One Year of "Learning About Lean"

I was surprised to observe that tomorrow marks one full year of this Blog. A few quick thoughts about it.

I first learned about blog technology about three years ago and was immediately fascinated by blogging's promise of rapid-fire, low-cost web publishing. I toyed with the idea for some time and was finally provoked by my friend Hal Macomber into starting it last fall.

What we have here is simply an experiment in learning. I find that when I can write about a subject, I understand it better. Nothing too complicated there. I've kept a personal journal for years...they are stacked up in my basement and may provide some humor for my grandchildren years from now.

The particular experiment of the blog was to see if a broader audience cared to eavesdrop on my musings about the practical issues of implementing Lean systems. I doubted it would be of much interest but decided to try it and open it up to my colleagues, vendors of our company and anyone else in the wider Lean community.

I continue to be amazed that these entries seem to have some interest, way more than I ever anticipated. Just a couple hours ago, the 101st person signed up for an email subscription via Bloglet. Thank you , "broyal at a company known for reliability"!! Plus, there are another 200 hits each week on the site. I don't hear much from anyone about it (except from my friend and colleague Al Schambach...thanks Al for not drooling through these!) yet I hope it is helpful. It certainly is to me.

I chuckled this morning when I reviewed my first entry. It was a humble attempt to capture some thoughts of a long-time friend of our company, Dwight Stoller, on the subject of dealing with change. In a way, I've continued to try to capture useful thoughts on implementing a Lean system. I guess that was a precursor of things to come.

Thanks for reading! Thanks for letting me learn about Lean. I hope you are too.

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Keeping a Painting Plant Spotless

On Tuesday this week, I had a wonderful opportunity to tour Precoat Metal's Northgate Plant near St. Louis. Precoat is a vendor of a vendor of ours; they put paint on the steel that becomes the roof and sides of our suburban, Equine, and agricultural buildings.

John Gardner, the plant's operations manager, gave us the tour. He's a 20 year veteran of the business and exhibited a contagious enthusiasm for his job and his plant. I've seen a number of steel handling facilities and this plant was, hands down, the cleanest, best organized, visually appealing one I've seen. And, mind you, painting steel coils that zip along at over 600 feet per minute with multiple shifts running 24/7 is no small task. Keeping all the material in order and producing a quality product is a mind boggling job.

I complemented John on the organization of the plant. He shrugged and, not surprisingly, gave full credit to his people. He also pointed out it was a journey, not a one-shot deal. "We've been doing 5S for several years now. It sure helps." And it showed.

"But the 5th S, Sustaining, is always the hardest" I commented to him. He agreed fully. "And without everyone involved, you never sustain anything," he added, the voice of experience coming through.

John did get people involved, though, and it showed. I strongly suspect his personal example and involvement also was crucial.

I hope you can pursue 5S in your surroundings. Check out this article on sustaining a 5S effort from a recent SME newsletter.

I hope this is helpful. And that it doesn't clutter your desk. Feel free to forward to a friend. Email me

More on Leveraging Constraints

One of my avocations is baseball. So you can imagine my enjoyment when I recently came across the blog Management by Baseball written by Jeff Angus. If you like sports, you might want to bookmark this one.

In his post last Thursday, Jeff wrote about the folly of linear thinking. While not specifically speaking about constraints, he illustrates a crucial point that constraints also handle. Each system has some "leverage points," places where a little bit of effort brings about a very big result, disproportionate to the effort extended.

Understanding constraints leads you to ways to find those leverage points where a little effort and attention pays off big.

I hope this is helpful. Feel free to forward to a friend. Email me

More on Numbers

While we're talking about financial calculations, take a look at this excellent column on identifying key metrics from Inc Magazine. It is by Norm Brodsky, a great, practical thinker. His summary:

Indeed, the best businesspeople I know all have key numbers they track on a daily or weekly basis. It's an essential part of running a successful enterprise. Key numbers give you the financial information you need to take timely action. Business moves too fast to wait for the monthly, quarterly, or annual statements. By the time you get them -- weeks or months after the end of the period -- you're already dealing with the consequences of whatever problems may have arisen when you weren't looking. You've probably missed out on a number of opportunities as well.

Thanks to my friend and reader of this blog Brian McCory for this link. Brian is an expert on sales and marketing. If you need some help in that area, email me and I'll hook you up with him. He is currently available for consulting or employment.

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Concrete Forms as a Constraint, Chapter 3

I wrote on August 18 about a construction site near my home in which progress seemed slow. I followed up with a post on August 21 in which I discovered the constraint, the limiting factor of this site's progress, was the fact that the concrete subcontractor owned only 45 lineal feet of concrete forms.

Well, today I happened by the site again and noted that they finally completed pouring the entire basement wall. However, they never did get any additional concrete forms; instead, they poured 45 feet at a time, all the way around the basement wall.

What do we do, practically, with this thing called constraints? I propose that we move with simple calculations to figure the value of one day's improvement in speed at the constraint. Stay with me here.

1. From local press releases, I can roughly estimate the value to the owners of the new building, a medical device manufacturer.
   • I'm guessing the expanded facility will generate sales of about $1 million per month.
   • From my prior experience in the medical device industry, I would conservatively estimate their gross margin rate to be about 40%.
   • This means they would generate about $400,000 to cover fixed expenses each month from the new facility.
   • With an average of 21 business days each month, this works out to about $19,000 per day.
   • Therefore, every additional day the plant is operating will be worth about $19,000 for the firm to cover fixed expenses.
2. This figure can guide the contractor in how to spend money to speed the process. In this case, is it possible to rent concrete forms for less than $19,000 per day? Yes! At the high end, they could have doubled the number of forms for $1,000 per week!!
3. As it was, it took them 20 work days to complete the basement walls.
   
4. So, had they had 90, rather than 45, feet of forms it could have taken 10 work days to complete the basement.
5. This would have sped the completion of the building by 10 days, allowing the company to make $19,000 times 10, or $190,000 in gross margin dollars. The cost to the contractor would have been $2,000.
6. The decision is obvious.

DISCLAIMER: All of these numbers represent my estimates. They are not official. However, they DO illustrate how you would go about this process. If my assumptions are wrong, you could arrive at a different conclusion. But don't throw the baby out with the bath. I want you to understand clearly that this is one way we move the seemingly theoretical understanding of constraints into rapid, effective decision making. Note the process.

• It requires clear conversation between the provider and the customer. Somehow, these rough calculations have to come out in the open. But, by using these calculations, the conversation is easier.
• The value of speed can be quantified.
• It only makes sense to do these calculations at the constraint! Speeding up nonconstraining steps will not generate the value to the customer.
• The numbers don't have to be perfect...they only have to be reasonable.
• This framework is marvelously simple and allows a clear framework for decision making.

I sure hope this makes sense. Try it out sometime and see for yourself.
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Labor Day Thoughts

A cool, rainy, fall-like Labor day. Some thoughts on the workforce, from a Lean perspective.

• Why does a company exist? Each has it's own reasons, but I believe there is a common reason.

  To make money now and into the future.

  If a company does not make money, it cannot pay its staff. It cannot innovate. It cannot devote any resources to improvement. To lose sight of the centrality of current and future profits is naive and shortsighted.
• So how does a company make money? By delivering value. That is, a product or service that is worth more to the end user than the price paid.
• So how does a company deliver value? Through its people. And this is where Labor Day comes in. Only when a company sees its people as the vehicle for delivering value does it start to understand how it can excel. Machines don't deliver value...only people. Companies miss this.
• So how does a workforce or union thrive? Same thinking...by delivering value. When a worker or a union sees its longevity linked to how well it delivers value to the end user, the battlelines disappear and the end user wins. Many unions and workers miss this.
• Eliminating non-value adding activities unleashes real value. And it takes a gutsy management and workforce to look at this with a dry eye.

I ran into an acquaintance this weekend whose core political and economic assumptions are considerably left of mine. After the predictable trashing of several of my values, he asked "So, Joe, how many people has your company laid off in the past few months?"

I quietly looked him in the eye and said "None. And we're hiring...just concluded the latest hire two days ago."

Silence.

A Lean workplace should steadily be adding value. It esteems deeply the contribution of each associate. And, as in most ways, it turns conventional wisdom on its ear.

I hope this is helpful.

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"The Knowing-Doing Gap"

Just finished up the book "The Knowing-Doing Gap" by Jeffrey Pfeffer and Robert Sutton. Published in 1999, I missed it when it first came out but picked it up recently on a recommendation. A good tip it turned out to be.

The authors point out numerous factors which cause people and companies to not take action on what they already know. Their finest chapter, IMHO, is the one entitled "When Talk Substitutes for Action". Wow. The title alone is a rifle-shot at ineffectiveness. Decisions, Presentations, Mission Statements, Planning; all will substitue for and tranquilize against effective action. Not that any of them are bad; they just can slow action.

This is a huge issue in a Lean effort. All too often, we see and talk about the tools of Lean (kanban, visual management, 5S, lower inventory) and don't actually learn from trying to actually do any of these things. They are far harder to do than to talk about.

This is, by the way, a huge risk in me producing this blog and in you reading it!!! I can substitute writing for doing; you can substitute reading for doing. Ouch.

How do the authors suggest we fight this tendency? They offer 8 prescriptions, which I paraphrase below.

1. Build a philosophy of action.
2. Knowing comes from Doing, especially teaching about Doing
3. Action counts more than Elegant Plans and Concepts
4. Doing will lead to Mistakes; will we tolerate them?
5. Fear fosters inaction; Drive out Fear
6. Fight the competition, not each other
7. Measure the few key parameters; take quick action on those metrics
8. How leaders spend their time matters

Please try something today and learn from it. I hope this is helpful. Feel free to forward to a friend. Email me

More on the "One Trip"

On Monday, I wrote about a trip to two construction sites. One worked well..the other did not. Here's more of the story, which is very instructive.

Late yesterday, I ran into a friend who is a manager at the general contractor running this site. After some pleasantries, I eased carefully into what I saw at his site on Monday afternoon; activity but no progress.

He sighed. "Yes, that's what you saw. And you know why? The concrete subcontractor only owns enough forms to set 45 lineal feet of concrete wall at a time."

Indeed. That was exactly what I saw. One end wall of the basement was about 70-80 feet long and only half of it was formed up.

This is a classic illustration of constraints. The crew I saw working aimlessly had a physical constraint limiting their ability to create value for the customer; they had a fixed amount of concrete forms. What do you do when encountering a constraint? You expoit it (have I wrung all possible out of it?), subordinate to it (do all other decisions take a back seat to maximizing the constraint?) and then elevate it (how can I get more of the constraining resource?)

In this case, my friend and I quickly got to the "elevate" question. Can we rent more forms somewhere? Can we borrow them? Can we use alternate ways to make forms? Concrete forms are not brain surgery. Can we get more, since we seem to have enough labor available to set them if we had them?

For those going deep, we might ask if there is a policy constraint sitting underneath this physical constraint. For instance, did the subcontractor have a stated or unstated rule that said "We never rent forms."? Is there some accounting policy that makes rented forms appear much more expensive than company-owned forms?

I don't know the answers to these issues. But, standing on the dusty job site on a hot August day, watching good people walk around in a deep, newly-dug basement, making no progress at all made me want to scream. This is why understanding constraints is so crucial to any Lean implementation. The constraint is where you apply the tools of lean to make the system improve. We have limited human and financial resources...let's put these limited resources to work where they matter.

Long-time readers of this blog may remember a series on Theory of Constraints that my friends Frank Patrick and Hal Macomber and I did last spring. If you find this topic interesting, start here and follow the links to learn more.

I hope this is helpful. And pay attention to the constraint. Feel free to forward to a friend. Email me

Not the news...just the index of the news

A few quick thoughts during a blisteringly hot stretch of weather in the Midwest.

• Toyota Along with three colleagues from the Wabash Valley Lean Network, I had the privilege of taking my third tour of Toyota's fork truck manufacturing facility in Columbus, Indiana last Wednesday. Not only is it fascinating to see a factory that hums with precision, it is also fascinating to see how it is such an organic, growing, changing enterprise. I'll write more on this.
• Focus Spent two days last week and all day today in kaizen events here at FBi Buildings. I've seen it many times before, but it never ceases to amaze me what can happen in a short period of time with a clear goal and other clutter out of the way. So why do I continue to accept other clutter?
• Gratefulness Seeing colleagues with relatives facing major, life-threatening surgeries, seeing businesses collapse nearby, seeing the fragility of an economy dependent on electrical power; every day is a gift.

I hope this day is a gift for you. And that this has been a little bit helpful. Feel free to forward to a friend. Email me

One Trip, Two Sites, Three Thoughts

Mondays bring surprises and this one is no different. My colleage Jim asked me to make a run to a job site this morning to see a material problem. While in the area, I stopped in at another nearby construction site.

There is nothing like getting into the action to see things more clearly. I elaborate.

The first site was a simple building. One of our four-man crews were working on it, under the leadership of one of our experienced foremen. Nothing flashy...in fact the building was back in a woods and will hardly be visible except to the owners, who obviously want some privacy. Yet, during the 20 minutes I was on the site, the four guys were working as a team. Nothing frantic, yet each guy had a role, plugged at it and as I backed out, I was amazed at just how much they had done in a third of an hour. I could sense a simultaneous pace and calm...a job site clearly under control.

The second site was a more complex building, but the task for the day was simple; setting forms in preparation for pouring a concrete basement wall. Six men were at work for a concrete subcontractor. Turned out I was there for about 20 minutes as well. The guys were moving about but it struck me that they moved without purpose. In the 20 minutes, I saw no rebar tied off, no forms set, no visible progress made. There was not a sense of pace.

This very unscientific observation is not meant to extrapolate either crew's performace from my mere 20 minute sample to a general trend. However, three things did strike me.

• Being there tells you more than reading a report. Anyone wanting to offer leadership in process improvement has to be at the place of work.
• Knowing what needs to be done is central. Jim Womack's first point of the Lean process is "Value". That breaks down to being able to answer the question "Just what do we need to get done today?"
• One need not be frantic to get a lot done. Calm resolove and measured movement clearly wins the day in the real world.

I hope this bit of reality is helpful. And that your Monday is a good one. Feel free to forward to a friend. Email me