a meeting unprepared is a behavior. Putting new tools and systems in place is ineffective unless behavior is modified accordingly.
The first step is to describe the behavior you want to see:
• “I want to see production supervisors propose changes to the production schedule in advance to avoid issues with vacations."
• "I want to see our production supervisors ask our planners what to do if they cannot respect the production schedule."
• "I want to see our planners on the shop floor talk with maintenance people about progress and timing of machine repair."
• "I want to see production managers ask questions of their supervisors if the schedule is not met."
The next step is to decide what changes in systems and tools will help to promote the desired behavior. Put another way, “How can I make it easier for people to adopt the ideal behavior than the unwanted behavior?”
So, to get the desired behaviors listed above, we have to ask questions like these:
• How can I make it easier for a supervisor to talk with schedulers than to deviate from the schedule on his own?
• How do I change the process to make schedulers aware of the upcoming vacation schedule?
Design your tools and processes specifically to support ideal behaviors. By starting with the ideal behavior in mind, you can improve performance at all levels of the organization.
When I first learned about the Shingo Model I found it difficult to think in terms of behaviors. I was more accustomed to thinking in terms of end results, capabilities and skills. The more I learned, however, the more enthusiastic I became about this new way of looking at things. If you haven’t tried it for yourself yet, you should.
When the Cook Spends More Time in the Boardroom than the Kitchen
by Peter De Clerck of Möbius
Some time ago, a colleague was giving training in operational excellence to an audience mostly filled with high-level managers. Imagine how excited he must have been.
Truly giving his best, and pretty confident of getting his message across, he surely wasn’t expecting to stumble upon this mail from one of them the next morning:
Thank you for the training given yesterday. I’ve noticed you’ve put a time slot in my agenda to visit our production plant on Thursday to go & see how things were progressing.
What was it exactly you were talking about and is it possible to reschedule our meeting within a month from now? That would better suit the agendas. Thanks.
Shocked, he wondered:
- Was I not clear enough?
- Were people sleeping during my training?
Perhaps, he thought, encouraging management to see the reality on the ground was going to be considered easy and not something to do only when the time was right.
His story made me think of those cooking shows that seem to be everywhere on television. I always think it’s a fun place out there in the kitchen. That’s where the meal—the value—comes together. It strikes me that a restaurant resembles an office space, and a cook seems to have mastered the essence of creating value for the customer, basically delivering a really fine meal.
Management on the other hand seems to spend time in the boardroom talking about the added value for the organization. However, are we really creating value for the customer then, or are we spending too much time on gathering data, creating numerous reports with over-abundant KPIs, frustrating our colleagues or discussing results somewhere too far away from reality?
So my next question would be: “Why do we do it?”
Let’s perhaps go back to a powerful yet extremely simple approach to managing organizations. It relies on 1) common sense and is 2) low-cost. These two phrases always get everyone’s attention.
Masaaki Imai, a founding father of kaizen, is to be sought after for this. Kaizen basically means continuous, incremental improvement involving all managers and workers. He argues that every time you get promoted you get further away from reality. By the time you are CEO, you are the most clueless person in your organization.
He continues by saying the more you go up the ladder, the less you might seem to know about the problems going on. Contradictorily, decisions are taken on that level where there is little to no knowledge of the real problems.
As managers we think we can prevent this by relying on numbers, and this is where the trap lies. Only if we go to the gemba (real place, where it happens) we are able to accurately interpret the numbers.
Give yourself some time, don’t be too busy to go to the kitchen of your company, observe and ask “why” as many times as you can to understand better what’s cooking there. It is the place where work gets done and the only place where value can be added to business processes:
- Solve the problem at hand
- Prevent it from recurrence
It will result in better quality, delivery and lower costs. You’ll be surprised how much it contributes to the value delivered to the customer.
The Principle of Flow and Pull
by Chris Butterworth of S A Partners
Too often the principle of flow and pull is seen as applicable only in a manufacturing environment. In fact, the principle can be applied in many different ways. On a recent trip to Kenya I had the pleasure of experiencing the "Matatu" bus service in Nairobi. It really got me thinking about the principle of flow and pull.
The system is very different from my hometown in Sydney, which has a very similar population size to Niarobi. In Sydney, buses are on a fixed timetable, readily available to look up on various travel apps and published at each bus stop. Buses are frequent and you can even track your bus’s real-time location on your phone. Like most big cities they are more frequent at peak hours, but despite this, are often full during these hours and relatively empty off peak.
So is this a good example of pull and flow? At one level, buses are pulled through at peak times to match customer demand based on historical demand patterns. Flow is dramatically improved through the use of dedicated bus lanes. Car drivers watch enviously from the queue of their stationary vehicles as buses shoot down the near empty bus lane. Occasionally frustration takes over better judgement, and a quick burst down the bus lane provides the thrill of movement and the often-illusionary progress as you are forced to wait to be allowed back into your lane a few hundred meters further on. If you are really lucky you also avoid the fine.
So there is some pull and certainly better flow for the buses than for the cars. Outside of peak times, the bus system is definitely more push than pull, with fixed timetables pushing out buses regardless of actual demand.
The system has recently gone cashless, which saves a huge amount of time in collection and counting of cash, and generally works very well. All you need to do is make sure you buy an electronic card and keep it charged up with virtual cash and all is well. That is unless you are a new visitor to the city and unfamiliar with the bus drivers’ inability to accept cash. I recently witnessed an incident with a tourist family trying to board a bus. English was not their first language, and the driver struggled to explain that just giving him more and more money would not work.
A couple of passengers tried to help – even by offering to use our cards, but you can only use them once on each journey. So after a lot of shouting and gesticulating from the driver, they eventually gave up and will hopefully be able to have a great laugh about the whole experience once they get home—which will hopefully not be by bus. So the electronic payment is intended to improve flow, and generally does, but it was pushed on to the customers, many of whom would still prefer to use cash.
Now back to Nairobi. There are no timetables, few marked bus stops out of the main central boarding points, and you struggle to track your bus’s location on your phone. The buses are small and take about 20 people - sitting down. I boarded a bus and took a seat. Luckily I knew it was the right bus because I had a guide. Also there was a very helpful man with a sign who stood on the pavement saying where the bus was going and encouraging passersby to catch it.
After five minutes, I wondered what time we would set off. My helpful guide shrugged his shoulders.
"It depends," he said. I decided to practice the five whys and get to the root cause of why we had been waiting. “Well,” says my guide, "the bus is not full."
Eventually my root-cause analysis revealed we would not leave until every seat was occupied. Now other passengers started to join in and promote the virtues of the bus by shouting enthusiastically out the windows to anyone showing the slightest interest. We quickly had every seat full and were off.
A conductor came to collect our fare and asked where we wanted to be dropped off. We picked a well-known building on the bus route a short walk from our hotel and paid a fraction of a Sydney bus fare. It was cash only and calculated based on how far we traveled. The atmosphere on the bus was fantastic. It was a tight fit, and it was impossible not to get to know your fellow passengers. Sydney buses tend to be silent with people buried in their phones and not knowing where to look. We had a great laugh on the Matutu with everyone sharing a smile and enjoying the experience.
So is the Matatu a push or a pull system? In one respect it's definitely batch and queue with customers waiting for the full bus or "batch" to be completed before the journey can start. My initial reaction was that this is not a lean system but on reflection I realized it has its advantages.
- Its top customer value is cost and it certainly delivers on this by only travelling when full utilization is very high and cost per journey is very low.
- Fewer buses are needed in the fleet, saving on capital and maintenance costs.
- At peak times the wait time is very short as buses fill quickly.
- In off-peak times there are fewer buses driving around empty and are only pulled through based on demand.
So whilst the departure and arrival time may be a little more uncertain than the Sydney system, overall the Matatu provides a great solution that minimizes cost and provides customer flow with on-demand pull. "Kenyan time" has a bit more flexibility than Sydney time, but then it only takes one accident in Sydney for the whole timetable to get disrupted.
We need to ensure that we design our flow and pull systems to maximize customer value. Different customers value different things, and we must be careful not to try to impose one-size-fits-all in our systems design. Both the Matatu system and Sydney system work well in different contexts and both have elements of flow and pull.
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“Medical Taylorism:” An Article that Does a Huge Disservice to Needed Healthcare Transformation
By Dr. Patricia Gabow and Ken Snyder
The article, “Medical Taylorism,” by Pamela Hartzband, M.D. and Jerome Groopman, M.D., in the New England Journal of Medicine, reflects a major misunderstanding of the principles and practice of the Toyota Production System, or Lean as it is often called. Specifically, the article appears to conflate poor implementation with the underlying principles. Several commentators, including many from the Lean community, have weighed in on this debate, but more needs to be said given healthcare’s need for transformation and the powerful solution that Lean offers in this transformation.
Doctors Hartzband and Groopman are feeling pain due to their experiences. We sympathize with their pain. Too often, whether in healthcare or other settings, we see poor implementations of Lean. These poor implementations are almost always due to failure to follow the principles of operational excellence.
In this discussion about Lean in healthcare, there are some specific principles that deserve emphasis. In citing these principles, we will adopt the terminology used in the Shingo Model.™
- Seek Perfection
- Respect Every Individual
- Control Quality at the Source
- Embrace Scientific Thinking
- Create Constancy of Purpose
It is unfortunate that many who implement Lean seem to forget these core principles. It is hard to imagine any set of principles which would more closely align with the needs of healthcare and commitment to the population’s well-being than these principles.
KPIs are Dead, Long Live the KBIs!
About a year ago, the head of logistics and purchasing asked me to carry out some observations on the floor. Their new ERP system had been implemented about two years ago, and he wanted to know where knowledge was still lacking so he could use the information as input for a training plan. So off I went to talk to some of the employees. I asked an employee to tell me exactly what she did while she was working on something, a bit like TV-chef Jeroen Meus. "And now I change this printer to the correct printer ... This has been wrong in the system for a long time." She felt no regrets to report the issue and get it solved once and for all, instead she solved the problem herself on a daily basis. And she was certainly not the only one I noticed doing this during my observations. The employees certainly knew what the final output should be, but they were less concerned about how it should be achieved, or even how efficiently it should be achieved. Is this the behavior and the consequent results you want to achieve as an organization?
Hoshin Kanri: Translating “Big Vision” from Strategy to Execution
Rick Edgeman, Research Director
Shingo Institute, Jon M. Huntsman School of Business, Utah State University
Part 1: Hoshin Kanri - Concept Origins
Published March 1, 2016
Prior to World War II, the U.S. share of the world export market was approximately 30%. In the aftermath of World War II that share grew to more than 70% - a result of a generally healthy and educated workforce, as well as a U.S. infrastructure that remained largely untouched by the war. In contrast, many European and Asian nations were left to deal with infrastructure devastation and human tragedy alike, often with less educated workforces using antiquated equipment.