After years of concentrating on tools, conversations about lean success have recently been dominated by softer subjects. Is this swing now risking the creation of a hard skills vacuum in some lean programmes? Jane Gray collates some opinions and experiences.
At Lean Management Journal¡¯s recent annual conference a presentation was made by Justin Watts of Burton Foods. In an agenda that was dominated by presentations focused on engagement and winning ¡®hearts and minds¡¯ for lean success Watts¡¯ title of ¡®Factory Physics¡¯ was decidedly the elephant in the room.
At LM Connect (another event from Lean Management Journal), held in March 2011, a speaker commented: ¡°I come to events like this and seem to hear nothing but presentations on people engagement nowadays. That is very important but it would be dangerous to forget about tools. We need them.¡± Why? The explanation from Watts, opposite, makes the case for lean leaders with strong technical knowledge of the methodology¡¯s tool kit.
Of course to get the kind of success which Watts¡¯ Factory Physics application eventually reaped, you have to have people on board and Watts recognises this saying: ¡°To get such a success right throughout the programme it was absolutely essential to break these seemingly ¡°complex¡± principles down to basic understandable concepts. To do this many workshops were run using Goldratt¡¯s dice game simulations tailored to that business. Hands-on sessions were run on the effects of the rules showing production operatives, planners, and senior managers how counterintuitive thinking can actually yield far greater results for a reduced operational expense, less inventory and improved service and lead time.
Watts added, ¡°without this ability to make the concepts easier to understand the chances of success are reduced dramatically when dealing with these complex concepts.¡± Having acknowledged the need to engage those responsible for execution however, let¡¯s return to a consideration of the level of technical understanding at a leadership level which Watts¡¯ factory physics programme required. How important is it to have academic pedigree in your lean project? Jeff McGowan, an alumnus of Cardiff University¡¯s Lean MSc and sourcing manager at Johnson & Johnson Lifescan says: ¡°This is an interesting topic. Many MScs and MBAs can reinforce the wrong behaviours driving short term thinking. There are others, however, that are positive such as the Lean MSc with Cardiff.
An MSc or MBA helps individuals to get to grips with how to manage much of the complexity they will have to deal with. It is also an essential ¡®qualifier¡¯ for individuals being able to influence the policies within organisations which create complexity.
¡°I think that in the West we have created such complex organisational systems that senior people often need these qualifications to help them make sense of their environment. However, if lean is our goal then our main focus should be on the thinking of the whole organisation, not a select few.¡± With this in mind McGowan went on to say that Western organisations still have a long way to go in emulating the sensei teaching and development approach exemplified by Toyota. He clarifies: ¡°In the West we don¡¯t place much emphasis on the philosophy behind how we operate and the way that we want employees to think. For example, Toyota defines how they want the business to operate through policies such as the TPS which defines how their supply chain should work. They defined the focus areas in the Toyota Way, 2001. People are then taught how all this works in practice through their sensei who helps them to see what each element means. This results in the desired way of thinking.
Adding another perspective on the importance of hard skills and technical confidence behind forward thinking and engaging lean programmes Richard Lloyd, general manager at Accolade Wines comments: ¡°I have recently been around our Australian Wineries leading the launch of lean in this region.
¡°For groups taking these primary steps it is crucial in my opinion to acknowledge the significance of culture and employee engagement. Caution needs to be taken though to ensure sufficient technical content is included in the early stages as there is a danger of not achieving employee buy-in if the technical substance is insufficient. Without some scientific method and hard skills to back culture up, lean culture building runs the risk of looking like a lightweight fashionable fad.
Without understanding key principles it would have been easy to get lost in applying other lean tools without improving flow. Armed with this knowledge it was much easier to show the plant team a higher attainable level of lean implementation Justin Watts, Burton Foods A fine balance needs to be reached to ensure engagement is realised; remembering that part of this needs to be achieved through the creditability of lean techniques.¡±
Factory Physics for lean success; a case study by Justin Watts of Burton Foods
The factory physics frame work may seem daunting and if you pick up the text book you may be freighted by the formulas and maths. Nonetheless the fundamental principles are essential to have in your tool box for a successful lean implementation.
There are some core rules from factory physics that should be in the forefront of every lean practitioner¡¯s mind, as they approach the goal of creating flow.
Hopp and Spearman state: ¡°A production system is optimised at maximum throughput and minimum cycle time.¡± But what does this mean? The simple rules are:
1 Lead time or cycle time = work in progress/throughput
2 Increasing variability always degrades the performance of a production system
3 If a workstation increases utilisation without making any other changes, average WIP and lead time will increase in a highly nonlinear fashion
4 Variability in a production system will be buffered by some combination of inventory, capacity or time .Variability, utilisation and time are interrelated (basic version of Kingman¡¯s equation) called the VUT equation i.e. if you increase utilisation without reducing variability cycle time will increase
By understanding these and applying these rules my team and I were able to help transform an already excellent business. By using the core factory dynamics we could prove that even though the plants previous lean efforts had maximised throughput and reduced process variation, the variation caused in their production system by scheduling policies and business choices driven by cost was sub-optimising the system and creating variable flow. Without understanding key principles it would have been easy to get lost in applying other lean tools without improving flow. Armed with this knowledge it was much easier to show the plant team a higher attainable level of lean implementation.
Elsewhere in the same organization a plant had already ¡®leaned-up¡¯ and was being used as an exemplar for other sites. The Factory Physics project was able to show that a plant was on a level footing with a plant with lower levels of throughput and higher levels of variation when you measured flow time. By using the formula below we could explain that one of the most influential factors on their flow time through the plant was the effect of arrival variation caused by batching.
Inevitably the variable flow time through the plant was being buffered by a safety time and stock buffer (Rule 4). There was an opportunity to reduce lead time by 50%.
It was interesting that no extra work was needed to improve changeover and the EPE (Every Product Every scheduling interval). This was simply done by choosing to run differently; by having a constant cycle time (manufacturing lead time), it allowed the time buffer to be reduced thus reducing total customer lead time and increased their responsiveness and competitiveness.
These changes to the physical and policy choices were supported by measures and performance management in the scheduling department.
Contact ¨C [email protected] for more information on this case study
So what should the focus be for lean practitioners?
Peter Hines formerly of Lean Enterprise Research Centre and chairman of SA Partners asked this leading question to delegates at the consulting company¡¯s workshop in Manchester last month.
Hines gave a revealing presentation highlighting the sustainability and ROI of lean initiatives and tracking the attention given to tools and techniques against that given to culture-building. He then asked delegates if they thought his statistics showed companies ought to concentrate more on culture building. Around 75% of those in the room gave confident affirmative answers while the remainder waivered, unsure of their ground.
Surprisingly Hines went on to side with the minority saying: ¡°The answer is that it depends.
It depends on where your natural strengths as a company initially lie.¡± SA Partners¡¯ chairman and founder went on to clarify that, while most manufacturing companies he had worked with tended to neglect the softer lean skills at first, since they are not inherent in sector traditions, organisations in other sectors, such as retail, struggled to build the technical know-how.
What was made clear was that lean leaders need to be aware of the natural inclinations of their organisations and to adapt the focus of their programmes to answer fluctuating needs. While lean implementations without people engagement may be unsustainable, a vacuum of hard skills can be equally damaging.
¡ñ Goldratt, E.M. and Fox, R.E. 1986. The Race. Great Barrington, USA: North River Press.
¡ñ Hopp, W.J. and Spearman, M.L. 2000. Factory Physics: Foundations of Manufacturing Management. 2nd ed. Singapore: McGraw-Hill Book Company.
¡ñ O¡¯Donovan B, Seddon J and Zokaei K 2011. Systems Thinking: From Heresy to Practice: Public and Private Sector Studies. Palgrave Macmillan
¡ñ Seddon, J. 2005. Freedom from Command and Control: A better way to make the work work. 2nd ed. Buckingham, England: Vanguard Education.