Toyota presentation highlights lasting impact of lean transformations

Electrified.

That’s the best way to describe how our Center for Operational Excellence members and guests left our seminar this past Friday following a rousing, inspiring presentation from Jamie Bonini, general manager of the Toyota Production System Support Center.

Bonini, speaking at the Sept. 13, 2013, seminar.

Bonini powerfully made the case to a crowd of nearly 150 that the guiding principles of operational excellence can make a lasting impact anywhere – and at COE, that’s what we’re all about.

Bonini illustrated the Toyota Production System implementation strategy TSSC has thus far used with more than 200 organizations, which range from manufacturing – a classic setting for lean implementation – to the more unusual nonprofit realm. Roughly 40 of these projects are under way in a normal year for TSSC, which has been around since 1992.

A deeply compelling case study that attracted attention earlier this year in the New York Times involves TSSC’s work with the Food Bank for New York City, where wait times for meals have plummeted and efficiency at the food pantry has skyrocketed. Check out a video of TSSC’s work with the food bank here.

What resonates from this, and other videos from TSSC, is not only the success of the transformations but the passion that spreads like wildfire throughout the organizations they work with. My favorite part of the Food Bank video comes about 11 minutes in, when Teisha Diallo, program director Project Hospitality unguardedly voices the thrill of seeing the food pantry line running much more efficiently.

“When I come around that corner, the line is gone, and I’m like, ‘Yes!’” she exclaims.

Not that getting there is easy – and that’s where Bonini imparted some valuable takeaways on starting a transformation at the right time, in the right way, and with the right leaders on board. His most compelling advice came when he said it’s not a crime to reschedule a lean rollout if the time isn’t right. Often, Bonini said, the lack of an underlying drive to have a problem-solving culture can be a holdup – or a deal-breaker if it isn’t resolved.

“If you’re not willing to build an organizational problem-solving capability, then don’t bother (with an implementation),” Bonini said. “It’s often a very difficult missing element from what I see (with organizations).”

Check out more photos from Friday’s seminar here.

Lean hits national headlines thanks to Toyota ‘donation’

There’s a recent story in the New York Times that’s about as inspiring as it gets in the world of continuous improvement.

toyota logoMona El-Naggar writes in the Times’ city section about how the Food Bank for New York City is serving the needy faster and more efficiently, with remarkable improvements visible from the kitchen to the warehouse. To thank for this is none other than automaker Toyota, which first approached the food bank in 2011 offering charity in the form of process improvement support.

Examples of the gains FBNYC has seen: Wait time for dinner is at 18 minutes, down from almost 90; the time needed to fill bags at the food pantry was slashed in half; and in the wake of Hurricane Sandy, time spent packing boxes at a New York-area warehouse dropped from 3 minutes to a lean and mean 11 seconds.

This isn’t elaborate Toyota engineer wizardry at work, here. Like in any organization, it’s all about reorganizing inventory, throwing some kanbans into the mix, and identifying bottlenecks in the process.

My favorite vignette in the story comes from the director of distribution at the food bank, who said they initially met Toyota’s offer with hesitation. “They make cars; I run a kitchen,” he told the Times.

Anyone who’s worked hard for buy-in on a bold vision would understand that hesitation, but it’s organizations such as Toyota and our Center for Operational Excellence members who are demonstrating each day that the drive to make processes great isn’t restricted to the automotive or manufacturing industries. Lean can work anywhere – and that it’s beginning to fan out into the nonprofit sector is a tremendously good sign.

MBOE recap: Lean in the back office

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.

jean cunningham consulting lean accounting
Jean Cunningham (courtesy jeancunninghamconsulting.com)

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

MBOE recap: Learning from observing

With the theory of value stream mapping internalized, our MBOE program’s health-care cohort traveled to Ohio State’s Wexner Medical Center while the industry cohort headed to Center for Operational Excellence member Tosoh USA Inc.  A key step before launching a value stream mapping exercise is to go to the gemba. You can’t really map a value stream unless you’ve seen the process and have the relevant data, and you can’t do it accurately without the people who are a part of the process.

MBOE students value-stream mapping following a visit to Wexner Medical Center

Legend has it that Taiichi Ohno, the father of the Toyota Production System, had his engineers stand inside a circle for eight hours to observe the process. There is a lot of learning that results from just observing. Once you understand how the process flows you go speak with the people who do the work. Share your findings with them. Ask them to validate the findings. Ask them why they do what you observed. Note the issues they point out and ask them what would make the process better and why.

On the hospital gemba, students went to three different areas: Outpatient endoscopy, inpatient endoscopy and Invasive Prep and Recovery (IPR). Ryan Haley, Peg Pennington, Jill Treece, Jason Swartz and Tim Nelson were key in assisting.

The biggest hurdle in getting started with the value stream map is selecting the correct group of product or services to represent on a single flow map. For example, in IPR, the manager was interested in understanding the flow of EP (Electrophysiology) patients. Within this group there were multiple procedures, such as ablation (that took the longest to perform and recover) and cardioversion (the shortest procedure to perform and recover). There are many more within that range. What procedure should one focus on? The answer: Select the family of procedures that if improved upon will have the most benefit to the patients and organization.

The students spent three hours on the gemba and mapping the process and later presented their findings to hospital leaders. As our students benefit from gemba partnerships, so do these organizations. In fact, many departments have implemented the recommendations made by the students and achieved positive results.

MBOE recap: There’s an app for that

For Fisher’s Master of Business Operational Excellence cohort this year, paper is so 2011.

MBOE took the leap to become a paper-free program this year with each student of the 2012-13 cohort receiving an iPad. Students can now access all materials on the iPad using iTunes University, type in notes, and then access them anytime without flipping through pages within a huge binder.

ipad apple
All MBOE students in the new cohort receive iPads with all course materials loaded. (Image courtesy Apple)

A big thanks to Randy Spears and Jacob Bane in Fisher’s Information Technology Services, who helped make it happen and were on hand to walk students through the various applications and modules on orientation day this week.

Orientation takes place not only for our students but for coaches. As they were briefed in a separate room, eventually everyone got together to get acquainted.  Bill Constantino senior partner at the W3 Group, introduced students the concept of Toyota Kata, a method that Toyota uses to innovate their products with built-in quality. He talked about change and what it takes human beings to change by posing this question: Why do humans have the ability to develop new neural synapses? That’s because humans have the ability to learn new things. Why is it then change is so hard? That’s because the uncertainty that lies between a current condition and target condition is not addressed in a way that facilitates change, Constantino said. So how do you address it? The answer is deliberate practice and asking the right questions over and over with a coach helping to do that. Some helpful questions to ask:

  • What is the current state?
  • What is the target condition?
  • What idea will you implement?
  • What do you expect to happen?
  • What did you learn?

The more people consistently follow this process, he said, change will become second nature.

With the work of MBOE also comes some play. We hosted an evening reception after orientation for students to relax and mingle with each other. Many students spent time with their coaches to get an understanding of the process, a great benefit the program offers by giving up-close access to major operational excellence experts.

With orientation finished, students began their year-long quest with the first official day.

Peg Pennington, Executive Director of COE, introduced the concept of systems thinking and exploring all possible root causes of any problem. The key to coming up with the right countermeasures/solutions to any problem is:

  1. Define the  problem
  2. Understand the root causes of the problem

According to Peg, there are various tools available for root cause analysis, most of which are limited in some way. A cause map helps to deep dive into all possible reasons that led to the problem and also helps link to the corporate that is impacted because of the problem. Peg drove the point home interactively using various fun exercises.

In the afternoon, Gary Butler reinforced the learning on cause mapping by walking the students through analyzing the reasons behind the explosion of the Challenger space shuttle that killed seven astronauts in 1986. He also stressed upon defining metric and defining them S.M.A.R.T.ly (Specific, Measurable, Achievable/Actionable, Relevant/Reliable and Timely).

 

MBOE HC Recap: Where’s your one second?

Students in Fisher’s Master of Business Operational Excellence Healthcare cohort spent four days last week at the Thedacare Healthcare System in Appleton, Wis., as part of the year-long program. Senior lecturer Mrinalini Gadkari was on the scene for daily recaps.

Ever think about how much time you spend, and often waste, in meetings? Let’s do the math: Let’s assume you’re in one hour-long meeting in an eight-hour workday. Five meetings a week, 20 meetings a month, 240 meetings/hours a year. That’s the equivalent of 30 workdays.

Time
"Time is a valuable commodity, and one easily wasted, in many organizations."

I got to thinking of this as lean consultant Tracey Richardson discussed the importance of even a wasted second while teaching our MBOE students the A3 problem-solving method. When Richardson started working at Toyota Motor Corp., one of her trainers translated the cost of one second lost to the company. Saving one second per plant worker, she said, was the equivalent of adding eight more cars per shift! One second to Richardson meant job security.

“I started looking for seconds everywhere,” she said, urging students to look at their own processes. Seconds might not make sense but probably hours or days or weeks or months would. Any unit of time could be translated into a dollar amount or, in health care, someone’s life.

Back to that one-hour-meeting calculation: With that much time invested, you’re pulling away key people in meetings that go on for years without achieving much. How does that translate into dollars or productivity?

How about going to the gemba instead? How about huddling with your team for a few minutes in a day and tackling real problems?

MBOE recap: The secret sauce of standard work

Students in Fisher’s Master of Business Operational Excellence cohort are back on campus for their second week together in the year-long program. Senior lecturer Mrinalini Gadkari is on the scene for daily recaps.

Short question, long answer: How did Toyota become lean?

As MBOE coach David Hoyte told students in a recent session, the automaker organizes all jobs around human motion and creates an efficient sequence with lowest possible waste. If that’s the philosophy, guess how your employees will start thinking and working? They note time they spend walking around, looking for things, bending or lifting when it isn’t necessary. They take more care in detecting errors and preventing them. They come up with a sequence that makes more sense of the process.

If your organization’s philosophy is cost reduction, you run the risk of employees seeking low-cost suppliers and abandoning quality. Instead of focusing on reducing waste in the process, individual productivity is under the microscope and blame reigns supreme.  

In most organizations people are used to doing work at their own pace with undocumented methods. Some work slowly and others work faster. Some have figured out the fastest method but they hide it from others. This makes the process variable and unpredictable. 

Work Flow
Toyota bases its work flow on a philosophy of waste reduction. Image courtesy MotorTrend.com

Take note of these three elements to achieve standard work:

  • Employees must know the pace at which they are supposed to produce/do work (the Takt time)
  • Employees are trained to follow a standard sequence and method such that everyone follows the same steps and sequence in the process
  • Have only just enough supplies when and where they are needed to produce/do work (work in process)

Quite simply, it’s a better use of employees’ time and talent if they spend it doing more value-added work rather than wasting their time in wandering or waiting.

Discuss: Do you see variation in how your employees do work?   How do you apply standardization to your work processes? What are some of the challenges and wins?

MBOE recap: The Weakest Link (…goodbye.)

Students in Fisher’s Master of Business Operational Excellence cohort are back on campus for their second week together in the year-long program. Senior lecturer Mrinalini Gadkari is on the scene for daily recaps.

As lean guru Tracey Richardsontaught our MBOE students the problem-solving process at Toyota, the thing that amazed me the most was that she rarely used the word “car” or anything close to it. She spent a major part of her time talking about culture and people instead, asking: “Does your company have values?” More importantly, she said, is whether your people believe in them. That, Richardson said, is the weakest link in a company.  Most organizations boast having values, but do leaders have the discipline to live them and hold people accountable? Have they internalized the values to reflect in their character? That’s where most organizations lag.

Tracey Richardson
Tracey Richardson coaches Fisher’s MBOE cohort

An example of a good leader sticking to values, in this case safety, remains in my mind: This company’s CEO was walking with me down a hallway when he noticed a paper clip on the floor. Without a moment’s hesitation, he bent down to pick it up, threw it away and we kept walking. He didn’t have to say a word. That company’s core value was conveyed through that action. 

Culture begins with leaders. People internalize what they see and hear their leaders doing consistently. The “true north” goal at Toyota can be described in one line: Customer first, the highest quality product, lowest cost, shortest lead time, safest manner, while respecting people. At Toyota, to create the highest quality product, they hire the right people in a systematic manner, train them to continue to have standardized processes, encourage them to highlight and solve problems in a systematic manner and value their inputs. Once a month, Richardson said, the president of Toyota would go to the shop floor and spend two hours working on the line, letting front-line staff help the manager on other processes. What a commitment from the president!

Discuss: How do you see the core values of your organization play out in everyday ways?

MBOE recap: Who is Tim Wood?

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?”

Steven Spear is the author of The High-Velocity Edge
Steven Spear is the author of The High-Velocity Edge, which examines the behaviors behind successful lean enterprises

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:

  1. System design using the best approach making the problems visible
  2. Problem solving by escalating and asking for help; containing the problem, and solving it when it is still a micro problem
  3. Knowledge sharing and applying the discoveries systematically
  4. 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

A long day but a great day!

Sleeping with the enemy

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!

Mrinalini Gadkari Ground Zero, NYC
Author Mrinalini Gadkari in Manhattan

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.