What is Lean and Why Do I Care Parts 3 +4

Q3. How is Lean different from other ways to improve productivity?

Typically when companies look to improve productivity, they look at the big value added things they do, such as machining metal or treating patients.  Then they look to find ways to make these steps more efficient.  While this is a piece of the Lean process called “point improvement”, it won’t meet its full potential in isolation. In contrast, Lean companies look at the “value stream”, which is the whole process a mechanical part or a patient travels through in a plant or medical centre.  By analyzing the value stream, from order taking to delivery, it becomes more apparent where value is created and where waste is diminishing the system.  Understanding the whole process enables companies to identify where efforts will have the greatest impact on reducing waste, and subsequently on increasing productivity.

Q4. Isn’t Lean just a collection of tools such as 5S and Six Sigma?

These tools are a very important part of Lean; they provide the methods through which companies can improve productivity. They are also highly visible and therefore easily recognized.  But Lean is about the bigger picture.  Lean thinking involves taking a holistic view of productivity; it moves away from point improvements and moves toward improving the whole process.  A Lean company is driven by continuous improvement.

 One important Lean tool is the value stream map.  Value stream maps are used to identify the fraction of each step that adds value, the fraction of each step that represents waste, and the targeted ways to improve.

What is Lean and Why Do I Care

I was asked to write an article on Lean for the Petroleum Joint Ventures Association, here is parts 1+2: 
 

Q1. What is Lean?

Lean is a collection of ideas and tools companies use to improve productivity.  It starts with the simple question “What does our customer value?” If the company can determine what its customers value, and if value is defined as the minimum activity that modifies or changes a product or service to meet customer requirements, the activities of the company can then be identified as either adding value or generating waste.   Waste includes reprocessing, searching for information, double checking, fetching, waiting, and so on.  In fact, very little of what most companies do can be classified as value.

n Lean manufacturing focuses on identifying and enhancing value for the customer.  By identifying value we can then identify and eliminate waste throughout the entire value stream.

This assertion is backed by surveys¹ that have found for a typical manufacturing company, only 5-10% of activities add value.  For service companies this number can increase to 30-40%.  Don’t believe it?  Think about having a puncture on your car fixed.  The actual time to fix the puncture takes only a couple minutes, but the whole process of planning and scheduling and traveling, takes much longer. 

Q2. Can Lean be useful for non-manufacturing companies?

Every process has opportunities for improvement. No process is 100% efficient from start to finish. It doesn’t matter if that process is manufacturing a car, preparing a quote for a customer, or drilling an oil well. Lean provides both a framework and the tools for companies to drive out inefficiency. This is why the big hardnosed Oil &Gas companies like Talisman and Shell are executing Lean; they know it‘s going to pay off with higher productivity and increased profits. These companies, in turn, following the examples of Toyota and Honda, are going to look at their partners and suppliers to influence them to implement Lean and drive costs out of the supply chains. This concept is already being embraced in Calgary, Alberta, with both Mount Royal University and the Southern Alberta Institute of Technology offering courses in Lean Management.

Stark strong message

Saw this message posted a few other places.  If you were to swap "change" for "learning" this would epitomize a lot of Lean.  In fact with out learning there can be no change as everytime we change something we learn.  At the worst we learn what does not work and can learn and change again.

Event to share

Build the Optimal Environment for Business Success
Cancelled and rescheduled for 6th June

 CME is proud to present with Productivity Alberta Don Bell, one of the founders of WestJet to Calgary on March 21^th.

 Don Bell, one of the founders of WestJet, is widely credited with helping to make the company one of the most successful airlines in North America.

Don strove to create a unique atmosphere for his employees, realising that happy staff members create happy customers. Recently retired, Don encourages business leaders to take their businesses to new heights by aligning the values and interests of their company with those of their employees, along with a little dose of common sense and a large dose of heart.

Come hear Don Bell and how his approach to business applies to your company.

Breakfast will also feature the 2011 IRAP Regional Awards for New Technology.

Date:  Wednesday, March 21, 2012

Place: Delta Calgary South

135 Southland Drive SE

Calgary, Alberta

Cost:  $49.00 plus gst CME Members

$59.00 plus gst Non-Members

Includes Hot Breakfast

To register, please Click Here:

Or please contact Linda Withers at (780) 426-6622
or linda.withers@cme-mec.ca

 For more information, please Click Here:

Unfortunately I won't be going, I'm in a training session got to keep learning.  If you can make it I highly recommend you do. Watch out for  my colleague Carla Ciepliski who will be there. 

87% Less walking happening in Lethbridge

Not all the changes required huge outlays of funds.
Using principles of lean manufacturing to improve flow, Mr. Quinton arranged to move all the grinding operations, which had been spread throughout the building, into the back, along with the ovens. The move led to a travel-time reduction of 87 per cent, he said. 

That is an awesome reduction in motion achieved by Sandberg Labs in Lethbridge.  Also great to see that the Quintons thought long and hard about investment and put it into steps that reduced over processing:

With the old, manual method of testing feed, “it had to be smartest chemist to figure out what was going on,” explains Mr. Quinton. “The most expensive person was tied up all day for 10 samples. Now the system is so automated that any technician can run it, while the chemist still does quality control.”

They didn't stop there they went after duplication, more over processing, over production, defects and even added some poke yoke.

“Sometimes we were using three or four different systems for the same sample,” Mr. Quinton says. “There was a lot of duplicate data, which made it prone to error. We were catching those but it caused delays. Now with the receiving person entering all the data once, we’ll be able to do bigger volumes with accuracy.” The new software also registers acceptable limits on results and automatically flags any out of range. 

 The whole article is at the Globe and Mail.  Lean does not have to be complicated and my bet is that the Quintons wouldn't even describe what they are doing as Lean.  And that is a good reminder for the rest of us.  Implementing Lean should not be about perfect 5S or going from push to pull it is about increasing value add for the customer.  Something the Quintons seem to be doing very well.

Neat ≠ Organized

Listening to Dave Allen seminar and this nugget of wisdom was shared

Neat ≠ Organized

There is a reason why 5S is done in the sequence Sort, Set, Shine...  To Set and to have not Sorted is only to make neat, it does not make Organized.  Even with many proficient Lean organizations I often see areas where Sort has not been done well.  In these situations the occasional or just in case tooling is still front and center.  Of the whole range of drivers or wrenches is kept when only a fraction are used.  The Sort step has to be done with bravery teaching those involved to challenge if a tool or the amount of parts are really needed.  In fact much great Lean work comes from asking do I really need this tool and exploring how that tool can be eliminated.  This is when 5S kicks off from being an organizing tool to a Lean tool that drives waste out of work.

Classic story of not going to the Gemba

 A short story for engineers, although you don't have to be an engineer to appreciate it.

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A toothpaste factory had a problem: they sometimes shipped empty boxes,  without the tube inside.  This was due to the way the production line was set up, and people with experience in designing production lines will tell you how difficult it is to have everything happen with timing so precise that every single unit coming out of it perfectly 100% of the time.  Small variations in the environment (which can't be controlled in a cost-effective fashion) mean you must have quality assurance checks smartly distributed across the line so that customers all the way down to the supermarket don't get pissed off and buy another product instead.

Understanding how important that was, the CEO of the toothpaste factory got the top people in the company together and they  decided to start a new project in which they would hire an external engineering company to solve their empty boxes problem, as their engineering department was already too stretched to take on any extra effort.

The project followed the usual process: budget and project sponsor allocated, RFP, third-parties selected, and six months (and $8 million) later they had a fantastic solution on time, on budget, high quality and everyone in the project had a great time. They solved the problem by using high-tech precision scales that would sound a bell and flash lights whenever a toothpaste box would weigh less than it should. The line would stop, and someone had to walk over and yank the defective box out of it, pressing another button when done to re-start the line.

A while later, the CEO decides to have a look at the ROI of the project: amazing results! No empty boxes ever shipped out of the factory after the scales were put in place. Very few customer complaints, and they were gaining market share.  "That's some money well spent!" he says, before looking closely at the other statistics in the report.

It turns out, the number of defects picked up by the scales was 0 after three weeks of production use.  It should've been picking up at least
a dozen a day, so maybe there was something wrong with the report.  He filed a bug against it, and after some investigation, the engineers
come back saying the report was actually correct.  The scales really weren't picking up any defects, because all boxes that got to that
point in the conveyor belt were good.

Puzzled, the CEO travels down to the factory, and walks up to the part of the line where the precision scales were installed.  A few feet before the scale he spots a $20 desk fan blowing the empty boxes off of the belt and into a bin.

"Oh, that," says one of the workers. "One of the guys put it there cause he was tired of walking over every time the bell rang".