Knowledge Fulcrum

Over the years, I’ve discovered that what makes LEAN so illusive isn’t that it’s a complex idea, but that it’s a simple idea that happens to be hard to implement.

LEAN – the name commonly used to describe the Toyota Production System -  is the systematic removal of waste from any system on a constant and never ending basis.   When I first started to study the Toyota philosophy, I struggled to see where I could find the kind of improvements that would generate the kinds of results I had read about.  That’s where I went wrong.  LEAN is about creating a rhythm where everyone in the organization is trained to see the small things.  Small things, when observed alone, seem insignificant – but when compounded over time and across many people — small things add up fast.

Here’s a a perfect “real world” example:

In my last company, we operated call centers where we conducted primary research studies for organizations.  On any given shift, an agent would work on an average of 3 different projects.  Because of how the software was originally developed, in order to change to another project, an agent would need to alert a floor supervisor to be “moved” to the next program.   This required the agent to get up and walk to the end of the floor to alert the supervisor.   For 12 years this was “standard procedure.”  No one ever stopped to think about what the cumulative “cost” of having the agent get up and request a change actually was.

When we started our LEAN journey, we began to look for small things that were simple to correct.  We started to measure everything we could.  Eventually someone decided to measure the average time it took an agent to “change” projects.   It was an average of 1.2 minutes.  Not all that significant, right?  But when seen in the context of the entire organization and over the entire year, the numbers began to add up very fast.

Average # of Agents per Day – 250

Average # of Study Changes – 3

Number of Working Days per Year – 350

Average Time per Study Change – 1.2 min

Average Cost per Agent ($11.20 loaded) – $0.1867/min

Total Cost to Change Studies each Year = 250 X 3 X 350 X 1.2 X $0.1867 = $58,810.50

The solution was simple.  We made cardboard “signals” that agents would raise when ready to change studies.  These “signals” alerted the floor supervisor, who then changed them over on the system.   In 24 hours, we were able to reduce the average change over time from 1.2 minutes to just .23 minutes.   That simple solution resulted in a net savings of $47,538 a year.  It only cost us a few dollars in card stock and a 15 minute training for every employee.

LEAN is not about BIG improvements.  LEAN is about seeing the business in a different way and constantly making small changes that overtime create significant savings for the business.   Now more than ever, we all should be thinking LEAN.

Now I want to walk you through the process we used to document our value stream, and what we were interested in measuring.

Generally it’s good to start your process mapping by looking at the job function level.  Depending on the complexity of your business, you may want to do this by individual department.  You will know if you need to break it down.  Map the current state first.

Use post-its to define each discrete job function in order.  You can use swimming lanes if there are concurrent processes you’d like to map.  Ideally, you’d also be gathering accurate information on the following metrics – to start you may just want to use your best estimates:

• Cycle Time – this is the average time it takes to do the task.
• Process Time – this is the average time it takes including any waiting before or after the task.
• Percent Complete & Accurate - an estimate of what % of the time the task is received complete & accurate.
• Percent Exceptions – this is a measure of how frequently there are exceptions which require special handling.
• Number of Hand-offs – how many times does the work change hands (don’t forget figuratively, if information is emailed around the company).

Now you can start to see how much time is spent on activities other than doing the necessary work.  Be sure to include documents or reports that are built into certain job functions.  For those who are more detailed oriented, you may continue to break job functions down into discrete tasks.

I would start broad until you get a feel for how this works.  If possible, remember to include people from every job function and department.

Now you can add up each type of time.  The total Cycle Time is the actual time spent doing the work to produce your product or service.  The total Process Time is how long it takes you to get the product or service out the door and into the hands of the customer.  Usually the Cycle to Process ratio is VERY low.  But now you should start to see where there’s opportunity to take waste out.

What does your employee feedback program look like?  Do you have one of these boxes in your office?  How do you gauge the mood of the employees in your organization?  Do you know what’s getting in the way of your people’s performance?  How do you know?   Let’s start over – why should you care? 

First, I’ll start with why some  employee feedback programs don’t work:

• Feedback systems are black boxes.  Ideas and suggestions either never get seen or fall on deaf ears.    If you aren’t willing to take action, then DON’T ASK FOR SUGGESTIONS.
• Feedback isn’t timely.  If the system is designed to gather information, but it’s not noticed or acted on immediately, then the problem either already did its damage or has grown into a bigger problem. 
• Suggestions are poorly defined.  Too often, employee feedback systems are only used to vent personal issues about peers, managers and customers and don’t identify the core operation or process that is broken.  
• Lack of accountability.  Most systems don’t provide any feedback loops to ensure corrective measures are identified, implemented and standardized.
• Feedback is ad hoc, not systematic.  If you don’t make it a priority everyday, or every week – then feedback systems won’t stick long-term.

If you’re still unsure as to the benefit of good feedback systems – then perhaps you can read a bit more about world-class organizations that implement feedback systems that produce results (Thanks, Verne!).  

Now the good news.  This doesn’t have to be rocket science – here are  a few tips to get you started:

• Make it a habit.
• Keep it anonymous.
• Make it about what, not about who.
• Good systems ask for feedback on corrective measures that will work; good systems are not just looking for complaints.
• Don’t shoot the messenger – if you aren’t ready to hear the brutal facts, then go to another website.
• Make sure the issues are visible so EVERYONE can weigh-in on what issues need addressing first.
• Never, ever stop!  It’s continuous improvement.
• Offer rewards when improvements save the company time, energy and money.  It only works if everyone has a stake in the outcome.
• When you listen – don’t defend but keep an open ear and mind to what your people have to say.

Today more than ever we all need to work together to identify and solve the issues that are holding our performance back.   Employees and owners can no longer look to the other for the answers - we need to work together to make our organizations and ourselves stronger, better and more effective.