If after a brainstorming session, you have a lot of excellent ideas to improve or redesign the process, you have a sweet problem on your hands. You and your team cannot implement all of them, you would have to go through validation, and prioritization process to choose those that will happen now, later, or maybe never.
To choose the ideas that require less effort and create more impact, you need a prioritization tool. The prioritization matrix shown below is the one I use. It shows a graph that measures effort along the x-axis and impact along the y-axis. Each axis was divided by half, creating four boxes. Each one represents a different action based on the level of impact on the desired results and the level of effort need it to achieve it.
The options are the following.
High impact, low effort – These are quick wins, prioritize these ideas.
High impact, high effort – Ideas under this box deserve action, maybe they can’t be completed within a week or required more resources but should be next in priority.
Low impact, low effort – Consider implementing ideas within this box. You can do them when there is time available. Some people think about this category as fill-ins.
Low impact, high effort – Ideas that have low to no impact in the desired condition can represent a waste of resources, do not do them.
This is how you prioritize the ideas.
After brainstorming, assign a number to each idea.
Draw the prioritization matrix in a whiteboard or flipchart.
With the participation of the same team that generate the ideas, classify each one in one of those boxes.
Select the ideas for short-term implementation.
The next step is to select a leader and team for each initiative. In no time, you all are going to be ready to have more fun!
Here is another example of how to use the 5 Whys, this time in a service environment. For example, in a restaurant, the symptom is a customer complaining about the waiting time. Unfortunately, the way many people would fix this is by apologizing to the customer and make sure that he or she gets the food as fast as possible. What is the problem? What is the root cause of the problem?
Remember our friends from Yummy Broth? They are a small restaurant specialized in soups, but they also served salads and sandwiches. One day, not one or two, but four customers were complaining about the service. The truth is that the food was not arriving in a reasonable amount of time, and the front-end supervisor was concerned. They managed to get food in front of the customers to fix the immediate problem. The manager does not want this to happen again. She knows how to use 5 Whys, so next day during their stand-up meeting, she went ahead to analyze the root cause of the situation.
For this problem, probably most people will choose to expedite the food for the complaining customers, a second group would try to find a root-cause and will stop with the third or the fourth why. Only if you keep digging, will find that the root cause is that there is no standard work. Even if team members want to help, they could not do the right thing because there is no instruction to do the work. Without a standard, effective cross-training is not possible. At least the manager knows better and keeps asking why until the real reason was uncovered. Now, she should be creating that standard work with the team to organize cross-training.
Previously, I discussed how the job environment affects lean implementation. The company culture determines how employees react to the news regarding continuous improvement or lean implementation. The reaction goes from confusion to disbelieve. If leadership credibility is not the best, many will think that this is the flavor of the month and will unconsciously sabotage the efforts. Once an organization starts down this road, it must keep going, or risk losing all credibility.
In my experience, there are three characteristics or values that describe the right environment for implementation. If they are not part of the culture, continuous improvement will be just a dream. Those values are the following.
Respect for the people
Respect for the people is at the core of lean thinking. The team is the heart of the lean system, as leaders, it is our responsibility to develop, empower, recognize, and provide learning and growing opportunities for our team. One way to show respect is the creation of fair rewarding and pay systems. Although money is not the best way to show appreciation, it is important. For some leaders, the biggest challenge is to learn how to treat their team as people and not just employees. Leaders should actively listen to understand their team concerns, what they care about, and ideas. Respectful treatment and rules are the same for everybody regardless of the role or years of service. Consistency and kindness create the trust environment that is critical for the next value, learning.
To practice continuous improvement, you need to break with traditional ways of thinking and doing things. You will need to learn new ways of doing old tasks. CI will expose new problems and bigger challenges; therefore, learning requires discipline and persistence to keep going. The leader’s job is to find ways to motivate, unleash creativity, promote collaboration, and encourage people to learn by doing. However, some classroom training on fundamentals is necessary for skills development. In CI, you either win or learn. Leadership has to bury the fear of losing and learn that it is ok to make mistakes. Also, encourage the attitude of we can do it, instead of saying that it cannot be done.
Communication is critical to organizations, regardless of the industry, size, or CI status. The biggest challenge here is learning to listen to understand, never to judge. Promote a strong two-way communication environment is easier said than done, especially when the starting point is the traditional “I say, you do” management. Effective communication needs the delivery of clear and complete information, which includes objectives, and the clarification of roles responsibilities. People need to know how the company’s performance and plans for the future. They also need timely and clear feedback regarding their performance. These conversations sometimes are tough, but necessary. Waiting until the performance appraisal time to give feedback is disrespectful and contrary to all the values listed here.
Previously I mentioned that PDCA is a good tool to standardize the kaizen event. Today I will show you the general steps to do a kaizen event and how to use PDCA. The following are the general steps to plan and execute a kaizen event.
Understand the problem
Plan the event
Learn about the current state
Design and test the new process
Validate the results against objectives
Modify the process if necessary
Once we achieved results, standardize, train, and communicate
Make further improvements, start over.
We learn before that the planning step is critical for problem-solving. It is because, during that step, you are studying the problem to understand in detail what is happening, which includes finding the root cause for the situation.
It is similar while planning a kaizen event. You start by understanding the problem or situation. You need to describe the problem as detailed as possible using the affected KPI’s, the process name, and its description. The charter document is very useful for kaizen planning. It is important to identify all the key information to make the event a success. It includes the scope, objectives, expected deliverables, team members with their roles, event dates, location, and basic information regarding the problem to tackle. These two steps are the equivalent to the Plan step of PDCA, the next two are the Do step.
The third step is to establish the current state, to draw a picture of the process as is. For this, you need to know the process, the first and last step, steps sequence, and standards. You also need to know the customer needs. The golden rule to fix problems is to go where the value is created, observe, measure, and ask questions respectfully. Identify waste, where the flow stops, safety hazards or risks, and quality concerns. The most important part of the PDCA cycle is understanding the problem. While doing a kaizen, it is critical to understand the process, including the root cause of the problems identified.
Equipped with this information, you are ready to start designing the new process. For this, start brainstorming possible solutions. The target is to eliminate waste, improve quality, or reduce the cycle time. Refine the list and select those ideas that are expected to have a bigger impact, and the team is able to do it during the allotted time frame. Test the process, simulate the conditions of the new process, and measure the results. Analyze the results vs. the objectives, validate if the process can achieve them. Modify the process if you need, test, and measure as many times as it is necessary until the desired condition is reached. If you noticed, this fourth step is following PDCA by itself, as shown in the figure below.
The kaizen step equivalent to Check is to validate the effectiveness of the new process. The event is scheduled for one week or less, but sometimes you will have pending items that need to be finished later. This step includes follow-up on the completion of those items. It also includes a revision of the results to determine if the kaizen achieved its objectives. Normally, this follow-up process happens 30 days after the completion of the event. Similar to what happens in the previous step, if the new process falls short on the objectives, you follow PDCA to modify, measure, and adapt until the desired condition is reached.
The last step in the kaizen event is to evaluate the performance of the process. Process monitoring should be part of the daily operation as well as discussion of gaps between standards and current results. Daily kaizen should address problems in quality, safety, or delivery performance. Remember, once the improved standard is stabilized, it is time to start the improvement process again.
When you have specific business improvement goals as part of your Business Plan and strategies, it is easier to identify where you should focus on kaizen activities. But even if this does not exist, you can still align your kaizen to your business goals. Let’s take a look at how you would do it under each scenario.
Before I continue, I want to clarify something. Previously I defined strategy as the framework that establishes what the organization will do to deliver value and how it expects to accomplish target revenues and profits. However, it is common to use the word strategy while talking about the activity, policy, or process designed to achieve the objective. For example, to support the objective increase in sales from x to y, the process or activity z (strategy) grow business by 10%. To be consistent, I will use the activity or process to indicate the way to achieve the objectives.
When it’s time to develop next year’s goals, you group the business plan with the continuous improvement plan. Achieving those goals means achieving the desired conditions for profitability, delivery, quality, and people. From these statements of intent, you move to develop specific objectives, which are a clear target or destination. To make your business map more effective, you also established what are you going to do to achieve them, and how you are going to do it. At this time, you can identify in what department or area this activity will have more impact on the KPI’s and use the information to plan specific projects. The kaizen events will help to achieve the objectives. Kaizen is very powerful when used as a tool to improve the process to close the gap with the objective.
When the business plan does not include the improvement plan, you can still align kaizen with it. Your team is dealing with problems that impact productivity, quality, cost, and delivery. Daily kaizen, and events, can help to overcome those challenges by improving the process and solving operational problems. You can start doing daily kaizen at any time to start tackling their pain points, but some recurrent issues with high impact in the business deserve a kaizen event.
As always, you need to understand the problems first. Talk with the team, key players, customers, and learn about their pain points, challenges, and needs. A brainstorming session with the team would be a good start to generate ideas for possible kaizen events. The next step is to validate those ideas, to see if they align with the objectives or drive the business KPI’s. With a refined list of kaizens, the next step is to prioritize based on the effort vs. impact or benefits level. After this, you are ready to start planning kaizen.
The important part for both processes is to align kaizen with the business objectives, which should target KPI’s that measure customer satisfaction, quality, delivery, and cost. Let’s keep improving!
Continuous improvement (CI) or Kaizen is the daily practice of creating small changes using low-cost common-sense solutions. In my post, Take Baby Steps for Continuous Improvement, there is a little history of how Kaizen was born. Continuous improvement involves everyone in the organization, improving processes everywhere, every day.
Since the goal of lean is to deliver to the customer the highest quality, at the shortest lead time, at the lowest possible cost, kaizen focus is quality, cost, and delivery. Kaizen’s major activities are 5S, standardization, and waste elimination. Daily execution of these three activities drives incremental improvement that brings dramatic results over time.
Daily CI is important to tackle small problems before they become big ones. The inspiration for daily kaizen comes from observation of frequent deviations from the standard, or ideas to improve the process. However, sometimes we have challenges that require a more methodical approach. When that happens, a Kaizen event comes to the rescue. Recurrent problems that affect productivity or KPI performance are a good candidate for an event.
A CI or Kaizen event is focused on one problem or improvement idea at a time. The goal is to accomplish dramatic improvements in 2-7 days period. These are rapid events, short, and based on common-sense solutions with very low or no-cost at all. The understanding of the problem, and kaizen planning are critical for success. It is also important to standardize the way of performing kaizen, everybody should follow the same steps and document the execution of those steps in the same way. A good method to ensure the problem-solving activity is standardize is using PDCA.
When it is done correctly, kaizen not only improve quality, cost, and delivery. It also helps the heart of the lean system, the people. It does so by eliminating safety hazards, simplifying processes, and teaching people how to identify opportunities, and improve their processes. In my next post, I will discuss the general steps to perform a kaizen event.
Continuous improvement creates changes in your business operation using common-sense solutions. It approaches common problems using good judgment. For that reason, any given day, you will see examples of lean tools in your daily life or at your workplace. We saw that before with visual management, which is now the favorite tool to communicate and guide behavior during the COVID-19 pandemic.
Although it is not as popular as visual management, kanban is no exception. Here are some examples.
When you define value from the customer point of view, know your value stream, and start reducing the eight types of waste, you are creating flow. The work, whatever it is, products, documents, tasks, food, or other, will flow better. A kanban system can help to minimize overproduction and inventory. It is a pull system, which means producing the right item, at the right time, in the right quantity.
The rules for an effective kanban system are below.
Customer (downstream) processes withdraw items in the precise amounts specified by the Kanban.
Supplier (upstream) produces items in the precise amounts and sequences specified by the Kanban.
No items are made or moved without a Kanban. Nothing is produced or replenished without previous consumption.
A Kanban should accompany each item, every time.
Defects and incorrect amounts are never sent to the next downstream process.
The number of Kanban is reduced carefully to lower inventories and to reveal problems.
There are two types of kanban, production, and withdrawal. Production kanban indicates the kind and quantity of products that the supplier must produce. You will produce the number of items on the card when you receive the kanban card. The withdrawal kanban specifies the kind and quantity of products that the customer needs.
Let’s use a hamburger place to show how kanban works.
The server asks the customer what he wants. His order is the customer demand, what item he wants and how many.
The server will record the order, this is the production kanban card. The kanban can be a traditional notepad paper or a computerized system on which the server writes the order and the cooks see it on a screen back in the kitchen.
Whatever is the case, it will be the sign for the cook to start preparing the food. The cook will produce exactly what the customer request, one hamburger with cheese, bacon, and salad.
To produce this item the cook will withdraw a hamburger patty, two strips of bacon, a portion of salad, and one bun. Each of these items is already prepared in labeled bins with their own withdrawal cards. When the cook finished one bin, he put the withdrawal card or the bin in the assigned location.
The person in charge of stock replenishment will walk by, take the empty bin, and replenish the empty space on the shelf with a new full bin.
Once the food is prepared, the cook rings the bell and move the plate to the delivery window along with the order ticket.
The order ticket from the computerized system or the notepad used before is the server sign to take the plate to the customer.
In this example, we have the external customer, the client who comes to eat at the restaurant. They determine how many hamburgers, and how much bacon and salad are used every day. The server and the replenishment person are both suppliers, at different levels.
The information flow from the customer, to the server, to the cook, to the replenishment person. This last one will have his own kanban to know when to order to external suppliers. The material flow from the replenishment person back to the customer.
The beauty of this system is that when it is well done you control inventory, avoid paying more for expediting items, save labor time counting inventory, improve space utilization, keep your employees focus on doing their work with minimum stress and your customers receive what they want when they want it. In the next post, I will share some real-life examples of kanban.
“In a period of low economic growth, overproduction is a crime.”
The goal of lean is to deliver to the customer the highest quality, at the shortest lead time, at the lowest possible cost, by continuously eliminating waste. Many companies have multiple problems that affect the flow, and the common solution is to build inventory. There are three types of inventory.
Materials shortage happens very often when cash is limited. Your employees know that, and their reaction is to hide some to ensure that they have available when they needed. Did you ever see somebody keeping a private stash of office supplies in their desk drawer or hiding ingredients in the bottom of the fridge? When you take inventory, you will not see those items, and there is a chance that you will end up buying something that you don’t need. Another chance is that perishable items got spoiled and end up in the trash.
Work in process inventory
Did you ever see a kitchen where cooks prepare too many of several items in advance to ensure that they will not run out during rush hour? Or a receptionist that printed too many dated questionnaires? Understanding how much work is needed for the day is a tough exercise, but it is a needed one. In a restaurant, for example, knowing the demand will allow you to go from making big batches of food to small batches delivered to the cooks just-in-time. The food on the customer plate will be fresh, and wastage will be minimal.
When you think of finished product inventory, most probably you think of a warehouse full of boxes. But there are many other examples that perhaps you see daily. For example, a bakery that has a full display of all types of cakes, brownies, and other pastries. Those pastries baked in the morning will not taste fresh in the afternoon, and some of them maybe will end up in the trash.
What is Kanban?
Inventory is money, the more you have around, the more money you have tied up to your operation. The worst part is that inventory does not mean that you are better prepared to respond faster to your customers.
A kanban is a visual tool that authorizes to produce or withdraw inventory. It synchronizes and gives instructions to internal and external suppliers and customers. It helps to prevent outages of materials and to provide the right amount, in the right place at the right time.
Kanban is a visual control tool that organizes behavior by signaling when it is time to move items. Each Kanban card signifies one product, paperwork, material, or task along with all information related to it. There are many different designs of cards, physical and digital, you can choose the most convenient for you or design your own. They can be as simple as a piece of paper with basic information or as complicated as barcodes, scanners, and computer applications. The kanban card should communicate at least the following.
What? item description, part number
Who needs to replenish? internal or external supplier
Who needs the item? internal or external customer
Where it goes? storage location, location of use
How many items? lot size, minimum, maximum
Cards are not the only form of kanban, below you can see other forms.
Open floor space marked with a square or a silhouette to indicate that someone withdraw the items and needs replenishment
A colored line on a conveyor or storage rack
An empty parts bin
A divider or color card between items or boxes.
Some of the kanban benefits are prevention of excessive inventory, prevention of stockouts, and forces stock rotation which is important for perishable items. Other benefits that stem from these are improvements in cash flow and reduction in expediting expenses and space requirements.
Kanban is becoming a very used tool in different industries besides manufacturing. Some examples are in technology, hospitals, and even for personal use. In my next publication I will describe how kanban works.
The key ingredient for a successful lean implementation is creating a continuous improvement culture. Changing behaviors and beliefs is never easy, but the previous culture will determine how difficult it will be. The work environment, which is the result of the company culture and management styles, will determine how the employees react to the implementation.
According to Gallup, just 33 percent of American workers are engaged by their jobs, with 67 percent either actively disengaged or “just showing up.” The way the employees feel they are treated by supervisors; how much they trust leadership and communication styles affect engagement and productivity. Employees want to feel valued, respected, that their ideas count, and their work is meaningful.
The objective of the culture change is to shift from traditional thinking to a lean thinking approach and to be successful, the relationship between leadership and associates will be the biggest hurdle. Leadership defines the organizational culture, that is why the first key element for a successful implementation is the buy-in and support from them.
Before you start planning the implementation, you have to understand how the previous culture shaped the work environment. The team mindset is closely related to the job environment and employee satisfaction.
Do you know how your employees feel about the company? How do they feel about their supervisors? What they think about how leaders make decisions? Do they feel that they matter? To change their mindset, you need to get honest answers to those questions. Getting the truth can be difficult and painful, but it is a necessary step to know how your employees feel and create the appropriate implementation plan.
If leadership does not change their traditional business behaviors and adopt servant leadership, no matter what you do, the implementation will fail. The true mission is to develop our people first, if you are not serious about this, then do not bother, lean, is not going to happen.
If you are serious about adopting Lean thinking and use continuous improvement, find the right way to motivate your team, starting with honest and open communication of why you want to change. Have a heart to heart conversations, to gather information to create change. Identify the team interests, how they perceived their benefits and company policies, and how clear they have their responsibilities.
It takes a lot of continuous work to change the culture. After those conversations, everybody needs to turn the page and start working together to create a better future and shape the new mindsets.