Creating Pull, where there is no pull

Creating Pull, where there is no pull

 

Much to blog about...so little time it seems. I'll just keep at it...thanks for reading.

A few weeks ago, my wife and I attended a conference held at a large downtown hotel in Peoria, Illinois. The very useful conference had nothing to do with lean, yet I couldn't help but notice examples of flow and inventory (are you surprised?).

The most fascinating of which was the soda machine.

The conference attracted almost 600 people and ran from Friday evening through Sunday afternoon. After the first large session, I went looking for a Diet Coke before the late session began, thinking a little caffeine would be useful. Looking around the lobby, I spotted the (apparently) lone soda machine, with a short line of other like-minded folks. I popped in $1.25, got a 20 oz. soda and headed back to my seat.

The next morning, I thought another Diet Coke would be a good idea after the 10am break. Heading to the machine, I saw a longer line of folks, most of which with their hands on their hips, staring at the machine. It seems that all the diet sodas were sold out and only some obscure grape drink remained. Wow, I though, how are all these middle-aged folks (like me) going to get through the rest of the weekend?

Later in the morning, I saw a woman with a Diet Pepsi. I walked up to this total stranger and asked "Where'd you find that?" She looked one way and then the other, as if to keep a secret, and said softly, "Down by the swimming pool!" I headed that way , past the sold out machine, to the pool and settled for a Diet Pepsi, as the Diet Coke was already sold out.

By the afternoon, though, that machine was sold out as well.

And it got me thinking. How much revenue did the vending machine owners miss out on? What was the cost of the lack of inventory of cold sodas? How might they remedy it?

Assuming the machine held 200 sodas, then one fill of the cooler could gross $250. From the length of the conference and the number of participants and the location of the machine, I estimated they could have sold 600 sodas ($750) over the weekend, or one per person, on average (Yeah, I would have covered for about 5 people). If the vending machine company paid on average 35c per soda bottle, their gross margin on the one weekend would have been $540. On one machine. If only it had been filled.

My guess was this machine, like most, was on a route. On some appointed time, an employee would drive to the hotel, check each machine, fill it up, empty the change and go to the next one. On a schedule. Irrespective of actual demand. Pushing the soda, not letting the end user pull it through. And this cost them $400-$500.

How might they have known it was empty? How could they have developed a pull system?

It is tempting to suggest a cool technical solution. Like mounting a wireless transmitter in the machine to send a signal when it is empty. And that would be neat. But also expensive.

Why not a simple thing like a sign on the front that said "If you find this machine empty, please notify the front desk. Thank you!" And then place a card by the front desk with the name of the vending machine company's phone number. And a way to check that message regularly.

There are always ways to get closer to pull. I hope this triggers some creative thinking for you.

 

 

You know you’re not lean when…

You know you're not lean when...

...you have expediter in your business.

And you are really not lean when you charge the customer to do the expedite. To wit:

A friend of mine just grumbled about the $60 fee he had to pay the US Passport service to get his passport renewed in time for a quickly-arranged overseas business trip. In effect, the sixty bucks is a bribe to move to the front of the line, in front of the other folks who sent their applications in sooner.

We are so used to such things, we usually don't give them a thought. But the lean leader sees these thing. Why? Because it is an indication of a lack of flow, a lack of standard work, a lack of improvement methodologies, a lack of attention to customer satisfaction.

Even more problematic is the use of a fee. The fee is a reward, an incentive, to keep the lines long and the service slow. Someone will pony up the fee to bypass the others. And the fee serves to slow the improvement process even further, due to the revenues the slow service generates.

Beware the expediter.

I hope this is helpful.

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Survivals, from Seth

Survivals, from Seth

Maybe I’m just noticing better due to our collaborative blogging effort with Jeff Angus on finding and eliminating "survivals".

Enter Seth Godin, one of the best marketing thinkers around, who blogs yesterday on survivals in on-line shopping carts. Yeah, survivals don’t have to be old to be real.

His point is how awfully persistent these things can be. Note how his example also shows up in our “interruption of flow” tool to find them.

Enjoy Seth’s excellent writing.



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Three steps to find “what stops flow”

Three steps to find “what stops flow”

Continuing with the small collaborative blogging effort with Jeff Angus on finding and eliminating "survivals". I wrote last time about looking for “what stops flow” and gave a couple of examples.

Here’s what I look for when I ask “what stops flow”.

· Where are piles? A pile is nothing more than a point where flow is stopped. A dam that causes water to back up. Piles mean there is no flow…work is just stacked. Why is the pile there? Why is it at this machine, at this workstation? What keeps it from flowing through this machine?
· Who’s waiting on whom? Who is on others’ mind when a slowdown happens? What name keeps popping up? What name triggers an “eye roll”? Why, then, does this name keep popping up?
· Who or what is the demanded asset? Who is it that needs to make the decision? What machine or software is most coveted? Who’s vacation schedule dictates what gets done?

In answering these questions, you will begin to isolate where flow stops. And when you find this, you can then ask “Why does flow stop here?” And you will likely find survivals there.

Try it. It gets scary, believe me. Because it will unearth some very useful trails to follow.

I hope this is helpful.

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What do you do when a blizzard creates chaos?

What do you do when a blizzard creates chaos?

 

Here's a great story of customer service from the recent blizzard in Boston, courtesy of Kevin Weiss, who writes Take Ten Minutes.  The key paragraph here:

 

The gesture was appreciated, but the real test of a company isn't how well it apologizes for errors, it's what it does to eliminate them.  In the aftermath of a service failure, organizations must choose between two distinct paths.  One is to see problems as a result of rare events, unforeseen circumstances, and issues beyond control.  The other is to accept responsibility for the entirety of the situation and own every failure.  Companies that choose the first path repeat their mistakes; companies that choose the second prevent problems from recurring and discover ways to mitigate "acts of god".

 

This issue of accountability is huge.  Who makes apologies?  Who accepts the idea that prevention is better than apology?

 

It is a substantial shift in thinking.  It challenges me, I hope it does you as well. 

 

I hope this is helpful.

 

 

Finding "survivals"

Finding "survivals"

 

Jeff Angus and I are doing some collaborative blogging on finding and eliminating "survivals", those invisible steps that impede your company and mine.  How do we find them? 

 

Here's a key question that I have found to regularly unearth these nasty little critters:

 

What stops flow?

 

In any manufacturing or process sequence, any machine, procedure or person that stops the flow of product is a possible (likely) seedbed of one of these survivals.  So, by looking for yourself and observing where flow stops, you will find them.  Probably more than you expect. 

 

Example one: My colleague Misty observed that she had been making a particular annotation on all checks we cut to vendors.  And it disrupted flow.  It had to be added onto the check after it had been approved. And she observed that we never used this particular annotation.  And, further, she discovered that the information it conveyed was already in our financial system.  It disrupted flow.  It added no value.  And, correctly, she said "Joe, why on earth do we do this?"  We eliminated it. 

 

She saw it because it disrupted flow.

 

Example two:  A local engineer whom I met through a network told me of a sheet-metal process she observed in her plant.  It seems that the process involved taking a large sheet of steel, running it through a metal shear to cut it into smaller blanks, then placing these blanks into a press, where a die cut the final shape of the part.  The final part was still flat.  Amy observed that the first cutting step seemed to disrupt flow.  So she asked one of the operators "Why do you cut that blank?"  Predictably, she learned "Because we've always done it that way."  Looking at the press, Amy then asked, "So why couldn't we just put the full sheet directly into the press and skip the blanking step?"  In this instance, there were no physical barriers to this happening safely. 

 

It turns out, the part was originally prototyped with a much more labor-intensive cutting process, not using the press at all.  Thus, the early blanking made the metal much easier to handle by an individual associate. When they installed the die, the old habit still stuck around. 

 

Amy drove the change to eliminate the blanking.  Not without some real grief and pushback.  But, she persevered and got it changed, saving a lot of hassle and eliminating one flow disruption. 

 

She saw it because it disrupted flow. 

 

Take a look for flow-stoppers in your operation.  And see if there isn't some survival in the way, a non-value-adding step that you can eliminate.  Now. 

 

I hope this is helpful.

 

 

Eliminating Old Die-Hard Behaviors

Eliminating Old Die-Hard Behaviors

 

One of the fun things about blogging is the occasional synergy with other bloggers on a given topic.  Hal Macomber, Frank Patrick and I did such a collaborative blog a couple years ago on Theory of Constraints.  It was fun and we hoped interesting for our readers. 

 

Here I go again.  I've quoted Jeff Angus' fine blog, Management by Baseball, on a number of occasions in this space.  Regular readers will not be surprised I like Jeff's blog, as it combines two of my absolute favorite subjects.  Jeff invited me to comment on a theme he blogged about earlier today; finding and eliminating "survivals".  Jeff defines "survivals" as those practices and behaviors that are so omnipresent that we don't even question their presences.  Just why do blazers have buttons on the sleeves?  Just why do we print that report every week?

 

Jeff describes baseball and personal examples of these practices.  In subsequent entries, he will describe his views on how to eliminate such silliness.  He invited me to contribute from my perspective as well.  He didn't have to ask twice.

 

Why?  Central to any Lean endeavor is the elimination of non-value adding activity, which such "survivals" are prime examples.  But how to we see these?  How do we make them jump up and wave to us?  There are some ways.  They are surprisingly simple.  I'll illustrate by example, it is a passion of mine.  Jeff will do the same from his software, project management and baseball worlds.  We'll link to each other's posts. 

 

Jeff and I both hope you find this helpful.

 

Daily Discussions with Drucker

Daily Discussions with Drucker

 

In a cool confluence of ideas, Michelle Miller blogged about her new choice of the Book of the Year a few weeks back.  It is a compilation of nuggets from Peter Drucker, titled The Daily Drucker, designed to be read on a daily basis throughout the year.   

 

Well, it didn't take a lot of prodding to get me to order the book.  I was first introduced to Drucker in 1979 in my first role ever as a supervisor.  My boss at the time gave me Drucker's classic The Effective Executive, saying "read this, it might help you."   The boss was wise...Drucker has proven even wiser.

 

No other individual has had as much an impact on my view of work and management than Peter Drucker.  I've read almost everything he's published since.  The man's laser sharp vision and tight prose are an inspiration.  I recommend him to anyone who asks (and some who don't). 

 

So, I've had this new Drucker treasure for a couple weeks now.  What relish I dive into each day's selection.  It is very much like a "blog in a book"...from the greatest management thinker of our day. 

 

I commend the book to you.  And don't be surprised to see comments on it on this blog.  Many thanks to Michelle for her tip...worth a lot!

 

I hope this is helpful. 

 

 

 

Culture and Perceptions Make Reality

Culture and Perceptions Make Reality

This morning I read Seth Godin's account of him serving on jury duty this week. Which reminded me of my jury duty experience about 18 months ago, which I wrote about here.

The two experiences were quite different. I found folks took the task seriously. Seth found people acting with distaste for the system. Seth and I both found it a fascinating opportunity for duty...but apparently our peers had different views.

I suspect culture is central to this difference, perhaps primary. North-central Indiana and Westchester County, New York are, culturally speaking, a very long ways apart. Thus, running a trial will encounter very different responses.

Which reminds me again just how important culture is in influencing any change or growth effort in a company. People are not automatons, they are not cookie-cut-outs that behave the same in response to the same stimuli. People are a product of their region, their backgrounds, their experiences, the norms of the area. We hire out of a certain region and background set. To ignore this is to be incredibly naive.

I hope this is helpful.

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Plan vs Actual, part 4

Plan vs Actual, part 4

So what is a benefit of doing plan vs actual?

My job includes reviewing our Accounts Payable each week. It's always there. And I wondered for quite a while how I could make a "plan" for it.

Some invoices are obvious...we pay the electric bill, we pay for postage. Some are more complex...did we get the quote right for the new machine? Did the person signing off the invoice have the right authority for that level of expenditure? Where's the PO for this one? Is someone slipping burying some added charges in the midst of a complex invoice?

But I stumbled onto an idea for this last November and have been refining it since. While the time taken to review each bill is quite variable, I noted that groups of them tend to average out. Specifically, our accounting system spits out a report for each A/P run and I discovered that one page of A/P on this report tends to be about the same time as the next.

So I started collecting data on how long it takes me to do each page of A/P. The data started out at about 7:30 per page. Since we usually have 4-9 pages each week, I could then do the multiplication and begin to predict how long it would take me.

Then, I further standardized the work and found that I could reliably get the time shorter, while still meeting my responsibilities. Put more simply, standard work helped focus my mind. Fewer drifts off into space while I was doing a standard. Now the time is down to 6:30 per page.

This is remarkably freeing. A/P lands on my desk. A quick look at how many pages, a quick multiplication, a quick look at my schedule and I know where I fit it in. Even in something as quirky as paying bills. The principles of Lean still apply.

I hope this is helpful.

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