The Ohio State University Fisher College of Business’ Master of Business Operational Excellence program is sponsoring a one-week “Genba in Japan” from May 12-19. The trip will offer an up-close look at how Japanese companies have succeeded in delivering superb quality at the right price, with short lead times, while ensuring high levels of employee and customer satisfaction. Sites include key suppliers of automaker Toyota – a lean manufacturing forerunner – and a range of other industries applying these principles.
“There’s no experience quite like going to the source,” said Rick Guba, an MBOE faculty member and retired lean leader from GE Aviation who’s leading the trip. “The organizations we’ll be visiting have been practicing the kaizen philosophy for decades, and seeing this up close is a once-in-a-lifetime opportunity.”
The “Genba in Japan” trip has limited space available and costs $7,500 per person, which covers travel within the country, most meals, and single-occupancy four-star hotels. Participants must arrange their own transportation to and from the country and have a valid passport or visa.
Even the best organizations don’t see outside their four walls sometimes, and those in search of the big picture often turn to value-stream mapping.
As a tool in the lean transformation arsenal, value-stream mapping is a tried-and-true approach to finding bottlenecks, redundancies and other problems in the product or service’s journey to the end customer. What far too few companies realize, however, is that value-stream mapping can be a great catalyst for changing leadership behavior to support and sustain a lean culture.
So once the value-stream mapping skills are learned, how can companies make that crucial leap to leverage them for transforming leadership thinking? COE is thrilled to welcome award-winning author and renowned speaker Karen Martin to campus on Friday, Aug. 15, to share her perspective on how it’s done in an exclusive members-only event.
Karen leads The Karen Martin Group Inc., which has been working with organizations to achieve both large-scale business transformation and more process improvement for more than 20 years and has specialized in lean management practices since 2000. Most recently, Martin is the co-author of Value Stream Mapping, the book she’ll be presenting on in August that lean turnaround legend Art Byrne has called “the new bible for value stream mapping.”
Karen is speaking from 10 a.m. to noon in Pfahl Hall at the Fisher College of Business as part of the school’s annual reunion of students in the Master of Business Operational Excellence program. COE members who attend the event will get a chance to network with alums of the one-year master’s program and, in a post-presentation event co-hosted by Barnes & Noble, purchase Value Stream Mapping and/or The Outstanding Organization and stick around for a signing.
The Center for Operational Excellence at The Ohio State University Fisher College of Business is continuing to expand its membership roster with the addition of a specialty plastics maker based in the Cincinnati area.
Mason, Ohio-based Clopay Plastic Products has joined the COE, becoming the center’s 36th member. Clopay makes specialty plastic films used in everything from infant diapers and feminine hygiene products to equipment covers and product packaging.
The company recorded an operating profit of $16.6 million on $563 million in revenue in its last fiscal year, according to filings from publicly traded parent Griffon Corporation. Clopay Plastic Products employs about 1,500.
Clopay (a linguistic mash-up of “cloth” and “paper”) was formed in 1930 and gained steam during World War II, creating waterproof laminated paper and board for overseas packaging. By a decade later, the company laid the groundwork for its business today, entering the burgeoning plastics market and making the first of a string of acquisitions and international expansion moves that have carried it through its 1986 acquisition by Griffon and beyond. Clopay remains a keen innovator as well, holding dozens of U.S. and overseas patents.
Peg Pennington, executive director of COE, said the company’s continued drive to improve and innovate makes it a perfect fit for the center.
“We’re thrilled to partner with Clopay Plastic Products as they transition to pursuing global operational excellence,” Pennington said. “They’re already working to ingrain these principles in their culture, which is a huge leap in the right direction.”
Vance Greene, senior director of global quality and operational excellence for Clopay Plastic Products, is serving as the company’s representative on COE’s non-governing advisory board. Greene is a 2009 graduate of Fisher’s Master of Business Operational Excellence degree program.
A Columbus-area school district is turning to operational excellence to help drive efficiencies and funnel more dollars into the classroom, armed with a pledge of partnership with Fisher College of Business and hopes of help from a competitive state funding program.
Dublin City Schools recently applied for $555,000 through Ohio’s Straight A Fund, which encourages districts around the state to find collaborative and innovative ways to reduce costs and better serve students. Dublin’s plan, spearheaded by Superintendent Todd Hoadley, is a structured lean/Six Sigma implementation district-wide that looks to cut costs in utilities, transportation, and other areas.
That’s where Fisher comes in. Through the funding proposal, several district staffers would enter Fisher’s Master of Business Operational Excellence program, a one-year degree track designed to create Black Belt-level practitioners with lean leadership skills. Hoadley himself is a graduate of MBOE, whose alumni routinely execute highly successful process improvement projects at their companies and often see promotions.
MBOE, though, is only one part of the Dublin plan, which looks ultimately to train more than 200 district employees – roughly 10 percent of its work force – in operational excellence concepts. This all-in effort, which also has Center for Operational Excellence member Cardinal Health on deck as a partner in training and education, looks to save more than $2 million through new efficiencies in utilities, transportation and other costs, according to a recent Columbus Dispatch article. The initiative is designed not only to be self-sustaining in the future after the initial funding round, but allocate more funding toward students.
“If those operations are not lean, that’s pulling money out of the classroom and away from kids,” Hoadley told the Dispatch.
While grant funding decisions are yet to be announced, Dublin already is at work, collaborating with Fisher students to drive results. A recent Dublin Villager article highlighted a study conducted by Fisher students since the beginning of the year and just unveiled to the school board. Fisher students in this project looked to speed up the rate at which maintenance problems around the district are fixed, a turnaround that sometimes exceeded a month, according to the article. Students’ recommendations incorporated milk run and 5S concepts, among others, to reduce the waste of maintenance workers looking for parts.
Dublin was one of 662 schools and other organization looking for a piece of the $150 million available through the latest funding round. The district’s proposal cleared an initial round of eliminations in late May and is headed to a more in-depth review process. Winners will be announced in late June.
For most of us, the sigma level – or defects per million opportunities – for New Year’s resolutions would be abysmal. We have 365 opportunities in a year to implement what we resolve to stick to and in reality, how many do we take advantage of? Whether it is skipping that dessert or going out for a run or practicing that hobby, rarely do we stick to our plan – but we keep complaining and hoping that we will achieve that goal. New Year’s resolutions are hard to keep.
Thankfully, our Master of Business Operational Excellence students had an easier task at hand during the Six Sigma Week of the year-long degree program. In the four days they worked on improving the sigma level for a coffee company called Sigma Brew, a simulation created by MoreSteam.com. Sigma Brew is fraught with many issues: Long lead time and wrong orders, to name a couple. Until now the students have been reading and learning the online MoreSteam modules on the Six Sigma body of knowledge. This week they had the opportunity to apply the theory to a simulated real business problem with the usual constraints of cost and resources.
Students first were challenged to define the problem correctly. Tons of data were provided but their job was to pull only those data that made sense to the business and helped them make meaningful decisions. This is not very different from what happens in companies. The true problem is hidden well below myriad symptoms. Data are available but they may not be relevant. It is only after defining a problem one can start to think about what data would make sense.
Data provide the baseline for the current performance of the company. Measuring the correct metrics guides you to not only make right decisions but also show you the impact of the solutions/countermeasures that you implement.
If the problem is not analyzed correctly, the countermeasures will only address the symptoms and the problem will continue. A cause map helps you drill down the root causes of the problem. Statistical tools such as hypothesis testing, regression analysis, ANOVA and others help you understand the degree of impact different root causes can have on the outcome you are measuring.
Improvement occurs when you implement the countermeasures in a systematic manner. It is important to track the metrics to confirm improvement. If there is not impact or the metrics are going in the opposite direction, it becomes important to start from the very beginning to identify the root causes and experiment until you are able to improve.
Improvements last only so long, especially if there are no controls in place to check the progress of the project. Control charts and standard work for leaders can take organizations a long way. There must be a system in place that helps visualize not only the progress but also any roadblocks that come up in way of progress. It is the job of all involved to solve and/or to escalate matter at the right levels to resolve the issues.
Students went through the DMAIC phase to address the issues that Sigma Brew was facing. Each group positively impacted process and the sigma levels went from a one to six up to eight!
When our Master of Business Operational Excellence health-care students spent some with Kathryn Correia, chief of Minnesota’s HealthEast Care System, she brought up a great point about the things that slow us down. Most of the interruptions that impede the flow of care, she said, aren’t surprises. If a machine breaks down, we know that somewhere we missed out on the preventive maintenance. If patients, providers or staffs are waiting for too long, we know that we have not really designed our processes to meet the demand. Defects occur because we have long been fixing symptoms but not the root causes.
This was one interesting insight in a busy week for the students, who heard from a number of instructors.
Bill Boyd, director plan development at Wisconsin’s ThedaCare, spent some time with students explaining how the company has adopted the value stream approach to enhance the patient experience and quality and efficiency of care. He emphasized how important it is to stop working in silos and come together as a team to address the care needs of patients.
Post-lunch, the health-care and industry cohorts spent three hours with Gary Butler and yours truly in an emergency department simulation. They applied their learnings in understanding the wastes in the process and improving the efficiency and quality of care the patients received. The simulation is designed to help understand how lean principles apply to a non-manufacturing process.
The day came to an end with a visit from Art Byrne, an expert in lean strategy, and Tom Mooney, manager of Lean Transformations at Goodyear. Byrne has been implementing lean from the position of a President, CEO or Chairman of the organizations he worked with since the last 20 years. He shared his perspective on the role the leaders have to play to successfully implement lean and sustain the gains. He left the students with a thought his sensei Chihiro Nakao once said to him: “Byrne San, if you don’t try something, no knowledge will visit you.” Lean is all about trying out ideas. If you don’t try, how will you know about the process you are improving?
Mooney gave a different twist to the challenges of a lean practitioner. He said to the students, “You are a virus!” He emphasized that the change agents always get resistance from almost everyone. The resistors are like the antibodies who are trying to dissuade and destroy the change agents. He urged the students to keep going, coach others and multiply the lean knowledge rapidly to bring change in the organization.
Some processes in our daily lives we easily take for granted – grocery shopping, for example. Our Master of Business Operational Excellence students in a recent visit to the Dublin, Ohio, Giant Eagle location saw firsthand that the grocery business is serious business.
Pittsburgh-based Giant Eagle, a member of the Center for Operational Excellence, has implemented lean principles in its stores to improve cost, efficiency, and customer experience. They call this system the Giant Eagle Business System, or GEBS. The MBOE program is designed to provide students all possible perspectives and experiences for a holistic learning experience, thus we brought them to Giant Eagle to give them yet another example of how a non-manufacturing process has successfully adopted lean principles to its advantage. So what did Giant Eagle implement and what were their gains? Well, first of all, the chain looked at the eight wastes in its processes. They differentiated what is value-added and non-value-added from the customer standpoint. Then they attacked the wastes.
Giant Eagle also addressed the variation in how inventory is stocked and developed a standardized process for that. They looked at the amount of inventory they carry in their back room. Giant Eagle used to operate as a wholesaler who just so happened to sell groceries. Being wholesalers, their tendency was to buy as much in bulk, so warehouses and back rooms were filled with too many products. To pick the right item, material handlers would need to move or lift a lot of products before they could get down to the one they needed to stock the shelf.
To become lean, Giant Eagle looked closely at the demand, and started ordering only how much was being used. They were also able to convince some of their suppliers to change their packaging to allow only enough quantities of products that can fit their shelves. They increased the frequency of deliveries from their warehouse and, as a result, drastically reduced how much inventory they hold in stores. One glance at the back room and it’s evident that inventory is minimal.
The students got a preview of how lean can be applied in a grocery store to ensure that customers can easily see and get the products they need as they walk around in the aisles.
Last week, we hosted our industry and health-care MBOE cohorts on campus, bringing together dozens of professionals in a range of different fields. The principles and leadership skills we teach in each program carry many similarities, but there remain some key differences between health care and the rest of the pack. Shingo prize-winning author Jean Cunningham highlighted one of those when she visited our health-care cohort last week.
Health care might be the only industry, Cunningham said, where you put a charge on a bill but only end up collecting a partial amount. That amount is based on the contracts and agreements organizations make with public and private insurance companies. Cunningham, author of the book Real Numbers, said traditional cost accounting systems are designed for all the resources to be used fully all the time. You create capability to create demand, and gather all resources such as people, materials and equipment and then produce what the customer needs. Taiichi Ohno, father of the Toyota Production System, once said that costs don’t exist to be calculated – they exist to be reduced. Lean accounting, Cunningham’s area of expertise, helps do exactly that by identifying and eliminating non-value add waste in the accounting process and helping managers understand the numbers to make meaningful decisions.
When organizations bring in lean, the first place they apply it is the “shop floor,” where patient care is actually provided. As the changes are being implemented, Cunningham said, it’s important to indicate them on financial statements. How do you do that? Well, the most important thing to do is to get the financial folks to plunge into operations and lean activities. Make them a part of the improvement teams so they can understand the changes that are being implemented and how they impact the financials. Lean accounting is about applying lean tools to streamline accounting and finance processes and also accounting for lean transformations.
Explaining lean accounting isn’t possible in the space of a single blog, but the key takeaway here is knowing that people outside of accounting need fewer, and easier-to-understand transactions. When they make transformations the key is to provide information that takes the right calculations into accounting and reflect gains and losses.
Interested to hear more about lean accounting from Cunningham? Click here
Our car was vandalized. We don’t know when it happened but we found it a couple of days ago. It was a shocking sight. The glass on the driver’s side of the window was broken and the shards were all over the seat and below. The center part of the dashboard was ripped apart and insides of the dashboard were hanging below. We do not know who did it and why they did it but the fact is that we felt violated. No one has the right to even touch let alone destroy what belongs to us.
Anyway, we called 911. Our first surprise was that 911 does not deal with vehicle break-ins. They gave us the number to call the Columbus police department. Surprise number two: The police department is closed on weekends! There was an option on the voice recording to stay on the line if there is a need to dispatch a police officer. We stayed on line. After a really weird ringtone, a lady spoke. We explained her what happened. Our biggest surprise followed. She said this is an unsolvable problem. It could be anybody who could have done this. It is impossible to investigate such cases. So go ahead and file that report. We asked her what happens after filing the report. Her response was, “Well, you inform your insurance company and they take it from there.” Bewildered, we asked, “So are you saying that the police will do nothing about this? No investigation at all?” Very condescendingly, she replied, “Ma’am, all I am saying is that you file the report. It is really a small problem.” First let me just tell you I hate it especially when they ‘Ma’am’ me. The word is respectful but you don’t feel any respect because the tone of their voice is degrading and anything but respectful. But think about how scary such a response is coming from someone we rely on for safety, security and assurance!
You are probably wondering, where exactly I am going with this? Well this goes back to leadership and how we respond to our associates when we implement changes. We go out to the gemba, teach people how to look for problems and encourage them to solve the problem. How do we actually respond when they do bring up the problem? The associates are in a vulnerable state of mind. Firstly, they fear losing their job. Secondly, they are afraid to bring up problems because until now they have survived because they hid the problems or fixed on their own. Guess what? It is not easy to handle change. Now what if they bring up a problem that has been there for a while and is “unsolvable” like above? The issue is too sensitive or political? What do you tell your associates? That you really cannot do anything about it? Do you tell them to focus only on a certain kind of problems? Or do you listen to them, go observe the process and understand the difficulties they are actually experiencing while doing their job? Do you or associates gather the data (observations, measurements, taking pictures or shoot a video of the process), asking other associates if they are experiencing similar difficulties and bring it to the attention of the senior leaders? You may get a no for an answer from the leaders but do you at least try? Do you ensure that your associates feel safe to discuss problems? Do you assure them that you will take actions and actually do it? Are you consistent with your words and action that they feel secured about their jobs?
There are lots of tools and methods of process improvement. You can open the tool-box and implement any tool when you want. However you cannot rely on the tool box to exert leadership. As a leader, you have to be out there. You encourage, listen, observe and empower under all circumstances unlike the above incident where they shrug off the responsibility labeling it as an intractable problem.
Share with me your experiences as you are implementing changes in your organization. What is your approach? What are your challenges and ‘aha’ moments that made you grow as a leader?
Walk into most any company, and the only signage you’ll see is the name of a department and the names of the people who work there. At the Master of Business Operational Excellence program, we teach our students that visuals can be used for much more, indicating the purpose for the existence of a department or a function within a company.
Drew Locher, Shingo Prize-winning author, recently shared with our MBOE students a quote while making a case for visual management. This comes from György Kepes, founder of the Center for Advanced Visual Studies at MIT:
“The visual language is capable of disseminating knowledge more effectively than almost any other vehicle of communication. Visual Communication is universal and international; it knows no limits of tongue, vocabulary, or grammar. Visual language can convey facts and ideas in a wider and deeper range than almost any other means of communication.”
Companies generally work in functional silos. Within the functional silos, many times people don’t know what their colleagues are working on and what the expectations are. People within the department know of their roles mostly from the job responsibilities they had read from the job posting and any projects that are thrown at them by the supervisor. The information lies within the heads of people.
How does visual management help? Locher says it helps once you understand the key elements of visual management:
What is the purpose or function of the area?
What activities are performed in the area?
How do people know what to do?
How do they know how to do it?
How do they know how they are doing?
What is done if expectations are not being met?
Last but not the least: Howwill we drive Continuous Improvement via visual management?
Organizations that care about operational excellence must care about these questions and think about simple and visual ways of conveying this information. Visual management aids in better use of the employee talent, builds in accountability, and leads to the right action when the visuals indicate so.
The idea is not to have just the visuals but a process to manage what you see in the visuals.
On their most recent visit to campus, our MBOE students also mastered the elusive solution to solve the Rubik’s cube puzzle. Executive-in-Residence and MBOE faculty member R. Gary Butler found an innovative way to help students learn the principles of standardized work and training within industry and apply it to the process of solving the puzzle.
Students were asked to first find the solution. They then created critical steps necessary to solve the puzzle and developed a simple process to train anyone who may have/have not solved the Rubik’s cube puzzle in the past. The group that developed the best method won a prize.