We are all Lean now. What’s next?

Every once in a while, for nearly 30 years, the question arises: “what’s the next big thing after Lean?”, suggesting that the askers are done with Lean. We write July of 2016 and it seems that everybody is Lean now.

Many people have been repeatedly exposed to Lean methods and tools, have been involved in Lean workshops, kaizen events, sketched Value Stream Maps and identified wastes, sorted out, cleaned up and rearranged stuff 5S style.

They have seen improvements, celebrated the workshop’s success and were dismissed with a feeling of mission accomplished. Others didn’t see a clear outcome, noticeable improvement or a sustainable result and resumed their regular work.

Both may have a legit feeling of being done with Lean, the first because their objectives were met, the latter because Lean doesn’t work.

Almost everybody has heard about Lean, in good or bad, in manufacturing or administration, in hospitals or software development. Lean is a word that found its way into the business lingo, and hearing it often makes it familiar.

There is also the growing impatience as everything speeds up and the instant satisfaction sought by everyone becomes commonplace. Few people are able to commit to a very long and tedious journey towards excellence in the Lean way, most would prefer periodical quantum leaps. Just as they replace their smartphone from one model/generation to the next, keeping up with fashion or state-of-the-art technology.

Of course we are far from done with Lean and very very few companies I’ve visited can claim being Lean. Nevertheless I can understand the fading interest in Lean and the need to reinvigorate it with something new and effective.

Something new means something new to people they didn’t know about until now, not necessarily new per se. Effective means bringing positive results system-wide, not a local optimisation.

My advice would be to consider Throughput Accounting, Critical Chain Project Management and the Logical Thinking Process.

This is not about the next big thing AFTER Lean but the next big thing WITH Lean!

Throughput Accounting (TA) is not really accounting but rather a Throughput-based decision-making approach. In a nutshell, TA shifts focus from cost reduction to Throughput increase and optimization. Follow this link to know more.

Critical Chain Project Management (CCPM) revisits Critical Path Method, the prevalent project management method that failed so far to get developers and project teams to finish on time. CCPM makes sure that projects finish on time and that, thanks to continuous improvement Lean and CCPM style, project durations can be shortened in future.

Logical Thinking Process (LTP) copes with system-wide complex problems. It provides logical tools and methods to surface and neutralize false assumptions, beliefs, conflicting objectives and the like that hinders the organization achieving its goal.

Giving a try with any or all TA, CCPM and LTP, will reveal new potentials and focusing points for Lean to exploit them. Lean isn’t gone soon.


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Critical Chain Project Management alone is not enough

Critical Chain Project Management (CCPM) alone is not enough to drastically reduce a project’s duration and improve the development process efficiency.

CCPM is a proven Project Management approach to ensure a project, any project, will meet its finishing date without compromising quality nor any of the requirements, and even though CCPM can lead to terminate projects earlier, CCPM alone will not squeeze out all improvement potential still hidden in the development process.

What CCPM does well is reconsider in a very smart way the project protection against delaying. Individual protective margins will be confiscated and mutualized in a project buffer, allowing everyone to benefit from this shared and common protection.

There is a bit more than this protective project buffer, but for the sake of simplicity let us just be that… simple.

The visual progress monitoring with a Fever Chart will provide early warning if the project completion date may be at risk and help spot where the trouble is.

Fever Chart

Fever Chart in a nutshell: x axis = project completion rate, y axis = protective buffer burn rate. Green zone = all ok, don’t worry, Amber zone = watch out, the project is drifting and finishing date may be jeopardized. Red zone = alert, project likely to be delayed if no action bring the plot into Amber and preferably Green zone.

After a while, with the proof that all projects can finish without burning up all the protective buffer, meaning ahead of estimated finish date, this arbitrary margin confiscation can be refined and some tasks durations trimmed down while fixing some of the common flaws in the process, like incomplete Work Breakdown Structures, poor linkage between tasks, ill-defined contents or missing requirements.

When done, the projects may be shorter because of lesser of the original protective margins and the other fixes, but the tasks themselves are seldom challenged about their value.

For instance, many of the project’s gate reviews have been set to monitor progress and give confidence to management. They were countermeasures to the drifts and tunnel effects, the period where management is blind about the progress, but with the early warning and easy visual monitoring through the Fever Chart, and more agility in the process, many of these reviews are now useless.

Thus, the time to prepare the documents, KPIs, presentations and attend meetings can be saved for value-creating activities or simply eliminated.

Other tasks may clutter the project, like legacies of fixes of older issues, long obsolete but still kept as the project template still carry them over. Evolution in technologies, unnecessary or suppressed downstream process steps, never fed back may also let unnecessary tasks in the project.

This is where a Lean Thinking approach completes CCPM, challenging the Added-Value of each task, questioning the resources required (both in qualification or competencies and in quantity) and even the linkage to preceding and following tasks.

When considering a development process, embracing Lean Engineering can even go further. Lean Engineering fosters learning and reuse of proven solutions. Libraries of such solutions and ready-for-use modules can save significant time, which can be reinvested in experimenting for the sake of further learning or to shorten projects and engage more development cycles with same resources and within the same time span.


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Performance improvement: simple things can earn big results

Silly things can cost a lot in terms of productivity and output.  In this video interview, Philip Marris  asks me about lessons learnt while helping a pharmaceutical plant to improve productivity and deliver drugs to patients faster.

It is about how simple actions solve those silly small problems and bring big results at literally no cost.


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TOC, Lean and aviation MRO

In a previous post, “CCPM helps shorten aircrafts MRO”, I explained the benefits of Critical Chain Project Management (CCPM) for reducing the aircraft downtime during their mandatory and scheduled MRO.

If CCPM is great and helps a lot meeting the challenge, it will not squeeze out every potential improvement, thus time reduction, on its own.

As I explained in my post Critical Chain and Lean Engineering, a promising pair, “What CCPM per se does not is discriminate added-value tasks and non added value, the wasteful tasks listed in a project in a Lean thinking way.

Conversely, if wasteful tasks remain in the project network, chance are they will be scheduled and add their load (and duration) to the project.

That’s why in aviation MRO (as well as in other businesses), Critical Chain Project Management will not be used as a stand alone but in conjunction with other approaches, like Lean and Six Sigma.

Lean mainly will help to discriminate value-added from non value-added tasks, especially those on the Critical Chain, making them high priorities to optimize, reduce or eliminate.

We did not differently when we started with our client Embraer and while in their service center, I placed Philip Marris in front of the camcorders to present, in situ, two books related to TOC, Critical Chain and Lean in aviation MRO (aircraft Maintenance, Repair and Overhaul).


Note: Critical Chain Project Management is part of the Theory of Constraints Body of Knowledge, hence the title of this post where “TOC” is referring to CCPM.


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Why SMED is quick win in pharma – Episode III

Improving changeovers in pharma industry is a relatively quick and easy way to… quick wins, faster and easier than usually assumed. This series tells you why.

Episode III: How to and Why it works

In the previous Episode I explained the background of the lag of many traditional pharma makers in regards to Industry Best Practices (mainly Lean) and operational performance. I highlighted faster changeovers as leverage for recovering wasted capacity and improve performances. In Episode II I gave examples of  gains that can be expected and why.
In this Episode, I explain how and why it works.

The first approach is the least “risky” one, which will not change anything, thus not jeopardizing compliance to procedures nor quality. It is based on the fact that changeovers take frequently more time than initially allocated and the assumption that the changeover procedure is sound and the time allocation is reasonable, i.e. changeover doable during the allocated time.

Reminder: pharma is regulation-constrained

As I explained in Episode II, in pharma industry all steps of a changeover are prescribed in procedures and traced. Lots of information and proofs are captured, paperwork filled because a great deal of these procedures are mandatory in order to comply with Good Manufacturing Practices (GMP) and/or local regulation.

This means there is a solid reference base available against which to compare actual way of changing over as well as a reference time allocation (standard time).

In other, lesser regulation-constrained industries, such detailed procedures and capture of data might simply not exist or will be much “lighter”.

The procedure fallacy

Industrial engineering, quality assurance and management assume that when procedures are written and approved, they are the tables of the law that personnel will follow thoroughly.

This is not always the case. People on shopfloor are pretty much on their own as management is more likely sitting behind a screen, on a desk in a remote location. So there is room for doing things slightly differently than the procedure prescribes. Often it is about swapping some tasks’ order because it is more convenient or the people’s preference.

Procedures are written for the standard (perfect world) case and won’t help if something unexpected happens, e.g. some material is not available or late. As unexpected events, big or small are likely to happen, people in charge of changeover will have to adapt or wait for instructions.

Doing things in a different order and/or in a different way will impact the changeover duration. It might speed up or delay it. The problem is that people on shopfloor may not have sufficient knowledge/insight about the possible overall impact, like negative side effects, of their even so small changes.

Chances are that procedures will be followed globally but variations will be found in the details of execution. That’s one of the reasons for the differences between allocated time and actual changeover duration.

And chances are that actual duration exceeds the usually generous allocated time, reducing the productive capacity, overall effectiveness and efficiency.

The easy way to reduce changeover duration

Let’s be clear: the easiest way to reduce changeover duration in pharma industry will probably not be the most rewarding one in terms of production capacity recovery, but… it’s the easiest one.

It is easy because it is only about sticking to already agreed procedure and standard time, thus no risk assessment nor quality assurance validation required.

This approach is based on following assumptions:

  • Changeover procedure is sound
  • Allocated changeover time(Standard Time)  is reasonable, i.e. changeover can be done within allocated time
  • Excessive duration changeovers outnumber the shorter ones, hence there is a net capacity loss when summed up

Step 1: Gather data about changeover duration. If there was no data capture or what was in place does not serve your purpose, create a form and capture what data is necessary

Step 2: Start analyzing. Look for trends, correlations and if possible causation

Step 3: Display a graph with changeover durations compared to standard time. Update it real time. The simple display of the graph and the information to shopfloor teams that changeovers durations will be monitored is enough to improve the situation, because now there is some management’s attention on it.

Step 4: Go see, ask why and show respect (this is a Lean management mantra). In other words, go and spend some time observing reality on the shopfloor (gemba). Do not hesitate to ask why this or that to people, they are the Subject Matter Experts. While asking, do not lecture but listen truly, without judgement and without disturbing operations. Try to find the root causes of good AND poor performance.

Step 5: suggest or make the necessary changes (without compromising GMP/safety/quality rules) in order to reduce the duration. Chances are the improvement will require someone with the necessary authority and know-how to coordinate the whole changeover, from new material delivery to leftovers sending back to storage place, including paperwork and human resources allocation to roles. Stress the necessity not to exceed allocated time.

Step 6: when necessary, run problem solving kaizen events. Always have at least one operational personnel involved.

Step 7: Keep capturing data, analysing it and understand the causes of longer AND shorter changeovers. Changeovers that will take exactly the allocated time are highly suspect, but will be dealt later. Watch for trend: after a short while, changeovers should seldom exceed the Standard Time, although some accidents may happen.

Step 8: iterate to step 4.

Results

The last time I used this soft approach (2015), we could recover the equivalent of one week of productive capacity within a period of 3 months, roughly 8% and about 170,000 additional units made available for sales. This was done at zero additional costs as all we needed was better organization, committed and refocused people and more management’s attention.

Of course this improvement was sustainable.

The changeovers done way under Standard Time were the proof of the excessive allocation and/or potential better way to proceed. With the relevant data, it was easy to convince management to have the procedure and Standard Time updated, giving the opportunity to improve further using SMED methodology.


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Meeting Bill Dettmer

I am fortunate having met William Dettmer in Paris, France, November 27 and 28th, 2014.

Bill is senior partner with Goal Systems International and author of eight books and numerous articles about Theory of Constraints, Thinking Processes and more.

>Lisez cet article en français

I have read Bill’s works and found myself deep-diving with great intellectual pleasure into Goal Trees, Current Reality Trees, Conflict Resolution Diagrams and more. It helped me a lot getting familiar with the Thinking Processes.

Having the opportunity to meet, chat and listen to the author in my hometown is a rare privilege I enjoyed very much.

Bill was guest of Philip Marris, the leading authority of Theory of Constraints in France, in his Paris office. Philip invited me too, challenging me with video recording and editing the meeting for an online series of videos.

Hohmann, Dettmer, Mano

These two days were great fun, sometimes for the talents in front of the cameras watching me running around the setup to check, fix or start a device, sometimes for all when the inevitable bloopers forced to restart the take.

While monitoring the recordings, I learnt a lot listening to Bill’s explanations and stories. He is not only an expert with long experience, he’s also a great storyteller.

These last points were endorsed by Erik Mano, the third guest of Marris Consulting, who attended Bill’s course in Luxembourg some time ago and testified about the course, its content and the usage he made of the Thinking Processes.

Dettmer and Hohmann

While these two days were fairly high-density, we found moments to relax. Philip suggested a picture of Bill and me sitting side by side with our books in front of us.

Regarding the number of books, Bill won (8 to 4) but admitted to the fact of being few years younger, I still can catch up.

But what I will never be good at is smiling.

Watch the first video introducing a serie about the Logical Thinking Process


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Cost and inventory reduction, right target?

Lego_022aWaste and costs reduction has almost become the definition of Lean for many people as well as an irresistible lure for most executives and managers.

Yet costs and inventory reduction, is this the right target?

In the various definitions proposed by Lean theorists, including Jim Womack, priority is given to identifying and creating value for customers. Using just needed resources is only a way to achieve this while seeking a competitive advantage. Reducing costs and make savings is only a corollary effect of this achieved frugality, not a prime objective.

>Lisez cet article en français

Why this obsession about waste / costs?

Lean has long been considered being something for operations: Production, Logistics … as its first name “Lean Manufacturing” could suggest. Indeed, first attempts and successes happened in the workshops and warehouses, on shop floor.

Operations guys have little leverage to create value for the customers. Conversely they can improve almost infinitely operations seeking to be more efficient, to speed up the flow or to reduce defects.

These improvements, synonyms of savings, quickly raised management’s interest in order to justify related expense of these initiatives with ROI and reap the “promised” gains.

However, most of the time these approaches do not produce the expected measurable results and generate frustration among actors although they often see dramatic improvements at their level .

Frustrations, failures, how is this possible?

First one must understand that local initiatives are often disconnected from the purpose of the organization / company. They “improve” activities or processes without a prior validation about their system-wide usefulness and contribution to the higher objectives of the organization / company.

The most disappointing case is to have improved a doomed process or one being itself a waste. In such a case, time and resources were consumed in vain. Deadly sin.

In a less extreme but frequent case, time and resources were consumed to improve a marginal process, which will be insignificant to the overall performance, despite the fact it looks spectacular in situ.

Second, one must remember that the cost and/or inventory reductions necessarily face an absolute limit, which is zero. Once there is no more spending and/or any inventory, this is the end of “continuous” improvement and ironically… an optimum.

Of course there is a practical limit before zero, from which the activities can not proceed satisfactorily neither for customers nor for other stakeholders. But this practical limit > zero only reduces the overall potential of cost and/or inventory reductions.

In contrast, sales growth is virtually unlimited. Although productive resources are saturated, it is always possible to provide new, additional value added services, such as express delivery, personalization, premium services, etc.

But this lever, far more powerful and faster to implement, contrary to general belief, is rarely used.

What alternatives to achieve success?

Those who embraced Lean Management understand that all improvement efforts must be aligned with the purpose of the organization / company, i.e. the need for improvements is derived from the Goal, strategic objectives and necessary conditions to achieve strategic objectives.

Therefore, Lean is only conceivable top-down, from the strategic intent to shop floor actions. Then, for people to apply coherently tools and methods, instead of locally cherry-picking any good looking idea, top management must dictate the needs to cover or better, communicate in transparent manner strategic intents and the cascade of necessary conditions to achieve high level objectives, thus the Goal.

Once these necessary conditions known, operators can measure the gap between the desired state and the current state and work to reduce this gap, on relevant topics and perimeters.

This communication is done using Hoshin Kanri and A3 reports when remaining in the traditional Lean framework, or using Goal Tree if open to add some Theory of Constraints’ tools.
Both are perfectly combinable.

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What is TLS? The Synergy of ToC, Lean and SixSigma

Chris HOHMANN

Chris HOHMANN – Author

TLS stands for Theory of Constraints, Lean and Six Sigma. TLS is meant to be the combination of 2 or all of these…philosophies, approaches, methodologies, you name them.

I discovered Lean (but we didn’t call it Lean then) and Theory of Constraints at the same time, when I joined a Yamaha Corp. subsidiary in 1989. Even so I gathered more experience with Lean, I used ToC principles and rules when relevant. Six Sigma came later but without surprise as I had been extensively trained about Statistical Process Control (SPC) long before Six Sigma gave it a new shine.

I used TLS without knowing it and came across concept and acronym only in the 2010s while reading Reza PIRASTEH and Kimberly FARAH’s paper “The top elements of TOC, lean, and six sigma(TLS) make beautiful music together” ( May 2006, APICS Magazine) and Bob SPROULL’s “The Ultimate Improvement Cycle” (CRC Press, 2009).

My “discovery” of TLS was nothing more than conceptualization and confirmation of what I have experienced by myself and found natural: using what the three components of TLS had to offer as a powerful synergy.

Introduction to TLS

This slide show provided by Philip MARRIS, CEO of Marris Consulting will give you an introduction to TLS.


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Approach, philosophy or methodology?

Chris HOHMANN

Chris HOHMANN – Author

We hear and read them often in relation with our preferred body of knowledge*, among which Theory of Constraints, Lean and Six Sigma are the most popular: the terms “approach”, “philosophy” and “methodology”.

I wonder if people use them purposely or as synonyms and I prick up my ears each time an expert explains Theory of Constraints (ToC), Lean and Six Sigma is not this or not that.

Paying utmost attention to the sense of words, especially in English which isn’t my mother tongue, I decided to make some research of my own about what is what and when to use it.

A chose the Macmillan online dictionary and found this:

  • Approach (noun): a particular way of thinking about or dealing with something
  • Philosophy: a system of beliefs that influences someone’s decisions and behaviour. A belief or attitude that someone uses for dealing with life in general
  • Methodology: the methods and principles used for doing a particular kind of work, especially scientific or academic research

No surprise, these terms are not synonyms. Yet there is a certain relationship that I see as concentric circles:

Philosophy as a system of beliefs and knowledge provides a global influential framework. Approach is a focused way to deal with something, largely influenced by the philosophy. Consistently, the proper Methodology helps Approach dealing with something by providing methods and tools.

Philosophy is more about abstraction and knowledge, thinking and attitude while Methodology is action focused. Approach is somewhat in between and links Philosophy to methods and tools, or thinking and attitude to doing and action, if you will.

Fine, so what are ToC, Lean and Six Sigma for example?

Well, for me first they are systems of beliefs backed by tangible proofs and knowledge. They influence my way of thinking and consider things. When I have to deal with a situation, an issue, I am influenced by this system and it formats they way I will approach it. Of course I will use the methods and tools ToC, Lean and Six Sigma provide in a certain way**, which is my approach.

**Using ToC, Lean and Six Sigma in combination or synergy is referred to as “TLS

So to answer the question what are ToC, Lean and Six Sigma, my answer is they are what you make them! They can be either Philosophy, Approach or Methodology or a combination of the three.
Therefore, in my opinion, nobody is wrong using any of these words as qualifiers, but the choice should be made with care for the sake of clarity.

Assuming only few people really pay attention to the meaning of the words, I think most people use them alternatively as synonyms. I dare ask what they mean if I feel necessary to clarify.

Adding to the confusion with Body of Knowledge and Paradigm

Sometimes we also come across Body of Knowledge and Paradigm. What do these words mean?

A *body of knowledge (BOK or BoK) is the complete set of concepts, terms and activities that make up a professional domain (http://en.wikipedia.org/wiki/Body_of_Knowledge)
BoK is shared and accepted by a community while a philosophy can remain personal.

Paradigm is a formal set of ideas that are used for understanding or explaining something, especially in a particular subject. It is a windows through which watch things or a prism through which seeing and understanding something.

“Prism” is purposely chosen as the point of view can be biased or distorted.

Best example is probably the world of cost paradigm vs. world of throughput paradigm, where the proponents of the second see the biases of the cost paradigm.

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What is Theory of Constraints?

The very minimum to know about Theory of Constraints

In order to define Theory of Constraints (ToC), it is necessary to define what a constraint is. A constraint is anything that limits the system (organization, enterprise, group, process…) from achieving higher performance relative to its purpose.

  • A constraint does always exist, otherwise the system would be infinitely successful, constantly achieving higher performance.
  • A constraint can be part of the system or lying outside of it, e.g. supplies limit the transformation of material, dull market limits the sales, regulation limits operations, etc.

Theory of Constraints is a “business philosophy” or “management paradigm” that takes into account the existence of constraints, focuses on the one that limits the performance of the whole system and strives to achieve more of its goal (patients treatment, sales, throughput, sales, whatsoever).

The constraint is often referred to as the weakest link of the chain (metaphor for the whole process), which limits the performance of the chain. It is therefore useless to improve any other link as long as the weakest has not been strengthened. ToC claims to focus on the most critical factor (the weakest link), while Lean in comparison is often deployed in unfocused way, wasting resources to improve any link of the chain without really improving the whole chain.

The notion of constraint is generally easier to understand using the bottleneck metaphor or the piping system.

 

Click on pictures to go see

Once the constraint is identified, Theory of Constraints proposes consistent methods, tools and thinking processes to get the most out of the system, despite the constraint.

Chris HOHMANN

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