The Biggest Waste of All?

Perhaps not bigger than some government spending programs, but that is a different problem far out of our control. Let's focus for a moment on a spending pipeline we have direct control over: lean consulting and payroll dollars.

If you do a quick search on LinkedIn for the term "Lean" and filter for Industry: Management Consulting you will get a return of approximately 3,468 results.

Let's say for a moment that all of those results are for hire. And for a modest Lean Manufacturing Implementation Project, a consultant should reasonably expect to take in at least $100,000 per year in order to live to see another day. One way to look at this problem is that companies are spending somewhere in the neighborhood of $350M for Lean Consulting. Companies who shell out this cash readily admit that an estimated 75% of the time, their Lean Implementation is considered a failure. In other words, we are prepared to flush $268M down the toilet every year. Sounds wasteful, right? Hold on just one minute and look in the mirror.

That is just the cost associated with Lean Consulting companies. What about those of us working within industry itself?

There are approximately 1.8M LinkedIn users that return the word Lean back in their current or past job title, this author included. Let's say that on average, these individuals are paid $80K per year. That puts us into some serious spend territory that would put some politicians to shame. Before I claim $144B is spent on Lean payroll per year, let's whack that back to a conservative 25%, just for the sake of argument. This lands us on $36B per year of estimated spend on assigning people to seek out and eliminate waste. On top of an additional $350M. Let's round to $36B and throw in our 25% success rate: o.k., we waste $30B per year on Lean activities!

And that doesn't include yellow aisle tape! And we Leansters wonder why executives and workers get bent out of shape over the next flavor of the month! We are advocating for a clean flush of their dollars!

I suppose if you compare this number to excessive inventories, we are talking small potatoes. January 2014 durable goods inventories were 10x the value of labor - so definitely not the biggest waste of all. But if I look at that inventory number ($387B) and assume that Lean was successful 25% of the time (that is in achieving flow and thereby reducing inventories) then there must have been some payback, right? How many do you think were truly successful at fully utilized lean systems where inventory was drastically reduced and maintained as a flow system?

Very few, perhaps less than 1% if I had to bet. In fact, durable goods inventories rose 3.7% in one year, hardly an inventory reduction. Of course, I'm playing with fire and about to be smacked down by a real economist who knows precisely how these numbers work, right? But that isn't really the point of this post so I'll stop while I'm ahead.

I wonder what that payback is on all of these Lean skills we have been learning? Are we achieving what we really need to? How do you see the payback? How do you sell the need for continuous improvement? What is the value in your organization? What responsibility does each individual in your organization have to effectively spend this money wisely? What can each do? How do we maximize the potential of each and every person, and not waste it 3/4 of their time? Can you imagine the results?

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Job Instruction, Art or Science?

Recently I watched an interview about the Art vs. Science of writing Job Breakdown sheets. I am highly suspect of the Art vs. Science pitch when it comes to leadership consulting. Why? Because even the greatest artists practiced and perfected their brushstrokes before they painted their masterpiece. This tells me that with practice, perseverance and opportunity - anyone can learn.

What I learned from this interview is that writing Job Breakdown sheets is not necessarily a technically precise exercise, but is about combining words and concepts rearranging them into sequences that work for the learner, so that it is easy for the learner to capture and remember all of the important steps and key points of the job. That it doesn't really matter if it is a key point or an important step, but what is important is that we are figuring out a way to make the job digestible for the learner.

While this sounds nice, I couldn't disagree more.

It's funny, pretty much every interaction I've had with people on the shop floor evolves into a discussion around things like sequence of work, subtleties of the job, the nuances and history of the work which that person takes pride in. If I were to suggest that those subtleties are not subtle, or the sequence is out of order, or their history is fiction, I can guarantee a somewhat visceral reaction. After all, they have the experience of the value-add work, whereas I do not. All I can do is help them learn new skills, show them where we need to go and encourage them to make their value-add better.

I was recently trained by somebody on how to assemble a component of a product we make. After watching the person do the job, I tried it myself. When I started the job out of sequence, the person immediately corrected me, "Don't forget to grease your part first!" Clearly, this person wanted me to remember something important before I moved on. In this case, I can probably say that the Important Step is, "Grease Part".

Now let's use our experts example: what would happen if I arbitrarily decided to put the greasing step as a keypoint, and I put it as 3rd on the list because I think it may be easier for the person to remember the 3rd keypoint because there is a #3 on the grease tube? If I write that as a key point, what is the Important Step?
Is it the same? I probably don't need to explain to you how this example alone invalidates the argument that keypoints and important steps are interchangeable.

But that may not be enough...now lets go one step further: how would I know that they can't remember it as the first step? I must have had the experience of observing the person fumble through the steps in order to realize this problem and then subsequently rearrange the steps in order to move the 1st to the 3rd, or was it the 2nd? What is the likelihood that this unpreparedness would undermine the training effectiveness, if effective at all?

Oh, you test the breakdown sheet first. O.k., let's say it was tested first, but we can go deeper with the flaws of this approach. Now, three weeks later, a different trainer must train a new person using the same breakdown sheet with the 1st keypoint located in the 3rd, or may be the keypoint is now the Important Step. What is the likelihood that they will be confused when they see me grease the parts on the 1st step and then skip over it on the 3rd? What is the likelihood that I will even use the breakdown sheet since it really isn't accurate in the first place?

And further still...what happens when the two trainees talk to each other? How well will they communicate about this job? What problems can you imagine, in the context of your workplace? Now imagine how many key points you may have in your workplace? Is it 100? 1,000? 10,000? 100,000? More? How many people work with these keypoints? It doesn't take much math effort to explain how this turns into a nightmare probability problem  - which is the primary purpose for putting standards in place to begin with.

I was somewhat surprised to see Important Steps and Key Points treated this way. It is my contention that this muddled thinking is the primary reason why people have difficulty in training to begin with and subsequently, problem solving at higher levels.

I think what he was trying to say is that you want to give people the right amount of information, in the right sequence so that they remember the job easily. That I can agree with.

So, let me kindly remind everybody here about the anatomy of a Job Breakdown Sheet:

WHAT - Important Steps - Advance the work - this is the sequence of the steps. The sequence of work can be rearranged for kaizen, but not for training, that would sort of defeat the purpose of standard work.

HOW - Key points - things that could hurt a person, make or break the job, or make the work easier, a trick, or a knack for something. I suppose you could make a key point an important step, but an important step it does not make. Example: Safety - you can do any job in an unsafe manner, and still advance the work. Key points are HOW you advance the work.

WHY - Reasons for the key points. Don't you want to know why we do things this way? Don't you want to communicate these things to people so they do not take shortcuts? You may better understand how your work relates to individual progress, team goals and business growth objectives if you include this info on your breakdown sheet.

When it comes to art vs. science, Job Breakdown Sheets are mostly science and little art. Yes, you need to know how to approach people. Yes, you need to know how to work with people. These are artful skills needed in dealing with people, but those skills alone will not make you successful at building a continuous improvement culture and they are not to be confused with technical skills.

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The Discovery of "Lean"

Whoa! I've been out of the blog saddle for a while...been a busy winter.

Speaking of staying busy, Mark Warren has been at it as well. Take a few minutes out of your day to check out this great synopsis about the "Discovery of Lean" by Mark:

I really like the slide above. It best illustrates what is wrong with today's version of lean:

1) We are taught to create work cells because that is lean,
2) The work cells do not really synchronize well,
3) They are not synchronized because the work content is not not balanced,
4) The work is unstable because standards are weak or non-existent,
5) Standards are weak or non-existent because (insert your reason here)

If you follow the chain above in the opposite direction, it is easy to see that people who organize for flow by first creating work standards it is far easier to implement and improve work cell arrangements to be flexible with demand. And of course, Job Instruction is a great place to start with creating work standards.

It is between the parentheses above where leadership can make all of the difference. Managers end up inserting excuses, leaders find the reasons and eliminate them. That is called waste elimination.

Learning to see the waste can be hard, because we are so hyper focused on creating work cells. When the work cells do not work, we resort to old coercive speed up tactics, give up or go back to the old way.

So, I admit it. I'm a purist, the stuff today's Lean is made of is really just a collection of skills and principles applied and developed over 100 years ago. I really like Mark's YouTube video above because it speaks to the validity of principles in systems leadership. I'm curious what all of you think about Mark's story above? Does this resonate? In what way?

(Darn, it is hard to not use the word, "lean")

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