All too often we find companies that are struggling with measures that don’t work.  Sometimes there are way too many measures for the people in the organisation to focus on.  Sometimes the measures are simply poorly designed and result in behaviour which creates waste and inventory.  Sometimes the measures simply don’t make sense to those being measured and are not taken seriously.  Sometimes the measures simply don’t help us focus on the causes of the problem or issue.

Our measures should provide immediate real-time feedback on performance, and create opportunities for improvement every minute of every day.  They should be driving us toward the the Ideal State for the process, and be helping us to eliminate waste and improve the flow through every process in our organisation.  They should be designed to engage and encourage the entire workforce to become actively involved in frequent “experimentation” to improve everything we do.

Our measures should also be designed to encourage us all to go and observe what is actually happening in the process.

The measures should form a balanced and dynamic link between our value streams and our daily problem solving processes.  To achieve “balance” it is useful to ensure we have measures that cover the following set of categories: Quality, Cost, Delivery, Safety and Morale (or Engagement).  The actual measures will depend on the process but should be metrics that are meaningful and “real” for the team who owns them.  To increase the level of ownership and buy-in it is useful to have the team involved with the creation and implementation of the measures, and to have the measures displayed close to the workplace in a format that the team can update easily and frequently.  Also it is important to remember the selected measures need to be metrics that the team can actually influence.

But what should we do if we already have measures in place?  Well here are 3 simple ways to start improving your measurement systems.  These have been written by Stacey Barr.  (Stacey’s contact details are included below.)

#1: Stop Reporting It And See What Happens

Decide, this month, to simply not include all the usual measures and statistics in the performance report that you suspect no-one refers to. You’ll soon work out, by trial and error, which measures really do matter, because they’ll be missed. It will help everyone else work out what really matters, too.

#2: Test Its Alignment To Strategy

Grab a flipchart page, or whiteboard, some pens, your business plan, and a list of all the measures you currently report. Along the top of the page or whiteboard, write each of the business goals. Then one goal at a time, list the measures that really, truly are fabulous evidence of the achievement of that goal. If the measure isn’t fabulous evidence, then flick it.

#3: Have A Single Version Of The Truth

Don’t measure the same thing in 12 different ways. Decide the one true way to calculate and report the measure, and standardise on that. I’ve seen immense amounts of time wasted in measuring something as straightforward as cycle time over a dozen different ways by almost as many different people, simply because no-one drew a line in the sand and said “Here’s how we measure this.”

Stacey Barr is a specialist in organisational performance measurement, helping corporate planners, business analysts and performance measurement officers confidently facilitate their organisation to create and use meaningful performance measures with lots of buy-in. Sign up for Stacey’s free email tips at www.staceybarr.com/facilitators and receive a complimentary copy of her renowned e-book “202 Tips for Performance Measurement”.

Why is it so difficult for many organisations to implement what are relatively simple concepts included in Lean?  Could it be that usually the leadership and cultural difficulties are larger than we thought?  Could it be that we have underestimated the effort required to achieve the levels of engagement necessary for successful cultural change?  Could it be that our people are continually distracted by other priorities that require urgent attention?  Could it be that our outdated measurement systems are diverting the attention of our teams away from the Lean message we are promoting?  Could it be that we have not provided enough good leadership or could it be that we have not developed a compelling strategy for change over a long enough timeframe?  Could it be that we are expecting our people to implement Lean in their “spare” time or could it be that Lean is something we think about every now and then, or when it’s convenient?  Could it be that we are thinking Lean is just a set of tools?

Here are 10 points to consider for those organisations implementing Lean, written by Jamie Flinchbauer, co-author of The Hitchhiker’s Guide to Lean and Partner at The Lean Learning Center.  These could be useful points to consider when the going gets tough in your Lean journey.

1. Rome wasn’t built in a day…and neither will be your lean transformation. Lean is not a one- or two-quarter commitment. It takes one to two years to build the necessary momentum, and from there your journey will last forever. Yes, tools such as kaizens can provide very quick and significant improvement. But, without taking the time to implement a program that yields sustainable benefits, process improvements gained by lean tools will slowly deteriorate back to where you started. Significant and sustainable results will occur throughout the entire process, but the most profitable returns are realised through a two-to-five year plan.
2. Lean transformation is not a part-time job. Don’t expect someone to lead the lean charge in his/her spare time. You need to assign a dedicated leader or team to take on this challenge. It requires daily attention from leaders who fully understand the scope of the project and who won’t get caught up in daily distractions. Most cultures are centered around solving today’s problem, reacting faster and better, and getting results today or tomorrow. Stuck in that culture, it is hard for leaders to consider a multi-year journey — people need to be extracted to focus on a different timeline. In addition, these leaders require continued support from management throughout the implementation.
3. Lean is more than just tools. Lean is not born from what you see, it is born from how you think. Lean is a set of rules and principles, not just tools. Tools focus on physical system changes, but that is not where the heart of lean beats. The entire way of thinking must become embedded in every person of your organization. You may fix one problem or process with a lean tool today, but if the old thinking continues, it will recreate the old problems. Only new principles or beliefs change behaviors, not systems or tools. Sustainable lean change — the kind that builds momentum — comes from the mind and heart of all employees.
4. Lean is a journey that never ends. There is a tendency for companies to declare “We’ve done it. We’ve achieved lean.” The truth is, lean is a constant, never-ending process. You will always strive to be lean, but you will never get there, because there is always a gap between where you are and your ideal state. If you believe that your journey has ended, you’ve failed. Even when you can consider yourself a success, do not stop. Success is exemplified by an organisation that continues to move forward at such a pace that it would be difficult to even try to slow it down. Consider Toyota — no matter how much better they are than their competition, they continue to find more and more opportunities to improve each and every year.
5. Be prepared for resistance. When change is proposed, people often feel threatened. Some will think it’s because there has been something wrong with what they were doing, but most will just be uncomfortable with the unknown. So, as your company embarks on this journey, you must work to help people understand why, what and how. Remove the fears — or make NOT moving forward the more fearful choice. Also, many people think lean means cutting staff, when in reality it’s about working smarter to preserve heads and even increase the workforce through market growth.
6. You need leaders to take on this challenge, not managers. Managing is maintaining current reality. Leadership is moving people toward the ideal state. Lean transformation is about leadership. And leadership is not a position or rank. Look for people at every level of the enterprise who are capable of leading. If lean is about transforming thinking, then to lead lean, you must be able to teach.
7. Be prepared for the investment — in both people and time. People will need to learn new skills and they will need the time to gain them. This means experimenting with every process everyday to get it right. There is also a financial investment, mostly in training, but also in process changes. However, the evidence is clear that the payback for this period is in months and not years. You can use focused-improvement tools such as kaizens to get immediate gains and pay for the investment. The potential of difference between lean and non-lean companies is not 5-10 percent, it is 100-1000 percent improvement in quality, cost, delivery and, of course, profit.
8. Lean is not just about the shop floor. Taiichi Ohno, one of the fathers of the Toyota Production System, said decades ago that “the Toyota Production System is not just a production system.” If you reduce lead time in manufacturing by 90% and can get product out in hours, but order entry takes four weeks, then you aren’t really moving forward in the market. You must attack every corner of the business from accounting to human resources to manufacturing.
9. There is no recipe, but there is a roadmap. A recipe tells you exactly how to do something - the amounts, sequence and timing. There is no such recipe for lean success since every company starts with a different set of ingredients (or factors and constraints). However, there is a roadmap. There are guideposts along the way to help you determine where you are and offer potential solutions to help you get to where you want to go. Learn from as many other journeys as possible to help understand the roadmap.
10. Don’t just copy the answers. Many people have tried to succeed at lean in the past by copying the solutions that Toyota or others have found, either through benchmarking or out of a book. The problem is, this is like a kid copying off someone else’s test only to find out they were taking a different exam. Your company is unique and will likely have some unique problems and constraints — you must engrain lean thinking in your organisation so you can find your own answers.

Over the last year Efficiency Works have been training Stoddart Manufacturing in competitive manufacturing and lean thinking.  In an article on Industry Search Bill Stoddart the Managing Director talks about how this has been good for his company and warns against the temptation to drastically cut spending on skills and training in tough times. He says

“To maintain a competitive advantage business needs a skilled workforce.

“But it’s not just about being competitive. By investing in skills you retain your workforce. Investment in training produces a highly skilled and motivated workforce of staff who want a meaningful career.”

Read the full article here.

www.industrysearch.com.au/features/industry_leader_warns_against_shortage_in_downturn_2831

How does TPM relate to Lean Manufacturing? Total Productive Maintenance (TPM) is really about applying Lean Manufacturing to the way we care for our equipment. TPM is an important part of our Lean Manufacturing initiative, because without it we will experience difficulty as we improve the flow of materials through the introduction of pull systems and the elimination of waste between the steps in our process.

Fundamentally, TPM is about applying flow, takt, standard work and pull systems to the way we maintain and care for our equipment. It is a culture change in the way people care for equipment that is much more than marking, labeling, cleaning machines, or operators doing maintenance work. Total Productive Maintenance is an equipment and process improvement strategy that links many of the elements of a good maintenance program to achieve higher levels of equipment effectiveness. It includes a set of techniques pioneered by Denso in the Toyota Group in Japan, to ensure that each machine in our production process is always able to perform its required tasks.

The approach is called “total” in 4 main areas:

Total Participation supported by “Total” Leadership. Firstly TPM requires the total participation of all employees, not only maintenance personnel but line managers, manufacturing engineers, quality experts and operators. This involves everyone knowing their exact roles and responsibilities, and then executing those roles reliably, on a daily basis. For operators this will involve well developed checklists and simple maintenance tasks set out every shift. We will need to ensure that abnormalities are recorded and reported promptly to maintenance personnel for repair. The maintenance technicians will be required to look for ways to eliminate those problems and at least establish PM’s to ensure the problem does not reoccur. Engineering will be required to aid maintenance in ongoing equipment improvement. And managers will provide the discipline in the system by ensuring relevant metrics are collected and channeled into the problem solving process.

Total Productivity. Secondly TPM is aiming for total productivity of equipment by focusing on the six machine losses: breakdowns, changeovers, minor stops, speed losses, scrap and rework. Years of experience and measuring at Toyota has shown that up to 1/3 of all production downtime is caused by simple limit or proximity switch confirmation failures. Our aim should be to eliminate all production “downtime” and at least as a stopgap aim for “single minute maintenance”- less than 10 minutes for any breakdown.

Total Lifecycle. Thirdly TPM addresses reliability throughout the total life cycle of the equipment to revise maintenance practices, preventative maintenance intervals, activities and improvements depending on where the equipment is in its life cycle. TPM includes daily maintenance by operators, namely simple checking and lubrication that results in early detection and fixing of problems. This aspect is probably one of the most significant aspects of TPM. This may involve more widespread use of “Condition Monitoring”. Specialists become involved to carry out “machine kaizen” or corrective maintenance. At Toyota this is the result of detailed studies over the whole life of the equipment to see where time, spare parts and dollars have been consumed, all in the search of maintenance prevention.

Total Systems approach. TPM also includes a focus on the whole system with a constant effort to improving all aspects of the equipment lifecycle, pursuit of efficiency and participation by everyone. This includes linking and improving all support activities eg employee training and development, spare parts management, document control, maintenance data collection and analysis, and feedback to equipment vendors.

Unlike traditional reactive and preventative maintenance, which relies on maintenance personnel, TPM involves operators in routine maintenance, improvement projects and simple repairs. This would typically include daily activities such as lubrication, cleaning, tightening and inspecting equipment.

In this way, for those of us with equipment centric processes, TPM is an important part of Lean Manufacturing.

Adapted from Robert M Williamson - Strategic Work Systems and the Lean Lexicon - Lean Enterprise Institute

Recently Efficiency Works exhibited at the 2008 Queensland Manufacturing Technology Exhibition (QMan) held at the Brisbane Convention & Exhibition Centre from October 21-23.  During the exhibition we met many new people interested in Lean Manufacturing and refreshed some existing acquaintances.  During the exhibition many visitors listened to a range of interesting speakers.

The keynote speaker was Andrew Smith from the University of Ballarat who presented the findings from a research project completed for the National Centre for Vocational Education Research (NCVER). The research project is called “To have and to hold: Retaining and utilising skilled people” and covers the issues companies should be focusing on in order to attract and retain good staff.  The findings highlighted the importance of creating the right learning environment and in particular the need to provide nationally recognised training similar to the Lean Manufacturing training available through Efficiency Works.

The full report can be found at www.ncver.edu.au/research/proj/nr06004.pdf