World-Class Performance and the 20 Keys

The 20 Keys are a powerful method for first assessing current state performance in operations, and then developing an action plan for improvement to achieve world-class performance.

What is World-class?

world–class

adjective
: among the best in the world
: being of the highest caliber in the world <a world–class athlete>

Source: Webster-Merriam.com dictionary

What does the phrase “world-class” really mean? This question has been asked since the term first became popular in the 1950s. Companies that are considered to be world-class consistently exceed customer expectations. This type of performance isn’t accidental. It requires systems that adapt to dynamic environments. Kaufman Global frequently uses the 20 Keys system in our work with clients that are pursuing world-class performance.

The 20 Keys Help Organizations Focus

Lean is an important element in the pursuit of world-class. The simplest definition of Lean is: “The relentless pursuit of waste elimination.” Regardless of business type or industry, many companies have great success with their Lean efforts. Unfortunately countless others don’t. Maybe this is because there are so many opportunities to eliminate waste that it’s easy to get distracted, lose focus and wander off course. This isn’t a new problem. Decades ago Iwao Kobayashi at Toyota evaluated manufacturing companies that were considered to be world-class and identified crucial areas that must be addressed in order to achieve such status. He categorized these areas and put them into a framework called the 20 Keys.

Kobayashi’s original Keys addressed an entire manufacturing facility. Kaufman Global expanded the concept by developing sets of 20 Keys for many functions such as Healthcare, Engineering, Supply Chain, and Finance, among others. We then integrated the technique into our Lean Daily Management System® (LDMS®) methodology so that measurement takes place at the work group level.

The Kaufman Global 20 Keys® methodology:

  1. Is a continuous improvement mechanism that combines intuitive world-class definitions with a means of measuring and scoring group performance
  2. Focuses intact teams on the issues that affect their work
  3. Can be implemented and linked across the organization to provide a comprehensive evaluation of effectiveness

Strategy and Tactics

At first glance, the 20 Keys may seem like another audit technique. But when this powerful system is deployed inside the Lean Daily Management System, it enables work groups to take increased ownership of their daily work. As an added benefit, these highly relevant, local improvement efforts can be rolled up into organization-wide results by providing a common measurement system amongst multiple locations. The graphic below shows how the 20 Keys works both strategically and tactically, linking the big picture goals of leadership to improvements in day-to-day work. The 20 Keys takes an organization’s vision of world-class and:

  • Connects the vision to actions by breaking it down into manageable pieces
  • Provides an easy to understand and manage measurement system for progress toward the vision
  • Enables relevant improvement plans close to the issues

how to achieve world class performance

Work group Application

Once the vision and strategic priorities of the organization are set, intact work groups complete a 20 Keys assessment and planning cycle to baseline their performance. Each key is evaluated at five levels of performance, ranging from 1 (Traditional) thru 5 (Best-in-Class). There are no ½ points and all statements or requirements must be met in order to achieve a given performance level.

With the baseline score established, the team selects their initial improvement keys and goals and creates a plan to achieve the gains. For example, if Safety was one of the keys identified for improvement and the current level of Performance was a 3, the team would be meeting the following definition:

  • Safety – Level 3: The concept of unsafe behavior is well understood and associates are familiar with the specific unsafe behaviors that create hazards and / or accidents in their area.

To improve their score and achieve the next level performance, the team would need to establish new work rules and processes that ensure all Level 4 criteria were consistently met:

  • Safety – Level 4: Unsafe behaviors are audited weekly and the results are posted. The team strives to eliminate root causes of unsafe situations and it is accepted practice for associates to coach each other on safe behaviors.

The 20 Keys of Lean Manufacturing

Regardless of whether the team sets an annual improvement goal of 10 points, or a quarterly goal of three points, it is important that they assess their performance against the plan at least every three months to ensure the action plan is being implemented and progress sustained. Posting the 20 Keys scorecard and implementation plan in the work area on the primary visual display enhances visibility to improvement progress and is a best practice.

Building the Foundation for World-class

World-class levels of performance are not achieved by accident, but through the execution of an incremental and strategic implementation plan. Kaufman Global has helped many organizations implement the 20 Keys and focus their improvement efforts. If you’ve already established a good foundation of continuous improvement, or even if you’re just starting the journey, the 20 Keys is a good way to enhance results and sustain momentum.

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To learn more about how to apply the 20 Keys and achieve world-class levels of performance, click here to download our Evaluating Continuous Improvement Effectiveness with the 20 Keys white paper.

The 20 Keys are part of Kaufman Global’s Lean Daily Management System ®.

The 20 Keys are discussed in this article: The Missing Link of Lean Success.

Relearning Jidoka From a Robot Vacuum Cleaner

About 20 years ago, when I first trained on the Toyota Production System, it was presented to me that the second pillar of the Toyota production system was “Jidoka”. Jidoka is a Japanese word that means “automation with a human touch”.  As I learned later, this definition just does not convey the quality concepts embodied in Jidoka. I admit, I had difficulty learning the Jidoka pillar because I got stuck on the word automation. I thought it was a call to automate processes with numerical control.

My Japanese Sensei explained that American Lean practitioners use the word “autonomation” instead. Hmm … sorry … not getting it. Still sounds like automating something to me.  Later, during a plant tour, the Sensei pulled our group aside to show us a u-shaped manufacturing cell with 12 machines being operated simultaneously by a single operator. The operator’s job was to unload and reload a machine, press the start button, carry the processed part to the next machine, unload that machine and load the part from the previous machine, press start … and so on, for the entire circuit. Ah hah! The light bulb came on! Autonomation means achieving autonomous operation of a machine; getting it to run autonomously and make good parts, without the necessity for a human to stand there and watch it.

Back to the present. Last fall my wife and I saw numerous TV commercials promoting a robot vacuum cleaner. My wife thought it would be neat if it really worked. I remembered this at Christmas time and decided to surprise her with the thing she had commented on months earlier.  She was indeed surprised, but not the way I expected. She immediately asked if I had problems with the way she cleaned the house!? (Key learning point: Don’t give your wife a vacuum cleaner as an unexpected gift.) Jidoka and the robot vacum cleanerOnce I got through that minefield, I skimmed the instructions and we picked the first room to clean. I positioned the electronic boundary beacon in the doorway, plugged in the base station, set the robot, pressed start and let it go. Fascinating! The robot started off in a random pattern throughout the room. When it bumped into something it stopped and turned in another direction. It remembered the walls and furniture it encountered and explored their boundaries. It was a big hit. My wife thought it was cute and fun to watch! Having redeemed myself, I left her to enjoy her gift.

Twenty minutes later I checked on the robot and found my wife still watching. “So what do you think?” I asked.

She replied, “Well it saves me physical work but it does not save me time. I can do it faster myself. I could be done and on the way to the store by now.”

“What’s stopping you from going to the store?”

“I have to watch it.”

“I can see you are fascinated by it, but why don’t you let the robot do its work and go do something else?”

“It might do something wrong. It could get stuck, fall down the stairs, or make marks on the furniture. It might miss some spots.”

“Have any of these things happened so far?”

“Well, no. When it went into the corner and bumped the walls it rotated until it found a path out. Same thing around the furniture.“

“How about the stairs?”

“It started to go past the edge, then stopped and backed up.”

“OK, so it detected the ledge and responded to prevent it from falling down the stairs. Hmm… I wonder what would happen if it got stuck under the couch or got in a tight spot?”

We positioned a chair over the vacuum so that it was penned in. After a few attempts to free itself, the robot stopped. It beeped a few times and a recorded voice said “error, error”. I removed the chair, pushed the blinking start button and it started vacuuming where it left off. A few minutes later, it drove onto the base station, beeped to signal it had completed the room and turned itself off. I could tell from observing the wheel patterns in the carpet the vacuuming job was complete and no sections were missed (visual management).

This suddenly felt familiar. “You know,” I said, “the vacuum cleaner is a machine designed to do a process that humans do. To be effective it must be able to detect exceptions and respond, so they don’t become problems or continue as work defects.” I continued, “For the vacuum cleaner, the response may be a countermeasure such as turning or backing up, or shutting down and signaling that human intervention is required to resolve a problem.” In essence the machine has been equipped to sense problems and make some human-like judgments (automation with a human touch). It has sensors to detect when it runs into something or may run off the floor, and they tell the computer processor a response is required (detect abnormalities). We saw the machine making these adjustments and we tested it for its response to a problem (stop the line for quality problems).

I asked my wife if she thought she could trust the robot to do the job properly without damaging anything. I forged ahead saying, “If you can, then you don’t need to watch it run. The human work has been separated from the machines work. Your job is reduced to plugging in the base station, pressing the start button and walking away.”

Her response was a somewhat cool, “Uh-huh …”

Sensing I was once again nearing the minefield, I quickly said, “How about you plug the base station in the den, press the start button and I’ll take you out to dinner while it works.”


Here is our glossary definition for: Jidoka

Improve Operations Fast: 5 Transformation Tools

When it comes to driving business improvements, the term “transformation” is overused. Transformation indicates a fundamental shift from one state to another.

Question: How often do organizations make such bold and radical choices and stay the course?

Answer: Rarely.

Years ago, I worked for an automotive tier 1 supplier that was facing all kinds of operational problems. Many of their challenges stemmed from an increasing number of additional products that required new machines and equipment, posing the question, “Where do we place them now?” Other challenges included long, complex delivery routes with WIP in every process step, conveyor belts creeping all over the place and inventory build-up. The list was endless. In the midst of it all, the manager had been trying to create efficiency to the best of his abilities but was failing ― slowly but surely.

Drastic change was needed. As a result, the plant shut down for a week, during which all machines were removed, and within that week everything was re-installed but in a complete new configuration based on one overarching principle: Flow!

Such drastic change is surely not always needed ― nor does it happen in many cases ― because most organizations do not have the collective courage to make such a decision.  So, often a choice is made for gradual, incremental changes, but incremental to what? In order to build a house you do start with the foundation don’t you?

TransformationA solid transformation does not happen incrementally. Instead, it happens dramatically and visibly. Incremental enhancements to operations are Continuous Improvement (CI) efforts, which are crucial to be truly competitive but happen at a slower pace. In situations where bit-by-bit simply isn’t cutting it, organizations should consider real transformation. Only then will dramatic results be achieved through bold change and decisive action.

If you’re considering a transformation effort, where significant results need to be generated fast, be sure to apply these five fundamentals to increase your odds of success:

1. Understand the Objective(s)

Identify one or two significant targets. Make sure that the objectives are quantifiable ― measurable up and down the value stream. Usually this involves a few fundamental measures that have a solid connection to bottom line results. Cost is often used because this mega-process measure wraps up just about everything, but especially materials and labor. But it could be other things like asset utilization or quality. The point is that these are big-picture, corporate target objectives that flow down inside the transformation initiative, generating the business case for change.

2. Make a Plan

The plan has to be simple enough to understand, but detailed enough to answer the basic questions that everyone will have: Who, What, When, Where, How, and How Much? This seems like basic information, but once you start to think about this in the context of a complex system (i.e., the operation), you realize that it really does take some thoughtful consideration. The better you do upfront on these important questions, the less time you will spend re-directing later on. Yet, there will be unknowns, so don’t over-analyze. Make enough of a plan to answer the questions and get started.

3. Apply Resources

Resources to drive transformation fall into two areas:

  • The resources necessary to push the organization off center and force the initial change. This takes significant energy and can’t be overlooked. Everyone already has a full-time job. Don’t expect the line organization to have the extra time necessary to effect a dramatic change. The bottom line is that some form of external support is most often required. It can be staff from other locations or external resources who make the initial push, but realize that they won’t be the ones to sustain or ultimately own the change.
  • The line organization who must ultimately own the initiative. The skills needed to push the organization in a new direction are not necessarily the skills required to sustain the change. But, once the initial rapid change is accomplished, it will take a lot of energy to hold into place. Don’t worry, this isn’t extra energy; it’s actually less energy than the old, waste-ridden practices prior to the transformation. Even so, the organization will attempt to do both the old and new ways. For this reason, you will need to apply internal resources to keep the new good practices in place, and to add even better ones as time goes on.

4. Over-Communicate

Make sure that everyone is clear about the objectives and plan to accomplish the objectives. A well-defined communications plan is an essential ingredient of success. Keep everyone informed about progress, challenges, accomplishments and, most of all, results — even the small ones. Near-term wins along the way will keep people energized and provide powerful ammunition for those who resist the change in favor of the tried and true ways of the status quo.

5. Measure the Results

Results give efficacy to the entire initiative. Many people have put themselves on the line, risen to the challenge and accepted the risk that comes with bold action. Do not abandon the proof that the effort — everyone’s effort — was worth the trouble. The key to sustainability is to make sure to have a system in place that can measure the results on the front line day-by-day and at the operating level month-by-month.

Want to learn more? For a solid example of an organization that dramatically transformed its manufacturing operations, click here to download our white paper, “Transforming Operations into a Strategic Competitive Weapon.”

Lean Should Be Part Of Your Growth Strategy

Lean is about waste elimination right? But to what end? The Toyota Production System (TPS) promotes eliminating waste in the pursuit of higher quality, lower costs and improved delivery with empowered employees. Yet, what is the ultimate objective? If you have “all of the above”, these are several things you don’t need to worry about as you pursue new customers and new markets. In our view, Lean is the ultimate strategy for growth.

Beyond Cost Reduction

In partnering with clients on Lean initiatives around the world, we often find that people equate “waste elimination” with “cost reduction.” This mindset is a cultural response to working in departmentalized operations, plants and processes that are measured as cost centers. Since most employees are not directly connected to generating revenue, their contributions to financial performance are only seen through cost and budget statements. This “cost reduction” view is sustained when organizations measure the success of their Lean programs based on savings from individual projects, Kaizen Events and employee involvement activities.

Don’t get us wrong. Organizations expect their Lean programs to deliver bottom line results, and they should track the returns from each Lean activity being conducted. However, there is much more to gain if they can transcend the cost reduction view and understand that Lean can be a powerful growth enabler when applied strategically to the business as a whole.

Growing the Bottom Line

Eliminating wasteful activities allows organizations to get work done with less effort. It’s also proven to increase output for the same effort. For example, one of our clients recently set out to improve its outside sales process. This was a cumbersome process involving documentation and approvals through the corporate office, extensive reporting and multiple trips to prospective customers to close a sale and / or to follow-up on billing issues. Upon conducting a highly focused workshop (Kaizen Event), a cross-functional team identified ways to reduce paperwork, eliminate steps, and prevent errors / exceptions.

weighing costs vs salesAs the team began calculating the cost savings of the new process, an “ah ha” moment occurred. The Director of Sales jumped up and said, “Wait, we are looking at this all wrong. What we have really done is create an opportunity for all of our sales representatives ― in every territory ― to spend an additional 10% of their time meeting with prospective customers. This has the potential to grow the company’s bottom line far more than cost reductions. Let’s project the value of that growth and go for it!”

Managing the Value Stream

Stated another way, Lean can be applied to increase revenue without proportionally increasing costs. For instance, let’s say there’s a manufacturer that is starting to recover from the recession. Orders are increasing, but the product mix is less predictable. In this situation, what’s the most effective growth strategy?

Manufacturing operations can be viewed as a stream of value-adding processes that create a product for sale to the customer —known as a value stream. Accepting that a value stream is no more effective than its weakest process, the best strategy for growth is to progressively improve those areas that will increase the output of the value stream as a whole. For example, doubling the productivity of a single process in the middle of a value stream does not necessarily increase the total output of finished product for customers.

Lean activities must be prioritized to progressively and continually improve quality, eliminate wasteful actions, re-balance work, and reduce causes for wait times. Attention needs be placed on continually improving the next constraining area. It’s not enough just to increase volume, as it just adds inventory (not profits). In fact, producing too much of the wrong product — and not having the product the customers want, when they want it — will reduce profits.

In the end, what adds more to the bottom line?

  1. Increasing sales by 10%, without adding labor; or
  2. Pursuing a 10% reduction in labor, while maintaining sales

The answer is a simple. In addition, accelerated — more substantial — growth can be achieved by continuously improving quality, cost and delivery at a faster rate than the competition.

Continuous Improvement And The 20 Keys®

On the Continuous Improvement Journey, It Pays to Look in the Rear view Mirror

Business leaders are often criticized for their tendency to keep looking “in the rear view mirror,” but is this always a bad thing? In life there are frequent occasions when one can learn from events of the past to augment future outcomes.  Where Continuous Improvement (CI) activities are concerned, monitoring and tracking quantifiable results over time maintains focus on increasing levels of performance.

Knowledge and expertise stem from both good and bad past experiences. As much as we admire the entrepreneurial spirit of those who seem to be charging ahead at the speed of light, the truth is that successful innovators occupy a significant amount of their time studying the “lessons learned” of their predecessors. Unfortunately, it’s far too common for organizations to follow a well-trodden path and then stop abruptly when other priorities arise. Experiences are often lost, and errors are later repeated. In the end, past efforts are often wasted as the creative ideas from former teams are constantly reinvented.

When it comes to continuous improvement, it’s imperative that time be dedicated to holding standard, prescriptive, and quantitative reviews that evaluate the effectiveness of CI efforts. A concentrated effort should be made to discuss and formally document successes and failures of any significant flow of tasks and activities. If one thinks about it, every workflow should be a continuous loop of tasks from which the concept of CI can grow and flourish. This is equally applicable to such innovative functions as new product development or to the more mundane activities associated with financial month-end closing. CI effectiveness reviews are a critical success factor for any initiative in order to continually build on prior efforts.

To quantify, monitor and review continuous improvement progress, there is no better tool than Kaufman Global’s 20 Keys ®, a proprietary method for focusing an intact workgroup on the 20 most important elements of how it is operating versus world-class (or better) standards. The 20 Keys automates the review process by regularly assessing current state, targeting future performance levels and implementing a month-to-month plan for improvement.

20 keys cycle for continuous improvementAs identified in the 20 Keys Cycle illustration above, the method drives a continuous cycle of improvement and builds on prior efforts. Typically repeated four times per year, location leadership or a designated representative works with the workgroup to assess their score for each of the 20 keys. This is an honest, direct exchange in which the they score each key against known criteria. Once the assessment is done, this same workgroup decides on which key(s) they should focus on improving. The objective is for them to increase their overall score by 10 points per year.

A universal process, organizations throughout the world have implemented 20 Keys successfully. To date, Kaufman Global has developed more than 25 different sets of keys that are applicable to both industry and functional applications, including Customer Service, Logistics and Supply Chain Management, Engineering, and Project Management, among others. Regardless of which key sets are used, the 20 Keys process provides a standardized approach for measuring CI effectiveness across functions and locations.

It’s time to make a fully documented review procedure (that includes targeted metrics) part of your organization’s way of life — no matter what industry or business function you happen to be working in. Think about it. What did you learn from your recent improvement efforts, what was measured to evaluate results, and how can those results be improved?

To learn more about Kaufman Global’s 20 Keys download our White Paper: Continuous Improvement and The 20 Keys ®

Stand Down Events for Truly Rapid Results

Over the years, businesses have used numerous tools and techniques to achieve rapid change (i.e., Kaizen events). These techniques have typically focused on resolving specific manufacturing or business issues and last (often) for five days. However, in today’s fast-paced world, shutting down for an entire week to find and implement solutions to known problems is most often considered out of the question. Businesses now expect immediate gratification, often aiming at big changes in a just one day.

With a “need for speed,” more and more organizations are adopting the idea of holding what are best known as Stand Down Days ― one-day problem solving events. These intense initiatives can be focused on a broad range of improvement activities, but are most often leveraged to jump start 5S programs. Far removed from “business as usual,” a Stand Down Day is not something that can be undertaken by the faint-hearted. Only organizations with true diligence will succeed.

For Lean aficionados, the execution of a Stand Down Day should not be that daunting, as it falls squarely within the typical framework of Plan-Do-Check-Act (PDCA) ― with a significant emphasis on the P. The primary objective of any Stand Down is to orchestrate a series of tasks in a day that could typically extend over weeks of uncoordinated activities. Such orchestration needs more than a maestro; it requires music sheets and the combined skills of an entire orchestra.

There can be no half-measures in accepting such an undertaking, and it all starts with 100% buy-in from the Site Leadership Team. This means wholehearted involvement from top management to commit their entire workforce. In fact, first and foremost, Leadership must agree to shutdown all normal operations and office activities for the day in order to have a single site-wide focus of creating a “world-class” working environment. There can be no exclusions! Leadership must also ensure that all employees understand the significance of what is being planned, and that their participation in the outcome can have a far-reaching impact on the overall success of the business.

The implementation of a 5S Stand Down Day needs to be looked at as an opportunity for the entire business to work together as a well-oiled machine. If one cog in the wheel is failing, the entire machine malfunctions. Due to the time restraints, nobody can afford to nibble around the edge of a problem that has suddenly become everyone’s problem. Instead, it must to be tackled as the only gorilla in the room. There is perhaps no greater motivation than this kind of peer pressure to deliver immediate and tangible results.

To learn more about how to most effectively plan and execute a Stand Down event, click here to download Kaufman Global’s white paper, “Stand Down Events for 5S: The Thirst for Rapid Improvement.”

Prioritize Manufacturing Fixes For Better Results

There are times when a manufacturing operation needs to get better (a lot better) — fast. This can be the result of many things. Often it’s in response to an external stimulus, such as competitive pressure, a quality “event,” or a troubled product launch. Sometimes it happens when customer demand increases without warning, where the “without warning” comes by way of truly new information and / or orders from the customer. Perhaps it’s because of a failure of internal sales and operations planning (S&OP) process — which happens more than anyone would like to admit. Or, it could simply be that the manufacturing operation has fallen into complacency and someone new comes in to disrupt the status quo. Whatever the reason, there are fundamental Lean manufacturing steps that should be taken to increase production. These types of changes are often inevitable and are often easier to achieve when thrust upon us.

Prioritize Improvement Activities by Aiming at Objectives

Lean waste wheel with manuracturing hot spots

Lean Waste Wheel with People Energy Added and Top Priorities in Red

Lean manufacturing aims directly at factory throughput. A simple question to ask is: “How do we incrementally get more top quality product out the door with the same or fewer resources?” Taiichi Ohno’s waste wheel has a simple way of describing the things that get in the way of optimal throughput. The wheel describes seven classic wastes: Transportation, Inventory, Motion, Waiting, Over Production, Over Processing, and Defects. Within each one, there are many methods that can be applied for improving results. It only makes sense to give some priority to what to fix first.

The top three waste targets for improving manufacturing most quickly are: Waiting, Inventory and Defects. Everyplace IS different, but overall, these are the areas that get you furthest fastest. Most other forms of waste, and the methods to address them, fall in line under these.

Waiting Waste

Whether its machine capacity or human capital, there is no greater sin than waiting for product to move through the system. The question to ask is simple, “Why aren’t things moving?” The reasons are fairly standard: machines are down, there are missing people, parts and materials, etc. Many paths can be taken to fix these problems. It could be maintenance and machine downtime, or it could be organizational / skill versatility or shift-loading. Missing parts are often supply chain issues, such as forecasting and supplier management. In the end, the simplest question has many opportunities for discovery.

Inventory Waste

Inventory (e.g., raw, WIP, finished goods) is visible and extremely costly. It’s bad enough when you think about inventory in terms of the cash it represents. It’s even more frightening when you add the costs of moving it to the location where it sits, sorting it from time-to-time, and throwing it away when it becomes obsolete or a quality defect is detected. Only then do you begin to understand how despicable inventory really is. But that’s only part of the picture. There are other reasons why inventory is a logical first-strike target.

  • Inventory not only disrupts throughput by physically getting in the way, but it also clouds throughput issues by masking problems. When inventory builds up, it disguises real issues that affect throughput and delivery. WIP covers up overall equipment effectiveness (OEE) and quality issues. Raw materials disguise supplier delivery and quality problems, and finished goods inventory mask gaps in on-time delivery.
  • Inventory is the most visible attribute of a Lean versus a non-Lean operation. Not only does it show up throughout the operation, but it also shows up at headquarters where the people who measure results automatically assign dollars to inventory. A comprehensive reduction in inventory (i.e., an improvement in inventory turns) is a sign to the entire organization — from top-to-bottom — that something is improving. This is important to build enthusiasm for the dramatic changes taking place throughout the operation.

Defects Waste

Building bad product wastes time, energy and money because it’s already loaded with labor and material costs. On top of that, we add cost to detect, sort and fix defects. Quality is in the top three most important initial targets because it cannot suffer at the hands of the throughput objective. And, nothing will undermine an initiative to increase throughput faster than a quality problem delivered to the customer. In the automotive industry, recalls result in billions of dollars of lost value every year. In the Oil and Gas industry, a single quality problem leads to non-productive time (NPT) that can cost a million dollars per day. And, it’s not just the cost of fixing the problem that impacts businesses the most, it’s also the damage it causes to the supplier and customer relationship. The cost of the Macondo oil spill disaster (which was more a process quality issue than a material problem) is incalculable ― both in terms of tangible and intangible losses.

Everything Is Connected

Because the entire system is connected, addressing any one of these three wastes automatically impacts all the others described by Ohno. Ask good questions at the start and develop a plan of attack that always keeps your focus on the objective: “How do we incrementally get more top quality product out the door with the same or fewer resources?” Start with the few critical places where small improvements will have the greatest effect, and then develop an implementation plan that includes the broader organization in a holistic approach. When you’ve made it this far, you can then apply waste elimination tools, methods and techniques to your heart’s content.

To Learn more about Kaufman Global’s view on Lean manufacturing, download our White Paper: Implementing Lean Manufacturing: A Holistic Approach.

Lean Tools are a Means, Never an End

One of the most common and most difficult to eradicate beliefs is that “Lean” is just a bunch of analytical tools and methods. By knowing and applying them, organizations often believe they will automatically — and forever more — increase their profitability. If this were the case, why are so many companies, institutions and agencies that have applied Lean tools not experiencing sustainable differences? Why is it that in many instances organizations, once started down the road of Continuous Improvement (with varying degrees of success for sure), break away and refocus on other initiatives the moment a new CEO or plant supervisor comes onboard? Are the tools not working? Is it just another consultant’s ruse, where the theory sounds great but doesn’t work in real life? Or, are the means and methods not being used properly?

Can Lean Tools (by Themselves) Transform a Business?

A tool is any physical item that can be used (by someone) to achieve a goal. So in essence, a tool does not do anything by itself. Someone must use a tool to perform (or not), and the correct use of that tool determines success or failure.

Computers, the Internet and mobile phones are all great inventions from the last century. However, given this definition, they are basically just tools — they are a means to an end and should be used as such. Nevertheless, in today’s times it is easy to find examples of where tools are being treated as an end more often than not. For instance, in manufacturing environments production schedules are created by ERP or MRP systems. Yet, these systems depend entirely on accurate data input such as correct inventory levels, material locations, scrap levels, (reported vs. actual), etc. And, as we all know, production cycle times never vary (ha!). All these elements are heavily influenced by people’s behavior where work discipline is translated into the accuracy or inaccuracy of the ERP / MRP tool. But in real life, we seldom follow the exact schedule generated by the computer. Why is this? The computer rarely makes mistakes. It’s because we — people — do not use the tool properly and consistently. We don’t give the tool what it needs which is accurate data and inputs. We automatically assume the computer has considered all the variables.

Proper Tool, Wrong Attitude?

In a recent visit to an assembly plant for window regulators, I noticed that throughout the plant supermarkets had been installed. Separate safety stocks and a constant milk run train ensured each cell was supplied with materials. At one point the milk run operator arrived at the supermarket to find it empty of a specific part. Not to worry, he immediately went to the safety stock, collected the parts and made the necessary adjustments so that the cell could continue working. So yes, the tools (e.g., inventory control, replenishment and kanban, etc.) were working. Yet, the operation was down for parts? The failure here is that the operator did not report the fact that the supermarket was empty, which would enable preventative countermeasures. As it turned out, the underlying problem was a combination of factors: parts placed in the wrong location caused by an overly complicated visual management system and an operator who, at the end of his shift, dumped the parts somewhere in his hurry to go home.

Be Consistent

In another assembly plant, a need was identified to increase the quality output of a specific cell. Boundary samples, error proofing sensors and devices were installed, along with standard work methods and detailed visual job instructions, all with great success. However, several months later, the focus of management changed. They believed quality was now a given because all the “tools” were in place. They chose to revert back to the old, well-proven method of shouting to demonstrate the new priority and increase output of the production line “any way you can.” The operators responded as predicted, and the output numbers from the cell increased. Over time, the focus on quality checks in the cell became more relaxed. Soon enough, scrap numbers began going through the roof. As it turned out, the operators had found a way to circumvent the sensors and boundary samples because they felt a higher productivity goal was being served.

Only the Whole Package Succeeds

In both cases, the tools worked and ensured short-term success, but the system failed in the long-run because the companies did not succeed in changing the behavior and mindset of all the process stakeholders. The organization did not change its values and instill process discipline to follow the structure and system that comes with the tools.

It’s important to remember the definition of a tool: any physical item that can be used (by someone) to achieve a goal. Success comes from selecting the right tool and determining how someone must use it. It is a means and never an end!

Lean tools are logical, easy to understand, widely applicable and, in most cases, simple common sense. The important thing to remember is that if we do not use them diligently, in a structured manner and adjust our own behavior, the tools alone will never achieve sustainable improvements.

Read about how we helped a leading industrial equipment manufacturer appropriately leverage Lean tools inside of a comprehensive Continuous Improvement approach. Click here to download Kaufman Global’s Case Study: Transforming Operations into a Strategic Competitive Advantage.

Benchmarks As A Performance Improvement Method

The Case for Benchmarks

Benchmarks can be a valid comparison tool to apply to your performance transformation for a couple of reasons. First, it offers initiative leadership the moral authority to urge comparable results. That is to say, given an equivalent process, if some other organization can do better with the same resources, or do as well with fewer resources, then their approach should become an entitlement to the astute observer. Second, it indicates that you might be too far from the best to even bother trying. Have you ever thought that maybe we just shouldn’t even try to manage the best motor pool? That’s right, maybe you should simply outsource your motor pool to a best-in-class resource.

One Little Hitch

So, while it’s true that benchmarks can provide authority and clarity, consider the flip side. It’s been observed more than once that few things are more wasteful than optimizing a process that doesn’t need to exist. So, if you learn that your process doesn’t really need to exist, will you really fold up shop? Often not. This frequently occurs in public sector settings. Standing back, we may surely agree that government needs to embrace Lean practices and improve processes. Yet, if Agency A learns of Agency B’s prowess doing exactly what they do, will “A” fire everyone, bolt the doors and outsource to “B”? You already know the answer. There’s this little matter of constitutional authority and jurisdiction. So, “A” needs to think instead of client (taxpayer) needs, baseline the as-is, identify the waste, make a fact-based plan to improve, and move out. Extensive benchmarking merely squanders already slim resources.

Benchmark Envy

Obtaining relevant, timely and directly comparable benchmarks is as much art as science. While fascinating revelations unfold, pursuing benchmark perfection consumes a lot of resources that could be better invested in just beginning your improvement journey. That’s particularly true (and wasteful) if you sense you’re quite far from ideal. For example, let’s say that in a 20 Keys® category you are at a 1, the best known is a 3, and you’re trying to understand how to incrementally become a 5. Instead of all that angst, we’d say why not get started on your transformation journey by just going for level 2 to start? You’ll be far more competitive right away, and it’s probably quite easy to stretch one level up where things will seem (and really are) a lot better. Moreover, taking this path means that your organization learns a lot about what it takes to become world-class. That alone is priceless and can prove to be a lasting gain.

Trust Your Team

There’s another risk in relying exclusively upon external benchmarks to upgrade your performance envelope. It could just be that the world-class benchmark identified for your performance challenge is itself challenged. In fact, it could be so distant or implausible that it doesn’t even deserve your off-hand consideration. What you need to do instead may require a real innovation, a step change, a revolutionary new way — period. And, the insights for that breakthrough may only exist in the soul of your team when passionately led in a new direction.

No More Fire in the Belly

Lastly, arriving to a “benchmark destination” can install a false sense of security that you’ve become the segment leader. It sends the message that “if we’re the best, why should we continue to improve?” So, while relevant benchmarks are important to understand and apply, I’ll leave you with this simple notion — let cool heads (yours) prevail in your pursuit of unimpeachable benchmarks. A little benchmark knowledge can go a long way. And sometimes, just sometimes, there can be great value in understanding your own execution before gauging performance with someone else’s tape measure.

For additional perspective, download Kaufman Global’s White Paper: Defining World-Class Practices.