If tool age didn’t pave the way of management age

Lean’s Tool age is approximately the period between 1990 and 2006 in which western companies discovering Lean first tried to copy-paste the Toyota Production System’s tools and methods.

Using these tools and methods brought nice successes, but kept inferior to Toyota’s and seldom sustainable.

Jim Womack was among the analysts discovering the true nature of Lean is not only a rich toolbox but a way to see, consider and think, which allow the proper and efficient use of the tools.

Recognizing the importance of the human factor, largely underestimated until recently, brought the age of Lean Management into the light. Lean Management is a profound understanding of the principles, which well applied, earn better and lasting results.

It’s easy afterwards to laugh at the initial blindness, thinking it was only a matter of tools and methods. Jim Womack’s experience, role and contribution to the (Lean) community allow him a gentle mock about companies still stuck in the tool age, encouraging them to step ahead into management age, as he does in this video.

Reflecting on tool age / management age, I wonder: wasn’t experimenting the tool age first necessary?

How would western Lean pioneer companies have reacted if they would have been told that the key to their future success lies in a new thinking way and the rigorous application of five or twelve principles, disrupting dominant industrial culture?

I assume no organization was ready to engage a Lean transformation journey without prior proof of concept, thus experimenting tools and methods.

Only after experimenting the potentials and the limits of the Lean tool age, organizations got ready to consider lean management age.

Still today, latecomers to Lean go through their own tool age, an understandable and respectable path I think, allowing testing by themselves, get some assurance before acknowledging to step further into Lean transformation.

Therefore I thing if tool age didn’t come first, Lean may not have caught attention and developed the way it did.


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Zero-based budgeting (ZBB) and lean thinking

Zero-based budgeting is a (old) budgeting method in which the building of the budget starts from a blank page or “zero base”. ZBB is not the usual variant of previous period budget with corrections but a totally new one starting from scratch.

The idea behind ZBB is to build a budget that fits the purpose or strategy of the organization, regardless of what have been in the past. Therefore, each function and related expenses must be weighted in terms of utility and contribution to the goal before making its way on the sheet.

And this is precisely where the link with lean thinking lies. ZBB was popular in the 1970’s, when “lean manufacturing” wasn’t even invented. It is only remembered by few persons exposed to it in their younger years or those who came across in literature.

In my case, I was initiated by my senior colleagues when I started consulting. We had only one assignment purely based on ZBB, but I found good use of the principles on numerous occasions since.

When building a Zero-based budget, each line has to pass the value-adding test and subsequent questions, as it is done in lean assessments:

  • Does this add value?
  • If not, can it be suppressed?
  • If not, can it be minimized?

ZBB is easy to imagine when starting a new business with limited capital. Each expense has to be carefully challenged in order to keep the whole endeavor in safe zone.

It is relatively easy when starting in greenfield, no legacy carries over its costs to the budget.

This logic is also familiar to those designing to cost. The total cost of a product or the whole project is a given limit and the design has to meet all requirements within this limit. Thus, every function, component and expenses has to undergo the necessity-to-purpose test.

ZBB is no exactly piece of cake when an organization already exists as ZBB is facing expenses that are not so easy to cancel. Some are related to regulation, others to social package, etc. Every stakeholder will have good reasons to keep a specific budget line.

ZBB was therefore often considered as a cost cutting method rather as a critical introspection and creative way to reinvent the way business is done. Put positively, ZBB could be a way to demonstrate how Lean can impact bottom line.

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Definition of Lean

Dan Jones, what is lean?

Lean is about a new business model that delivers far more superior performance for customers, employees, shareholders and society at large. Initially this superior performance delivers exactly what customer wants, without any problems, delays, hassles, errors and firefighting.
Very quickly it’s also freeing up the capacity to deliver a third or more value, from existing resources without additional costs.

Jim Womack about Lean Thinking

Creating more and more value with less and less. That means less time, less space, less effort, fewer errors. It’s pretty simple. It’s all Lean is. The question is how you do that?

Related: Mike Rother’s definition of Lean

Robot as coworker, a cobot

Automation and robotics are ways for old economies to keep up with competition being inovative and cost effective. Yet aging of population, raising concern about health and safety, stiffer regulations, etc. may welcome the robot as a companion. Those able to work with humans on a shopfloor are called cobots, collaborative-robots.

Collaborative industrial robots are complex machines which work hand in hand with human beings. In a shared work process, they support and relieve the human operator. One example: a robot lifts and positions a heavy workpiece whilst a human worker welds light iron hooks to it. During this task, the operator and the various elements of the robot, such as the robot arm and tool, are in close proximity to each other. The robot and the worker may come into direct contact with each other as a result. A comparable situation can be found with mobile service robots, which are being used in increasing numbers in the proximity of human beings in occupational contexts and in public or private environments.

>Source: Institut für Arbeitsschutz der Deutschen Gesetzlichen Unfallversicherung (IFA)

HIRO, a collaborative human-like robot for industrial applications (Japan)

Meet BAXTER, the Cobot (USA)

>Read Robotics Featured Articles – The End of Separation: Man and Robot as Collaborative Coworkers on the Factory Floor

Andrew, cobot for lab (Switzerland)

Related >Cobots Utopia

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ABC analysis for efficient picking

When it comes to machine layout, workplace setup or storage space, a prior ABC analysis of the frequency of events or value, volume, weight, etc. is a good start for making it efficient.

Reminder

The ABC analysis is based on the principle of Pareto law, sometimes called 20/80 (20% of causes accumulate 80% of effects) and defines three classes A, B and C:

  • Class A: items accumulating 80% of the effect
  • Class B: items accumulating the next 15%
  • Class C: items accumulating the last 5%

According to 20/80 law, A class items are few (20%) but concentrate the main part (80%) of the effect. In the case of an inventory, few class A items will accumulate the main value or biggest weight, will move the fastest, will earn the most profit, etc. depending the parameter considered.

B class  is made of relatively large share of part numbers or items accumulating altogether only 15%  all occurrences. The numerous items of C class make a tail accumulating the remaining 5% of occurrences, despite their great number.

Application example: Inventory and picking management

Let’s consider a warehouse where operators prepare kits or orders from parts or products stored on shelves. The shelves are traditionally set up in a U-shaped layout, providing a logical path for picking.

Let’s assume the part numbers are placed on the shelves in an alphanumerical order, the first being AA000 and the last ZZ999, to simplify picking and make it straightforward. Picking lists are consistently printed in alphanumerical order, the operator walks the U and picks up the articles (part numbers) accordingly to his list.

This system is pretty simple, but yet not very efficient. For each preparation of few articles, operators have to walk the whole U. If the stored items are big volumes or if the U cell is widespread, the time spent in walking and transportation becomes significant.

Remember time passed to move or transport material or parts is considered non value operation, a waste in the lean thinking way.

Applying the rules of ABC analysis to our inventory, and focusing on the “stock turns” index or “frequency of picking” per part number, we’ll see an A class (probably around 20% of all items) accumulating 80% of all pickings.

The A class items being so often picked, it is only common sense to place them the closest to entry-exit (green zone) in order to reduce reaching distance, hence time spent picking.

Stored quantities must be consistent with picked quantities, therefor and despite the fact these items represent only a limited share of the whole (numbers of part numbers), the A class deserves duplicate storage space on the shelves.

Statistically in fewer demand, B class items are placed behind A class (orange zone) and C class items (the least picked) stored even further (red zone).

Now, thanks to new layout, picking time and distances are globally reduced. In most cases, the journey in the U cell will be restricted to the front (green zone). In few cases only, statistically less frequent, the operator will have to walk the whole U cell.

Other benefits

 

On top of time and distance reduction, we can imagine the light of our green zone should be on constantly, but orange and red zones could be equipped with sensors or switches to light them up only when somebody is in. In the same way, for the comfort of workers, heating or air conditioning isn’t necessary in zones where they seldom go. These are opportunities to reduce energy expenses.

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Lean Transformation Model by John Shook

John Shook, Chairman and CEO of Lean Enterprise Institute, explains LEI’s Lean Transformation Model. Mr Shooks take the Lean (Toyota inspired) house as a base for the explanation. This house or temple has many variants and is variously (mis)understood. While drawing the house on a whiteboard, John Shooks gives explanation in a very simple and straightforward manner.

While explaining the Toyota Production System house is often misunderstood as a prescriptive model, he suggests that regardless of the construction itself, each system that is described as a house needs the same components: solid foundations and pillars to support the roof.

Paradoxically, the construction should start with the roof, because on the gable the purpose statement or true north will be carved in. Like ancient temple tympanum telling a story to visitors, the statement give sense to the whole, it explains why the house, what for, or like the ToC thinkers would state it; what to change to?

ToC stands for Theory of Constraints.

For the roof to be seen and the house to be able to host people, the roof must be placed atop pillars.

The first pillar is process improvement, how to change current condition in order for the purpose to become true, how the change has to be conducted. The second pillar is capability development, meaning giving people the means and know-how to conduct the change. Both pillars are necessary for continuous improvement.

In the house, a character represents management and leadership behaviors.

The foundation is made of mindset, the basic beliefs and assumptions.

A successful transformation needs all five components: roof, two pillars, people, and foundation. Even at a moment the focus may be more on one particular components, all are needed to keep the transformation in balance.

Once the house drawn and explanation given, John Shook revisit it all asking five questions:

  1. What is the purpose of the change–what true north and value are we providing, or simply: what problem are we trying to solve?
  2. How are we improving the actual work?
  3. How are we building capability?
  4. What leadership behaviors and management systems are required to support this new way of working?
  5. What basic thinking, mindset, or assumptions comprise the existing culture, and are we driving this transformation?

You may be interested to read why I Why I don’t like Lean houses, except this one and Lean transformation model as TP trees

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What jobs in the factory of the future? Part3

Chris HOHMANN

Chris HOHMANN – Author

Factories are not the only place where the future of jobs is questionable. New technologies may have far bigger impact on employment than generally thought. Until “recently” job losses related to innovation have eventually been compensated by new roles for workers, but this may no longer be true according to an analysis of the Economist.


In short

Innovation is an accepted – if not welcome disruption – as it allowed growth, enhanced productivity and better life, although it kills some jobs. These job losses being compensate by growth of demand for more goods and services.

But, if jobs most vulnerable to machines were those that involved routine, repetitive tasks this may change in near future as computers/technology are increasingly able to replace humans, often more reliably and quite always cheaper.

Many of the jobs most at risk are lower down the ladder, whereas the skills that are least vulnerable to automation tend to be higher up.

As technology races ahead, low-skill workers will reallocate to tasks that are non-susceptible to computerisation – i.e., tasks requiring creative and social intelligence. For workers to win the race, however, they will have to acquire creative and social skills

source: http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

The rise of the machines, as named by the Huffingtonpost, may impact jobs far harder than generally thought.

Almost half of all jobs could be automated by computers within two decades and “no government is prepared” for the tsunami of social change that will follow, according to the Economist.

Unaware of this threat to incomes of many citizens, no country is ready for it and Shunning progress would be futile because any country that tries to stop would be left behind by competitors eager to embrace new technology.

Read the Economist’s The effect of today’s technology on tomorrow’s jobs will be immense—and no country is ready for it from Jan 18th 2014

Read the Huffingtonpost about the Economist’s column


What jobs in the factory of the future? >Part1 >Part2 >Part3 > Part4 >Part5


What jobs in the factory of the future? Part2

Chris HOHMANN

Chris HOHMANN – Author

In this second post of the serie, well-known software editor SAP proposes six theories about how Industry 4.0 may change the way we work.

The original is online >here


SAP’s Six Theories about Industry 4.0

(excerpts and comments)

Theory 1: Digital natives will define the way of working. Thanks to their affinity for mobile devices, this new generation is used to adapting quickly to new technologies and will eventually squeeze out older employees.

Theory 2: Industry 4.0 will make employees in a company happier and more satisfied with their jobs, because they will be able to work more independently than before. In the future, information will be available at the push of a button. Real-time technologies are essential if employees are to be an integral part of the company’s processes and stay up-to-date at all times. This will give the employees creative freedom that was not possible before.

CH: I wonder what creative freedom means in an industrial environment?

Theory 3: Industry 4.0 will lead to employees performing tasks at a higher level than that for which they were originally trained. This means that employees will need to have a different and better level of training than they do now. But the job market doesn’t and can’t provide this new generation of high potentials off the shelf, so it’s important for employees starting out at a company to be made aware that they’ll need to constantly learn on the job. Today, this topic is being discussed among highly qualified engineers, tomorrow it will be a topic for subject experts, and the day after that a topic for everyone else. Tasks will be more complex in the future, and everyone has to be trained accordingly.

Theory 4: Employees needn’t worry if their skills have become outdated. Technology is so adaptable and intelligent that it can help you precisely when you need it most. The Google Glass data glasses are a prime example. People turn to all sorts of technical aids for support, even people who don’t belong to Generation Y or Z.

CH: given the ever fewer people needed to do the job and despite protective social laws, if the choice is open to employers, they may favor the best fit. Theory 1 and 4 look mutually exclusive.

Theory 5: Most people will have to work longer as a result of the age pyramid. Thanks to “physical and cognitive skills support” – a new generation of industrial cyber-physical systems – older people will be able to master increasingly complex tasks quite easily in the future.

CH: the “physical and cognitive skills support” may be turned into more artificial intelligence and automation, why would it support senior workforce? Just like for fighter jets, human pilots carry a lot of constraints limiting the fighter’s performance. Drones will outperform piloted jets in many aspects. So could factory automation.

Theory 6: Industry 4.0 will lead to increased demand for specialists in the short-term. These specialists will have more room to make decisions, they’ll be more satisfied with their jobs, and they will make processes more efficient – regardless of the generation they belong to.

As different as these six theories are, there is one point on which all researchers agree: the artificial intelligence of cyber-physical devices will never exceed human intelligence. Assist it, yes – control it, no.


What jobs in the factory of the future? >Part1 >Part2 >Part3 > Part4 >Part5


What jobs in the factory of the future? Part1

Chris HOHMANN

Chris HOHMANN – Author

German industry backed up by federal government are the promoters and leaders of the fourth industrial revolution, named Industry 4.0. The goal is clearly stated: prepare a sustainable future for domestic (German) industrial production and keep machine-tool industry on the leading edge.

Once understood Industry 4.0’s technological promises, the question about jobs in these future factories raises soon. It seems obvious that the 4th revolution will impact personnel, especially workers. Everybody assumes the less qualified, the harder the blow.


Preparing the future

A study from  Fraunhofer IAO Institute and a prospective analysis by ERP editor SAP give  some answers.


This serie of posts is based on an West-European point of view. I know best the French domestic situation and almost all early publication about Industry 4.0 is in German.

Born French citizen near the German border, I am fully French & German bilingual.


Fraunhofer’s study

This article is based on the study’s management summary. You may find the manager’s summary and study on Fraunhofer IAO Institute website.

The recent years have seen the most important economic crisis since end of World War II as well as the fast recovery of German economy, a demonstration of the role of industrial production as keystone for the competitiveness of the German economy.

Highly volatile markets, new entrants and global players, client-specific products and complex production processes require flexible and responsive systems and staff while keeping leading edge in quality and productivity.

Actual developments, like Industry 4.0, flexible Low-Cost-Automation and use of social media and mobile devices in production open new horizons.

The Fraunhofer IAO has examined the following key questions for this study:

  • What development of the production work German manufacturing companies will face?
  • What solutions for successful production work are rising from the use of new technologies such as mobile devices, cyber-physical systems (CPS) and social media in production?
  • How will the megatrend flexibility influence production work?

Summary of findings

  • Automation will allow ever smaller production batches yet manpower will remain important component of future production systems.
  • Flexibility is and will remain a key factor for production in Germany but in shorter lead-times.
  • Flexibility has to be more focused and systematically organized. An “overall flexibility” will not be enough.
  • Industry 4.0 means more than networks of cyber-physical systems. It’s about smart data collection, storage and sharing between and by smart objects and humans.
  • Decentralized production management systems multiply, yet a decentralized and fully autonomous production management of the smart objects is not in sight.
  • Safety and security of smart facilities must be taken into account from their early design.
  • Workers’ and knowledge workers’ usual tasks will continue to come together. Production operators will take charge of more product design aspects.
  • People will have to be trained directly and qualified on-the-job, on short notice, for barely anticipatable tasks.

In short

The results reflect the existing expectations in theory as well as in practice. They serve as a base for discussing sustainable and competitive Germany based production.


What jobs in the factory of the future? >Part1 >Part2 >Part3 > Part4 >Part5