Every activity that doesn’t add Value for the Customer costs you money. Money that increases cost, reduces margin and makes you vulnerable to leaner competitors.
It’s the tax that you pay for inertia and inefficiency. And it’s the tax that keeps on taking. Every day that you aren’t implementing Lean. Every day that you lose focus on improvement. Every day that you keep on doing what you’ve always done.
With labour and materials costs continuing to rise, and customers wanting price reductions, it’s the tax that you must avoid. In fact, reducing Waste-Added Tax should be part of everyone’s daily activities.
Here’s a suggestion: show WAT as a line in your Management Accounts. Measure it, publish it, hold people accountable, set targets and apply your problem-solving process to reducing it.
In the late ’80’s I was fortunate to join a very fast-growing electronics company that was one of the first UK manufacturers to adopt what was then known as “Just-in-Time Production”. I was employed as Materials Manager to implement a new MRPII system and to introduce Just-in-Time supply to a reduced supplier base. The concept of “Lean” was not then known, and the main focus of business improvement activities was around Total Quality Control, Zero Defects and Quality Circles.
One of the very few English language books available at the time was Richard J. Sconberger’s Japanese Manufacturing Techniques, first published in 1982, and still on my bookshelf. Even the title of the book shows that the main focus then was simply to copy what were thought to be the main techniques of successful Japanese manufacturers. In fact, each of the book’s nine chapters deals with one of these “techniques”. Chapter 4 in particular indicates this thinking: “The Debut of Just-in-Time Production in the United States. Lesson 4: Culture is no obstacle; techniques can change behaviour”
Sadly, this view still persists to this day with some manufacturers. They still see “Lean” – as we now call it – simply as a set of tools and techniques to be learned and applied. Not surprisingly this narrow approach rapidly leads to disappointment and then a search for the next “initiative”.
Over the last 30 years we’ve come to realise that Lean is a company-wide philosophy that requires strong Leadership at all levels, a respect for people and a willingness always to look for a better way. Yes, the right tools and techniques are important, but there’s much, much more to Continuous Improvement than tools and techniques.
If you’d like to share your own experiences of “Just-in-Time” and Lean, please register and comment. And if you’d like some help with your own Lean journey, please email me at Andrew.Nicholson@ImproveMyFactory.com
We’re all aware of the “Busy Fools” syndrome – high output, high costs, high stress, and high risk. When you’re up to your neck in alligators it’s tempting to just keep ploughing on, Head down, bottom up, you know that you’re wasting time and money but you hope for the day when everything “quietens down” and “gets back to normal”.
If customer service deteriorates, this might be self-fulfilling. An IT industry insider once described to me the typical cycle of a high-growth IT business – rapid growth leads to poor service, which slows growth. Service improves, the company grows, service declines, ….. and so the cycle continues.
If we can avoid this decline in service levels then we’ll need to accept that things won’t just “quieten down” and that “busy” has become the new “normal”. So we need to know what to do about it.
And businesses who are “Quiet” and “Efficient” also need to have effective strategies.
That’s why some years ago we developed this simple “Busy” / “Lean” Grid, to help business leaders understand where their business is, and what they need to do about it. Let’s have a look at each of the four quadrants:
“Busy and Inefficient” – the “Busy Fools” scenario. The busier we are, the less efficient we become. Stress levels increase, service declines and productivity tails off. One of our biggest challenges (as a management consultancy and training organisation) is in persuading prospective clients to stop chopping down trees and spend some time sharpening the axe! In this situation very few business leaders have the courage to make everyone “down tools” for a week to transform the way they operate, so we need to find another way. The solution is to spend a couple of hours training staff to identify the main sources of wasted time and effort, to generate improvement actions, and to implement a prioritised improvement action plan. Pretty soon, productivity increases, stress levels are reduced and morale improves.
Quiet and Inefficient” – the “About to go out of business” scenario. At this point, massive action is needed to turn around the company’s fortunes. Sales, service and efficiency all need to increase – often with little or no investment available. Fresh thinking is required, often driven by new Leadership.
“Quiet and Efficient” – the “All dressed up with nowhere to go” scenario. Being Lean is all about adding value and eliminating waste. Many organisations like eliminating waste but far too few focus on increasing the “value-add”. If you find yourself in this situation then you need to get close to your customers, understand exactly what they value and are prepared to pay for, and find more and more ways of providing this. As part of our work with clients in this quadrant we focus on VAST – Value-Added Sales Techniques. In the longer term, this needs to become part of effective Supply Chain management.
“Busy and Lean” – the “making it look easy” scenario, where most of our clients are! When you’ve truly embedded Lean thinking and Continuous Improvement, the rewards are very clear. Even in a recession, sales increase, margins improve and people still find time to make this month better and more efficient than last month. These World Class organisations invest broadly across the business, they innovate their products and processes, they look to inspire their employees and stakeholders and they understand “why” they do what they do.
Whichever quadrant your business is in, if you’re keen to improve contact info@NicholsonConsultancy.com. We can help you add value, reduce costs, and “work smarter not harder” – all at the same time!
Maybe it’s just me but I’m regularly disappointed when people who should know better confuse the two. So here’s my little rant:
Unless you work in a very well-run hotel, please don’t pretend that “Housekeeping” is anything like 5S – it isn’t!
And if you’re doing 5S properly please don’t undermine it by calling it Housekeeping!
At worst, Housekeeping is a one-off tidy-up. At best it’s a standardised regular tidy-up that gets checked. Don’t get me wrong – it can be very effective and in some environments it might be all that’s needed.
5S on the other hand (sometimes also called 5C or CANDO) is a disciplined, systematic approach to workplace organisation. It uses simple visual management to
minimise wasted time and effort
establish “One Best Way”
So here’s a little challenge for you – have a close look at your business and each workplace within it, and then
if you’re at an early stage, decide if basic Housekeeping is all that you need (being tidy and looking good), or if you need to invest time and effort to reap the full benefits of 5S
if you think you’re already doing 5S, take an honest look at the list above and check how many of those benefits you’re currently achieving. If there are any gaps, maybe it’s time to reinvigorate your approach to 5S and raise your game
And if you’d like some advice, training and hands-on help to implement and sustain 5S, please contact Andrew.Nicholson@ImproveMyFactory.com or call (UK) 01325 328855.
It’s easy to become sceptical about Vision, Mission Statements and the like adorning the walls in Reception, but working for an organisation that does worthwhile work that you believe in or identify with, is increasingly important.
We need to feel that what we do has some purpose and meaning, and we’ve probably heard the truism that “We are happy to the extent that we are in pursuit of worthy goals”
Hoshin Planning (Policy Deployment) is a very structured way of addressing this. Put simply, the idea is to cascade an organisation’s goals – by discussion and agreement – through every level of its hierarchy. Although it appears simple it often takes years to introduce the approach effectively. Done well though, everyone can see how the projects that they are working on fit into the “big picture”.
More easily, a good employee appraisal system should help translate the organisation’s goals into objectives, targets and measures for key staff.
Even more simply, regular one-to-one sessions where employees agree objectives and receive regular feedback, can be a great way of ensuring that employees understand how and why what they’re doing fits into the “big picture” and why it’s important.
Whatever technique we use though, we need to help employees understand that their work is important and valuable and that it contributes to a worthwhile goal. From a Leadership perspective we need employees to understand not just “what” they need to do and “how”, but also – and most importantly – “why”. Speaker and author Simon Sinek explains this in his “Start with Why” Ted Talk on YouTube.
… and if you’d like some help to find the “Why” in your own manufacturing business, contact Andrew.Nicholson@ImproveMyFactory.com
Take an active interest in helping your employees to develop – you’ll boost their skills and their motivation!
Most of us like to feel that we’re making some progress in our lives and our careers. We want to keep our minds active and we want to believe that tomorrow we’ll be more knowledgeable, more skilled or more adept than we are today. And most of us feel happier when we’ve got something to aim for – “We feel happy to the extent that we are in pursuit of worthy goals”…
Ultimately we’re each responsible for our own career progression and development but it can be difficult to do it all on our own. And that’s particularly true if we’re not sure what skills we might need in the future.
Larger organisations may have HR staff with active “talent management programmes” who provide career counselling, well-planned training and development opportunities, and the like. But for smaller organisations there’s often very little help or it falls to the employee’s immediate supervisor or manager and often is low on their list of priorities.
An alternative approach is to provide access to a mentor or “career buddy” elsewhere in the organisation – ideally a more experienced manager that the employee doesn’t directly report to. They will have an idea of the roles that are likely to be required in the future, and can guide their mentees towards how best to acquire the skills and knowledge needed to fill those roles. It’s also a great way of helping more experienced staff find new ways to make use of that experience. Try it!
… and if you want effective, bespoke training and development for your manufacturing employees, contact Andrew.Nicholson@ImproveMyFactory.com
Manufacturing clients that we’ve been working with at a strategic level already have well-rehearsed plans in place for Brexit. For those who are still reeling with shock here are some of the short-term actions that Manufacturing Leaders might consider – the “Six R’s”:
Reassure: the first essential role of Leadership in turbulent times. Ramp up the communication, make yourself available, get out and about in the workplace. Let people know that despite recent rhetoric no-one’s job will be lost this month or next. In particular, reassure migrant workers that they are valued and wanted and will continue to be so.
Resilience – time to update your business risk assessments and make sure that you have robust plans in place and contingencies for the things that won’t go to plan! In particular, consider broader supply chain risks (see below).
Rates 1 – Exchange Rates: the pound will be weaker for a while so ramp up the exports and continue to use Lean to in-source materials and components. De-risk the Supply Chain and take manufacture and control in-house.
Rates 2 – Interest Rates: we simply don’t know if interest rates will go higher or lower so shorten your payback periods slightly but keep on investing. Short-term turbulence often leads to cheaper asset prices so look out for bargains – don’t put off that acquistion but instead go flat out and bargain for a lower price.
Routine: now is the time to reinforce Standard Work, One Best Way and all of the “boring but important” daily disciplines that make for successful long-term business.
Remember: turbulence doesn’t change the world but it makes for bigger opportunities and bigger threats – update your SWOT review, spot the opportunities and act decisively.
As our knowledge and practice of Lean has developed, many of us have come to the conclusion that there is no standardised “one size fits all” roadmap or sequence that details every step of “how to implement Lean” for every organisation. But there are three vital stages that it makes sense to follow. Here they are:
1. Grasp the Current Situation. A full understanding – by all team members – of the current situation, is the essential starting point for any improvement activity. Questions to ask might include: Exactly where are we now? What are we trying to do here? What is our purpose, our mission? How do we add value for our customers? Honestly, how are we performing now? Are our measurement systems capable of telling us? Are we collecting (only) the right information to help us to make decisions and to take action?
2. Achieve Stability. What are the most important processes in your business? How do you develop new products or services? How do you deliver them? How do you plan, execute and measure the vital few? How do you manage your people, from cradle to grave? Are these processes capable, under control and stable? How do you sustain “One Best Way”: do you provide clear instruction, effective training, regular monitoring, wide-spread mistake-proofing?
3. Implement Lean. Only now can you begin to change the way you work, with a real prospect of success and sustained improvement. Once you have stable, repeatable processes you can analyse them and find ways to do them better. With the right tools and support the team can simplify and streamline the processes so that you become more efficient and more productive, and achieve better outcomes.
The detail of how to do it – and the exact tools to use – are gained only through years of experience. If you don’t yet have that experience you’ll need to hire it in, but make sure that you coach your people so that they “learn by doing”. By following this approach, and by rigorously following the PDCA Improvement Cycle (Plan-Do-Check-Act), you can genuinely transform your organisation and make Continuous Improvement a way of life.