Attendees of last Friday’s professional development meeting hosted by the Center for Operational Excellence can thank the executives from Cardinal Health Inc. and Starbucks Corp. for the insights they carried into the office Monday. Those of us at COE owe them gratitude for a pair of touches outside the norm for our programming that proved wildly successful.
In the morning session, at the suggestion of lead speaker and Cardinal executive Whitney Mantonya, we devoted the entire second half of her time to a panel discussion featuring her colleagues who have helped with the Dublin company’s lean transformation. A panel on a topic featuring all employees from the same company? It isn’t something we’ve tried before and it’s not even the traditional form of a panel. What transpired, however, was a detailed dissection of the bird’s-eye view Mantonya provided in the first half, the exact kind of sleeves-rolled-up scrutiny our knowledge-hungry members want. It seems the group’s favorite part of the morning session was the very section we didn’t originally plan.
Sometimes it doesn’t hurt to step outside the box.
That’s exactly what we did in the second half of our afternoon session as well, when we escorted the entire crowd of attendees from Pfahl Hall to the Blackwell Hotel for a hands-on T-shirt folding activity suggested and led by Starbucks that taught the basics of standard work. We’ve been hands-off with hands-on activities at our seminars before, but the overwhelmingly positive feedback (and happy faces on our Flickr page) indicate it was exactly what the doctor – err, barista ordered.
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?
Life brings bad problems and good problems, and the Center for Operational Excellence is happy to be right in the middle of a very, very good one.
To put it quite simply, we’ve grown our membership base at such a steady clip that a group once numbering four in 1992 has hit 34. This has translated not only to more people actively working with Fisher on their pursuit of operational excellence but more attendance at our quarterly professional development meetings. A lot more. Our Sept. 30 event that featured a retired Kodak executive and Harley-Davidson CEO Keith Wandell peaked at about 200 attendees, a record. This past Friday, when hosting executives from Cardinal Health Inc. and Starbucks Corp., we would have hit and potentially exceeded that record by opening the events to the public but invited members only because of space constraints. Once again, a very good problem.
In our member roster and the decision-makers who come to our programming, these aren’t just manufacturers with a shop floor. COE is embracing the notion of continuous improvement in the most inclusive way possible, paving the way for the entrance of Nationwide Mutual Insurance Co., Huntington National Bank, OSU Medical Center and others in the transactional and health-care spaces.
Not that we’re leaving our core constituency behind. We’ve come to recognize a growing contingent of members in the logistics and distribution sectors needs specialized attention. For that, we’ve brought on one of the brightest minds tackling logistics in academia today, and we didn’t have to look far. Prof. Tom Goldsby, PhD, of Fisher’s Department of Marketing and Logistics, has stepped in as an associate director for COE to work closely with several companies that will benefit greatly from his award-winning research.
Goldsby already has made his debut before our COE board. We expect you’ll see a lot more of him.
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.”
This past Friday, students in Fisher’s MBOE program got a real-world lesson on the word gemba with visits to Ohio State University Medical Center and Tosoh Corp.
At the medical center, Dr. Susan Moffatt Bruce and her team welcomed students, who got up-close access to areas including labor and delivery, chemotherapy infusion and the invasive preparation and recovery area, a 23-bed unit that serves OSU’s Ross Heart Hospital. Each group was chartered with creating value stream map for the processes they observed, an hours-long process that resulted in a few common themes: Variation in process, a gap in understanding of the full value stream among frontline members and not enough communication among team members.
The efficiency of health care took on a new urgency when a patient, Michele, and Dr. Daniel Eiferman spoke. Speaking of her father’s six-year journey with cancer treatment, Michele said: “Please don’t assume that patients know the condition of their illness or the next steps. Also, please listen to what the patient or their family member is trying to say.” Dr. Eiferman said because he wants to use as much of his time to help patients, “the inefficiencies in the processes keep me away from adding value to my patients.”
Students said they wanted to make sure that their findings were helpful to the managers who let their staff dedicate half their day to spend with the students. High praise on the results came from none other than Dr. Charles Lockwood, dean of the medical school, who said it was important to understand the constraints that people work with to do their jobs and eliminate those constraints whenever possible to improve inefficiencies.
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.
Our good friends at the Cambridge, Mass.-based Lean Enterprise Institute are giving operational excellence junkies a chance this week to learn from a few masters this week – without leaving the office.
Tuesday Nov. 29 at 2 p.m. EST, the institute is hosting a free webinar titled “Learning to See the Whole Value Stream: The Power of Extended Value-Stream Mapping.” It’s set to last one hour and will be led by Jim Womack and Dan Jones. Those of you brushed up on your lean reading might notice they’re the gents who quite literally wrote the book on some hallmarks of lean thinking including, well, Lean Thinking, Lean Solutions and Seeing the Whole Value Stream.
The cost? Your time, an hour of it to be exact. Click here to register for the webinar.
The concept of value-stream mapping will be fresh in the minds of a few of our member companies: Grange Insurance and Huntington National Bank. A group of employees from each company came to Fisher earlier this month for a day-long session on VSM led by COE Executive Director Peg Pennington. They’re part of a growing contingent of transactional companies in COE – and they’re making great strides in apply operational excellence strategies to new realms of the corporate world.
Amy Tomaszewski, Grange’s assistant vice president of operational excellence, told me the event was a great success for her company and “provided quite a few ‘Ah-ha!’ moments.”
“The instruction was excellent and tailored to the service transaction environment, which is often overlooked in lean training,” Tomaszewski said. “Through the real-life computer simulation of the movement of electronic work and the team exercises around value-stream mapping and a simulated Kaizen event, we were able to see the result of both positive and negative changes that can occur when a company looks for and acts upon improvement opportunities in a value stream.”