When I walk into a Giant Eagle, I know exactly where I can find my favorite multigrain Cheerios. I also know a box will be waiting for me when I want it. The logistical engineering behind making that happen never occurred to me until a recent presentation by Prof. Thomas Goldsby for our MBOE industry cohort on lean logistics.
Lean logistics and a supply chain make many processes seem like magic. Think, for example, about a company like DeBeers, exploring unknown lands, discovering diamonds, cutting and polishing them and then supplying them all over the world. Or a hospital, well-stocked with syringes, needles and oxygen cylinders. Logistics account for $1.2 trillion of the U.S. economy, or about 8 percent, meaning that for every $1 spent, nearly a dime of it goes to logistics. Of that cost, 63 percent is transportation.
So what is a supply chain? It’s the network of companies that work together to provide a product or service for the end-use market. Simply put, an apple grown in an orchard doesn’t come to grocery stores in baskets. Logistics facilitates the flow of materials and products into and beyond a facility. Lean logistics facilitates the flow by minimizing wastes.
Back to those apples: If a store stocks up on a ton because a farmer had a good season, those take up not only too much space but likely will result in waste. On the other hand, if demand spikes that doesn’t mean retailers, distribution centers and farmers should go into overdrive. Supply chain and logistics is about balancing demand, inventory and the number of trips needed. The question: Are you going to manage your supply chain, or is it going to manage you?
Next time I visit my grocery store for those Cheerios, I’ll have a completely different perspective.
How do logistics and supply chain management affect what happens in your organization?
In this week’s pre-graduation meeting for our MBOE industry cohort, Lawrence Inks, a guest lecturer and assistant professor of management and human resources at Fisher, shared some key thoughts on talent management. Organizations need talented people, Inks said, more than talented people need organizations. Talented people thrive anywhere, so it’s important to hunt them down and hire them but more important to retain them.
Some tips to do just that:
We love giving positive feedback but most of us don’t do a good job communicating in general. Remember how nice it was when you receive a handwritten note from your boss? Most praise these days comes through e-mails – we’re busy and there are other priorities. Help your chances of talent retention by writing a note to your top performers.
Compliments to our best employees many times begin with the positive but insert something negative in the same line. An example: “Tom, you are an excellent facilitator but you are not good at all with data analysis.” Inks calls that the “lather them up but shave them” approach, where people are about to feel proud of their accomplishment, but in a fraction of a second their newfound motivation is killed. Talented people have no dearth of opportunities, and if they don’t feel valued they’ll leave you just as fast.
It’s important to note that feedback for underperformance is necessary, and it’s a fine art. So before giving positive or negative feedback, make sure goals are clear and the employee understands. Are they too low? It’ll be hard to hold back that 3% bonus. What the goals should be is set in a way that over-performers are easily distinguishable from average employees. In short, Inks said, a performance review should not bring surprises to either party. This is only possible if there is ongoing feedback that goes along through the year before the annual performance review is conducted.
What are some methods you use to appreciate your employees? How do you let the under-performers know that they are not at par?
After three long days over last week, the final day of the MBOE session’s first week came with wrap-ups from COE Executive Director Peg Pennington, Gary Butler and yours truly. Peg went over the basics of A3 problem solving and provided an overview on DMAIC to get the students ready for the six sigma in August. I spent time teaching students the basics of future-state value-stream mapping, a topic that sparked discussion on process time, lead time and cycle time. Gary and Peg discussed the do’s and don’ts of the the student capstone projects.
I’ll close with some reflections from students ending their first week in the MBOE cohort:
“The purpose of lean is not just elimination of wastes. It also means producing twice at half the input.”
“It is making sense how a value stream map makes waste visible.”
“We hope that the value streams we created at the gembas would be helpful to the managers there.”
Barb Bouche, an MBOE coach and director of process improvement at Seattle Children’s Hospital, told students at this week’s session that she began exploring the option of applying Toyota Production principles to the hospital a few years ago. She met with resistance from the organization, the argument being, “Patients are not cars.” Shortly afterwards she happened to cross paths with some people from Boeing. They told her during their lean journey the argument they commonly heard was, “Airplanes are not cars!”
It didn’t take Barb long to realize that argument arose from a resistance to change. In last decade Seattle Children’s has completely changed how it do esbusiness by applying lean principles. Officials have significantly reduced the inventory of supplies by working closely with their suppliers and developed a world class process for materials management.
Speaking of airplanes, the MBOE students spent their second day on campus manufacturing StrikeFighters using Legos. After struggling through the first and second round of the chaotic batching process they finally were able to create flow using the lean principles of takt time, work cell, one piece flow, level loading, kanban and simplification. My co-author, Matt Burns, wrote about this same simulation in an earlier post.
A student commented, “I think I am just beginning to see what lean is all about!” Another said, “I did not know what I was doing in the first round. The last round made it very clear after all the chaos was gone and there was finally some coordination and flow among my team members.”
In the evening, Capt. Michael H. Glazer, commanding officer and professor of naval science at OSU’s Naval ROTC gave a captivating overview of flight deck operations and aircraft carrier facts. With multiple safety programs, Glazer said, the naval aviation mishaps decreased from 776 aircrafts in 1954 to 39 in 1996. Keep in mind naval aviator trainees are landing the aircraft on a short run of only 330 feet.
Students in Fisher’s Master of Business Operational Excellence cohort kicked off their first day with an introduction to value-stream mapping by Gary Butler, an executive in residence in the Management Sciences department. After a good discussion about what value is and who the customer is, Gary gave students a handy acronym, TIM WOOD, to remember the “seven deadly wastes” in any process: Transportation, Inventory, Motion, Wait, Overproduction, Over-processing and Defect.
In the afternoon, we had the honor of listening to Steven Spear, author of The High-Velocity Edgeand a well-recognized expert on leadership, innovation and operational excellence. Steve articulated the inside mechanism of the Toyota Production System in his exceptionally simple and persuasive style in two hours – using only two PowerPoint slides that centered around this question: “What’s Toyota’s real innovation? Is it their car or the management system?”
Steve pointed out four major characteristics of the Toyota Production System, which he wrote about in a landmark 1999 article in the Harvard Business Review:
System design using the best approach making the problems visible
Problem solving by escalating and asking for help; containing the problem, and solving it when it is still a micro problem
Knowledge sharing and applying the discoveries systematically
Engaged leadership that focuses on managing systems and developing people
The day ended with students practicing current-state value-stream mapping for a simple business case of the pencil pushers and were introduced to a number of concepts. Some students struggled but it’s expected. They’re eager to learn more and had many great questions. At one point we had to remind them that they cannot learn everything in one day. There’s one whole year to go!
Here are some end-of-day reflections:
– If Toyota has found success in nesting to address problems, why does modern business encourage a flat organization?
– It is important to design the work such that one can see the problems
– Mistakes are okay as long as I learn from it and make changes based on what I learned
Excitement is high this week at the Fisher College of Business as we launch the first cohort of our MBOE Healthcare Program. MBOE, by the way, stands for Master of Business Operational Excellence, a program we introduced three years ago with a group of students mostly from the manufacturing and service industries. In the last cohort, however, we noticed nearly half of the students were from the health-care sector – and what we did about it is this very program.
MBOE Healthcare is a one-year program focused on achieving operational excellence using lean and Six Sigma, combined with effective leadership skills and team engagement techniques. The program aims to develop each student – a manager, leader or other professional with a passion for operational excellence and change – while improving the systems and processes in his or her organization.
This MBOE program isn’t just in a classroom. Students will head to hospitals to visit the gembaand observe successful changes. They’ll also take part in online learning and a combination of on-site and distance coaching by industry experts. The students apply this knowledge to a strategic capstone project carefully selected with the active involvement of the student’s supervisor or sponsor. They also work closely with the original industry cohort in the four weeks they’re together on campus to learn from each other.
Each of the eight weeks on campus involves four full days of intense learning from Wednesday to Saturday. Past students have called these weeks “exhausting and exhilarating” as experienced faculty members and guests teach using their own experiences working in organizations all over the country.
A student of class 2011, Susan Moffatt-Bruce, Assistant Professor of Surgery and Chief Quality and Patient Safety Officer at the Ohio State University Medical Center, told me the program “has provided me the tools to implement change through shared understanding and team engagement.”
Stay tuned for a daily update on the first week of the MBOE program.
While hosting a colleague and her husband for dinner last weekend, somehow the conversation drifted to the topic of strange pets people keep. My colleague’s spouse shared the hands-down winner, a story of an acquaintance – we’ll call her Kelly – who was so attached to her pet python that she slept in bed with it. Everything was going well until she noticed the snake had stopped eating. Concerned, she took the python to the vet, who told her why: Kelly’s bedfellow was starving itself for the big prey – her!
We might not know it, but we’re cuddled next to hungry snakes every day: The defects in our systems and processes lurking beneath the reworks we perform and roundabouts we take. Toyota Motor Corp. has a way to find those: An “Andon” cord, which flags a problem, prompts a hunt for its root cause and potentially pauses production if it can’t be solved immediately. When Lean Enterprise Institute CEO John Shook came to our Master of Business Operational Excellence program in October, he mentioned that the cord is pulled about 15,000 times a day at Toyota’s factory in Kentucky. “Better safe than sorry” seems to be their motto.
We rarely look at the process as a whole, instead we fix one incident and move on. We do root-cause analyses and fix problems, but do we really track if those changes have succeeded? Most root-cause analyses become a part of files and folders opened only when a regulatory agency visits the organization. In the meantime, how many times do we allow errors and defects to pass on to the customer?
Reworks are like enemies in disguise. Keep them out of bed.
A few years ago, I was working with nurses, pharmacists and physicians to understand the chemotherapy administration process at a cancer center. They all had a common problem: Too many screens Way too many. As I observed a nurse as she was walking me through the process of activating a chemo treatment, I noticed she went through 19 screens as she toggled through the multiple systems to access all the information she needed to do her work.
In the lean world, this is described as “overprocessing” waste.
I’ve been a part of a number of IT system implementations where organizations hold out hope that it will solve all the problems they face. Many hospitals, for example, implement new or upgrade old electronic medical record systems to reduce errors and speed up the documentation process. There’s logic here: With electronic records there’s easy access, no file cabinets, no scribbled notes, one centralized hub for information and a much weaker chance it will get lost or delayed. Clearly there are many advantages.
The problem here is the blind reliance on IT systems to solve the complexities of organizational processes. An IT system isn’t going to help if your chemo activation process requires 19 steps because it won’t solve a problem that arises from a complex process. First, we must simplify the processes and base our IT systems on that, not vice-versa.
A prime example: Toyota was among the early adopters of hybrid electric engines and other state-of-the-art technology, but the automaker thoroughly tests anything to make sure it’s reliable and serves its people and processes. If systems aren’t tested they could lead to additional work flow issues. As Dr. Jeff Liker writes in his book The Toyota Way, management should conduct pilot tests to determine if new technology is suitable for the organizations business (or clinical) processes, operations systems or products. Management, Liker writes, also should reject or modify any technology that might cause disruptions or unreliability.
Many organizations, unfortunately, don’t follow that advice.
What kind of issues do you come across using IT systems at your place of work? How do you address them? What would you do differently?
We’re pretty proud of the successes we’ve seen in just three years running Fisher’s Master of Business Operational Excellence program. And the same can be said of the industry heavy-hitters we line up to give students top-notch wisdom in lean leadership. Among those big deals is John Shook, the CEO of the Lean Enterprise Institute in the Boston area. Modest and easy-going as Shook is, he wouldn’t tell you that, but having him spend a day with our students is like taking a film-school course on westerns with Clint Eastwood as the prof.
Shook was kind enough to sit down with me after a full day of breaking down A3s with the MBOE cohort for a wide-ranging chat on the future of lean and some of his personal experiences (read the full interview). If you don’t know much about him, he spent time in Japan at Toyota Motor Corp. about 30 years ago and, quite simply, is one of the reasons lean is alive and well in the U.S. today.
While our chat was full of insight, one thing Shook said near the end has stuck with me since, and it’s about why companies make mistakes in a lean transformation, and more specifically in using A3s to solve problems. “All lean tools and processes,” he told me, “are like an iceberg. There’s more underneath them that embody different ways of thinking and going about work, and if we just copy the tools it’s possible for us to miss that and be implementing the tool for the tool’s sake.” Shook then referenced an old saying about hammers in search of nails.
He’s not talking about carpentry here. This is the heart of the matter when it comes to lean, the idea that we shouldn’t just be putting out fires (hammering nails) but digging deep behind them to discover what caused that spark. Switching metaphors here: A layer beneath the tip of that iceberg is the crucial root cause.
So what does digging for that root cause, maybe with the help of an A3, do for your company? Shook says it best:
“It helps us solve problems and create a problem-solving culture all at the same time so it can help us choose the right hammer.”
In a recent session for Fisher’s Master of Business Operational Excellence class, we had the pleasure of hearing James Hereford, COO of the Palo Alto Medical foundation. While discussing lean deployment in the health-care sector, he touched on using Japanese terms for the tools and methodologies of the Toyota Production System. It’s Hereford’s preference to use the original terms. His succinct defense:
“When you go to a Japanese restaurant, do you order sushi or do you say something like, ‘Please get me raw fish rolled in a leaf and rice?’”
What is in a name, really? If we’re doing what the words mean, does it matter if they’re Japanese or English? For many words in lean there isn’t even an exact translation. The closest translation of a simple word like gemba, for example, would be “actual place where the value is created” (Google it for many others).
So is it necessary to expend energy inventing words that convey the meaning instead of using the original words, especially if the tools and methods will be used regardless? Many people tell me, however, that in process improvement they get better buy-in when not using Japanese terms. Whatever works!
Have you had to deal with a divide in using Japanese terms with lean?