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Asset Artifacts

In 1980, an ASRS at my company was the showpiece of a new plant, its capability for high-density automatic storage and retrieval of inventory heralded as step change in stockroom services.  Eight years later, as the company adopted a just-in-time philosophy however, the ASRS was viewed more as an automated waste, facilitating storage of unneeded inventory and creating a huge amount of delay in the kitting process.  Gradually the many drawers of the ASRS were unloaded and inventory moved to or near point of use.   The magnitude of our inventory opportunity was revealed as parts hidden in the machine were brought into the daylight for all to see. 

But the empty ASRS itself lingered as a white elephant, a “permanent” fixture too big to push to the side.   It remained a part of the production landscape while we debated, “What do we do with this thing?”   Some managers argued that it had been such an expensive investment, “We can’t just toss it!”  Our controller, Brian H., took the assignment to find a buyer.     But after two years with no takers, we paid the company who installed the ASRS originally to dismantle and remove it.   We took a loss on our books to free ourselves of an asset artifactan item that adds no real value but has either book or perceived resale value.

Ten years later the story repeated, this time with a different kind of ASRS – a new computer system.  Approaching the dreaded Y2K Armageddon, the search began. Our needs for automation of information, however, had been substantially reduced by this time.  Brian Maskell refers to computer transactions as the WIP of information flow.  We had much less of this WIP in 2000 than in 1980, a condition reflected in our request for proposal to potential hardware and software suppliers.   But when bids arrived, all proposed a bigger system with more storage and more peripheral devices.  One salesperson confided, “We thought you just made a mistake in your RFP.”   That newer computer systems can store massive amounts of information and process high volumes of transactions is not a benefit.  Stagnation of material or stagnation of information – what’s the difference?    We opted for “less is more”:  a smaller system that fit our new strategy, not an asset artifact. 

Today I watch for asset artifacts, devices built or bought for an old strategy that have become obstacles to improvement.  Here are a few recent examples:

  • A glass-laminating machine in a window factory was covered with plywood and converted to a large table when the company decided to purchase laminated glass rather than manufacture it.   It looked like a table, but was actually an expensive machine.  Once discovered, this particular asset artifact was sold for a good price on eBay.
  • An operating room converted to dead storage for broken gurneys, wheelchairs and spare parts.  “We have no way to dispose of unused equipment,” a worker tells me.
  •  A machine shop so crowded with unused machines, that material transport was nearly impossible.   The company owner vehemently resisted the disposal of this “valuable resource” for several weeks.  Then one day as I approached the building entrance a sign on the front door greeted me:  “Equipment Sale on Dock.”  Call it top management 5S.   No one but the owner could have made this decision, whose result was a 50% increase in much needed floor space.  The cash generated was used to train employees – the most valuable resource.
  •  At an architectural wood company, a warehouse bulging with expensive veneers purchased for custom cabinetry and then not used.  I gave workers in the warehouse red tags and asked them to mark the veneers that could be sorted.  The team lead told me “We only need one red tag, because the entire contents of this warehouse will never be used.  All the material in here is excess, purchased to assure grain and color consistency, but not all needed for the job.”   In fact, the company had already initiated a project to double the size of the warehouse.  A tour of the floor with the company owner brought a tear to his eye. “I know we probably won’t use these veneers, but they are so valuable.”  He couldn’t part with the custom veneers – asset artifacts — so he enlarged his warehouse (now also an artifact.)

In our DVD, 5S-5 Challenges, we make the case that intrinsic valuevalue on the books or perceived resale value —  is not real value.  Most often this challenge in understanding is for top managers who would like to believe that artifacts are real assets.   Take a wide-angle look at your workplace.  Do you have any asset artifacts that you can share with us?

O.L.D.

Hospital Heroes

About six years ago I was meeting with a clinical team to kick off an early improvement effort at their hospital.  We began with a reflection on the problems with traditional business management practices.   To break the ice I played a short clip from an I Love Lucy episode that has now become a staple of lean learning.  We watched as Lucy and Ethel struggled to keep pace with an ever-accelerating chocolate packing line, and we watched Lucy stuff about two pounds of unwrapped chocolates into her clothing lest their autocratic supervisor see that they couldn’t keep the pace.  (If you haven’t yet watched this clip from Job Switching, you can view it on YouTube.) 

When the clip finished I asked the group to describe practices that would not be favorable to continuous improvement.   Was the line running too fast or were there too few wrappers? How could we tell?  What did we know about the kitchen or the wrapping line?  What problems were Lucy and Ethel experiencing?  What about the relationship between employees and supervision? 

At one point in the discussion a nurse noted, “Lucy and Ethel are hiding their defects from management.”  

An administrator in the group added,  “We call them occurrences not defects. The word ‘defects’ is a no-no.” 

A doctor seated next to me leaned over and murmured, “We don’t hide our defects, we bury them.” 

There is no question in my mind that every person in that cross-section of employees was passionately committed to providing the best possible patient care.  But the doctor’s dark humor caught my breath.  Six years earlier my mother had been one of those defects, a person in reasonably good health who entered a hospital for elective surgery, contracted a hospital born pathogen and died of pneumonia.  I understood the doctor’s words all too well.  My instinctive response to the discussion was a quote attributed to Edwards Deming: “A bad system will beat a good man every time.”  The group nodded in agreement.   I left my personal tragedy out of the discussion.  It would have been just one more data point in a larger tragedy of denial.  

But, there was no denial among this group, just concern.   All of the systemic problems that characterize traditionally managed organizations – functional arrangement of processes and resulting “batch processing”, complex ladder structures, convoluted information flow, lack of clear standards – all of these were present in monumental proportions.  Yet this group, hesitant and unsure, was taking a risk that they could heal this condition, not in a quantum leap, but with small stepwise improvements.   One member of the team, a physicist, expressed doubt that small changes would make a difference, but he too was ready to be part of the experiment.  At the conclusion of their early improvement project this physicist stated with all the authority of a scientific thinker, “Based upon the evidence, I can only assume that the significant improvement that was made occurred as a cumulative result of many small improvements.”  This improvement team was the advance guard of a movement which extends today well beyond the operating room and the hospital ward.   They committed time to improvement despite frenetic schedules, long days and scarce resources.  

We are accustomed to thinking of hospital heroics as they relate to lifesaving moments in ER’s or miraculous surgical outcomes.  And of course these are hospital heroics.  But thanks are due also to the clinicians and administrators – doctors, nurses, technicians, and support staff – who were sufficiently dissatisfied with the status quo to take a personal risk to heal their healthcare system.   They too are heroes whose actions will save the lives of countless future patients.  

O.L.D.  

P.S.  On another topic, I’d like to remind everyone to stop by GBMP’s booth at EASTEC next week (Booth #5366 in Building 5 in the Lean & Green Resource Center) to say “hi” and be a contestant in our game show: “Who Wants To Be A Lean Millionaire”.  Learn more about EASTEC here.

Practice Makes Permanent

In my last post I made the case for regular practice (everybody everyday) of new perspectives, behaviors and practices.   All new learners begin by just “going through the motions” and gradually become proficient through regular practice.  I’ve personally gone to sleep many nights pondering a new concept or thinking about a new skill only to awaken the next morning with greater understanding.   It seems as though our brains actively reflect on the day’s experiences while we sleep.  Each day of practice that we miss is therefore a day void of that particular learning.  It’s time lost that cannot be made up by cramming.  I’m not offering proof here, only my own repeated experience.  

In the case of my seven-year-old son’s guitar lessons, I reminded him of this:  “Practice makes perfect.” 

In the case of Lean learning, however, the challenge is much greater.  Students are almost always already “practiced”, but at the wrong things.  A friend of mine who manages several US and Mexican lean implementations commented, “The Mexican employees are much more receptive to Lean thinking because many have never worked in a factory before, and have no idea that there is a non-Lean way of producing.” 

American workers and managers already have a well-established mental model of how a plant should run.  They practice according to that non-Lean model every workday.   Roles, rules, and routines are played out according to a status quo game book.  Ryuji Fukuda likens this vicious circle to a golfer with a bad golf swing going to the links every day to “perfect” his incorrect form.   Practice does not really make perfect in that case – but it does make it  permanent!   

Then we tap those employees for a “kaizen event.”  Even from an optimistic view point, employees who participate in events, only get to “sleep on” a few days of the new concepts. For the rest of the month, it’s back to business as usual.  They sleep on that.  Indeed, one of the arguments for event type kaizen is that it enables suspension of status quo practices for a period of time in order to enable employees to experience a new way.  But too often employees only get to “go through the motions”, not to really learn by doing. 

“Come Monday,” one production employee related to me at an event I attended, “we’ll be back to where we were.” Unfortunately if post-event homework is not completed, things may be worse on Monday.  Employees in the “kaizened” area are left to pick up the pieces.  The tacit learning from this process?  SOS.  Employees sleep on that outcome as well.    Some years ago I signed a contract with a manufacturer stipulating that I never utter the word “Kaizen” in the presence of employees, it so enraged them.

Still I regularly visit companies that gauge their success on the numbers of kaizen events.  Next to 5S Scores (a topic for another post), “number of kaizen events” is perhaps the most prevalent corporate Lean KPI.    However, the majority of these event-counters cannot say that they have reduced inventories or shortened lead-times or improved deliveries or profits beyond a one-time gain.  They talk about the difficulty of “sustainment” and wonder aloud why it’s so hard to enculturate employees.  The truth is when everybody practices status quo behavior almost everyday, that is what is sustained.  If employees are not practicing the new way everyday, by default they are practicing the old. Practice makes permanent. 

O.L.D.

BTW  For those you close to Springfield, Massachusetts, don’t miss EASTEC , May 17-18.  I’ll be there and hope to see you.

Everybody Everyday

When my son, Ben, was seven years old, he took his first guitar lesson.  After the lesson, I was curious to know how liked the experience.  He exclaimed, “Dad, the teacher said I only have to practice on the day of the lesson!” 

“Hmm,” I replied, “are you sure that’s what he said?”    Ben just gave me a sheepish smile. 

I think everyone wishes learning was that easy, and we often behave as if it were.   Both managers and employees are stingy with their time when it comes to understanding and practicing lean.  They opt for books on tape, one hour webinars, DVD’s (like GBMP’s) and lunch-and-learns which may get them started in a good direction, but are not enough.   Like my seven-year-old son, they expect that practicing once in a while is good enough, that somehow we can learn by cramming.

The reality is that notwithstanding the occasional epiphany, we learn in a continuum, forging our understanding in bits and pieces through trial and error.  GBMP’s slogan, “Everybody Everyday”, is as much a recognition of that learning model as it is our expression of what we believe is meant by “Kaizen.”  In fact, Kaizen and learning both must be continuous – not sporadic and batchy. Deming Prize winner Ryuji Fukuda describes this  learning cycle with three basic requirements (shown above): Managerial Engineering

  1. Identify Reliable Methods – in other words identify the behaviors and practices of the most successful companies, and emulate these.  
  2. Create A Favorable Environment.  Management’s job is to create an environment in which employees are valued for their creative abilities and are rewarded for surfacing problems and improvement opportunities — a very large topic for later posts. 
  3. Keep Everyone Practiced.  This is the “Everybody Everyday” part. For my son, Ben, that meant picking up the guitar and practicing every day, not just on lesson day.  More generally it means “learning by doing” in the actual workplace every day.  Too many organizations skip this step opting instead for a “Somebody Sometimes” approach commonly called the “event.”   What employees learn from this approach is that improvement is only for some persons and it’s apart from rather than a part of the workday.  

Fukuda’s book, Managerial Engineering (1983) was the very first Lean book published by Norm Bodek, and I think one of the best ever from Productivity Press. Ironically, it now appears to be out of print (but available for a penny plus shipping costs at resellers.) For over 25 years I’ve alluded to Dr. Fukuda’s model with the promise to clients, “If you follow the three steps, you will succeed,” but also warning, “the steps are not easy – and the third step is the most difficult.”  More recently, Mike Rother’s insightful book, Toyota Kata, adds more weight to this everybody everyday learning model.  Mike will be speaking at the Northeast Shingo Conferencein Springfield, Mass in October. (There’s still time to get early bird pricing before May 1.)

What my son, Ben, realized at the age of seven, is the key point of this post.  But there’s a critical second part to this thinking that will be in my next post.  In the meantime please share your lean learning experiences. 

O.L.D.

CEO’s

Back in the late ‘80’s I had a friendly relationship with some folks at the “JIT Office” at Digital Equipment Corporation (DEC).  These were early adopters promoting a seemingly unpopular idea at this high tech giant.  “We have little success implementing in our own backyard,” related John N., a manager in the JIT Office, “but we have a really good JIT provider in Ireland.”  

“Why Ireland?” I asked.   “Because,” John replied, “they’re far enough away from us that they are not so heavily influenced by the mother ship.”   

Today, DEC has sunk beneath the waves, absorbed first by COMPAQ and then by HP (the only player in this market who did take JIT seriously.)  But the general CEO  (Cloistered Executive Officers) problem in large corporations is as bad now as in 1989.   When Fredrick Taylor advanced the idea of division of labor, he no doubt did not think the divides might be oceans and continents.  Nor would he likely have approved of the inner sanctums within sanctums that isolate top managers from the domains they rule.  

Today as in 1989, distance from the home office remains a double-edged sword.  On the one hand remoteness provides an opportunity to think outside the box.  Concepts like Lean may fly beneath the corporate radar and flourish in pockets like DEC Ireland.  On the other hand, these extremities may be arbitrarily squashed at any moment by the cloistered executive officers.   Witness the fate of Wiremold after its purchase by French giant, Legrand.  The story in 2000 was that Wiremold had been sold for its “lean technology”, but alas, the cloistered executives at Legrand killed the goose.  They only wanted Wiremold’s distribution system, nothing more, and had no clue what they were dismantling as the firm sunk back into a traditional batch and queue mode.   Eli Goldratt likens this situation to playing chess, with the game board in one room and the player in another unable to see the board.  

And that other room doesn’t have to be a continent away; even one floor’s difference can create the damaging upstairs-downstairs environment.  Where top executives are isolated from their operations, Lean implementations are tenuous and tactical at best.   Updating  Roger Milliken’s 1989 assessment of the three biggest obstacles to continuous improvement (top management, middle management and first-line supervision), the last two decades of TPS learning have brought many middle managers and supervisors into the light.  Most top executives continue, however, to dictate from darkness, preferring to be cloistered.  

I was recently in a discussion with a group of respected Lean advocates who were pondering the difficulty of engaging top executives in the lean transformation process.

 “Top executives are a very busy group, under immense pressure to produce,” one colleague noted. “We need a compelling proposition to get their attention.”  Heads nodded in agreement.

Another colleague added, “And they are uncomfortable unless they are in the company of their peers.  It’s lonely at the top.”  Again, heads nodded in agreement. 

“So we need to have a separate venue for teaching and engaging top executives”, a third person offered. 

“Doesn’t that sort of perpetuate the isolation problem we’ve just been discussing?” I asked. 

“Perhaps,” someone responded, “but these folks will never participate if we don’t give them their own show.”   Heads nodded in agreement. 

What’s wrong with this picture?  I know there are a few vocal lean advocates at the top, but how can we bring others out of the cloister and into the light?   Let me hear your thoughts.  

O.L.D.