Evolving Excellence

5S: Reality or Lean Illusion

by BILL WADDELL

Probably the worst abuse of lean principles - or the most misused - is 5S.  Take a gander at this from the Wall Street Journal.  According to Ms. Julie Jargon, the value of 5S is time saving - making workers more efficient.  The old school management, and new management trained in old school schools, seems to be unable to see value in anything other than cutting labor costs.  Pursue 5S, says Julie, and the workers will no longer "waste time looking for tools". So to be sure the folks at Kyocera aren't wasting time looking for staplers, they have a guy wasting time inspecting other people's cubicles.  Kyocera took a whopping 2.6% to their bottom line, but the important thing is that their headcount is down and people are using authorized 5S clips to support plants in their cubicles instead of paper clips.

Then there is this guy, after rambling through perhaps the most absurd history of the origins of lean ever put forth, explains "Efforts in 5S almost always improve workplace safety, operator morale, quality, and productivity. It can also be very impressive to visiting customers and prospective clients."

You can find 5S described as "Lean Lite" - accomplished by implementing 5S on a stand alone basis, without any of the other aspects of lean.  It is more commonly described as little more than glorified spring-cleaning dressed in Japanese terms.

In fact, 5S is most importantly the disciplined visual control over each operation within the manufacturing process.  It is the tool that enables you to rest assured that the kanban is working.  It is the physical manifestation of standardized work.  It is the essential support for operator-performed maintenance activities.  It enables everyone on the shop floor to know that the machine set-up/changeover process is operable as designed.  In short, it is the intersection of all of the process optimization and control aspects of lean.

Kevin and I have often written of the widespread tendency to "look lean", rather than "be lean".  Stand-alone 5S in pursuit of saving operator time "lost looking for tools", or impressing "visiting customers and prospective clients" is about the best way to achieve this result.

Neat and organized factory floors are hardly a breakthrough insight of the Toyota folks.  In fact, it is more than a bit ridiculous to spend money on seminars, training or consultants to pursue stand-alone 5S.  If 5S is not going to be integrated with comprehensive process control you are better off saving the cost of the lean training and spending a fraction of it on a handful of brooms and trash cans.

The best explanation of 5S I have seen is in JIT Is Flow - Practices And Principles of Lean Manufacturingby Hioryuki Hirano.  (No, this is not a plug for one of my books.  My good friend Norman Bodek gave me the honor of translating some of Hirano's Janglish into the King's English, but I have no stake in the book.  Nonetheless, I have used it as the standard manual for just about all of the lean shop floor training I have conducted since I had the privilege of learning Hirano's concepts.  As far as I am concerned, every manufacturing manager should have a copy of it on their desk for reference.)

Hirano explains that, once 5S is in place in conjunction with kanban, TPM, set-up optimization, quality controls and standard work, its most valuable function is to serve as the physical baseline from which continuous improvement can be made.  Without 5S and 3T (The 3T are Target Item, Target Location, Target Quantity - 5S and 3T are worth little without each other.  The 5S controls the place and the 3T control the flow), it can be almost impossible to tell where real problems lie, or if changes resulted in improvement.

Leanies wrestle with the challenge of the fifth S - sustaining.  If you think 5S is essentially a cosmetic issue - a morale-building, customer-impressing way to look lean, it cannot be sustained because those things have little tangible value.  On the other hand, if you really understand that 5S is the heart and soul of your factory's visual control over processes and rate of improvement, the ability to sustain 5S is the best metric of all of your management's commitment to lean. 

The Potentially Deadly Annual Inventory

Traditional organizations, especially in the manufacturing sector, usually go through a grueling exercise called "inventory" or "&#!*@ inventory" depending on whether you're supervising or doing the actual work.  Typically it's around the end of the year, if not quarterly, and is designed to ensure that months of transactions have occurred properly and counts are correct... and "value" can be changed based on the change of "cost" standards for the following period.  Traditional accounting then requires a revaluation of inventory value, often resulting in significant expense hits to companies with bloated warehouses.  It's one of those miracles of traditional accounting: somehow at the stroke of midnight "value" can change dramatically.

One of our nation's bio labs recently had a minor problem when trying to account for their inventory.  Cost reconciliation was not a factor, but it still created something of an issue.

An inventory of deadly germs and toxins at an Army biodefense lab in Frederick found more than 9,200 vials of material that was unaccounted for in laboratory records, Fort Detrick officials said Wednesday.  He [Col. Mark Kortepeter, deputy commander of the U.S. Army Medical Research Institute of Infectious Diseases] said the found material included Korean War-era serum samples from patients with Korean hemorrhagic fever, a disease still of interest to researchers pursuing a vaccine. Other vials contained viruses and microbes responsible for Ebola, plague, anthrax, botulism and host of other ailments, Kortepeter said in a teleconference with reporters.

How this happened probably sounds familiar to many of us.

"What happens over time, these get moved from one freezer to another, historically. Now we have much better tracking of where they are," Kortepeter said. The material was in tiny, 1mm vials that could easily be overlooked in the 25-cubic-foot freezers or even covered by clumps of minus-80-degree ice, said Sam Edwin, the institute's inventory control officer.

The same problems that confound inventory management at manufacturing organizations, right?  How do lean organizations reduce or even eliminate the problem?  First they try to reduce the inventory as much as possible by getting rid of non-performing inventory assets.  Fort Detrick is doing that as well.

About half of the found material has been destroyed, Kortepeter said. Samples deemed potentially useful were saved and entered into a laboratory database, he said.

But that's not a solution and just fixes the problem at the current point in time.  To really prevent the problem from reoccurring the organization must attack the inventory-creation process itself by eliminating overproduction and minimizing work-in-process.  To ensure inventory accuracy the transaction process needs to be streamlined, simple, visual, and intuitive.  Every transaction boundary creates complexity that leads to potential errors.  Finally the locations that hold whatever inventory that remains, if any, need to be 5S'd to improve organization.  I wonder how the 350 freezers at Fort Detrick are organized... are some used strictly for long-term storage?  Or are all accessed on a regular basis?  And I wonder how many freezers are really required in the first place.

Mailbox:0 - Oh So Lonely

For years I've been one of those types that operates most effectively while in a state of chaos.  I've tried paper planners, electronic planners, and even online planners... and nothing has worked.  Similarly I've had no methodical way of maintaining the work, personal, and side business email accounts.  All tasks were always accomplished, but the process just wasn't pretty.  Chaos was exciting, invigorating, and challenging.

Over the past year I've realized that chaos is no longer effective, probably as the perfect memory and rapid-fire decision-making required by chaotic management meets its match: advancing age.  So at home and the home office I weeded through boxes and boxes of paper files, shredded 90% of them, and scanned the rest.  Voila!  No paper at home.  I then forced myself to start using a planner, and the discipline is slowly building on that front... although I still prefer free-form notes.

At the office I haven't maintained any paper files for a couple years.  Anything critical is in electronic format, and by nature of my position I have the luxury of safely assuming someone else has a copy of anything else I need.  I take a lot of pride in being able to say "nope, don't have it!" to anyone who asks if I have a certain piece of paper. There's not a single file cabinet in my office and virtually no paper on my stand up desk.

The same couldn't be said for email, so this past month I launched an assault on that medium.  I used to keep several hundred emails in the inbox of each account, which formed both an informal action/followup list and a record of discussions.  It simply wasn't practical and I'd spend a couple hours each day just sorting through them all.  Even then I'd receive questions from annoyed people asking if I'd read their particular email.  Usually my parents.  Chaotic management was being transformed from a thrill to a scary, laborious chore.

Recently we sent a boatload of people through GTD (Getting Things Done) training which advocates a rather strict methodology for handling email, in particular taking immediate action on every incoming message.  The intent is to keep zero emails in the inbox.  At first I rolled my eyes knowing how far away I was from such a goal.  I also knew that I could never maintain a slew of "@action" style folders.  But the challenge intrigued me so on one unusually free Friday I sat down for a few hours with the work inbox.

I was wrong; there were over 500 emails in it.  Ok.... I knew that most were simply messages I thought I might want to read again, so I first used my typical pruning mechanism.  I sorted by sender and killed about 300 right off the bat.  Replies to replies, automatic notifications that certain reports could be found at some other network location, and the like.  Poof!  Then I sorted by date ascending and took a look at the oldest.  I immediately knew that any response to a question from a year or so ago was going to be fruitless, if not downright embarrassing, so those got lopped off.  Down to 100.  Then I sorted by subject and started the real work.  Real replies, action, or delegating.  It took me a couple more hours, but I got the inbox down to about 20.

The final push came after one of my staff members emailed me that she just hit "inbox:0".  Holy cow.  Could I nail those last 20?  By the end of the following week I had... and then watched it creep up to 20 again just in the space of going to lunch.  That became the challenge, and what has motivated me over the past week: could I keep ahead of the flood, which comes in at a pace of 20 to 30 an hour during a typical day?  For the last several days I have left the office each day with less than 5 and arrived the next morning with about 30, but that's fine.  I feel it's sustainable, and I do hit inbox:0 at least once each day.

During this process I didn't save any email into a separate special folder.  Critical items went into non-email electronic documents so I don't have duplicate folders in the email and file areas.  So what about all those other email folders?  Could I kill them too?  Last Friday I decided to try.  Entire folders filled with old emails were summarily sent to electronic heaven.  Action items were transcribed into my planner.  Critical records of customer discussions and the like were put into non-email electronic files on my computer.  Then yesterday, after a final brief task of emptying the sent mail folder and trash folder, it finally happened:

Mailbox:0 

Not just Inbox:0, Mailbox:0.  Not a damn email anywhere to be found... at least for a few seconds until the next one arrived.  I killed that one out of pure spite without even looking at it just so I could marvel a bit longer at my accomplishment.  The head of a company with hundreds of email-loving employees has zero emails, anywhere.  Bite me, world!

Incredibly liberating... and then I felt a wave of loneliness.  Those mountains of emails were connections to friends and coworkers.  Strange.  But I'm sure I'll get over it.

This past weekend I started to put some time into the other email accounts, and soon I'll start on the gigs and gigs of electronic files.  Electronic 5S. There's some strange zen in sitting on the beach with a laptop, slashing the clutter of files and emails.

Remember a couple years ago when I suggested that a desired attribute of a new home should be less storage space, not more?  Perhaps an analogous challenge in today's electronic world should be a smaller hard drive, not larger.  Perhaps smaller really is better?

Cheatin' With MATI

by BILL WADDELL

I thought I'd give you a break from all of the grand philosophical ranting and actually write about something practical.  Not to worry. I won't make a habit of it - after all, I have a hard earned reputation to protect.  From time to time, however, it is important to demonstrate to myself that I do actually know a thing or two about lean shop floor stuff. 

First, a couple of disclaimers:

Greg Wahl - CEO of Wahl Clipper - actually came up with this idea while I was working for him.  I tweaked it a bit and implemented the concept, but he is really the brains behind the MATI Score idea.  That said, he still has a full time day job, while I am back to consulting, so I'll write it up and shamelessly take more credit than I deserve. 

Second, this is for the experienced lean folks.  If you are new to value stream mapping, or haven't done much with charting your processes, you really should skip this one.  Using the MATI Score tool without having a solid foundation in mapping manufacturing processes is going to lead to trouble down the road.  It is kind of like giving calculators to elementary school kids before they have learned to do math manually.  They will get the right answers, but they won't really know why.  Sooner or later that will catch up with you.

MATI stands for (M) Moves; (A) Activities; (T) Transactions; and  (I) Inventory.  It is a method of identifying and categorizing all of the non-value added waste in a manufacturing process without going to the time and effort of doing the detailed flow charting that goes into process mapping.  In other words, it is a calculator or a short cut.

In the course of a kaizen event, or any other effort that is intended to improve or modify a process, you simply add up those four things:

Moves - the number of time a part is physically moved in the process

Activities - the number of times a person has to do some non-value adding work to the part (the most common ones are performing a quality inspection or a cycle count)

Transactions - the number of times the part has to be transacted in your accounting/ERP/inventory control system

Inventory - the number of days of inventory on hand (if you need to calculate this in terms of weeks or months of inventory in order to keep the number manageable, you are probably not ready for the MATI Score tool.)

The MATI Score = M (moves) + A (activities) + T (transactions) + I (inventory)

Obviously, the lower the MATI Score is, the less waste there is in the process.

The purpose of the MATI Score is to quickly determine the amount of waste in the process in the current state, and to just as quickly evaluate the waste reduction impact of the changes you make in the future state.  It is intended to make sure that you are not simply pushing the inventory or other waste to another part of the process, without having to flow chart everything.  The goal, of course, is to continually reduce the MATI Score of every process. At Wahl it is required that a before and after MATI Score be calculated as part of every kaizen event.

It also provides the benefit of quantifying waste.  It forms the basis for measuring overall improvement, and gives you a quantified method for identifying the processes most in need of attention.

The genesis of the MATI Score idea was the need for some reassurance while we were transitioning considerable amounts of inventory from a warehouse to point of use storage, from MRP push to Kanban, and from a functional production layout to value streams.  With so many changes taking place simultaneously it was very helpful to have a quick tool to assure that we were not simply rearranging the waste, and that the changes were resulting in real improvements.

So there you have it.  The MATI Score does not eliminate the need for process mapping and I do not want anyone to leap right to it.  But if your mapping skills and knowledge are solid, it provides a quick and effective tool for tracking and  driving the non-value adding elements out of your manufacturing processes.

(How many other CEOs understand and live lean well enough to come up with an idea like this?  That the CEO came up with this might help you understand why Wahl is selling Made in the USA consumer products to Walmart and taking market share from their Made in China competitors.)

Ohno’s TPS

I began re-reading today the classic book Toyota Production System: Beyond Large-Scale Production by Taiichi Ohno. As I was perusing Ohno’s Preface I came across a series of quotes that I found useful.

Quote 1:

“The most important objective of the Toyota system has been to increase production efficiency by consistently and thoroughly eliminating waste. This concept and the equally important respect for humanity...are the foundation of the Toyota production system”

It is interesting that on the first page of the Preface of the book published by Norman Bodek and company over at Productivity Press in 1988, there is mention of the equal importance of waste elimination and respect for humanity.

I work at a company that is going through a bit of Lean conversion in the manufacturing groups. We teach an Introduction to Lean class to everyone (In fact, I’ll be teaching a session tonight). In that training we do not emphasize the point that waste elimination and respect for humanity are equally important even though one of the icons of Lean and one of the co-creators of the Toyota Production System mentions how important this concept is in the 3rd paragraph of his book. This book, by the way, was published in English over 20 years ago and in Japanese over 30 years ago.

By the 5th paragraph of the book Ohno made the following statement:

Quote 2:

“We are now unable to sell our products unless we think ourselves into the very hearts of our customers, each of whom has different concepts and tastes. Today, the industrial world has been forced to master in earnest the multi-kind, small-quantity production system.”

These are words of wisdom written in the 70’s but even more applicable today. How many of the problems we are experiencing today could have been mitigated by reducing the vast inventory of products built in mass and carried over worldwide supply chains. We simply need to get into the hearts of the customer and “make each item one at a time.” (Paragraph 7)

In the same way that each customer needs us to enter their hearts to provide them true value one at a time, we should seek to enter the hearts of the learners we are mentoring in Lean and provide them guidance one at a time. Tonight I’m going to make it a point to focus on the respect for humanity pillar of Lean in equal proportions as the continuous improvement pillar. What are you going to do?

Inventory Hoarding vs. Just In Time

It's always a pleasure to see an article make it's own point... especially when it is contradictory to the premise of the article itself.  Take, for example, a recent article on how companies are trying to streamline inventories in the face of the economic downturn.

The economic downturn is hitting companies so hard and so fast that even those that have made huge strides implementing inventory-control systems haven't been able to react quickly enough to avoid a costly buildup.

After falling sharply for a year, U.S. inventories shot up by $6.2 billion unexpectedly in the fourth quarter of 2008, according to the latest U.S. Commerce Department figures. The surge underscores the rapid demand decline that is hitting large and small manufacturers.

"The system went from full speed ahead to stop," said Ronald DeFeo, chief executive of Westport, Conn., mining and construction equipment maker Terex Corp.

The impact both cascades and amplifies the problem.

The upshot is that companies up and down the line are slashing prices and throwing the brakes on new production.  As they rush to clear away the excess, their actions tend to magnify slowdowns already underway.

Nothing really new, but then comes the couple of lines that piqued my interest.

Part of the problem is that many companies built stockpiles last year in the face of surging prices for items such as steel and plastics.  That goes against the principles of just-in-time production, which dictates holding minimumstocks of raw materials.  But such hoarding makes sense when prices are rising.

Wait a minute... didn't he just say that the increase of inventory "in the face of surging prices" was "part of the problem"?  Then how does the exact same thing, hoarding, "makes sense when prices are rising."?

The answer is that it doesn't.  Remember a few months ago when we were talking about the foresight of Southwest Airlines for locking in fuel at a relatively moderate price point?  Now a few months later their competitors are eating their shorts thanks to a precipitous reduction in fuel costs, and Southwest is now locked in at higher than market levels.

There's a global supply chain component as well.

Another factor making inventory management more difficult has been growing globalization.  Red Wing Shoe Company Inc. in Red Wing, Minn., produces in three U.S. plants, but also outsources some lower-priced lines to Asian factories.  Chief Executive David Murphy said he has been able to quickly curb production at his U.S. plants as demand slowed, but his inventories of imported shoes have swelled, in part because those orders were placed far in advance of the downturn.

The bottom line?  You need to either believe in the power of just-in-time, commit to it by absorbing some occasional swings in raw material pricing and demand, or just give up.  Long term competitiveness is truly based on a long-term commitment and mindset.

Waste in Speed?

A core aspect of lean is execution, fast execution.  Ohno and Shingo often pushed their folks to just try new ideas and refine later instead of endlessly discussing every possible nuance in an attempt at perfect planning... and thereby getting nothing done.  There's a lot of logic in that, and many of us have been at organizations that experienced "improvement paralysis."

But there's another side of the story, another aspect or extreme that needs to be avoided as well.

President Barack Obama has pledged to "wield technology's wonders to raise health care's quality and lower its cost," but many in the field warn that rushing the process of digitizing patients' records could lead to wasteful spending.

[snip political aspects of story, from both sides]

An unrealistically fast rollout could lead to unqualified technicians installing systems in ways that lead to frustration and backlash among doctors, warns Mr. Glaser, who serves on the board of the National eHealth Collaborative, a public-private partnership that aims to accelerate the development of health IT. "If it's too hasty, you can create so many bad experiences that people say...'My data's a mess and my patients are angry,'" Mr. Glaser says.

Waiting for the perfect solution doesn't work.  Jumping too quick is wasteful as well, both in terms of inappropriate or ineffective technologies and solutions being installed, but also in terms of creating customer frustration... which leads to difficulty embracing what could be a positive change over the long haul.

A Visit to the Laundromat

Remember those college days, a couple decades or more ago, when we visited the coin-op laundromat each week or so?  It's been a while.  But I still visit a couple times a year to wash some large items like the king comforter.  So it was this past weekend.

It's always an interesting experience thanks to the diversity in my small vacation fishing town.  Obviously there are the people a little down on their luck, the tourists, the guys biking down the Pacific Coast Highway, the fishermen, and people like me who are trying to squeeze in a large item wash between a Starbucks run and a quick workout.  It can be a bit grounding in reality.  In the laundromat we're all equals, all waiting our turn for the right size machine, all dealing with the fact that we can't reserve a spot on a machine like a spin class.

So there I was, sitting and waiting on the cheap plastic chairs, admiring the fading fishes painted on the walls, and the lean guy in me couldn't help but notice some visual controls... or sometimes lack thereof.  First, on the good side, were some of the newer machines.  They actually had some decent visual work instructions.

  

Not too shabby.  Even a cave man could figure that out.  But then, on an older machine...

 

"2.50 - Two dollars fifty cents - Do not slam door - Five 5 quarters pushed in twice"

I realize that the typical clientele is fairly challenged, like engineering college students.  But this could have been done just a bit better.  How about "10 x" and a picture of a quarter with "25c" in it? 

I had to use a fairly large machine for the comforter, as you see below.

It stands a bit over five feet tall.  See that lid on the top?  That's where you have to add soap/etc. into multiple cavities as noted by some embossed visual signage.  You have to look DOWN to figure out which cavity, and it's already over 5 feet up.  I'm not exactly short, and I had to stand on my toes. 

Wouldn't an easy solution be to have a visual indicator on the front? 

And finally, what's the best way to indicate that a machine isn't working?

 

Yellow tape holding the lid down and tape over the coin slot.  Effective, simple.  I was trying to figure out what was wrong with the system, and realized nothing was necessarily wrong.

Except that I remember the same machine being broken six months earlier.  Still broken, or fixed and then broke again?  Who know. 

The Impact of Mean Visuals

Those of us in the lean world know the power of visual controls to convey information, metrics, and methods.  But can the design of the visual control itself directly impact performance?  Take a look at how logos and mascots have been redesigned for various NFL teams... and the results.

Obviously the mascot change itself was not the sole contributor to each team's turnaround... or was it?  And similarly the last thing we want is to associate "lean" with "mean" any more than it already has been.

But perhaps we should take another look at those signs, metrics, andons, and such to ensure the design also conveys our intent.  Are we consistent in what an upward-sloping graph means?  Are colors, especially red and green, used to convey the same urgency positive or negative?

My old employer, a $10B company at the time, actually revised all of it's financial, QA, and operational reports to ensure that any negative number meant "bad."  It cost a bunch of money and headaches to implement and it seems silly, especially to those of us used to reading numbers in parentheses being "good" in several circumstances such as a "decrease in NCMR's", but the impact on the rest of the organization was unexpectedly large and impressive.  Everyone at all levels immediately understood that if they saw a negative number, it needed attention.  Multiply that by thirty or forty thousand people and you create some real change and value.

Management Improvement Carnival - The Best of 2008

John Hunter at Curious Cat has asked several of us to help co-host part of a larger scale Management Carnival Best of 2008 series where several bloggers are joining to recap the best posts from multiple lean or management improvement blogs this past year. The breath and quality of improvement information is rather incredible.

Check out the full list who have recapped several of their own favorite blogs

I'm going to do my best to select some of the best posts from the following blogs: LSS Academy, Got Boondoggle, Edge Perspectives and Work Matters.  So off we go!

From LSS Academy:

• Eight Reasons Your Lean / Six Sigma Initiative Could Fail - The dangers of using the wrong metrics and the wrong motives.
• One Piece Flow versus Mass Production - Ron creates a great video showing how one piece flow trumps batch production.
• Leadership Lessons from The Cheesecake Factory - the gemba, any gemba, can teach many lessons.
• Womack's "Lean" versus Ohno's "TPS" - Yes the new "lean" terminology can be a bit confusing when trying to map it back to original Toyota "TPS".
• Value Stream Mapping Overview - a series of posts detailing how to do VSM right.

From Got Boondoggle

• My CI - a great visual method to create and demonstrate individual continuous improvement projects.  Followed by...
• Top 12 FAQ About My CI - follow up information on how to create and implement this method.
• How do we Sustain Kaizen Results? - The kaizen is often the easy part; sustaining the results depends on the quality of the follow-up activities.
• Thinking Outside the Wooden Pallet - Have you ever considered how much waste is created by your forklifts?
• Master of the Obvious - Have you learned so much, been trained so well, obtained so many "belts"... that you miss the obvious right in front of you?

From Edge Perspectives

• Innovation on the Edge - Value and competitive advantage are created at the edge... places of potential and friction, where traditional products and practices are no longer adequate to address unmet needs or unexploited potential.
• Stupidity and the Internet - Is the internet making us stupid through its use of short twitteresque posts instead of in-depth analyses?
• The Bigger Consequences of the Big Sort - Similar to the above, do online communities create narrow viewpoints instead of the diversity forced by physical community interaction?
• Shaping Strategies - The opportunities created by developing strategy instead of simply adapting to changing conditions.
• Exploring New Forms of Economic Leverage - Most firms leverage their financial prowess.  But what about their capability and learning advantages?

From Work Matters

• Great Customer Service Story at Timbuk2 - How erring on the side of trusting people and believing that good things will happen, everyone is elevated.
• Leader's Apologies: Doing it the Right Way - Careers, business success, and customer service all improve if mistakes are recognized and apologized for... correctly.
• Another Asshole Infested Hospital - As if healthcare didn't have enough problems already.
• Dr. Giuliano's Ten Commandments for Minimizing Medical Errors - Continuing the topic of healthcare, but with a lesson for the rest of us.
• Leadership vs. Management: An Accurate But Dangerous Distinction? - The danger of just managing... and the danger of just focusing on big ideas.