The building blocks of LDMS.
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The building blocks of LDMS.
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Create engaged problem-solvers who lift results every day.
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The promise of better performance via digitization and real-time access to information is best achieved if we begin with a process-centric view. With that, ask the question: What minimal information does each process require to make the best possible decisions? By so doing, we sort the wheat from the chaff and relay only the information required to speed decisions, enable agility and lift results.
We’re impatient. In delivering products and services everybody wants to improve results. Yet, progress rarely matches expectations. To create an advantage, few things hold greater promise than digitization. We’re well equipped with computers, smart phones, tablets and touch screens… and lots of data. The cloud allows us to distribute huge quantities of information with ease. In spite of all this technology, we bog down when it comes to parsing critical bits of information needed to make the people-process interface work best.
Merging the concepts of “digitally enabled change” and “performance” can mean different things to different people. We’re seldom on the same page. The connection between digitization and performance is two-fold: First, it should enable better and faster decisions; and second, it should help compare results in order to propel best demonstrated practices. Such entitlements are pure gold for a large enterprise. Let’s take a closer look.
“In our projects, “digitally enabled change and performance“ often means to provide the right information to different stakeholders. E.g. to gather data from comparable machines all over the world, and to compare a dedicated machine with the others. There is always a best and a worst and when you ask why, you get a chance to improve. Or to gather best practices from different teams and to provide this knowledge in a manner that somebody else can use to solve problems directly, or faster or better. This requires connectivity to gather the data – to have a kind of intelligence to make information out of the data and then to turn information into knowledge.”
Instead of starting with all the data available – both signal and noise – and pushing it into the process, we start by looking at the process itself and ask what minimum information (data) is required for people closest to the work to make the best decisions.
Why is worker inclusion so important? In practice, we’ve found that only the people doing the work can reliably tell you what information is essential to getting the job done right. Thus, engaging in front-end information conditioning is vital to actually reducing lead times, revealing improvement opportunities and paving the way for a better future-state work process.
As its name implies, a Decision Map emphasizes the idea that faster and better decisions are the precursor of optimal processes. We start with a fairly traditional view so we can see the process flat on the wall – it could be a swim lane map, box and wire, value stream map, etc. Then we identify places where information is required to make decisions and take action. We pose simple enough queries that often prove to be thorny lines of inquiry such as:
|Who makes the decision and is this right?||There can be no room for ambiguity.|
|What information is really necessary?||Less is more. Extraneous information is inventory and inventory has a carrying cost.|
|Is the decision point in the right place in the value stream or could it be moved or consolidated?||When more than one point makes a decision, it’s an opportunity for no decision.|
|What’s the best way to collect and convey the information?||Critical point here. Some information is best collected and conveyed electronically. Some is better suited for human involvement. This must be sorted out deliberately.|
The maps show us different functions and accountabilities. You will find that some of the same data and information will be allocated to more than one location for different purposes. The point here is that these distributions of information are not a push of all information to be sorted out by the users, but rather they are done with a logical intent to provide only the information necessary to make the best decision at any given node.
For faster and better point-of-use decisions, information must be relevant to the user. Because of this we highlight data that is layered according to function and accountability. While daunting in an environment that identifies with “everybody can and perhaps should know everything”, a disciplined “need to know” approach makes whatever information is conveyed seem more valuable to the user because it is concise and actionable – it sorts out the wheat and the chaff is left behind. In the end, Digitization can enable change and performance in remarkable ways. But, the concept works best when we don’t just throw all kinds of data at people and process and hope for the best. Up front evaluation of the process with the people doing the work is the right way to start. It makes change stickier and reduces rework and frustration. Most of all, it gets to optimal performance much, much faster.
Want to know more about how Kaufman Global helps clients manage change and improve performance? Contact us.
*ROI Management Consulting, AG is a German-headquartered, network partner of ours that specializes in operational performance.
A small group recently posed a few questions to us about Operational Excellence, leadership and change. They were looking to get started on their journey and wanted to understand our perspective on some of the critical elements. Here’s a recap of the ensuing discussion…
A. The graph below is sourced from our YE16 OpEx survey report. It shows how the surveyed organizations ranked the effectiveness of training at various levels of the organization and across a variety of business types:
We can all see the connection between better engagement scores and improved performance, however there is a lot of confusion about what good engagement looks like. Often engagement is thought to be more frequent face time between bosses and subordinates, 360 feedback, suggestion programs, and so on. Rather, good engagement is about giving people the ability to directly influence their work. It recognizes basic human needs that include the power to make decisions, the ability to control outcomes and being part of something bigger. These attributes are not naturally occurring in many work environments so equipping leaders to enable OpEx is about training and coaching them on the essential actions and behaviors they must take to engage and align the organization from top to bottom.
Our approach to ensuring effective leadership training starts with the Managers / Executive Lean Overview workshops. These sessions quickly inform the team with a common vocabulary, awareness and understanding of:
Tools and methods are covered, but gaining expert capability on them is not specifically intended. Rather, this portion of the workshop is meant to provide context for how front line practitioners apply problem-solving tools to achieve desired business outcomes.
Our primary objective with leaders and managers is to provide insights that help them define and develop their own leader standard work. This means doing the hard work of changing some of their own behaviors and habits to be able to actively coach and demonstrate support for Lean to the organization as implementation begins.
Beyond training and workshops, coaching is an important element that we always employ during project work with clients. Coaching is about observing behaviors and suggesting alternatives that can be more effective at delivering certain results. A simple example: If you want people to be more engaged, ask leading questions as opposed to prescribing a potentially ill-conceived solution. In this way, everyone learns something and engagement is supported instead of stifled.
A. No. We’re talking about a shift here that must be valued up and down the organization and especially at the top. These values drive subtle and not so subtle behaviors that become part of the culture and transcend market shifts and personnel changes. Here we assume “implementation” to be a sustainable OpEx system. A leader who is equipped to lead engagement not only understands the benefits, but values the operating norms that better engagement brings.
Since a lot of the heavy lifting and day-to-day activities of implementation are in fact delegated, it’s important to understand how to help leaders do this. We talked about the training and coaching aspect for leaders in Q1 above. In addition to understanding the value of better engagement, the organization must know how to do it.
Everyone in the organization must be expected to spend a small percentage of time on improving the business ― as opposed to running the business. In the simplest terms, this means allowing workers some freedom to fix problems that affect their day-to-day work at the micro-process level. Supervisors and middle managers aren’t exempt: They too should spend about an hour a week addressing slightly more “macro” problems that affect their areas and people. At all levels, the most effective improvement efforts are team-based to drive process ownership and accountability.
Since exactly how to do engagement can be described, the activities can be tracked. This is important because it moves leaders beyond the idea of just “valuing engagement” (because who doesn’t right?) to “knowing how to DO engagement.” Only when this happens can implementation be effectively delegated.
A. Engagement scores are important. OpEx and engagement scores (from surveys and audits) are directly related. Successful Operational Excellence is in large part the result of good engagement. So engagement scores are a good lagging indicator of OpEx and a great leading indicator of operational performance.
A focus on leading indicators is a good place to start. Here’s a way to think about indicators:
Want more detail on these topics? You can download the full survey report – An Examination of Operational Excellence – from the Resources section of our website. (It’s great, really).
To learn more about enabling leadership to connect the dots between engagement and value, check out our White Paper: Engage the Organization – And a Performance Culture Will Follow.
The cost of poor employee retention is significant and ever increasing. The ability to retain good people is a huge competitive advantage. Whether the market is going up or down, turnover is a factor for all employers, no matter what your business.
Not sure retention is an area you really need to spend energy on? Consider this… with strong employee retention strategies and tactics, you:
Those are some pretty critical wins. And, they all contribute to significantly better business performance. So why not do it right? And by right, we don’t just mean pay increases, stock options and / or bonuses. These pieces alone won’t solve your retention issues. It’s not all about the money… really. While financial incentives can buy some time, they do little to build confidence in the culture of the organization and the enterprise. A low retention rate is always a symptom of other issues.
Without a practical employee retention strategy in place, organizations find themselves parting with a higher portion of their best and most qualified talent, the result of which is losses in productivity, time and money. So how do you stop the bleeding? First, focus on the heart of the issue… people.
The number one place where organizations get it wrong is engagement. That’s right, when people leave, it’s most often because they did not feel a sense of accomplishment or belonging. People want to feel like they are part of something. For decades, surveys have concluded that compensation and benefits, while important, always rank lower than belonging and the ability to contribute meaningfully when it comes to job satisfaction. Don’t ignore this!
There are plenty of ways to improve retention by getting (and keeping) people engaged. Start by including people in improvement activities like process mapping – those working inside the process always know the most about value and waste where they work – this is their chance to contribute their knowledge! Engaging them in the hands-on work of fixing identified improvements should follow via small focused projects (Kaizen Events and Rapid Improvement Events). To ensure energy and support for these efforts, leaders should receive training and alignment coaching to help them understand that it’s OK to give up some control and let the organization contribute more from the frontlines.
To move beyond a project-based approach to engagement, consider the structure and discipline embodied in Kaufman Global’s Lean Daily Management System®. This is the real deal when it comes to sustainment and a structure that keeps people involved on a day-to-day basis within their workgroups.
Supplemental Reading Recommendation:
White Paper | Engage the Organization and a Performance Culture Will Follow
When an organization is formally and consistently engaged, a culture of performance follows. Understanding how to achieve a performance culture, why it’s so elusive for many leaders and their organizations, and what it takes to make it reliable is the key to sustainable improvement.
The following is the second excerpt in a 3-part series from Kaufman Global’s updated white paper, Implementing Lean Manufacturing: A Holistic Approach. In this paper we discuss:
In this installment we discuss why Taiichi Ohno’s original 7 wastes must be updated to include two new ones: Alignment and Engagement – which if not addressed will foil any implementation.
Lean is not “installed.” A self-regulating, Lean system is created by a continuous focus on eliminating small instances of waste or “muda” (muda is the Japanese term for “waste”). Waste is defined as any work that does not add value to a product or service. If the customer does not benefit from it, it is muda. All inspections, rework, repairs, walking, material movement, inventory of any sort, waiting, and so on are muda. They all cost money and produce nothing of value for the customer. Lean (pull) slowly evolves from a traditional (push) system as wastes are eliminated little by little. When an organization first begins to initiate Lean activities, it is a traditional system with perhaps a few Lean tactics being applied here and there. At some point, with dedicated effort, it becomes more of a pull system than a push system.
Figure 4 displays the four categories and nine types of Lean waste. This new model evolved from Taiichi Ohno’s original three categories; People (work), Quality and Quantity, and associated seven types of waste. In the late 90s, an eighth waste that acknowledged the value of people began to appear. That “waste” has been described in a number of ways, including: intellect, creativity, involvement, etc. In the time since it has become increasingly apparent that the people aspect still receives too little attention and prior descriptions have not been specific enough.
Kaufman Global gets more direct by describing the People Energy wastes of Engagement and Alignment. This draws attention to the elements that must be overtly addressed in order to make Lean really work and puts a finer point on the idea of holistic, integrated Lean. It’s necessary to do this because of the almost insurmountable implementation problems that many organizations encounter. Their struggles are driven largely by the fact that people energy wastes are not dealt with as an integral part of Lean adoption. Therefore, we have directly incorporated people energy wastes, along with ways to minimize them, into the basic conceptual model of Lean. The specific definitions of each type of waste are described below.
People energy waste arises from a failure to harness the potential that exists in all workgroups. This form of waste is the most important thing to address in Lean implementation or any other type of change initiative. Failure to harness people energy creates most of the significant problems that organizations encounter when they attempt to do something (anything) different.
Alignment Waste is the loss of value that arises when management and employees at all levels are not consistently aligned and energized to address critical issues. Making this happen is the sole responsibility of leaders and managers who are easily distracted. Alignment requires conscious and planned strategy and tactics that ensure messaging is consistent, priorities are established, communication is open and deviations are explained. “Flavor of the Day” or “Programs of the Month” are good indications of alignment waste. Good alignment means that you start, and stay, the course.
Engagement Waste is the loss of value that occurs when people do not have some control over the work they do. This is one of the toughest things for managers to abide because they feel like they are giving up some control – which they are. True engagement means requiring workgroups to measure their performance at a micro-process level and then expecting them to improve their performance over time. Many organizations waste a lot of energy on faux-engagement activities such as coffee talks and lunches with “their people.”
The idea here is to engage and align the organization via well-defined structures. All the good intentions and skills in the workplace cannot operate seamlessly if responsibilities, resources and personnel are not formally assigned and led. Structure requires a formally dedicated steering committee, work stream leaders and teams, explicitly assigned resources, schedules, charters, and champions. Alignment and engagement compel two critical outcomes that are essential change- management requirements for successful implementation: relevance and ownership.
Relevance: To sustain any initiative, people must work on issues that are, in some part, relevant to them personally. The most basic and beneficial aspect of good alignment and broad engagement results when individuals and teams are compelled to deliver on improvements and fixes within the processes they control. This creates, by default, an environment where much of the improvement activity is truly relevant to those doing the work.
Ownership: Human beings are territorial and proud. If they are associated with something, it is absolutely essential for them to believe that it is admired and respected by others. This tendency is wired genetically into us all. If people are not permitted to exercise some degree of control and power over their work place, they will not be inclined to identify with it nor will they strive to make it excel. This is the underlying basis for the outstanding performance of all self-directed workgroups.
Concerning all People Waste, understand that it’s not that the people are being wasteful but rather that these are wastes that are visited upon people by a non-Lean configuration of work.
People work waste arises from human actions involving processes. This type of waste is most analogous to the waste encountered in industrial engineering concepts. It can be divided into three categories: processing, motion, and waiting.
Processing waste is the result of inefficient work. Typical causes are inadequately trained workers, hard-to-use / locate tools or poor-fitting parts. Employees are hard at work, but there is a better way to do the job.
Motion waste is all movement that does not add value. All walking and reaching for parts or tools is muda.
Waiting waste is people waiting for parts, help, a machine that is broken or down for a die exchange, and so on. People can add no value to the product or service while they are waiting.
There are three types of quantity waste that arise because material (or data or paper) must be processed. This type of waste comes from creating too much inventory between workstations (WIP), Raw and Finished Goods inventory and material movement and transport – think; forklifts, stackers and trucks.
Inventory waste arises when inventory is not being used but has been paid for, perhaps has had value added to it, takes up space, requires expensive storage and retrieval systems and becomes lost, damaged and / or obsolete. Finished Goods inventory is even worse, as all of the intended value has been added and several weeks or even months may pass before it is paid for.
Work In Process (WIP) waste is inventory somewhere in the system between Raw Materials and Finished Goods. Whenever there is material waiting between two processes, it is waste. WIP waste occurs because process times are not balanced and matched with takt time.
Movement waste is all transportation of materials. Shigeo Shingo, the conceptual organizer of Single Minute Exchange of Die (SMED) and poka-yoke (error proofing) concepts, humorously observed that forklift and conveyor salespeople must routinely bribe traditional plant managers. Why? Because, he jested, no other mechanism could explain the incredible amount of unnecessary movement built into the processes of non-Lean plants.
Fixing defects is the sole quality waste. Each defect turns value-added work to waste and requires more nonvalue-added work to be repeated during rework or repair. Prior to the implementation of Lean, quality waste is usually the most visible waste due to its impact on customers and the tendency of a traditional push system to fail to recognize the other types of waste as significant. Ironically, reduction of the other wastes through Lean always results in a dramatic decrease in defects. This occurs even without the focused implementation of powerful tools such as error proofing or Six Sigma.
The next section presents an integrated discussion of Lean tools, concepts and implementation techniques. The tools and methods should not be separated from the implementation approach. While this paper does not provide a detailed examination of Lean tactics, it does present sufficient information for the reader to determine what they must learn in order to develop a successful Lean implementation initiative in their organization.
As muda is eliminated through the application of various Lean tools and methods, a pull system gradually emerges. Figure 5 presents the Master Jargon Chart of Lean Manufacturing. The Master Jargon Chart summarizes and presents the various Lean wastes, tools and methods into a single conceptual framework. Figure 5 is Lean; that is, in order to “do” Lean, the waste reduction approaches and corresponding tools and methods shown there must be comprehensively applied in an integrated manner.
All of these tools and approaches need not be implemented simultaneously. In fact, it would be a mistake to do so. Further, the criticality of each tool varies in different environments. This is why a “one-size-fits-all” Lean implementation is a mistake. While all successful Lean organizations use many of the tools to some extent, various tools are more comprehensively applied in certain environments than in others. As we discuss specific tools and approaches, this will become obvious.
The left two columns of Figure 5 present the four categories and nine types of waste described earlier. The structure of this model might suggest that each waste category is targeted by a specific approach and / or method. While this is true to some extent, all of the methods are extensively interdependent and interactive. You cannot “cherry pick” tools and techniques and expect long-term Lean success. In particular, if you do not employ the methods required to address people energy wastes, the other methods will fail to achieve competitively meaningful results.
To be continued. In Part 3 of this series, we provide describe a fail-proof system for implementation. Or, if you’re ready to read the entire white paper now, click here to access it via our Resources page.
Earlier this month we spent a few hours with the great team at Jefferson Electric to help them do their first process mapping exercise. They are thinking hard about how to be more effective and standard in the ways they work so that they can continue to grow their business and provide opportunities for new team members to join their organization. We had a great time learning about their solar business and seeing them collaborate as a cross-functional team — really getting to the nitty gritty of how they can better connect their sales and field operations. No team is too small to tackle making positive change — it benefits the internal and external clients and enables agility and responsiveness! #solar #jeffersonelectric #teambuilding #CIisforeveryone
When it comes to guiding an organization through transformative change, control is the determining factor. How much design and direction is pushed down from the top and how much discretion is left to the rest of the organization will make or break any initiative. The best outcomes are achieved by striking the right balance between two approaches: Top-down command and control versus autonomous decision making. Moving the organization off their status quo means certain things must be directed and enforced, yet many organizations fail because so much of their energy is focused on controlling the wrong things.
Successful transformation efforts demand collaboration up, down and across the enterprise. For process optimization to occur, the organization must establish ways for people doing their work to be continuously involved. Significant changes (processes, procedures, work standards, etc.) must be developed collaboratively. If new methods and approaches for process, communication, safety and efficiency are foisted onto the organization, resistance mounts and the game is over before it’s even started.
The culture of the organization and individual leadership styles will impact how transformation efforts go. It’s usually difficult to tease one out from the other since they are the product of their collective and often mutual experiences. Even so, it is a mistake to use culture as an excuse for poor progress. There are ways for leaders to adjust their approach within the context of the existing culture. In top-down environments, unless there are real changes in the fundamentals of collaboration, it soon becomes evident that the “transformed” enterprise looks and operates as it always has.
Self-Regulating Systems – Feedback, input and action at the work-group level are the hallmarks of good performance systems. Self-regulating systems engage the organization to do three things:
These systems integrate those doing the work in the design of the process and ask what needs to be done to optimize performance. These systems are less bureaucratic and faster to react.
Command and Control Systems – Here, process design and work standards are developed far away from the work processes. Command and control systems:
Those who embrace and perpetuate authoritative command and control systems believe that top down management knows more about how work should be done than those closest to the work. These “managers” hold power dearly and resist engagement for fear of losing power and control.
Authoritarian organizations are less efficient and less effective than those where a certain and significant control is pushed down into the organization. When this happens, reaction times in the dynamic environment speed up and safety and efficiency improves because decisions can be made faster. Standardizing and enforcing how the organization engages as a self-regulating system yields the greatest long-term benefit. Unfortunately those managers who survive in top-down systems are the usually the last ones willing to give up “their” control.
Command and control styles dominate because they are more traditional and more familiar. For bosses and managers, giving up control is tough, especially when under stress. Self-regulating systems don’t require any less work, but in them the direction from the top shifts. They require people to own their performance and enforce the best framework to make this happen.
For those control freaks out there who must control something, fear not ― moving into a more autonomous environment requires plenty of leadership and direction. No organization comes together one day and says, “Hey, let’s all take some control and regulate ourselves and own our performance!” Getting to this place requires a transition of power that requires a lot of work for both traditional leaders and their organizations who are used to being told exactly what to do. People are smart though, and they will find the best ways to optimize processes, enable standards and share learnings if they are given the chance and a mandate. Start by describing a structure that accelerates engagement, collaboration and autonomy and then make sure people are fully subscribed.