ARE UNIONS ANTI-LEAN? by David Paino

Unions are cerunion-worker-striking-sledgehammer-crest-retro_m1XqTrtainly under some fire in today’s current business, social & political scene. I’m not joining in on any bashing or political debate on this subject; but I have seen problems arise between labor and management when a company adopts lean as a strategy. I believe there are lessons to be learned to understand some critical concepts for success. These problems can be significant obstacles if not addressed properly. As in any relationship, communication is the key!

My first experience being a part of a lean transformation came while working in a union shop. We had a good family-like environment represented in the culture and there were very little, if any, significant union versus management issues. Unfortunately, this is not the case with many organizations. Regardless of this advantage, we still had many hurdles to overcome in our pursuit of creating a value stream organization. The changes that came during the implementation raised many questions within our people that we had to answer quickly and clearly. We had “expediting experts” who would have nothing to expedite. We had inspectors, welders, packers, etc… who only did one thing, one way. There were some who were afraid to lose their job, some were afraid to learn something new and others just afraid of change. It wasn’t just operations and union employees who had these kinds of questions and concerns because this affected everyone. We were all about to work very differently as we embarked in this major transformation.

Lean can have a negative connotation with people that creates fear. Our job as leaders was to eliminate fear and create a vision that people could understand and benefit from being a part of as we moved forward. We were open with the people in letting them know why we needed to do this, clearly communicated the vision, and created an opportunity for everyone to benefit. It was very powerful!

Empowering people requires cross-training! The existing union pay scales and structures did not reward or promote cross-training and often made it difficult to move people who did not want to learn another task. We knew we had to address this immediately. We learned as an organization that cross-training was truly a “win – win” for profits and our people. Why are there some people that don’t get this? The attitude of “that’s not my job” has no place when you are trying to build an organization of problem solvers. Isn’t it better to know a variety of different jobs and skills? Some organizations are afraid to share information with employees. This is another mistake. For lean organizations, cross-training is critical to achieving a strategy that creates flexibility, stability, improvement and growth for the company and their people.

We had to restructure in many ways. This included the organizational chart down to the way we rewarded people in the organization. Culture is always thought of as something hard to change. Ultimately, the way we manage creates the culture. So, maybe it is more difficult for the managers to change than it is to change the culture? Unions don’t have to be anti-lean, but they have to understand that we cannot work in a traditional manner and expect lean results. Leadership has to do the same thing! I found the best way to do this involved these key issues:
– Remove fear
– Communicate a clear vision
– Empower your people
– Make it so everyone benefits

In this example, we transformed & saved the company during a very difficult time. Our improvements were outstanding and our people benefited tremendously as a result of being empowered.

Posted in Industry, Lean Culture, Lean Manufacturing, Respect for People, Strategy | Tagged , , , , | 4 Comments

What Does This Guy Do?? Role of Value Stream Manager

bFor many people the role of a value stream manager is not clearly understood. Others incorrectly use the term value stream manager as a substitute for production manager or supervisor in the factory. A Value Stream Manager has full responsibility for the revenues, costs, and profitability of a major part of the company’s business.

This is the 5th article of a series that shows how to develop a truly Lean Management System.  Here is the big picture diagram:

Lean Mgmt System Diagram-2 (7)

 

In this article we are primarily addressing “order fulfillment” value streams. These are value streams that get orders from customers, fulfill those orders by shipping the products, achieving profitably and continuous improvement. There are other kinds of value streams. Most companies have value streams to develop new products and services. There are also departments that support the value streams. These include such things as HR, IT, financial accounting, etc..

 Click here for Lean Management System information

Our focus is on value streams in manufacturing companies, but similar methods apply with healthcare Service Lines. Lean banking operations use value streams that are largely based around information flow. The same principles and methods apply to all of these.

The Role of the Value Stream Manager
Ideally, the VS manager has full authority and accountability for the revenues, costs, and profits of the his/her product families. The VS manager must be very close the customers, very close the operations that create customer value, and very close to the suppliers. In other words, the entire flow of value creation.

There are eight aspects of the value stream managers’ work that we will address in this article.

Click here to see a diagram of the 8 aspects of the Value Stream Managers Role.

The overall Job Description for a value stream manager is:

1. Create more customer value
2. Grow the business
3. Eliminate waste from every process
4. Make tons of money

VS Manager Blog DiagramWhile this definition is a little tongue in cheek, you can see that the job of the VS manager is a business, executive role. Many companies think that the value stream manager should have a production background. It does not matter what background the value stream manager has, provided they can run a mini, entrepreneurial business within the business.

1. Clearly Distinguish the Value Stream Team
The VS manager’s role starts – of course – with people. The VS manager must have the people that can support and improve the operation. Increase sales to grow the revenues. Improve the processes to free up capacity and grow the business without growing costs. Improve the relationships and performance of the suppliers to achieve high quality, frequent (often daily) deliveries of small quantities. Simplify the processes using lean methods so the business can run largely visually.

There needs to be a balance of skills and experience. The VS manager can not be an expert in every aspect of the process. If the VS manager has a marketing background then it’s important to have strong operations leaders in the value stream. If the VS manager has an engineering background, then the value stream will need strong sales and marketing leaders, for example.

2. Build Your Team
VS managers take very seriously the lean principle of empowerment and respect for people. The culture of continuous improvement and the pursuit of perfection is developed by the VS manager, and supported by company executives.

The VS manager must challenge the entire team to not only serve the customers and create value, but also to make improvement every day, every week, and every month. The VS manager must also “hold an umbrella”over his/her employees so that they are not distracted by corporate and other issues going on in the business. The VS manager addresses these issues and keeps the team focused on customer value and continuous improvement.

3. Build Knowledge Within The Team
The VS manager is responsible for the skills and knowledge of the value stream team. This includes formal training sessions and the follow up and certification of the employees. This is often done by HR, and some companies include an HR person in the value stream team if the company and the value stream is large enough to warrant this. The VS manager is also responsible for the cross-training of the people. The purpose is to provide flexibility within the value stream. The cross-training of the people is often a value stream measurement so as to focus on achieving this flexibility.

The VS manager primary role in building knowledge is through active mentoring of the people. There are many opportunities to do this. Mentoring people during the daily “Gemba walks**” through the value stream processes. Mentoring the leaders and team members working on lean improvement projects. Reviewing the A3 documents are an excellent time for mentoring. Regular review of the Leaders Standard Work outcomes with the people directly reporting to the VS manager. Mentoring during the SOFP executive meeting (Sales, Operations, and Financial Planning) and the strategy deployment “catch all” process.

The mentoring is not done by telling the people how to do things differently. It is done by asking appropriate questions and drawing out the people’s own experience and difficulties. It is better to have a person work out a change or problem solution themselves, the the VS manager to give them the answer. Even if the VS manager’s solution is a better method.

4. Build Customer Value
It is essential for the VS manager to have detailed and deep understanding of how the customers value the VS products and services. Much of the “leg work” is done by marketing, sales, and product development, but the VS manager must be on top of these issues. The customer value changes over time and new products change the value propositions. Additionally, the VS manager needs to work to create cooperative and partnership relationships with the customers.

5. Strategy Deployment
Companies using lean strategy deployment method develop the company-wide strategy and then break that down to the strategic contribution of each value stream. There is a “catchball” process where the VS manager (and their team) review the requirements and critique the plan. During this process the “ball” is thrown backward and forward until there is full consensus across the entire company. This is not the normal management by objectives used by most companies. Consensus means that everyone is genuinely “bought in” to the plan and have developed practical methods within their value stream to achieve it.

6. Daily, Weekly, Monthly Leadership
Unlike senior managers in traditional companies, lean leaders are frequently at the Gemba. While the daily and weekly routine meetings are led by local managers and supervisors, the VS manager has a standard schedule (leaders standard work) to regularly participate in these meetings. The VS manager can not attend each one every time, but over time he/she will attend them all. The purpose is for the VS manager to be highly knowledgable of what is really happening on the shop floor, the sales office, the quality work-stations, purchasing, etc. etc..

The weekly value stream meeting around the visual performance board will always be attended (but not usually led) by the VS manager. Similarly for the weekly income statement review, customer service meeting, etc.. The VS manager is also actively involved in monthly meetings including the SOFP executive meeting, capital review, and strategy reviews.

7. Value Stream Measurements
The operational and financial measurements of the value stream are, of course, key knowledge for the VS manager. The weekly value stream performance measurements are posted on a visual board that shows the results, the reasons for short-falls, and the continuous improvement projects to solve problems and improve the flow. The weekly income statements show simple revenue, costs, and profits for the week. The VS manager and the VS team uses these to understand the financial impact of their work, bring the VS under control, and improve the financial results.

The daily or hourly measurements posted in each work center, office, or other processes are similarly reported visually. The VS manager reviews these as a part of the daily/weekly gemba walks. The “box score” shows a summary of the value stream performance each week. It shows the operational measurements from the visual board, the financial results from the income statement, and the capacity within the value stream.

8. Driving Lean Continuous Improvement
The VS manager must understand the customer value created by the company, eliminate waste throughout the value stream, free-up capacity (people, machines, cash) and use this additional capacity to grow the sales and the bottom line without increasing costs (other than materials). The VS manager will instigate (through the VS continuous improvement team) the development of current and future state maps and to identify what changes must be made to create the growth and profitability.

There are (broadly speaking) four different kinds of continuous improvement processes. Breakthrough improvements achieved through large significant projects. Continuous improvement (often called kaizen) events the derive from the VS maps and the performance measurement boards. Just-do-it improvement are the 100’s or 1000’s of small improvements done every day by people working in the VS processes from sales, to operations, purchasing, accounting, etc.. The fourth improvement method is Target Costing where improvement methods are used to increase value to the customer and reduce the costs of products.

Click here for a helpful CHECKLIST you can use to assess your value stream organization.

Click here to see a diagram of the 8 aspects of the Value Stream Managers Role.

* Gemba means “the place the work is done”. Lean leaders have few meetings in conference rooms. Most routine meetings and discussions occur at the Gemba and the lean leaders are at the Gemba a considerable time every day.

Posted in 5 Lean Principles, Continuous Improvement, Industry, Lean Management System, Lean Management System Series, Lean Manufacturing, Management Accounting, Respect for People, Team Work, Uncategorized, Value for Customers | Tagged , , , , , , , , , , | Leave a comment

From JUST-DO-IT to JUST-DONE-IT

Keep Calm PDCA-1 (1)I have been working with two multinational companies recently and the need for  “just-do-it” daily improvements came up. The companies are very different but the team members in both companies got excited about just-do-it and took action on some similar things. They saw the importance of simple daily imprgovements. One company is a pharmaceutical plant in Europe. The second an industrial equipment manufacturer in Indiana.

All companies and every process have 1,000’s of small problems. It is only the people doing the daily work that can identify these problems and solve them. When you add these little improvements together over time, you get massive improvement of quality, delivery, and cost

Just-Do-It is More Than Improvement

I have become increasingly enthusiastic about these small just-do-it improvements. If you can harness your entire work force to make small improvements every week or every day, you have achieved two major lean imperatives. The first is that you will get a lot of improvement that is done by the local experts; the people doing the job. The second and equally important gain is that you will have a highly engaged workforce that really “gets it” with lean and are committed to long term change.

image

So many companies try to do lean by organizing a bunch of project plans and implementing lean changes in their organization. These top-down projects can give you some good results; but it is NOT lean. Traditional management has been doing this for years. They see a problem. They get experts to come up with a solution. The solution is implemented. You are NOT doing lean if your changes are made through large projects completed by black belts that parachute in now and again and change things!!  Contrary to the principles of lean thinking, they are not empowering their people or “respecting” the skills and knowledge the people have learned at the gemba.

Two Different Companies; Similar Improvements

C:UsersBrian MaskellGoogle DriveAA-DataBlogsMaking JustDoI

The BMA Inc. standard visual management training shows a lot of photographs of visual management in action. One photo shows an example from an Italian company that had cut windows into the doors on the side of their machines so the operators to check and correct the fluid levels at the beginning of each shift.

This is a common TPM (total productive maintenance) step, but it is unusual to see the windows in the side of the machine.

People from both companies latched onto this idea. The pharma company has a final packing cell that is a hyper clean room. Everybody must wear full clean-room outfits. The printer that provides the packing labels is in an adjacent but separate room. A problem the operators have had for years is that they can not see if the printer has enough labels. If not, they have to refill the printer. If they find this out during the task, it takes a long time to resolve because of the clean room and the kit they have to wear. So their first JUST-DO-IT is to cut a hole in the side of the printer and show an indicator for the minimum label count on the roll.

C:UsersBrian MaskellGoogle DriveAA-DataBlogsMaking JustDoIThe industrial equipment company had a curing oven that needs to be switched on throughout the shifts. The operator must monitor the gas flow during warm-up to ensure the oven lights correctly. But …. you’ve guessed it ….. the gage is inside a door on the side of the oven. For years this has been an annoyance to the operators, and some times the product is ready for curing and the oven has not been pre-heated correctly. The answer? Cut a window in the door so the operator can easily keep an eye on the gas flow gage throughout the pre-heat. This just-do-it was completed the next day and became a JUST-DONE-IT before I left on Thursday.

Are thesed world-shattering changes? Of course not. But if you can engage your work-force to make many small changes week-in and week-out. These small changes turn into massive lean improvement.

Keys for Success With Just-Do-Its

The Just-Do-It process is highly structured and organized. The purpose is to engage the local people with real improvement that is lean and appropriate for their work area. Some of the keys to JDI are:

  • Having a large number of improvements on-the-go.
  • The people do the improvements themselves. These are not suggestions. They are actions.
  • The improvement ideas are authorized (or otherwise) in 24 hours to maintain momentum
  • Unauthorized improvements are discussed with the people and modified to achieve the issue another way. Often the improvements are broken into several smaller just-do-its.
  • Some JDI’s are large enough that they transfer into kaizen events.
  • Small incentives can add some sizzle to the program. People are not paid for improvement ideas. But lunch with the President (or without the President!!), donations to their favorite charity, ball game tickets for their family, front door parking space for a month, etc. can make the process more fun.
  • When reviewing and authorizing a JDI, try hard to say “yes”. The improvement does not have to the best improvement. The people will build on it later. You may have a better idea. Often it is better to have the people introduce their initial idea and then improve it later.

Here is a short video showing how this JDI process works.

https://vimeo.com/127182058/

Posted in Continuous Improvement, Pharma, Value for Customers | Tagged , , , , | Leave a comment