What has been more difficult, however, for many organizations, is letting go of the old organization and policy that supported earlier strategies.  These constructs that have been baked into our infrastructure and systems die hard. One example of this is the concept of direct and indirect labor. 

Let’s call it Indirect Distortion, Lean Peeve #4.   

Fifty years ago, when I entered the manufacturing world, roles were very clear: You were either touching the product or not.  Supervisors, material handlers, stock keepers, inspectors all were considered indirect.  But as our shopfloor adopted a Lean strategy, the closer we approached one-piece-flow, the distinction between direct and indirect became more blurred.  For example, when we set-up a cafeteria style stock area adjacent to assembly and rotated assemblers through the material handler role there was initial pushback.  “You can’t have direct folks doing indirect tasks,” I was told.  Why?  It would “mess up our costs.”   Fortunately for me, our V.P. of Finance visited the floor for himself to understand.  The job was reclassified. 

On the other hand, as our stockroom shrank, we redeployed stock keepers to insource production from an external supplier.  Until our standard cost system caught up, this created an illusion that were losing money.  Once again, through some myth-buster heroics from our V.P of Finance we demonstrated that the change was, in fact, super-profitable.  I was fortunate to have this support on site.  Many sites, like one I worked with years later as a consultant, do not have that advantage.  I once visited a division of a medical device manufacturer that was deemed by the corporation to be its productivity leader.  What I learned on my visit was that this site unofficially “borrowed” production workers from the floor to make improvements and solve problems.  This deceptive practice, while highly effective, was hidden from corporate management, lest the borrowed workers be classified as indirect labor at a time when management was taking an ax to that population.  “Doesn’t corporate see this?” I asked.  “No,” replied the site manager, “they never visit.”   

A memorable quote from Jim Womack, our opening keynote at this year’s Northeast L.E.A.N. Conference, comes to mind: “Cost accounting makes liars out of all of us.”    The point is that a Lean strategy is too often thwarted by status quo organization and policy and, in this case, even the language that describes it.  

O.L.D.

Stay tuned. Lean Peeve #5 coming tomorrow. Oh and by the way… there are less than two weeks until my organization’s annual, but inaugural virtual, conference, “The Northeast Lean Conference: 21st Century Lean”.   Send a team and recharge your Lean batteries for 2021.  Here’s the link the program and registration.

“What do you do for a living,” a neighbor asks.  As I try to explain about GBMP’s attempts to help customers improve productivity and quality, my neighbor interjects with a smirk, “Oh . . . you’re an efficiency expert.” He thinks I walk around holding a stop watch, trying to find ways to make people work faster.  “Well,” I respond, “we try to improve SYSTEM efficiency, not just local efficiency.”  About this time, he has zoned out, not particularly interested in the distinction I’ve made, and he changes the topic to football (see yesterday’s blog post.)  I’ve written more than a few posts over the years about the difference between local improvement and system improvement. Here’s one more. 

Lean Peeve #3 is Local Efficiency.

Alluding to the stopwatch, I’ll begin with the definition of efficiency: standard time / actual time X 100%.  This is the one you’ll see on your ERP system. Say that I’m machining PARTA with a standard time of 60 seconds.  That standard was measured by someone with a stop watch to determine that fastest repeatable time for the operation. But I actually take  65  seconds each for this lot.  My efficiency is 60/65*100% = 92%.  Simple enough.  However, PARTA is two levels deep on the bill of material of the final product sold to the customer and is therefore essentially decoupled from actual need by weeks or longer.   My efficiency is not based on the ability to provide what the customer needs, but on a standard that rewards me ala Lucy-in-the-chocolate-factory to go as fast possible. Consider the implications of this definition of efficiency in context of the metaphor.   What would happen if each person in the canoe pictured paddled as a fast as he or she could?  (Having been in the Boy Scouts, I know what happens.) That’s classical efficiency, or, as Toyota calls it, local efficiency.  SYSTEM efficiency would have everyone paddle at the same rate (call it Takt time), which is pretty evident in a canoe.

But let’s take this idea back into the factory: I have just completed an order for 360 PARTA’s, built according to my MRP (based on EOQ, fixed lead-time, pan-size, safety stock and a raft of other order modifiers that will be the topic of a later post) with an efficiency of 92%.   These will subsequently be sub-assembled in a different department according their MRP requirements and ultimately built and shipped to the customer in a still different quantity from either upstream process, each department operating at high local efficiencies.  There are no colliding paddles as in the canoe metaphor, just lots of squandered capacity and excess inventory. 

What do you think of the SYSTEM efficiency is in this example?

It turns out that where efficiency is concerned, the whole is not necessarily equal to the sum of its parts.  In fact, in a functionally organized workplace (ironically set-up as such to maximize local efficiency) we can expect system efficiency to be far less than the sum of its parts.   We can all be paddling as fast as possible, thinking we’re doing great – but the boat is going in circles. 

Speaking at a Shingo Conference some years ago, my friend and mentor, Russ Scafede, who was a senior manager at both GM and Toyota during his career, reflected this way on local efficiency: “At General Motors, we use to joke that all of our divisions were making money; it was only the corporation that was losing its shirt.

How do you measure efficiency?  Share a story. 

O.L.D.                                                       

Want to learn more about True Efficiency?   Please tune into the 16^th Annual Northeast L.E.A.N. Conference to learn how taking the best thinking from Lean Transformation and Digital Transformation can accelerate your continuous improvement efforts.  Only two weeks to go before opening day. Our three exceptional keynotes (there are also ten breakout sessions and lots of networking opportunities) include Fady Saad, co-founder of MassRobotics, who will discuss the rise of robotics and AI technologies and how their applications will disrupt the way we understand and implement lean methodologies and approaches as we know it today. From applications in manufacturing, logistics, construction, agriculture and healthcare, robotics and AI will change the way we do things. Learn how the lean community can better prepare and adapt to this new era of smart systems.   You can get more information and register here. 

Ok, perhaps, I’ve overplayed this a bit, and the last time I wrote an ode was in a 17^th century literature class about 50 years ago.  But I was struck last week when teaching a Shingo Institute workshop by a question from one of the participants, as we discussed the principle, RESPECT EVERY INDIVIDUAL.  Referring to an excerpt from a 1952 episode of I Love Lucy, a popular example of autocratic management, my student queried, “What’s the supervisor’s name?”   

(If, by chance you have not seen this video clip, stop for a moment and view it.  Here’s a recently colorized version:  Lucy 2020.)

The excerpt is from a 1952 episode of I Love Lucy, but I recall seeing it first in 1994 when Toyota Production System Support Center (TSSC) played it in a training for my company.  They referred to it as “traditional manufacturing,” and asked our class to identify things that would not be conducive to TPS.  There were many observations of bad practices and bad behavior, which I will not relate at this time. Watch the clip yourself and see how many you can find.

What struck me about the question is that in the many times I’ve shown this video, all attention and empathy by observers is typically devoted to Lucy and Ethel. The supervisor is just a nemesis.   In fact, the supervisor, as we Googled, has no name – she’s just SUPERVISOR.  This new line of questioning led to a productive class discussion regarding the common plight of frontline supervision.  Not excusing her bullying behavior, merely asking her to be more caring and supportive trivializes her problem and disrespects her as well as Lucy and Ethel.  Hence the keyword EVERY in the principle RESPECT EVERY EMPLOYEE.  I’ve often referred to frontline supervision as “most difficult job in the organization.”   What do you think?  And, by the way, how many practices and behaviors can you name that are not conducive to TPS? 

O.L.D.     

Enjoy your summer as best as you can in this crazy pandemic environment.  And if you’re looking for an energizing event to kick off the fall, checkout out our Northeast Lean Conference: 21^st Century Lean. Yes, of course, it’s virtual but we have a super line-up of speakers and participants – and all of the engaging activities of our in-person conference: thought leader keynotes, breakouts, Lean Lounge, Silver Toaster Award and Lean after Dark.  Plus – bonus video material for attendees.  Here’s the link:  http://www.northeastleanconference.org. Hope to see you there.   

Shortly after my last post, in which I referred to sowing the “seeds of change,” I enlisted the help of my son, Ben, to reseed a particularly bare area of our yard.  I’d neglected this spot for a few years and it had become sparse and dormant.  Fixing the problem was therefore not merely a matter of spreading new seed.   There was a significant amount of work to be done first to prepare the soil.  This essentially exposed the problem and at the same time made it amenable to improvement.  Had I just sown seed on the thatch and weeds that had infested the grass, the results would have been disappointing.  A seed or two might have taken root, but most would have languished. 

It occurred to me as I watched Ben, fifty years my junior, steadily completing a task that would have been more of a struggle for me, that changing a culture requires sweeping away an accumulation of debris from the past.  Exposing the problems is hard work and not pretty.   “Make problems ugly,” is a popular expression in the Lean world, but exposing problems often elicits criticism from the keepers of the status quo.  At least in this case, exposing the problems fortunately fell to the younger generation.    I got the easy job: sowing the seeds.  Each of us contributed to the change as we were able.  After three months more of creating a favorable environment for the grass, I celebrated with a Sam Adams in the space we planted together.  This time, I think, I will try harder not to take the lawn for granted.  Culture change is after all, not a discrete event, but continuous improvement that engages everyone according to their individual capabilities.  And not to be taken for granted.

Have a relaxing 4^th.

O.L.D. 

PS Speaking of Culture Change, my organization is a big proponent of The Shingo Model and Guiding Principles to provide context for Continuous Improvement – the “know why” in the form of principles before the “know-how” which is systems and tools. It develops company culture thru analysis of how principles (along with company vision, mission, and values) inform behavior and how systems reinforce it.  Benefits include a more engaged workforce that understands continuous improvement at a much deeper level and a sustained culture of excellence. When results are achieved through behavior grounded in principles, they are for the long-term. Learn more about it during our upcoming virtual seminar.

And if you’re interested in continuing your Lean tools education during the summer months, GBMP has lots of great virtual workshops to choose from – from value stream mapping to pull systems (kanban) and much more in between. Check them out here. We look forward to “seeing” you soon!

For the last four months, GBMP, has of necessity, pivoted to predominantly virtual consulting, training and coaching.   Now, as the economy begins to reopen, I’d like to share with you two lessons that we have learned:

Office space adds limited value to our work.
We have discovered that physical distancing for our team does not necessarily reduce presence or alignment.  In fact, the need for very frequent communication during the pandemic has highlighted the advantages of virtual methods like Zoom and Slack.  The GBMP team has not been able to assemble physically since February, but we have met “face-to-face” virtually nearly every day, something that would not be practical in real space.  While do look forward to a time when can occasionally meet in person, we have come to realize that the “new normal” may not require the expense of an office. 

Virtual is here to stay, as a component of learning.
Like many of you, GBMP has adapted to the pandemic’s reality, and we have learned through this difficult process that there are aspects of virtual learning – particularly the explicit learning – that are actually advantageous to both teacher and learner. This is something I would not have subscribed to personally, had pandemic conditions not demanded it; but response from customers has been overwhelmingly positive.  We are anxious to be back on-site with our customers “in the Gemba” at some point, but we also anticipate that aspects of virtual learning will continue and develop as an improvement to Lean and Six Sigma learning and organizational transformation. 

While timing for recovery from Covid-19 is no less uncertain for me today than several months ago, life goes on, work continues and so does improvement to the work.

GBMP’s mission, to keep good jobs in our region, is stronger than ever and we will continue to adapt to provide value to our community.   We value our many relationships and look forward to bright outcomes for all of us. 

Bruce Hamilton,
June 25, 2020

At the time of this unusual decision, I had already been employed at UE for fourteen years in a variety of office jobs.  I worked in a building a couple blocks away from the factory, and “punching the clock” had never been a part of my day.  From my first day of employ, my attendance was tracked by exception – sickness, personal time or vacations – pretty much on the honor system.  But in 1985, coincidentally around the time I transferred into manufacturing, the idea to remove the time clocks was floated.  I weighed in as member of the management team on this idea, but I was pretty much a bystander, a new kid on the block, still unaware of significance of the change.   

The proposal raised concerns with many managers and supervisors that some workers would cheat the company by fudging their hours or simply not showing up for work.  From factory workers there were suspicions that without the clock they might be coerced to work extra hours without pay.   Both of these concerns were, as I understand, the historical reasons for the implementation of time clocks as a common factory practice.  Time clocks have been fixtures in factories since the turn the 20^th century, installed to provide an objective measure of attendance.  They persist today as a management system example of “the way we’ve always done things” as well as a symbol of mutual distrust between management and labor.   

Back in 1985, a business owner reflected on the time-clock proposal and listened to the concerns raised by others in the company.  Ultimately, he decided, hourly employees should be no less trusted than office workers. (Thanks, Dave.)  Forty hours of attendance would be assumed except as noted by each employee.   No more double standard: a twenty-year factory employee no longer had to prove he or she was present while an office worker hired last week did not.  The most obvious result of this system change was the absence of lines at time-clocks.  Subtler yet more significant was the change in working relationships. More of us, less of them.  In 1990, United Electric was recognized by the Shingo Prize for Enterprise Excellence, a coveted award based largely on the engagement in continuous improvement by employees, but arguably influenced by a singular management decision made years before.  (And, by the way, attendance actually improved.)

Today, whenever I visit factories and witness the stampedes of employees to time clocks and hear the complaints of time lost to waiting in line to punch in out, I wonder why no one questions the practice.   On the contrary, in the last 50 years an entire industry has grown up around punching the clock, adding software even to automatically track an employee’s whereabouts as well as his/her attendance.  

Is this an improvement or are we, as Shigeo Shingo liked to say, just automating a waste – the eighth waste – and taking mutual distrust to a new level?   

A quote from Peter Drucker is ringing in my ears: “There is nothing quite so useless as doing with great efficiency something that should not be done at all.”

What do you think?  Is it about time to reconsider time clocks? 

O.L.D. 

PS Speaking of time, at this particular time of year, myself and my colleagues at GBMP would like to wish everyone a very happy, healthy and bright New Year. We look forward to seeing you, members of our Lean community, at events we sponsor throughout the year – from benchmarking plant tours and Shingo Institute workshops to Lean Certificate programs and our annual Northeast Lean Conference. We are especially excited to be able to offer Systems Design, the newest Shingo Institute workshop, this February at Vibco in Rhode Island. We hope you can join us.

Yet, as can be seen from this documentary footage of Mr. Claus,   Santa was abiding by this ideal many years earlier.   His chagrin, when asked to “push” toys that were slow movers, indicates St. Nick’s abhorrence for speculative production also known as overproduction.  After all, the Christmas list was the original Kanban.  Without this pull system, Santa’s elves would, like many manufacturers, always be very busy building the wrong things; and Santa would have to leave backorder notes under the tree on Christmas morning.  As for standardization, anyone familiar with Norad’s Santa tracker will attest to his standardized conveyance route.  And Oh!  What a Takt time for the jolly old elf!  I have to admit that despite my enduring admiration for Toyota’s Production System, none other than Santa Claus is the penultimate just-in-time provider.   Thank you, Santa.

To everyone else, ho ho ho.  Have a restful and happy holiday.  Gratitude.

O.L.D.

P.S. I hope you will join me this upcoming Tuesday, December 18th, for my monthly free webinar “Tea Time with The Toast Dude”. I’ll be discussing how organizations sometimes struggle to gain traction with Hoshin planning. While substantial energy is put into the strategic planning process, too often the plan becomes a static document that fails to align and motivate the entire workforce. The deployment part of strategy deployment does not happen. Read more/Register here. Did I mention it’s free? Hope to “see” you there.

While it’s gratifying to think that this campy thirty-minute video has found a place in Lean Transformations, it’s also a little concerning when I hear that the “Toast Kaizen” video is the Lean training.  What was created as an icebreaker, has occasionally been overblown beyond its purpose.   Some time ago, while speaking at the Shingo Conference I asked attendees in the audience how many had seen the Toast video.  Nearly every hand went up.  But when I asked who had read any of Shigeo Shingo’s books, only a few hands went up.  I asked the audience, “Did you know there’s a whole lot more to Lean than the Toast video?”

Yes, a whole lot more than viewing the “Toast Kaizen” video will be needed to really receive the benefits of Lean.  Toast is just a small catalyst to kick off the continuous improvement engine.  This is why at the 14^th Annual Northeast L.E.A.N. conference, while we celebrate Toast’s 20^th (tattoos and Toast caps for everyone), we are also homing in on those transformers that have truly become Lean Learning organizations and whose compelling results bear witness to their efforts.

There’s still time to register, but seats are filling fast.  Please join me on October 10-11 at the Providence Convention Center. Rhode Island is beautiful this time of year. I’d be remiss if I didn’t also mention the two Shingo Institute courses – Discover Excellence and Continuous Improvement – which are being offered in conjunction with the conference. You can learn more about those here.

O.L.D.

Industrial engineers addressed the stockout issue with the purchase of a new high-speed wire machine.  The machine performed several operations in a single pass and cut cycle times in half, but it took much longer to set-up than its predecessor.  And, because the new machine was very noisy, Bob’s department was moved far away from his internal customers and enclosed in soundproofing foam.  As parallel countermeasures to stockouts, production schedulers massaged the sales forecast to bump up planned quantities of popular products, while inventory planners increased safety stock quantities for high-runner wire assemblies.  These steps combined to pyramid inventories to record levels; one entire row of high-bay storage in the automatic storage and retrieval system was now dedicated to wire assemblies; but, no improvement to delivery.

These were pre-Lean times with pre-Lean countermeasures, none of which involved Bob C.  He was just some guy on the front line, as much an object of change as the lead-wires he made.  Then Bob’s company discovered the Toyota Production System, referred to now as Lean.    The technical aspects of Lean resonated with Bob immediately: Why not build what his customer’s needed as opposed to some speculative amount based on forecasts and safety stocks?  Bob reasoned, “If I build only a week’s supply instead of month’s worth, I won’t even need the high-speed noisy machine; I can use the older machine that has short set-ups.”   This was the birth of Kanban at his company, a simple two-bin system.   It was a difficult birth.

“He’s not building to MRP,” declared the inventory planners as though it were heresy.   Production control, already in hot water with the sales department, echoed concerns of inventory Armageddon.  “We’ll go out of business if we do this.”   Bob’s plan was scaled back to a proof of concept pilot.  With one foot in the pull world and another still in push, Bob persevered: small batches triggered by Kanban made on the old machine and gross overproduction for the remainder produced on the new high-speed machine.  Little by little Bob’s concept was borne out; stockouts were nearly eliminated for the pilot parts. After several months, a plan was generated to gradually phase in additional parts.

But Bob wasn’t satisfied. As he reflected on the set-ups steps for his machines, he determined that they could be greatly reduced – almost eliminated.  “If we can make a few simple changes to this process, I can build a day’s worth and still keep up.  I can produce the low-runner wires pretty much as needed.  And, I no longer need the noisy high-speed machine.”  By this time, Bob was no longer “some guy on the front line.” He was a change agent and a thought leader.  “We can use pull for all of our production.”  Bob became our Kanban expert.

Bob C. continued to think about his production.  “Why so many wires?” he asked.  “Some lengths differ by only a thirty-second of an inch.  Who cares?”  It turned out that nobody cared. Wire assemblies had been designed in different time periods, and designers had not had good design tools to identify the insignificant differences.  Bob saw the opportunity, however, because he was on the front line and was looking for improvement opportunities.  I posted a story about variety reduction in 2011 if you’d like to know more about that.  In short, however, far fewer lead-wires part numbers were ultimately needed.

Until his retirement, Bob C. continued to develop mastery of his craft and freely shared his learning with everyone around him.    In that spirit, GBMP established the “Silver Toaster Award” in 2008 to recognize front-line employees that have demonstrated exceptional leadership and spirit for continuous improvement.  The award is presented annually at the Northeast Lean Conference.  All nominees receive free admission to the conference, and one of this distinguished group will receive that Silver Toaster.

Is there a front-line employee in your organization with the Silver Toaster Spirit whom you’d like to nominate?  There’s still time.  Here’s how.

Hope to see on October 10-11 in Providence at the 2018 Northeast LeanConference.

O.L.D.

Who remembers VisiCalc, often referred to as the first killer app?  In 1978, this first spreadsheet software ushered in the personal computing boom.  Although it only ran on Apple’s priciest computer (the one with massive 32K RAM), its ability to calculate and recalculate arrays had much to do with the explosion of information automation. By 1985, a next-generation product name Excel conquered the market with significantly more computing capability than its predecessors, eventually adding macros, graphics, nested arrays and easy interface with many other applications.  Today Excel is reportedly in the hands of some 1.3 billion users.  It’s a fascinating tool with more features than almost anyone can use.

But fascination with information automation can be problematical.  In 1996, while TSSC was assisting my company with improvement to machine set-ups, I used Excel to devise an A3 improvement plan complete with graphical VSM current and target states, problems and countermeasures, and milestones and results (documented in a 2012 post, “Value Stream Wrapping.”)   When I proudly showed the document to my teacher, he scoffed “You should spend more time observing, and less time making it pretty.”

I’m reminded of this advice every day during my work with customers.  Why do we feel the need to digitize everything?  From strategic planning to training to project management to idea systems to problem-solving to pull systems, we race to automate, believing that these are improvements.  Here a few myths from Lean implementers, quoted verbatim that I’d like to debunk in honor of my teacher from TSSC:

Myth 1:  “We cascade our strategy online to every department creating a line of sight from corporate down to individual department metrics.”
Reality:  Too often this multi-level bill of activities replaces the kind of human discourse needed to effectively communicate and deploy strategy.  An X-type Matrix, for example, nested to multiple levels does not illuminate, it hides connections that would be immediately apparent on a physical strategy deployment wall.

Myth 2: “Putting our Idea System online has increased the visibility of ideas.”
Reality:  Online Ideas System software hides ideas.  A factory employee recently referred to her company’s Ideas App as a “black hole.”  Also, when ideas are digitized, the visual nature of a physical idea board is lost to myopia.  We view ideas one at a time rather than components of a system.  And, even though computer literacy of the average employees is improving, the thought of using an app still scares many employees away.

Myth 3: “Electronic huddle boards provide real-time standardized information.”
Reality:  Sure, LCD’s are cheap today – maybe even cheaper than a decent whiteboard – but electronic huddle boards suck the life out of creativity and ownership from the front line.   One supervisor complained to me, “It takes me much longer to enter information to the huddle board application than it did to simply write on the whiteboard.  I update it when I can find the time.”   Hardly real-time.

Myth 4:  “We are conducting our Lean training online to save time and money.”
Reality:  No doubt, there is an explicit component to Lean learning that may be accomplished sitting a computer screen, and there are slide shares for this, some available through Groupon for peanuts; but real learning only occurs through hands-on practice and coaching.  This is especially true for Lean learning where concepts are counter to conventional thinking.  While the Internet offers an incredible resource for learning, it’s not a substitute for tacit learning — learning by doing.  Organizations that think they are saving time and money by using only online training are actually wasting both.

Implicit in all of these myths is the replacement of manual management of information with a machine function – call it the Internet of Things or Industry 4.0, our next industrial revolution.   But what will be the benefits?  Will the killer apps really make industry more flexible and efficient, or will they merely dehumanize the workplace.  What do you think?  Can you cite any other IoT myths?  Please share.

Happy 4^th.  For iPhone and iPad users only, here’s a fireworks app J

O.L.D.

PS I’m hosting a free “Tea Time with The Toast Dude” webinar and a discussion about Idea Systems, next week after the holiday. Are there gaps that hold you back? Ideas Systems are one of the most powerful and impactful means to engage “everybody everyday” in your improvement process. Yet many fall short of their potential for lack of participation. Join me on Tuesday, July 10 for a “Summer check-up of your idea systems”. What’s working, what can be improved? See you then! Register here.