Lean Six Sigma

Old Style Thinking of Plan – Do

One of my favorite authors (even though he has turned me down several times for a podcast) is Jim Highsmith. Jim has authored, several books with my favorite being Agile Project Management: Creating Innovative Products (2nd Edition) which comes as no surprise to most readers of this blog.

One of the items that Jim challenges in the book is the project management thinking of Plan-Do. In the book, he states that when considering plan-do it assumes that we already have the acquired knowledge to get the job done. He believes it should speculating not planning and exploring versus doing. In the process world and most specifically in the area of Lean, we think of PDCA and the planning portion of it as a hypothesis and the do as the experiment. Which I feel lies somewhere in between Jim’s explanation of the two. If I use the three components of how I visualize my Lean thoughts, Standard (SDCA), Incremental (PDCA), and Exploration (EDCA), I believe I can safely say that my thinking does align itself with Jim’s.

Lean Thinking

In the before mentioned book, Highsmith discussed the “Story” aspect of iteration planning. He says in the book,

I was slow to embrace the term “Story” for iteration planning. What finally convinced me was this need to change people’s perception of planning. The traditional terms we used were “requirement” and “requirements document”— words that conjure up fixed, unvarying, cast-in-concrete outcomes. “Story” conjures up a different scenario, one that emphasizes talking over writing and evolution over a fixed specification. Using the term “speculating” rather than “planning” has a similar effect. When we speculate, we are not prescribing the future, but rather hypothesizing about it. And, to those who practice the scientific method, we hypothesize and then run experiments to test that hypothesis— exactly what happens in agile iterations. Speculating also conjures up a vision of a group musing about the future instead of one rushing to document.

In the past several months, I have really started to embrace this “Story” type of thinking. I have started to create more narratives in the planning phases and even in my proposals.

  • In project scoping there are fewer tasks being assign in the earlier phases but it also seems to drive more conversation in beginning of the project or an iteration such as SDCA, PDCA, and EDCA. I think it is a good thing.
  • On the proposal side, I have found many people uncomfortable with this process. They are looking for what you are going to do. I equate that to starting with the answers. Which I typically think in the sales and marketing world is a disaster waiting to happen.

What are your thoughts, is more narrative/speculation a good thing or a bad thing?

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Solutions – Simple Enough for Everyone to Master

Alain Patchong is the founder of the TheOneDayExpert and author of a series of books on Standard Work. TheOneDayExpert is built around the simple idea that in today’s highly competitive environment, industry, which has already harvest low-hanging fruits, cannot rely anymore on single-minded or one-size-fits-all tools. TheOneDayExpert leverages 20+ years of industry Alain Patchongexperience to offer creative training for academy and industry. It also partners with companies to develop smart technology and deliver manufacturing excellence.

 

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Respect in Lean

I asked Michael Balle in a past interview (Related Podcast and Transcription: Pushing Kaizen Beyond the Walls) what the term “respect” means in Lean. Michael Ballé is the co-author of, The Gold Mine, and The Lean Manager. His most recent book is Lead with Respect.

Joe:  You touched upon a point there. In “Lean”, can you define what respect means?

Michael Balle:  We try. We try. I think that the tools are very easy to define because they’re quite specific. I can give you my own take on respect, and I’ll be very cautious on this, as this is the result of my current work. The way I see it, respect has two very pragmatic things. The most immediate thing I see: respect is about making sure people understand their opinion counts. This is as pragmatic as it gets, is that you acknowledge people’s opinions all the time. It doesn’t mean you agree with them. Understanding doesn’t mean agreement, but we use the production analysis board with the comments all the time.

We use specific ways of just saying to people, “We hear your opinion on this. And we’re interested in your opinion. And please give us your opinion.” I think it’s very important for people who work in a company that they understand that the senior people actually take their opinion into account.

The second part I would say about respect, which the deeper part is; I believe that people in a company have a right to succeed. It’s not a duty to succeed. It’s a right to succeed.

They have a right to succeed in their day. They have a right to come home saying, “Darling,” to their partners, “Darling, I’ve had a really good day, I’ve succeeded.” And they have a right to succeed in their career.

This is part of what management should do. How do we create situations where people can succeed? I believe that this trust that comes from this is very powerful. This mutual trust is built on mutual wins.

It’s short wins, and this goes with the Kaizen, is that if people work together and have wins together, in short, ways, they will build this trust. This is so powerful for companies.

So, respect has many, many different dimensions. One is the teamwork that we were talking about. You develop individuals by teaching them how to solve problems with others. The other is this notion that it has to be a win-win. It has to be some element of shared success that leads to developing these mutual trusts.

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Targeting what your Customer Values at each stage of the cycle will increase your ability to deliver quicker, more accurately and with better value than your competitor. It is a moving target and the principles of Lean and PDCA facilitates the journey to Customer Value.

When Not To Use Standard Work

TheOneDayExpert is built around the simple idea that in today’s highly competitive environment, industry, which has already harvest low-hanging fruits, cannot rely anymore on single-minded or one-size-fits-all tools. Experts with holistic view and deep insight are needed. Yet solutions must be made simple enough for everyone to master and own them. Alain Patchong is the founder of the TheOneDayExpert and author of a series of books on Standard Work. Alain also is the guest on next week’s Business901 podcast.

An excerpt from the podcast:

Joe:   Would you recommend sometimes not using Standard Work? Are there times that it’s obviously besides let’s say repeatable, are there other times that you would shy away from it or is repeatable the key part of using Standard Work?

Alain:  Standardized Work has no interest when there is variation when there is volatility when there is low repeatability. This can be due to a lot of causes. It could be just like this process is designed on purpose not to be repeatable – then there is no Standardized Work. But there is some occasions, some situations where it is simply due to the machine, the machine which is very, very unreliable, the machine which is all the product which is causing huge problems and so in those situations, my advice is start fixing those problems first. Start fixing making your machine reliable, so we can use tools like TPM or whatever.

If you try to implement Standardized Work when you have this environment with a lot of disruptions, first of all, operators will be frustrated because they are already frustrated by those stoppages which are coming over and over. But they’ll say, okay why are you focusing on us? First of all fix the problem. Fix all those machine stops. So fix them first and then you’ll get this credibility to be able to go ahead and start working on Standardized Work

Joe:   I think it’s interesting when you say that because so many times workers, frontline people and nurses for a great example, they find workarounds to problems to be able to take care of things and make them work. When you try to implement Standard Work, they just look at you because there are so many other things going on, they’re like — and so that’s a great indication.

Alain:  Yes, yes. That is what I explained in the first book actually. Is that okay? Before doing anything, okay well, fix all the problems because if you come — and this is what I’ve noticed during my personal life at Goodyear when I was implementing this. People are willing to work, they are willing to work with you in improving and doing Standardized Work but first, you have to show them that you are taking seriously the daily problems, the daily frustrations, and this is where we have to start first.

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Why use all Three? TOC, Lean, Six Sigma

A favorite podcast of mine was with Bob Sproull,  an experienced manufacturing executive with a distinguished track record of achieving improvement goals in Manufacturing, MRO, Quality, Product Development, and Engineering. In the podcast (Related Podcast and Transcription: Can Theory of Constraints, Lean and Six Sigma Co-Exist), I asked Bob; “Why do we need all three? It seems mind-boggling. I don’t have enough time to implement Lean. I have enough trouble implementing Six Sigma. Now, you throw Theory of Constraints on there. I think I’m headed for failure.”

Bob: Well, Joe, I can tell you it is not the first time I’ve been asked that question. So, let me try and tell you actually why I think it’s a whole lot easier using this integrated improvement method. In a typical Lean or Six Sigma or Lean Six Sigma implementation, one of the reasons why I think a lot of these efforts fail is because the organization ends up trying to do what I call “solve world hunger.” In other words, they try and Lean out every aspect of the business. When, in fact, if you look at the business, every business has key leverage points.

My thought is rather than trying to improve every single aspect of the business, let’s focus on those leverage points, and those leverage points end up being what Goldratt referred to as the system constraints. One of the things that you have to be a believer in, and I know you’re a believer in the Theory of Constraints, but one of the things you have to believe in is throughput accounting.

By that I mean, if you look at the components of how you make money in the business, you’ve got basically three things. You can go through an inventory reduction. The second thing is what most companies do is, they focus on reducing operating expenses, and, unfortunately, that typically comes in the form of layoffs, which I despise. The third component, though, is by increasing your revenue base.

If you look at those three components, when you reduce inventory, typically that’s a one-time improvement in cash flow. If you look at operating expense -my definition of operating expense is any money that you spend to turn inventory into throughput. And you can cut operating expense way too low. You actually can debilitate the organization, and that’s what happens to a lot of companies.

Throughput, on the other hand, and the definition of throughput in the Theory of Constraints world is new revenue entering the company, and that is really revenue minus total variable cost. That’s such things as the cost of raw materials, sales commissions, those things that vary with the sale of a product.

The bottom line here is… Back to your original question, why is it so much easier? Well, you don’t need nearly the army of improvement resources that you might think. I think another mistake a lot of companies make is they go out and train the masses and expect to see bottom line improvement. My belief is you need enough to focus on the constraint until you improve the constraint to the point where it’s no longer a constraint. But, as soon as that happens, another one takes its place.

Then, you simply move your resources, your improvement resources, to that new constraint, and it becomes a cyclic cycle of improvement. It sustains itself. So, from that perspective to me it’s a lot easier. All three initiatives, Lean, Six Sigma and the Theory of Constraints, not just complement each other, but they enhance each other. You get faster bottom line improvement with less effort. So, that’s my take on it. That has worked for me in many of the companies that I have implemented this.

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Should You Be Using Multiple A3 Formats?

A Lean Implementer with a passion for continuous learning on all subjects related to business and lean, Matt Wrye is the author of the popular blog “Beyond Lean,” which centers on evolving leadership and changing business. Matt was a past podcast guest of mine (Related Podcast and Transcription: Building a Learning A3) and I asked him, “Where would you warn people not to jump in and use an A3?”

Matt:  Well, I don’t know if there’s a place or a type of situation where I would warn them not to use an A3. But what I would warn them on is formatting or the A3 itself. In our example, or in our case, we have multiple A3 formats depending on what type of work we’re trying to do. So if we’re trying to solve a problem, we have one format. If we’re trying to develop a strategy, we have another format. If we are trying to work with a client in scope work, we have a different format.

We’ve used the A3 format in concepts to lay out the work that we need to do but have set it up and put templates in place to meet that need. It’s not a one?size?fits?all. You know, we’re even having a discussion now to say, “Is that’s working for us or not?” and having a reflection piece on it now. I don’t know, because, honestly, from my standpoint, I could see A3’s being used anywhere because it’s a great tool to help foster discussion and bring items to the table. A side benefit of using it and putting it on paper is it actually will focus ?? it’s a small psychology thing ?? the discussion on the issues on the paper and not the person whom you’re talking to.

I’ve even used an A3 one time for no other reason than that I’ve framed up the current state and what I believed the future state needed to be, to go have a discussion with a person where it was believed their area was causing problems in another area. Just by using that and focusing on the piece of paper, we were able to have a discussion and a better understanding where both areas wanted to be, and not the areas pointing fingers at each, saying, “No this is your fault, no this is your fault,” type of thing.

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