Lean Improvement - Breakthrough Horizons

Measurement and Return on Investment

2016-02-16T19:06:00.001-05:00

Lean Nation,

It has been a while since my last blog. Too long in fact, but I am committed to blogging more frequently in 2016. Today's blog is on measurement and Return on Investment. Great organizations can measure their results. They can measure them at the local level, at the site level and the enterprise level. And they can measure things in real time. No waiting for month end reporting or quarterly reporting to know which way things are trending.

Aside from real time measurement, great organizations simply have the ability to measure things. I firmly believe capability follows motivation. Great organizations do not accept the "computer system" can't give us that information. they go get it. Automated if possible, manually if not automated, and with a stop watch if necessary. "Go and See" is the best way to see if something is working.

Before I go on, let me state that measurement is critical because it is the only way we can show improvement. If you can't measure it, you can't improve it.

Now before we get into ROI, let's review what to measure. Measurement in an improving environment comes from one of five dimensions. Quality, Delivery, Cost, Staff Morale, and Growth. Collectively these measures make up we call a balanced scorecard and also make up what we call the "true north" dimensions. When waste is removed from a process, typically all five of these dimensions move simultaneously. Done well, you can expect double digit growth in each of these measures year over year. The following table explains the five dimensions in more detail.

True North Category	True North Measure Definition
People	Staff morale or staff engagement
Quality	Defects per unit of service or process outcomes related to meeting the customer’s requirements
Delivery	Lead time for goods and services from customer need identified to customer need met expressed in time (minutes/hours/days)
Cost	Hours or $ consumed per unit of service. Typically a measure of productivity
Growth	Increases in revenues or volumes

Now during the course of improvement, we want to ensure we have a good return on investment. A well done lean management system will deliver an ROI of 3 or 4 to one on an annual basis.

Be cautious, however, as every A3 and every project will not return hard dollars. Nor should it. But the collective of your improvement efforts should return 3 or 4 to one annually. One of the biggest mistakes organizations make is expecting every single project to return hard dollars. This neglects the dozens of important pieces of work that return soft dollars, improve the customer experience, improve staff morale, make the workplace safer, and change the culture of the organization.

One of the techniques I like to employ is running a multiple team kaizen event. In this circumstance, one of the teams should have a hard dollar savings. This in effect funds the other teams. The balance of the teams can attack a variety of different wastes, but may or may not have a hard dollar savings.

Lean Blessings,

Ron

President and Sensei

Breakthrough Horizons LTD

www.breakthroughhorizons.com

Measuring and Taking Action

2014-09-16T11:13:00.003-04:00

Lean Nation,

Deep sigh.....There is much work to be done. This blog begins with a story. A true story at that. One of my peers has a client that has been struggling with creating oversight for their improvements. Their current set-up is a scattering of open and closed A-3's around an accountability matrix on a wall. I am working from the assumption that everyone knows what an A3 is.

Technically, A3 is a paper size; 11" by 17". It is the largest sheet of paper that can be faxed. More specifically, Wikipedia defines the A3 as follows. "A structured problem solving and continuous improvement approach, first employed at Toyota, and typically used by lean practitioners."

So consistent with a theme that I have blogged on repeatedly, all improvements should link to the organizational strategy. This organization was trying to show their strategic intent of their lean work (through A3's posted on the wall) aligned to their key measures. This organization had sound strategic pillars, People, Quality, Access ( Delivery), and Value ( Cost). Their outcome measures were solid as well.

The problem was the action taken to drive the outcomes measures was lacking. In an attempt to create a sense of urgency, this consultant created some trend charts of the key measures to show lack of both action and results.

The response from the Senior Leader was “nothing new here, We look at this every month”. I explained they we could go beyond looking at it every month and start using the data to identify priority improvements, accountability……….His response was that their organization is getting away from using metrics "like this" because people just game the numbers.

In simplest terms, if you can't measure it, you can't improvement it. When the senior leader of the organization (by the way this is an $800,000 enterprise with 6 sites) doesn't want to measure key outcomes, lean improvement is going to be tough sledding.

We have much work to do in educating leadership.

Lean Blessings,

Ron

Ron Bercaw

President and Sensei
Breakthrough Horizons Ltd.
www.breakthroughhorizons.com
2 time Shingo award winning author

The secret sauce of lean leadership

2014-09-01T21:27:00.001-04:00

Lean Nation,

I have been very blessed in my life. I have worked for and with many companies. Some were large and some were small. Some were publicly traded and some were private. Some were union and some were non-union. Some were high tech with new products coming to market and lots of automation and some companies were low tech with lots of labor. But most importantly, some had great leadership and some had atrocious leadership. I am now convinced that every job was a stepping stone to something better, even though I couldn't see it at the time.

This is a lean blog, though, and I am pretty sure no one cares about my work history. But I took two important learning's away from this experience. The signs had always been there, but they were never clear. The signs were solidified about a month ago in a conversation with a 40 year lean veteran. I asked him what are the keys to creating a culture of improvement . He said unequivocally the key is leadership.

I asked him to be more specific. He said leadership needs two skills to be successful at improvement. The first is not a surprise. He said that leaders need to hold everyone accountable to follow standard work. This means staff and management. This means "special" employees like physicians and engineers, and lawyers. And this means leadership like directors, chiefs and vice presidents.

I see in many organizations that the staff is held accountable. But the further you get from the staff, the less accountability there is. This creates many problems, but most notably, lack of leadership standard work drives the majority of the waste in the system.

The second leadership skill is the ability to create a tangible vision. While lean at its most fundamental, is about seeing and eliminating waste, sometimes the entire system is so wasteful, it needs to be totally re-designed. While many leaders agree with this statement, many fail to act in any meaningful way. The risk of failing is too great. The culture change too large. We will upset people. This has worked in the past. Look how we benchmark....The list goes on.

One way this plays out is the creation a fuzzy strategy, with unattainable or un-measurable goals. The lower levels of management, in an attempt to meet the strategy, embark on multiple and frequently competing initiatives. This results in limited improvement, poor results, and lots of frustration.

Great lean organizations have a clear vision and strategy. There is no guessing on the approach, measures or expectations. And they don't dodge the unpopular issues, sacred cows, or silo-ed organizational structures. There are no untouchable employees. Everyone participates and every is accountable. Transformation is the goal.

So looking back on my career and my consulting practice, I can attest that every transformation that failed was because of a gap in one of the two leadership skills. Either the accountability framework was not in place, or leadership did not have the courage to create the correct and clear vision leading to sub-optimal results and no culture change.

How's your transformation going?

Lean Blessings,

Ron

Ron Bercaw
President and Sensei
Breakthrough Horizons Ltd.
www.breakthroughhorizons.com
2 time Shingo award winning author

Standard work for lean experts

2014-07-14T19:45:00.000-04:00

Hypocrites? I can't think of a better word. Let me explain. Many organizations are not getting everything out of their improvement efforts. So using lean thinking, we have to diagnose the root cause of the lack of results.

The common culprits; lack of leadership, no real-time problem solving, and no visual management to discern normal from abnormal are not going to be discussed. I have committed substantial commentary to the subjects in previous blogs. I want to discuss lack of standard work.

We should know by now that standard work is the underpinning of lean success and improved performance. Lean tools exist to help to make waste visible and then eliminate those wastes. The concepts of continuous flow, pull, and zero defects have been well documented and eliminate many of the seven forms of operational waste. But the waste will return if the remaining work is not standardized.

Standard work represents the safest, easiest, best know way to do something. It is recipe that when followed leads to the highest quality, shortest lead-time, and lowest cost way to complete a process. It brings life to flow, and pull, and defect free.

Any credible lean expert will be competent with standard work, and can teach the concepts, document the process and teach team members how train and certify team members in standard work.

So here is my question, when it comes to managing an improvement cycle using the scientific method, where is your standard work?

To get the most out of your improvement process, four things need to be considered.
1. Standard work should exist and be utilized when preparing for improvement.
2. Standard work should exist and be used when running and improvement.
3. Standard work should exist and be used when sustaining improvement.
4. Standard work should be followed.

Do you have written standard work? Do you follow it? If not.......you are a hypocrite. And it might be costing you some improved performance. Poor preparation, poor event execution, and poor sustainability all lead to sub optimal results.

So if you have a standard work gap, you can now take a countermeasure.

Lean blessings,

Ron

Ron Bercaw
President and Sensei
Breakthrough Horizons Ltd
www.breakthroughhorizons.com

1.

Are your internal lean experts excelling?

2014-03-29T18:17:00.003-04:00

Lean nation,

Today's blog will review an important lesson. If you have read any of my blogs in the past, your will quickly recognize this theme. About 1/3 or more of my blogs focus on this topic. Have you guessed it yet?

Leadership

I was teaching a Master's class at the University of Toronto, and an adjunct this week on healthcare quality improvement. I had a class of some the best and brightest minds in healthcare including a blend of physicians, clinicians, and administrator's. It is inspiring that our next generation of healthcare leadership is getting a grounding in lean quality improvement.

This class was an intense course. 4 days of consecutive lessons. I prefer teaching in that format since the concepts are progressive in their application and the back to back consistency enables better retention and application of the material. The questions I received from the class were very interesting and an excellent gauge for what is happening within the healthcare industry. As least as it relates to the students in the class. And this class was international in their make-up.

Would you be able to guess where the majority of questions came from? Yes there were thee usual list of questions related to tools and their application. The concepts students struggled the most with included the following:

the application of takt time
properly completing a time observation
properly completing a loading diagram
applying the scientific method through the A3, and
process control

Ironically, the broader issues with the class were not tool related at all. There were leadership related. As we talked through linking lean improvement to corporate strategy, removing the barriers to large scale organizational change, dealing with accountability issues, one theme became apparent. Leadership in these students organizations were unclear of their roles, or not engaged in the improvement process at the level required to be successful.

All of the major issues that need to be resolved to transform an organization must be dealt with directly by senior leadership. This topic dominated the class from the first through the fourth day. I had to spend a lot of time addressing the leadership aspects of each of the change concepts. More time was spent talking about the tricks to get leadership's attention.

Let's go back to the title of this blog. Are your lean improvement experts excelling in your organization? If not, the problem may not lie with the improvement team, it may lie with leadership.

Lean Blessings:

Ron

Ron Bercaw

President and Sensei

Breakthrough Horizons Ltd

www.breakthroughhorizons.com

Shingo award winning author

How long does is take to transform to a lean enterprise?

2014-03-08T12:16:00.000-05:00

Lean nation,

I hope everyone is doing well with the un-seasonally cold weather over the past 10 weeks. While we all like to complain about the cold and snow/ice, the change in climate does two important things for us; 1) it kills bad bugs , and 2) the melt off fills the lakes and streams. So let's count our blessings and look forward to a nice spring and summer season.

One of the questions I frequently get from my clients is how long does it take to transform? This is a great question, but one very difficult to answer. Third parties that offer improvement and transformation services will answer 3-5 years. No corporation that ever actually "transformed" has completed the journey in 3-5 years.

The true test of transformation has few acid tests:

1) Can the organization weather the change of their change agent? I have seen many companies do great things for 3 years. When the CEO, or the GM leaves, the improvement leaves with them. This is the most common cause of lack of sustainability. Is your improvement effort focusing on developing all of the members of the senior team to weather a change in leadership? Or is one person driving the bus. I have seen an organization do 10 years of great improvement work only to have a new CEO wipe out the entire improvement department within 3 months of their arrival.

2) Another red flag as that lean is an "operations" thing. improvement never moves beyond the operational area in to admin, finance, HR, new product development, maintenance , supply chain, etc. If this is the case, you are are risk of not transforming. The organization is too shallow at the leadership levels to recognize the benefits of transformation for the entire enterprise and even the extended enterprise.

3) Another common failure is lack of a long term view. Organizations set goals of transforming every thing and everyone in 3 years. 100% of all people trained! World calls status in 3 years. While this might impress wall street or the board, this is not a path of transformation. True transformational success requires a focused approach to improvement aligned to corporate strategy. The pace should be calculated and based on sustaining improvement and changing culture, not number of people trained, or number of projects completed. Truly transformational efforts want lasting outcomes ( results ) and culture change, not effort. This is what publicly traded companies have a difficult time transforming. the measuring stick is making the next quarter's guidance , not really sustaining improvement in performance and culture.

4) An additional factor is is self reflection and engagement. A Toyota executive once commented PDCA sound simpler right? 10 years for Plan, 10 years for Do, 10 years for check, and 10 years for Adjust. 40 years to learn PDCA? If we do some self reflection, we all have some work to do.

So now that have covered why organizations don't transform, what is the number of years required to transform an organization? I'm not sure there is a magic number, but if I have to be pinned down to a single number I would estimate 2 decades. 20 years! Most organizations jump from shiny object to shiny object. Quality circles, TQM, empowerment, etc. This behavior fails to transform an organization. Learning can't occur when the methodology and language changes every 5 years.

You do not, however, need have to wait 20 years for results. Improvement, done properly, should immediately deliver results to your customer, your organization and to the staff.

Lean Blessings:

Ron

Ron Bercaw

President and Sensei

Breakthrough Horizons LTD

www.breakthroughhorizons.com

Shingo Award winning author

How to survive change fatigue

2014-01-26T20:49:00.001-05:00

Lean Nation,

Today's blog will focus on the inevitable change fatigue. If you have followed the advice in either of my two publications, "Taking Improvement from the Assembly Line to Healthcare", or "Lean Leadership for Healthcare". Or followed my advice on earlier blog posts. You will now understand that creating a lean culture has some clear and distinct steps.

First, link the strategy to improvement by defining your strategic outcomes aligned to true north. Select and map the key value streams to deliver the required improvement to your customers. Complete A-3 thinking using a combination of projects and rapid cycle improvements. Then sustain the gains with standard work and visual management.

But what happens after a year of rapid cycle events? The entire value stream has been "changed". The management energy now required to maintain standard work seems overwhelming. Aren't we finished? Haven't all the changes been completed? Don't we need a break?

In short, No! The break organizations take after the end of the first pass of improvements through the value stream is what kills many lean initiatives. Are you perfect? Hardly. So more improvement is necessary. But what about this fatigue. There is no energy left to make the next level of improvement. Change fatigue comes from many sources but the common ones include the following:

No change in management day to day practice. The same culture of going to meeting after meeting exists.
No leader standard work. Management does not know how to do their jobs.
Lack of staff engagement. Management is forced to hold everyone accountable because the staff has failed to won the new processes.
The rest of the organizational management practices have not yet changed. Despite working in an improving environment, the rest of the organization ( HR, finance, scheduling and staffing, materials management, etc.) operate in the same inefficient manner taking management away from gemba.
Lack of senior management focus. The daily priorities change day by day causing lack of focus.

Change fatigue is an excuse. Rather than understanding the root cause of the problem, management "quits" and calls for a break on new change. This disrupts the momentum of improvement and make future improvements extra hard to obtain.

You might argue that root causing the reasons for change fatigue is taking a break. This is incorrect, fixing any problem is improvement. My advice is to push through this initial resistance. Once you come out the other side this "change fatigue" phenomena will not return.

Lean blessings,

Ron Bercaw

President and Sensei

Breakthrough Horizons Ltd

www.breakthroughhorizons.com

Shingo Award winning author

Directly Linking Improvement to Strategy

2013-12-13T10:35:00.001-05:00

Lean Nation,

Happy Holidays to everyone! As the holiday season unfolds, I wish everyone a prosperous and safe holiday season, and happy New year! If you have worked hard to eliminate non-value added activity from your processes, hopefully 2013 was full of many great surprises of improved quality, shorter lead-times, and improved productivity for your organization. If you have yet to get started on your improvement journey, great things await you in 2014!

In my travels this December, ran into a situation I frequently see within organizations. Many organizations have some form of improvement capability. They have trained personnel with some basic understanding of tools and the application of the tools. Less frequently, they might also have engaged leadership with a desire to change culture and improve. Both of these ingredients are important to delivering sustainable results. However most organizations are hand-cuffed because of one critical leadership flaw. That flaw would be lack of focus.

One of the biggest problems I see in many, many, many..... organizations is they try to accomplish way too much. Leadership has failed to separate the many good ideas and initiatives from the critical few. The specific lean approach to developing and deploying strategic initiatives is known as Hoshin Kanri, also known as policy deployment or strategy deployment. This process delivers the critical few breakthrough objectives and provides a framework for developing, refining, deploying, and managing the organization to the delivery of breakthrough objectives directly derived from the strategic plan.

There are many places to research Hoshin Kanri and several outstanding books are written on the topic. So I am not going to talk about strategy deployment in this blog. Others do a better job of speaking about the process and its benefits.

Should your organization wish to pursue the process of Hoshin Kanri route, however, be warned. If you are not willing to totally unwind your current strategic planning process, along with the corresponding operational and financial review processes, then I would not take on Hoshin Kanri. If you do, you will be managing two systems and the new one loses every single time. There is no hybrid approach that works effectively. Either follow Hoshin Kanri standard work or don't, but being half in and half out will be ineffective

Now back to my blog content. Specifically, the organization I was working with had several hundred trained improvement specialists. Almost all of these personnel were part- time improvement people holding other full time jobs, but none-the-less this group had more than enough capacity to move some big dots. As a general rule, this multi-site organization had leadership committed to resourcing projects.

The challenge was that the organization has over 150 key measures to deliver improvement on. No one could articulate what the measures were, which were important, how they were measured. So each team targeted a different measure or measures and although pockets of improvement existed, no meaningful outcomes were generated. Why? Because there was never enough critical mass on anyone single focus to move a big dot. The work was scattered and diffused. Teams were fighting for the same resources like IT and supply chain. And managers and leaders were constantly bickering over which project was more important. All of these activities are 100% waste.

This is a self inflicted leadership wound. I believe the single most important thing leadership can do is determine the priorities and focus of the organization. Asking people to focus on, improve, and report on 150 items is criminal. (By the way, the second most important think leadership can do is hire the right people to do the work).

So the question is how many priorities should there be? A world class organization has a total of 3-7 top level priorities. A lean organization will typically have 5 areas of focus. These areas of focus are directly aligned to true north measures. True north measures point to the top level outcomes that the organization aspires to obtain that would lead to breakthrough performance as viewed by their customers. As a refresher, the true north measures include dimensions of Quality, Delivery, Cost, and Growth and since nothing happens without people, another dimension, Human Development is added to the list.

The task of taking an organization from 150 areas of focus to 7 would be daunting and likely impossible in the first attempt. Getting from 150 to 20 in the first pass might be possible and takes the organization quite a bit closer to their goal of 5-7.

Great organizations excel and move big dots because leadership clearly articulates and resources the critical few breakthrough strategies, provides oversight for their execution and takes quick interventions when things go off track. This is how you directly link team level improvement to strategy.

Lean Blessings,

Ron

Ron Bercaw

President and Sensei

Breakthrough Horizons Ltd

www.breakthroughhorizons.com

Shingo Award winning author

Getting Senior Leadership Engaged in Lean Improvement

2013-12-07T20:27:00.000-05:00

Lean Nation,

I have written many times about the necessity of senior leadership to be "leading" lean enterprise transformation. I have several posts in this blog and I have several chapters in both of my books dedicated to this topic. (Taking Improvement from the Assembly Line to Healthcare, and Lean Leadership for Healthcare). Today's blog will bring another lens to this topic.

I have discussed that the key to long term sustainable success is getting leadership to think act and behave differently. In fact check my previous post to review just that topic. So to have leadership begin to think act and behave differently, you will need your leadership to (or if you are a leader) commit time and energy to the change process. But what if your change initiatives are part of their time management problem?

"Huh, I thought we wanted leadership engaged." How is this possible.

Many, many, many organizations falsely take a project approach to transformation. This approach will fail every time. You can not change an organization's culture by executing a series of projects. As I have said repeatedly, organizations should pursue improvement along the lines of creating flow and pull, and designing products and services to be defect free along value streams. Perform a value stream analysis along your key strategic core processes, and execute rapid cycle improvement to change the culture.

So let's assume that my organization is engaged along the lines of improving four value streams. A different value stream is running a kaizen event (or rapid cycle improvement) every week of the month. This seems logical: level the improvement across the month. From a process improvement perspective, this is ideal. The workload is leveled across the month. But from a leadership perspective this is not ideal.

Leadership is now required to be present at four kaizen kick-offs, be present at 3 team leader meetings each week, and attend four final report outs. Under this format, I have frequently seen each leader assume another leader is present at the various activities, and the corresponding learning will be lost. Additionally, attendance will begin to wane. This can be mitigated with a schedule of which leaders need to attend what, but we are still limiting the learning.

You might consider getting your organization on a rhythm of improvement. By getting on a rhythm lean organizations pick one or two weeks each month that become the designated improvement weeks. In this format leadership can prepare , well in advance, to be present at the kick-off, daily team leader meetings and the report out. No excuses.

If your leadership engagement is spotty, check your improvement rhythm. Get on a cycle of improvement focusing on a single week each month. I recommend you pick either the second or the third week each month. Many organizations are usually distracted the first week of each month with month end close, and are distracted again at the end of the month meeting customer requirements for the month or the quarter.

If you can establish an improvement rhythm, you might see your leadership presence and engagement pick up.

Lean Blessings,

Ron

Ron Bercaw
President and Sensei
Breakthrough Horizons Ltd
www.breakthroughhorizons.com
Shingo Award Winning Author

What are the common causes for lean transformation to fail?

2013-10-20T13:41:00.002-04:00

Lean Nation,

This blog will focus on why lean transformations fail. I will not likely do this topic justice. John Kotter, in his best selling book Leading Change, delivers compelling evidence on why major change initiatives fail. I suggest anyone that is pursuing a lean initiative read this book. You can now get used copies of this book from Amazon at a very reasonable price. My comments on this topic are meant to be additive. I have no desire to deliver an antagonistic point of view.

Without a doubt, the number one reason lean transformations fail is lack of leadership. While every leader is enamored with getting world class results and improving top line and bottom line results, many leaders make the same common mistake. They believe that everything around them needs to change, but that they are exempt from this change themselves.

Having been working with process improvement now for 15 years at the very senior levels of different organizations, I am now positive the single most important factor in being successful in a lean transformation is getting the highest levels of the organization to think, act, and behave differently. What I currently see is not poorly scoped improvement events, poor team make-up, poor measures, etc, but rather leadership behaviors and leadership practices that drive the culture back to status quo.

In the first six months of a typical transformation, we see value stream actions plans, kaizen cycles of improvement, standard work, and various types of visual management. These operational changes are geared toward getting team members to take action. It is the collection of actions that shape behavior and the collection of our behaviors that shapes culture. These improvement related behaviors are fundamental to a lean transformation and constitute the building blocks of any improvement system.

What typically changes with the senior leadership in the first six months of a transformation?

operational reviews?
staff meetings?
rounding?
performance management?
leader standard work?
strategy development and deployment?
budgeting systems and approaches?
individual behaviors and role modelling?
visual management systems for leadership processes and results tracking?
problem solving?
project management?
recruiting processes

Most organizations do not lead by changing senior leader processes, behaviors, and actions. Without a measurable improvement that moves an operational metric in a meaningful way, you will not get the attention of the senior levels of the organization. This is understandable.

However, if you are in year two or three of your transformation, and have not started to take on some of the leadership processes, actions, and behaviors listed above, you are not on track to be successful in the long term. For transformation to occur, the way leadership thinks acts and behaves must be changing.

There are many reasons why leaders may not have started to do things differently. These include:

no one to coach leadership
lack of interest
no accountability systems
lack of skills
competing priorities
external strategic pressures
leadership turnover
incentive systems
senior leader (the top person on site) is not engaged.
lack of patience
no ability to connect leadership practices to improvement performance
comfort with current practices
results and budget have been acceptable in the past

Regardless of the reason, leadership engagement is THE necessary ingredient for successful transformation. There are other reasons why lean transformations fail, and I will cover those in a future blog. I'd ask you to look at your transformation. Is your senior leadership thinking, acting, and behaving differently? Next to stability and the 4M's, leadership engagement is key to long term success.

Lean Blessings,

Ron

Ron Bercaw

President and Sensei, Breakthrough Horizons

www.breakthroughhorizons.com

Shingo award winning author

Production Control

2013-10-14T15:33:00.002-04:00

Lean Nation;

Today's blog will focus on one of the aspects of visual management known as production control. In some environments, the approach is known as process control, but the concepts are identical.

Production (Process) Control Board

A production control board is used to monitor standard work. Before monitoring an improved process a whole mess of lean stuff has already occurred. At this point, the process being improved will have completed the following list of activities:

takt time will have been calculated
a loading diagram will have been completed of the current conditions
waste will have been identified and removed
a new loading diagram will have been created with the waste removed and the work balanced and if necessary leveled
a new staffing plan will be created to support the new loading diagram
standard work will have been written
next we need production control

Production control is calculated in units per hour in lieu of hours per unit. So it is the inverse of takt time. If the takt time is 20 minutes, then the production control target is 3 units per hour. If the process is running to takt time, then 3 unit an hour will be produced. Production control documents the plan versus actual condition.

In its most simplest terms a production control board would look as follows:

Time Plan/Total Actual/Total Comments

hour 1 3/3 3/3 none

hour 2 3/6 2/5 ran out of supplies

hour 3 3/9 4/9 added a resource to catch up

hour 4 3/12

hour 5 3/15

hour 6 3/18

hour 7 3/21

hour 8 3/24

This allows everyone working in the process to see at a glance how the process is operating. Are we ahead or behind and why? If we are behind, it is because waste is creeping back into the system? If we are ahead are we skipping quality steps, or adding resources beyond what is necessary?

The key to production control is to display, hour by hour, the status of both the plan and results of a given process. This allows corrective action to be taken in real-time to ensure waste is staying out of a process. The people doing the work fill out the board. Staff and management are responsible to take action to correct the non-standard condition.

Every lean initiative should end with two things; standard work and visual management. The recommended type of visual management of a process is production control.

Lean Blessings,

Ron

Ron Bercaw

President, Breakthrough Horizons Ltd

Shingo Award Winning Author

www.breakthroughhorizons.com

Time as a critical aspect of lean improvement

2013-09-28T09:03:00.001-04:00

Lean Nation,

As a I travel around the world and watch lean thinking applied, I see a theme developing. As more and more improvement facilitators, engineers, and quality improvement scope out improvement activity and apply various tools a key aspect of the Toyota Production System is being lost. In the big picture, every organization is trying to shrink the timeline between a customer having a need and that need being met. Let's look at a few examples:

A customer has a need for a new cell phone. a lean organization will aspire to:

shrink the timeline from customer (market) need to product available on the market
shrink the timeline from the moment a customer walks in a store until the time the phone is purchased and the service is activated
shrink the timeline from the moment a support call comes into the service center until the customer issues is resolved.

2. A customer needs a surgery. A lean organization will aspire to:

shrink the timeline from appointment needed until the clinic visit is complete
shrink the timeline from decision to operate until patient leaves the surgical center
shrink the timeline from service to collection of cash

The single leading indicator of competitiveness is time. World class organizations provide products and services in shorter time lines than their competitors. There have been some studies done that show that those that can do that repeatedly have shown the ability to grow 4 times faster than their competitors.

In a lean improvement project (event), time is used repeatedly. Time is used to calculate takt time, to determine manual cycle times, to calculate value added and non value added times, to determine the loading diagram and staffing models, to calculate work in process space requirements and space requirements in general. So time is a pretty important piece of data.

So now to get to the point of this blog. I have dozens of teams and organizations that run improvement events without a measure of time. The goal is to create standard work, or improve the customer experience. To be clear, there are events that focus on quality and safety improvement. These activities might not have a time measurement. ( Although in the big picture, higher quality and safety will ultimately reduce lead times)

However, I would encourage you to always have a time measurement in your discrete improvement events. Shrinking the time from customer need to customer need met through the elimination of wasted time and activity is the end game of lean improvement. Not everyone in management or staff likes the direct accountability of a time measure. Also capturing time observation data can be time consuming, boring, labor intensive, etc. These are only excuses. Some dimension of time should accompany every improvement project.

Lean blessings,

Ron

Ron Bercaw

President and Sensei

Breakthrough Horizons Ltd

www.breakthroughhorizons.com

Shingo Award Winning Author

Leader Standard Work

2013-09-18T17:23:00.003-04:00

Lean Nation:

Today's topic is is going to cover leader standard work. From an improvement perspective, after studying a process and making a measurable improvement, a lean practitioner will always leave behind two things;

1) Standard Work - the recipe for the easiest, safest, highest quality, best known way to do something

and

2) Process Control - a form of visual management that allows everyone to know what is expected, see what is happening at a glance, and take action when an abnormality occurs.

These two things embed improvement into a process. Standard work ensures that all the great thinking is part of everyone's work, and process control makes waste visible so action can be taken to ensure the waste stays out of the process.

Sound easy right? Unfortunately standard work and process control are not common, intuitive, or even welcome by all staff. The ingrained culture in your organization might make it very difficult for everyone to consistently follow standard work and to capture and identify abnormalities. Worse, if management doesn't work consistently, persistently, and tenaciously to follow up on standard work compliance and problem solve issues impacting standard work, your new improvement isn't going to be sustained.* (*Note: That previous statement is not 100% true. If you mistake proof the process to eliminate any possible means of variation, that will also ensure compliance and consistent outcomes)

The way to engage management to ensure standard work is being followed and to problem solve when wastes creeps back into a process is through leader standard work. We find many times that when the work standards are improved and rolled out, staff will begin to change behavior. If management doesn't also change behavior, then the existing management approaches can actually regress any improvement. Said differently, putting the old management behaviors on top of new standard work will guarantee a failure in sustained improvement.

Lean organizations use leader (and management) standard work to change management behavior. There are a host of activities that can be performed, but leader standard work is designed to change management behavior thus enabling a culture of continuous improvement to flourish. So what exactly is leader standard work?

Leader Standard Work (LSW) is a recipe for management actions and tasks that lead to an improved organization. More specifically, LSW is a checklist of the easiest, safest, highest quality, best known way to manage an organization. This is important because the checklist creates focus. It shows the leader specifically what to do and what not do do. Management typically spends the majority of their time on administrative standards (scheduling , budgeting, controlling, etc.) Management should be spending their time on operational standards (setting, maintaining, and improving standard work) to improve the quality, delivery, and cost of the work.

Leader Standard Work ensures that the leader spends their time on the right things. I have an example of a template for leader standard work. It is broken into daily, and weekly tasks. The key is to make sure work is being done that has an improvement focus. 100% of every day cannot be spent on fire fighting, on answering e-mails and phone calls, attending meetings, and performing administrative tasks.

In completing your actual leader standard work start by scheduling the standing meetings that you need to attend, then schedule in all your improvement work, and end by scheduling your administrative tasks. Improvement work can include many things but at a minimum should include time in workplace (gemba), auditing of standard work, reviewing the process and visual controls, and problem solving. To change the culture and sustain improvement, these specific activities need to occur DAILY. In a world class organization, these activities occur hourly.

Remember, failing to change management behavior will make your continuous process improvement journey very difficult. Great organizations start with leader standard work to ensure operational standard work is followed and visual management systems are used to keep waste out of your system.

Lean Blessings;

Ron

Ron Bercaw

President and Sensei

Breakthrough Horizons LTD

www.breakthroughhorizons.com

Shingo Award winning author

Lean Leadership for Healthcare - Approaches to Lean Transformation

2013-09-02T16:29:00.001-04:00

Lean Nation,

Today I thought I would briefly discuss my second book on the application of lean in healthcare. There is starting to be more and more lean specific material available to the healthcare industry. Most of the content is relative to "how to do it". This book specifically looks at how to lead transformation.

Healthcare organizations that have already applied Lean thinking to their processes, with the diligence of effective management and strong leadership support, are now realizing the benefits of their efforts. And, many of those benefits surpass what was thought possible just a few years ago. To be successful, these organizations had to provide the leadership to arrive at their future state.

Lean Leadership for Healthcare: Approaches to Lean Transformation explains how to apply Lean improvement to both clinical and non-clinical processes. It presents valuable lessons learned by the author over the years of leading improvements in this complex industry and lays out a clear road map for initiating your Lean improvements.

Illustrating the leadership behaviors required to achieve sustainable success, the book is ideal for leaders in the healthcare industry looking to initiate Lean improvements. It reviews the fundamentals of Lean and explains how to link a strategy of continuous improvement to corporate strategy to achieve operational excellence. It also describes how to mitigate the risk of failure when undergoing large-scale corporate change—including what can go wrong and how to prevent these failures.

The book includes case studies that share the time-tested insights of healthcare team members and leaders. It outlines a management system for sustaining your Lean improvements and provides the Lean leadership approaches, thoughts, and visual tools you’ll need to guide your organization along the path toward world-class healthcare performance.

Please post a comment if you ave any thoughts on the book, or any questions I can answer.

Lean Blessings,

Ron

Ron Bercaw

President, Breakthrough Horizons

Shingo award winning author

www.breakthroughhorizons.com

Reflections From the Shingo Prize Awards Ceremony

2013-06-01T21:16:00.001-04:00

Lean Nation,

A few weeks back, I had the honor of receiving a Shingo Prize for my book, "Taking Improvement from the Assembly Line to Healthcare." The award was a research award for advancing lean knowledge. To be acknowledged by the Shingo Prize committee as having created some material that gives a new look on how to apply lean in the healthcare industry is quite humbling.

There were a total of 19 research award winners in 2013. Each had a unique piece of literature on the application of lean. Some of the award winners are well known, John Toussaint and Bruce Hamilton are well recognized lean leaders. Others a little more obscure, myself included.

Clearly the highlight of the evening was the co-presenter. Since the Shingo Prize was celebrating their 25th anniversary, they took the opportunity to invite Shigeo Shingo's son to the ceremony. I never had the opportunity to meet Mr. Shingo, arguably one of the two greatest lean minds ever ( Toichi Ohno being the other).

The Shingo Prize has an annual conference with four main deliverables; the research awards ceremony, the Shingo Prize company award winners, a series of conference workshops and tours, and the conference curriculum ( speaking sessions) focusing on a wide variety of lean related topics.

This is one conference I would encourage the true lean practitioner to try to attend.

Lean Blessings,

Ron

Ron Bercaw
President and Sensei
Breakthrough Horizons Ltd
Shingo Award Winning Author.

Which Lean Tool is Appropriate?

2013-03-16T19:40:00.001-04:00

Lean Nation,

During my workshop this week, I was asked the question, "How do you know what tool to use and when?" This is a very common question asked by new lean practitioners. Having done a quick scan on the number and types of quality improvement tools, I quit counting at 240. Yes , there are over 240 discrete quality improvement tools. When you consider that there are dozens of applications and techniques of these tools, picking the right one, at the right time, can be a daunting task.

By application of the tool, I mean that the use of takt time in a process that repeats every 50 seconds is entirely different than a process that repeats every 14 weeks. Time observation on a repetitive process is different than time observation on process that occurs annually.

Fortunately, for lean thinkers there is some great news! There are a core group of tools that can be mastered (or at least we can become competent with) that will carry us a very long ways. Some of the tools help us to see waste and some of the tools help us to eliminate waste. The following table lists the tools and their purpose.

I refer to these tools as the common tools used to see and eliminate waste. Over the coming weeks, I will publish thoughts on some of the applications and techniques of these various tools individually.

In my years as a Sensei, I virtually always stay within this tool set when initially trying to understand a problem. For more complex problems there are some other tools and techniques that will come into play, but mastering these will enable 10 years of probelm solving within virtually any organization.

Lean Blessings,

Ron

Ron Bercaw
President and Sensei
Shingo Prize Winning Author
www.breakthroughhorizons.com

Gathering Demand Data

2013-03-08T23:09:00.003-05:00

Lean Nation,

One of the questions I received from one of my students this week is how to better capture customer demand data. While I have previously viewed this concept as obvious, I have learned that capturing demand data can be somewhat elusive.

Let's begin with a brief review as to why this data is essential. Demand data makes up the denominator of the takt time calculation. Recall that takt time is equal to the available time divided by the demand ( also known as volume). In our continuous process improvement world, takt time drives most of our analytical calculations. Takt time determines our staffing compliment, our space requirements, our standard work in process amounts, and our just in time kanban calculations, along with setting the rate of products or services.

One of the important requirements in calculating demand data is that the data must align with the units used in capturing the available time. So if we choose to use one work week, or 40 available hours, as our available time, then we are in need of the customer demand data over that one week period. Likewise if we are looking at a year as our available time, then we require the demand data over the same one year time period.

Demand is based on actual customer need. I often hear, we can produce 100 units a day, or we can complete 30 tests a day, or we can schedule 16 appointments per day. This is not demand this is capacity. Similarly, I hear we purchased 1000 units last year. This would be an example of purchases and not demand. What was consumed or what was sold is the demand. We cannot properly calculate takt time based on capacity.

Another common action I see is improvement teams will use the backlog of items (or units) and use that number for demand. For example, we have a 12 week backlog and we would like to burn down the backlog in 3 months, so our demand is 1/3 of the backlog per month. This is also not demand. This assumes there are no further requests for services or units over the next 12 weeks.

When we ask for demand data, we are looking for the steady state customer need. Let's assume in our 12 week backlog example the customer demand is 16 units per week. To get to a 12 week backlog, we would need to have 168 units already in the queue. Being able to process 16 units per week, would prevent the backlog from growing. We would need to run faster than 16 units per week to burn backlog. The steady state customer demand is 16 units. Normally when you desire to burn backlog, you need to get to steady state first, then make a plan to burn the backlog.

Now to actually get demand data, we may need to employ a variety of data collection techniques. Common approaches include mining electronically captured data, direct observation, and check sheets. If you cannot immediately capture demand data, the electronic approach will likely not be successful and you will need to quickly move to manual data collection approaches.

In summary capacity does not equal demand. For takt time calculation, we need the steady state customer demand. Once the steady state demand is understood and we are capable of producing to that rate, we then can evaluate accelerating the run rate to burn down a backlog (if it exists) to meet our customer required service levels.

Lean Blessings,

Ron Bercaw

President, Breakthrough Horizons Ltd

Shingo Award Winning Author

www.breakthroughhorizons.com

Lean Leadership - use of internal and external consultants

2013-02-10T18:34:00.001-05:00

Lean Nation;

This week's post will continue on my lean previous started leadership series and I will discuss the use of internal and external lean consultants. One of the job's of the lean leader is to ensure that the right capability exists in your organization to deliver results, build internal capacity, and create a culture of improvement. There are two primary ways to acquire internal expertise; hire it or use an external third party to provide it.

Regardless of your choice, the role of the "lean" expert is to do three things:

Transfer improvement knowledge to the organization. Everyone in a lean organization should be striving to become and expert. Lean is a process of the people not a process of the expert. Your expert should ensure that everyone is continuously building lean improvement capacity and knowledge is being transferred.
Provide leadership coaching and mentoring to the organization. In my opinion, lean expertise should never be acquired simply for an expertise in lean tools. Tools can be taught and learned. There is a much narrower pool of lean leaders that have the capability to develop and train the organizations leaders. This skill is essential if you want to create a culture of improvement. Your expert should have a history of delivering lean management coaching and leadership.
Mitigate transformation risk. Done well, lean transformation can take your organization on a journey of double digit improvement in the areas of staff engagement, quality, delivery, cost and growth. Tremendous rewards for those willing to get their hands dirty. The flip side is you can spend tremendous amounts of expense on lean improvement without any real results if you don't know what you are doing. An expert with both lean management and leadership expertise along with expertise in the lean tools can greatly reduce organizational risk of failure.

Experts with all three skills are available for hire both inside your organization and as external resources for your organization. The main benefit of having the position inside your organization is the reduced expense for gaining capability, assuming you can hire someone with skills in all three categories described above. Most people that are looking for internal expertise want all if the benefits of transfer of knowledge, leadership mentoring, and risk mitigation,. The common mistake organizations make is they end up hiring someone with either lean tools without lean leadership skills, or lean leadership without tool expertise. Both will lead to dramatically reduced results.

A great benefit of hiring an external lean expert comes from the fact that the third party is not part of the organization. This allows the outside expert to be much more candid about the real performance of the organization. The outside resource can be more critical of leadership without the political repercussions of the candidness. Again this candidness only occurs if you hire the right lean consultant.

Both choices can take you to the same place. Be sure you hire or outsource someone with the right skill set to be successful.

Lean Blessings,

Ron

Ron Bercaw

President and Sensei, Breakthrough Horizons Ltd.

Shingo Prize Award Winning Author

www.breakthroughhorizons.com

Lean Principles - Kaizen

2013-02-02T19:27:00.001-05:00

Lean Nation,

This blog is the last in the series. Prior to this blog, I have discussed the previous four lean principles; flow, pull, zero defects, and visual management. All of the lean improvement principles work in harmony to shape behavior and guide organizational thinking to deliver compelling value to customers by repeatedly seeing and eliminating waste.

The last lean principle is to practice kaizen. Kaizen is a combination of two words "kai" which means change and "zen" which means for the better. Kaizen thus is about making change for the better. As a principle of improvement, kaizen is a mind set to perpetually pursue perfection. The first three principles flow, pull, and defect free are used to design your processes. The fourth principle, visual management, is how you manage your lean processes. The fifth principle, kaizen, is used to ensure improvement is continuous.

In a lean environment, the spirit of kaizen is being met when several improvement behaviors are present.

Success is not declared to soon, an improvement is identified only as a building block toward perfection. Perfection in a lean world is all value added activity lined up in continuous flow.
Processes are repeatedly improved using PDCA thinking.
Improvement is seen as incremental and continuous. Good ideas are not discussed but are implemented quickly. Small ideas are tested and put in place every day.
The organization understands that a 50% solution today is better than an 80% solution six months from now.
Every process is studied and re-studied. The organization never settles for good enough.

I like to view kaizen as a mindset to improve on the first four principles. World class organizations practice kaizen every day. Their greatness among other things, is that, there is an understanding that the next challenge always awaits them.

Lean Blessings,

Ron

Ron Bercaw

www.breakthroughhorizons.com

Shingo Award winning author

Lean Principles - Visual Management

2013-01-03T18:24:00.003-05:00

Lean Nation,

Happy New Year to all you Lean practitioners. I hope this year will lead to significant changes in business performance and culture related to your relentless pursuit of eliminating non-value added activity for your core business processes.

This blog is part five in a six part series. In the three previous blogs we have covered the lean principles of flow, pull, and zero defects. The next lean principle is about how you manage in a continuous improvement environment. World class organizations manage visually. The principle behind visual management is to create the manage systems, both visual and/or audial, to be able to quickly discern normal from abnormal. An abnormal condition must be readily visible to all staff, and action must be taken in real-time to return the workplace to normal conditions.

Some examples of visual management in your life would include the gas light coming on in your vehicle when your fuel tank approaches empty. Many times the light is accompanied by a ding sound using both audial and visual indicators of an abnormality. An intervention must be taken (i.e. get to a fuel station to re-fuel) or the vehicle will stop operating soon. Traffic lights are another type of visual management. The traffic light colors come with a variety of visual clues telling you to stop, proceed with caution, or stop. Failure to take the appropriate, immediate intervention can result in an accident or a traffic violation.

In the workplace, visual management is used to manage both process and results. At a very high level, I like to break the concepts of visual management into three buckets. The first area of visual management is the management of outcomes. This system is a collection of trend charts showing results and targets, as well as the corresponding action plans to deliver on these targets and the status of these plans.

The second area of visual management is the system of managing process. This system shows hour by hour status of the process and highlights when the system is not operating as designed. Variations from standard are identified and if possible fixed in real-time. If the issues cannot be resolved in real-time, then the sources of variation need to be identified through a histogram/Pareto diagram so they can be prioritized for problem solving. Problem solving is best done using a 5 Why and 2 How approach that gets to root cause, where the direct cause can be identified and the problem can be countermeasured for permanent solution. we'll discuss problem solving in a future blog. The final piece of the visual management for process involves the action plan for resolution. Summarizing, visual management of process involves seeing normal operations from abnormal operations, capturing the frequency of deviations from standard, and documenting the corrective actions for resolution. All posted in a transparent manner for everyone to be able to see.

The third area of visual management involves management of the workplace. The workplace is usually managed visually through the implementation of a 5S system. In a bit more detail, 5S is a management system that visually creates a high performing work area. Many wastes are eliminated through 5S, and I consider 5S to be a basic staple of any improvement system and everyone should begin with this system. I have a previous blog that talks about 5S if you are interested in learning more.

A world class organization has all three elements of visual management in place, current, and followed. These elements include visual management of outcomes, visual management of process, and visual management of the workspace.

Managing visually makes seeing abnormal conditions obvious. The power here is that interventions and time spent resolving issues can be focused and prioritized. The process of managing by exception is what makes excellence possible.

The next blog will focus on the final lean principle : kaizen.

Lean Blessings,

Ron

Ron Bercaw
Breakthrough Horizons Ltd
www.breakthroughhorizons.com

Zero Defects

2012-11-12T20:43:00.003-05:00

Lean Nation,

We continue with the six part series covering the five principles of lean improvement. Thus far, I have discussed creating flow and what that means to a lean organization. Secondly discussed the second principle known as pull. Today's topic is developing a system that is capable of delivering zero defects.

Of all the lean principles, perhaps none is more important than eliminating defects. Human beings, by our design, are prone to make errors. A defect is an error that reaches the customer. Ideally, we seek to be error free, but we can live with a system that prevents any error from reaching our end customer.

Defects in their minor form, only serve as a nuisance. The ketchup pack left out of your order of fries, or the garment your find without a price tag when you get in a line with many waiting customers behind you. A worse from of defect is that which requires a lot of rework adding cost and time to your products and services while eating at the staff doing the work.

In the extreme, defects can cost people their lives. The sign that falls of the building, the wrong medicine given to a patient, or the truck accident leading to a gas leak or fire.

A lean organization seeks to design systems that prevent defects. Preventing defects is not as easy as a memo saying no more defects. Process and culture must be changed to create a world class organization that approaches defect free processes. To get started simply start by capturing and reporting on errors. In many organizations I work with, the staff and the management have no idea of the quantity and source of defects. You can't fix what you can't see.

There are a host of lean tools designed to move processes toward zero defects. The short list includes the following:

successive operator checks
mistake proofing (hard and soft)
closed loop corrective actions
standard work
recipe cards
andon
5 Why's
quality at the source
root cause analysis
A4 problem solving
cause and effect diagram
7 Quality Tools

The key point, regardless of the tools or concepts used, is that for a system to reach its potential, you must develop a way for the work to be done right as it progresses through the value stream. Thinking zero defects and then applying zero defect approaches is a great way to start.

Think about a defect for a second. Think about the wastes that is causes: at a minimum inventory, waiting, and rework. Defects also impact people in a negative way and as such, are disrespectful to the worker. Defects also increase cost since they take time, space, and resources but fail to deliver value to a customer.

Your role is to design process that are defect free.

Lean Blessings;

Ron

Ron Bercaw
President, Breakthrough Horizons Ltd
www.breakthroughhorizons.com

Implementing Pull

2012-11-06T17:25:00.001-05:00

Lean Nation,

We continue with the six part series covering the five principles of lean improvement. Thus far, I have discussed creating flow and what that means to a lean organization. Next, I will discuss the second principle known as pull.

A lean system desires that work flow nonstop through the entire value stream (VS). In every VS, constant flow from one value-added step to the next typically doesn't exist. This means a hand-off from station to station occurs. Pull first directs us to examine this handoff. Establishing a clear method for handing off from one process to the next is called "creating a tight connection." Defining the alert to tell the supplying process to start or to deliver is called "trigger." A trigger is like a starter's pistol signaling runners to start. Even with a tight connection and a trigger, we still don't necessarily have pull. A key component of pull is that the sending process stops producing and waits if a trigger isn't received.

An example of push in healthcare presents when a department processes a patient and sends them down (pushes them) to the next department where they wait. When someone gets or "pulls" the patient from the waiting room, this is often, and incorrectly called pull. True pull is present only if the sending department actually stops processing patients when the receiving department "stops pulling".

One hospital spent months trying to connect their Post Acute Care Unit (PACU), post surgery, to the nursing division. They had implemented phone calls, standard work and many other things with little progress. When the patient was ready to move, the PACU began their push to the nursing division. In the spirit of pull, team members agreed to implement a pull system. This means that even if a patient is ready to move, PACU holds the patient until nursing pulls them. This could mean PACU holding patients longer and the number of patients in PACU growing and if all spaces were filled, surgery would have to stop.

Since stopping surgery is a major issue, the hospital is putting in safe guards, but is closely guarding against the PACU being able to call or push patients to the nursing division. One safe guard will be an andon signal for PACU to pull if the number of patients starts getting dangerously close to capacity.

Standard work defines the response to this andon signal which involves management's intervention. Lean tools are used to make this pull system work. Tools include visual boards in nursing to know if a bed is available. A checklist to complete when a problem occurs. An andon light to alert key people of a potential problem and standard work for staff to use. People foresee the problems that will surface if a pull system is implemented and use these reasons to argue against it.

A pull system reduces WIP inventory and in reducing inventory it lowers the water level allowing existing problems to come to the surface. This surfacing of issues and the need to urgently resolve them is another purpose of a pull system. It may be counterintuitive to try a pull system, but the results are amazing. Flow increases and process noise reduced.

Lean Blessings,

Ron

Ron Bercaw

President, Breakthrough Horizons

www.breakthroughhorizons.com

Principles of Lean Improvement - Creating Flow

2012-10-29T20:51:00.000-04:00

Lean Nation,

Following up on the previous blog in which I discussed the five principles of lean improvement, this post will cover the first principle; creating flow. Like a river flows from its tributaries toward a lake or sea, so should work "flow".

Many practitioners new to lean, believe that the principle of flow involves lining up all the work activities one after another. This is incorrect. First wasteful activity should be eliminated. and the remaining activities should be lined up for continuous flow. In meeting the spirit of flow, the desire is to have only value added activities flow one after another.

But creating flow has other attributes as well. In addition to lining up the value added activities one after another, other conditions are also desired. First, the goal is to have no waiting between steps. Like the river, we desire work to flow continuously. Secondly, having work flow continuously, but having a large queue in front of the flowing work would also be wasteful. The desire of a system with flow is to have the work flow at the rate of the customer demand. In lean circles this is known as takt time. This is necessary in order to service all of the customers with minimal or even no waiting. The third attribute of flow is to have the work "recipe" be consistent and repeatable. It does little good to have flowing work with no inventory between steps, paced to the customer demand, when the end product is not to the customer specification.

Summarizing the spirit of flow, the system should be designed so that:

value added tasks are lined up one right after another
no inventory or waiting exists between the steps
the work is paced to rate of the customer demand
work is performed consistently with a repeatable outcome

The benefits of flow are many. These include the following at a minimum:

The timeline for the work to be completed shrinks
Quality improves since immediate feedback from one step the the next is possible
Inventory shrinks for two reasons. First, there is no work piling up between steps. Secondly, work does not pile up at the front of the queue since the work is paced to rate of customer demand.
Waste is readily visible as a disruption in flow stops the work making the waste visible for correction.

When undertaking lean improvement, it is recommended to begin with flow. I recommend you always begin with flow. Flow enables the elimination of great amounts of waste and allows the other wastes to be readily visible so they can eliminated later.

The next post will focus on pull.

Lean Blessings,

Ron
Ron Bercaw
President, Breakthrough Horizons
www.breakthroughhorizons.com
Shingo Award Winning Author

Principles Of Lean Improvement

2012-10-20T13:25:00.001-04:00

Lean Nation:

Today's blog will focus on understanding the five principles of lean improvement. This article begins with the premise that the reader has an understanding of the 7 wastes + the waste of un-evenness and over-burden. Improvement at its most fundamental is about seeing and eliminating waste. The ability to identify waste is the first hurdle in any lean improvement. I have at least a dozen blogs on seeing waste. Feel free to search the site and research any of the prior waste discussions.

Eliminating waste is the next step, and usually a bit harder than seeing it. To eliminate waste using lean thinking, we apply the principles of improvement. The five principles of lean include the following:

Create Flow
Implement Pull Systems
Zero Defects
Manage Visually
Practice Kaizen

Using these five principles repeatedly will eliminate large chunks of wasted time and activity. Each time wasted time and activity are reduced, the entire system "improves". In a continuously improving system, everyone works to produce the highest quality, in the shortest lead-time at the lowest cost.

Let's map the improvement principles to elimination of the common wastes.

Improvement Principle	Wastes Eliminated
Flow	· over -production · inventory · waiting · defects
Pull	· inventory · waiting · over-production
Defect Free	· defects · waiting
Visual Management	· defects · motion
Kaizen	· over-production · over-processing · inventory · waiting · motion · transportation · defects · un-evenness · over burden

Over the next couple of months, I will go into more detail on each of the individual improvement principles.

Lean Blessings,

Ron

Ron Bercaw
President, Breakthrough Horizons
www.breakthroughhorizons.com
Shingo Award Winning Author

Taking Improvement from the Assembly Line to Healthcare

2012-06-20T13:28:00.001-04:00

Today I wanted to blog briefly on my new publication. Actually it is not new and has been out for about six months, but I haven't done much advertising to date. This book is as stated and talks about taking the Toyota Production System, more commonly known as "lean", and applying it to the healthcare industry.

There are a lot of misconceptions about what lean is and what it is not. These misconceptions are hard to overcome within industry and become even harder to overcome in heathcare. All of the improvement sciences are based on the scientific method. Understand what is happening today, create a hypothesis, and test the hypothesis. If you can prove the hypothesis is true, then create the work standards to realize the desired result every time.

This cycle of experimentation works as well in healthcare as it does in any industry. There is no magic formula for success. The fundamentals of improvement apply anywhere work is done. Whether we are painting , grinding and assembling or assessing, diagnosing and treating, value is being created for a customer. If we can understand exactly who our customer is and understand the value they expect, then the science of lean improvement applies.   Lean is not just for assembly line processes, or transactional processes, or short cycle time processes. If work is being done, either value is being created or time and resources are being wasted. Understanding this is the key to improving processes. This books speaks about how to deliver compelling value in healthcare. Specifically how to achieve high levels of staff and medical staff engagement, how to improve process and clinical quality/safety, how to improve access and reduce lead times for services, and how to reduce cost and improve productivity.

This book is special for the simple reason that it covers the full spectrum of improvement within the healthcare industry in six different parts. First, I discuss in detail the need for change... NOW. There is a perfect storm brewing in healthcare where several forces are coming together to make healthcare unsustainable. These factors include an aging population increasing demand on the system, an aging workforce where it is getting more difficult to fill vacancies, less than optimal quality outcomes in a variety of different services, and escalating costs. There is no industry that warrants improvement more at this time.

Next the book details the fundamentals of improvement. The improvement principles are described both inside and outside healthcare to allow the reader an opportunity to grasp their elementary meaning. The key principles of improvement include flow, pull, defect free, visual management, and continuous improvement. These principles are the DNA of lean improvement.

Once the basic concepts are understood, a detailed explanation of the tools and their application are discussed.   Key tools such as value stream mapping and analysis, A3 thinking, and kaizen workshops are explored to bring the improvement principles to life. Other tools covered include takt time, time observation, the loading diagram, spaghetti mapping, communication circle, standard work, and process control.

Case studies follow showing real healthcare examples of how the principles of improvement were applied and how tools were used to see and eliminate wasted time and activity. Areas covered include the emergency department, an orthopedic clinic, diagnostic imaging, patient registration, system collaboration within the community sector, and improvement within an in-patient unit. Each case study provides a background, an understanding of current conditions, a discussion of the improvement plan, a description of the specific tools utilized, and the before and after numbers.

The book discussion then moves toward how to get started with lean improvement.   A six step road map is provided on the key steps necessary to foster a culture of continuous improvement. These steps include defining the measurable outcomes, selecting and mapping the key value streams, beginning improvement, sustaining the improvement with visual management, developing the organization through lean training and coaching, and finally spreading the improvement. Each step provides details on the need for these activities and some key tips on how to successfully perform each step.

The book concludes with the most important activity needed to sustain and cultural transformation; leadership involvement and commitment. 10 leadership lessons are discussed to provide insights based on working with over 100 healthcare organizations in improvement work using lean management approaches. These lessons learned are from both at a personal level; leading by example, and at an enterprise level; creating the right structure to be successful.

The combination of addressing all the aspects in lean healthcare make this book truly unique.   Summarizing, the book covers, the reason for improvement, the tools and application of the tools, case studies, a road map to get started, and leadership lessons learned.   The book is augmented wit over 80 charts, figures, and pictures to illustrate the points and examples contained throughout.

Feel free to add comments on this blog if you have read the book and have any comments you wish to make. Or if you have any questions feel free to leave me a question on the blog comments section.

A second book is being created as of the date of this blog. This book will be on Lean Leadership in Healthcare and will highlight the leadership activities needed to drive a culture of continuous improvement. It will be available in the spring of 2013.

Lean Blessings;

Ron

Ron Bercaw
President, Breakthrough Horizons Ltd
www.breakthroughhorizons.com