CI Tools

What is customer value and how do you define it?

The journey to transform your business into a continuous improvement enterprise should start with the definition of value. The CI business management model defines the value of a product or service from the customer’s point of view. How much your product or service is worth for the customer? What are the expectations?

How do you find the answer to those questions? Only the customers themselves can tell you. There are a couple of ways to get their input, talking with them, or using social media. The best time for a conversation is right after they received the product or service. Ask about their experience. What do they like? Do they have any suggestions? Listen to what they have to say and watch their demeanor. Social media accounts are another way to receive feedback from customers. Review the comments and ratings often. You can also create polls to survey their opinion.

The information from these three different sources will give you the value definition from the customers’ point of view. Value definition is a critical piece to start your continuous improvement quest. You will use it to classify each process as value-added or non-value-added. Value-added activities are those that transform input into output or change materials or information. In other words, the customers are willing to pay for it. Everything else is non-value-added or waste.

When you go to a restaurant, you expect to receive on a reasonable amount of time the plate you ask. You also expect that the staff follows any special instructions like cooking the meat the way you request it. You will pay for the food and the service without hesitation. If the restaurant messed up with your plate, that is a defect. Now they have to prepare a second plate, which is overproduction. Both things are waste or non-value-added activities. I bet that you, the customer, are not willing to pay for them.

Businesses need to complete various processes that are critical for operation but do not add value to the customers. Examples of necessary non-value added activities are hiring, payroll, and month-end financials.

The entire flow from the customer order to product or service received is drawn using a value-stream map (VSM). VSM is a special type of flow chart where you can visualize the flow of information and materials. This map is a tool that allows you to see waste and plan how to eliminate it. How to create a VSM will be the subject of a future post.

The priority of continuous improvement is to eliminate waste. Waste elimination will create faster and bigger results. Second, it is to challenge and reduce the necessary non-value-added activities. Minimize the quantity of non-value-added steps will further improve flow and reduce costs. Finally, you will work on optimizing value-added steps.

CI 101

Do you believe in these lean misconceptions?

Do not makes these mistakes, learn about lean misconceptions

Like many other things in life, continuous improvement is often misunderstood. During my lean journey, the following are the most common ones that I have encountered.

CI is not a department store, you don’t get to pick and choose what you think you need. CI is a system, the only way to achieve big and consistent results is by using all its parts. CI is a business management system designed to provide customer value with fewer resources. It is made up of a group of principles, best practices, and tools. 

The heart of the system is the people, and you show respect by developing them. These motivated and engaged teams participate in the improvement process and create value. You cannot focus on the tools while ignoring the people’s part.

The second misconception is the idea of delegating the implementation. CI thinking is opposite to traditional management, for a successful implementation the company culture has to change. This change only happens if it is coming from top to bottom. Top leaders need to learn and practice CI every day, everywhere, just like the rest of the team. They show commitment by supporting and actively participating in the transformation.

Another mistake is believing that CI is a cost reduction tool. Do not start this journey without a clear purpose. Why do you want to do it? If the answer is cost reduction, think again. Go and see, ask why, and show respect will lead you to achieve cost goals. But that cannot be the purpose. Instead, think about changing lives or creating value.

The biggest misconception is believing that CI is only for manufacturing companies. Continuous improvement, Best Business Practices, Danaher Business System and Lean Manufacturing are different names for a way to conduct business. The foundation for all of them is the Toyota Production System (TPS). The name Lean Manufacturing shifts your attention to manufacturing, and TPS makes people focus on cars. I prefer to use continuous improvement or Best Business Practices. Those are general terms with no reference to any industry.

Now you know what not to expect from continuous improvement. If you haven’t yet, read my post What is Continuous Improvement and Why you Need it? You will see why you need it in your business.

CI 101

What is a system?

A system is a set of principles or procedures working together to achieve a defined goal. Continuous improvement or Lean is a business management system designed to create customer value with fewer resources. Each part of the system has a purpose or objective. Many times only one or two lean principles are implemented, but not the system. Perhaps that is the reason why the expected results are not obtained.

The goal of lean or continuous improvement is to provide the customer with the highest quality, at the lowest cost, in a shorter time. The foundation of the system is stability and standardization. The pillars to achieve that goal are delivery time and quality. The heart is involvement, highly flexible, and motivated team members that are always improving.
Each program or principle connects with one of those components. For example, 5S and standardize work are critical for process stability. Continuous flow is one of the activities to achieve shorter delivery times.

How do we take care of the system’s heart? One of the most important principles of lean is respect. It is important to treat our team members as human beings and not a commodity. We show respect by taking the time to develop their skills and helping them to be successful. Create opportunities to learn using lean tools and encourage them to improve their work. Employee participation in improvement activities is a way to increase engagement. It gives them a chance to win achieving success in their efforts to create simple and safer processes.

Little by little, I will continue to share other activities or tools connected with the goal, foundation, pillars, and heart of the Lean System. Continuous improvement is not a supermarket of tools to pick and choose those you like more. You don’t need to use all the tools available, but you have to support all the system components. What makes Lean good is not the effectiveness of individual tools, but the synergy between them to achieve the goal.

CI 101

What is ​Standard Work?

You need to measure what you want to improve. A metric is a measurement you use to track and assess the condition of a process. It gives you information about how the process is working and provides a baseline for improvements. After each improvement cycle, the resulting value is the new goal for your process parameter.

You use the current value of a metric or process parameter to know whether the process meets the goal or it needs adjustment. For example, the safe internal temperature for cooked chicken is 165° Fahrenheit. That value is the process parameter goal. If at the end of the process the actual temperature is 165° or more, the chicken is safely cooked. If it is less than 165°, you need to adjust. In this case, you adjust the process by cooking the chicken a little longer until it reaches the goal. How do you get the expected results every time?

In this example, you have a recipe. That document states all the ingredients and the instructions to cook the chicken. It includes the oven temperature setting and a range of time to cook the chicken. Also, it includes the process parameter goal, the cooking temperature for the chicken. If you follow those instructions, every time the chicken will be cooked and will taste about the same.

Standard Work (SW) is a simple written description to perform a task. SW is the safest, highest quality, and most efficient way to execute a particular task. Once you establish SW, it becomes the only acceptable way to do the process it describes. It contains the sequence of steps to complete the task, the process parameters, and their goals.

Update the standard work every time a process parameter or the steps change. Training for Supervisors and employees is critical to ensure everybody follows the standard. After training, it is time to improve again!

Home

How can I keep my pets stuff organized?

If you love your pets as I do with mine, then your house is full of their stuff. We have toys, different kinds of treats, health supplements, and flea and tick care. Also, we have grooming supplies, cleaning supplies, travel gear, and many others. How do you keep all that organized?

The best way to organize and keep it that way is by using 5S. 5S stands for the first letter of the methodology steps. The steps are Sort, Set in Order, Shine, Standardize, and Sustain. It is a method used in all types of industries to build a nice work environment. Like many other continuous improvement tools, it is useful at home as well. The result is a clean, uncluttered, safe, and well-organized space.

The first step is Sort, which means that you need to sort all the items between what you need and what you don’t need. Start by taking out all the pets stuff you have around the house. By looking at everything in one place, you will be more effective in your sorting exercise. Check for things like:

  • expired items – medicines, health supplements
  • broken things – brushes, feeders, or scratchers beyond their useful life
  • duplicates – four carriers for one cat is too much, maybe you need only one nail clipper
  • stuff that you don’t use – like a cat carrier where your cat doesn’t fit anymore, or toys that your pet never uses

While sorting things follow this rule when in doubt, take it out. Do not store back anything you haven’t use in one year or more. There are a couple of options for those things, recycling, a donation to a local shelter or a friend, yard sale, or the trash bin.

The second step is Set in order, everything in a place and a place for everything. Find a house for every kind of item. Have toys, medicines, grooming supplies, travel items, and others with the like. Have the items close to where you use them. Check these ideas:

  • You can have by the door the items needed for a walk like a leash, poop bags and a collapsible water bowl.
  • Place a basket with bath supplies on the area where your pets get bathed. Shampoo, conditioner, brush, and towels go there.
  • Have a small cabinet in the same area the litter box is with litter bags and cleaning supplies. It can have a hook on one side to hang the scoop.
  • Keep a basket with toys in the area where they play the most.
  • Depending on how much you have, dedicate one cabinet or closet for the pets stuff.
  • Use bins or baskets to keep items like medicines, treats, health supplements, and grooming supplies separated.
  • Use clear bins so you can see through, no need to open to check what is inside.
  • Separate the items for pet type also. Color-coded lids are the best, let’s say, blue for dogs and red for cats.
  • Use a hanging wall organizer to keep the pet records in one place. 

The next step is shine or clean. Get those carriers, pet towels, and other items clean before storing them again.

In the fourth step Standardization, is about creating procedures and visuals. This step is absolutely necessary for the office or business. It is about creating written procedures that define who is responsible for what, when, and how. If you decided to use labels or color-coded bins, this is when you create your system. If you want to make sure everybody cleans the litter box the same way, this is the time to decide who, when, how and what cleaning supplies.

The last step is to Sustain, find ways to keep things cleaned and organized. You need to make a routine to keep everything in its place. Until you and your family have the habit of keeping stuff on their homes you can hang some signs to remember the procedure. Once a week, while sweeping the house check for compliance. Communicate with the family if something was out of place, keep working on creating the routine.

Your life will be easier following these steps, no more wasted time looking for items. Of course, you can do this exercise with toys, sports items, books, office or school supplies and many others. 5S is an excellent way to keep everything organized.

CI Tools

What is 5S?

5S is the five steps program for housekeeping and workplace organization. Standard work, waste elimination, and 5S are the foundation of the common-sense improvements approach. 5S stands for five words that together make this cleaning and organization methodology. The steps are Sort, Set in Order, Shine, Standardize, and Sustain. Together, they promote stability and improvements in the business processes.

In the first step, Sort you go through all the materials, tools, and equipment on the area sorting between necessary and unnecessary items. You will keep only those items that you need to do your job. Also, you keep only the amount you need. During this step, red tags are used to unneeded items to identify them. This is part of the Red Tag Campaign. The rule of thumb is When in doubt, move it out.

During the Set in Order step, you will assign a location for the needed items. Have closer to you those things that you use very often. Think about what I need? Where I need it? How many? Consider to create a central location for shareable items, this will reduce excess inventory. The motto for this step is A place for everything and everything in its place!

Shine is to clean everything inside and out. Inspect for broken pieces, wear and tear, and leaks while cleaning. Make sure that your findings are corrected as soon as possible. Think about ways to minimize reoccurrence. Ask yourself: What to clean? How to clean it? Who is responsible? Set the cleaning standard, how clean is clean. Develop temporary checklists, cleaning responsibilities, and schedules. 5S is not spring cleaning, Make inspect and clean part of your daily routine.

Standardize the preceding three steps. Set clear expectations to make 5S the everyday standard for your workplace. This is the time to revise the temporary signs, maximum number, checklists, schedules, and others. Do you need to change anything? Make sure that the standard is correct before making it official. To avoid falling back to the initial state, Follow the standards daily, success is a habit, not an act.

Sustain is a never-ending step. You want to make sure that all four previous steps are followed every day. Develop a 5S mentality by promoting 5S daily, recognizing success, and correcting out of the standard situations. Create and enforce a 5S training for new team members. The motto for 5S is Cleaning and organizing is a practice, not a project. Make 5S part of your daily routine.

Some of the benefits of 5S are obtaining a clean, sanitary, and pleasant work environment, remove safety hazards and improving employee morale and motivation. 5S also creates a great first impression for customers and visitors. Start using 5S as part of your improvement program today!

CI Tools

Are your processes consistent?

Do you get the same results out of a process always? If you do, then the process is stable, but if you don’t, then you need to stabilize it. How do you do that? 5S and visual management are the foundation for processes consistency.

5S stands for five words that together make this cleaning and organization methodology. The steps are Sort, Set in Order, Shine, Standardize, and Sustain. By making 5S part of the daily routine, the workplace is clean and organized all the time. If somebody is not following the standard, and causing inconsistencies in the results, it is easier to see and correct.

A standard is what is supposed to happen. If your process does not have a standard, you need to create one. There are no improvements without standards, they are the baseline for comparison. In a visual workplace, the out-of-standard situation is easy to recognize, and employees can easily correct it.

When we fail to achieve the expected results, it is because the process fails. To have consistent results, we need to follow the standard. To improve the results, we have to improve the process. In my next post, I will discuss 5S in detail.

Productivity

Do you want to see simple solutions at work?

Earlier this week, I posted about using common sense, low-cost solutions to create improvements in the business operation. In this post, I want to present to you one example.

The manager of a chemical laboratory that provides service for a food manufacturing company had problems to released test results as per the customer demand. The samples waiting for analysis were piling up on the refrigerator, and the staff was working overtime to process the backlog. My friend was getting ready to hire an additional lab technician when I suggest to let me help him. He agreed to walk the lab with me at the time he was explaining what he thought was wrong.

I noticed various boxes on the floor, which is a safety hazard. The working tables looked cluttered. I watched one technician searching for the right sample for almost five minutes. They don’t have an efficient method to store them. Also, I observed another technician walking around the room to work on different workstations to complete his test. While I was watching him, somebody came to drop more samples. She just put them right on top of the piled the other guy did while searching a while ago. Within the first ten minutes, I identified two causes for inefficiency, disorganization, and ineffective layout. Everything I pointed out was waste from the customer’s point of view. All those things contribute to increasing the testing time per sample without adding value to the process.

We have a short meeting with the staff to explain the situation and invited them to be part of the solution by participating in an improvement activity called Kaizen. They were happy to do something because although they like money, they wanted to spend more time with the family.

The laboratory performs on a daily seven major types of tests. One of them accounts for almost 70% of the daily demand. We focused our analysis on that test type. The staff draws a process map with the steps to complete that test. They also measured the time to complete the test and watched the process to identify waste.

We used 5S, a housekeeping and organization program to clean and organize the entire laboratory. The staff used a drawing of the facility layout to draw all the walking between steps of the process. They also measured the distance walked. Based on their observations and suggestions, we moved some equipment and tools to have them closer to where they need them. Just by doing that, they reduced the walking time by more than 50%, which reduced the test process time as well. Other benefits of this event were: 27% reduction in over-time, 52% reduction in total process time, and 30% more on-time test results released to the customer.

They need some help to move the equipment, but the investment was peanuts compared with the benefits. After the event, the customer noticed the improvement in the quality of service, and the team was able to rest better and spend more time with their family. I will keep using this example on future posts to explain in detail how we achieved the improvements.

You can have similar results by using continuous improvement as your strategy to increase customer satisfaction. Let’s have a good old conversation about how you can do it!

CI 101

How do you reduce operating expenses?

There are two ways to increase profits, to increase revenue or reduce costs. Operating expense is a common headache for business owners, are you one of them?

These days consumers have more choices and more information than ever. They know that with so many competitors, they have multiple options for the needed product or service. To survive and be successful in this environment, cost reduction is critical. How do you reduce operating expenses?

Unfortunately, when it comes to cost reduction, the first thought is to reduce team members. Another common idea is to cut materials cost by buying inferior quality. You can not afford to do anything that affects the quality of the service or product. The best solution to cost expenses is to identify and reduce waste.

Waste reduction has to be an everyday activity, it is not a one-time event. With the help of your employees, you can improve your business working with continuous improvement basics. The basic activities of CI are housekeeping and organization, waste reduction, and standardization. You know already what waste is, in the next weeks I will talk about the other two.

Assessment of your business processes to identify waste reduction, standardization and organization opportunities is the best way to improve. Do not start this process as an excuse to cut manpower. Reducing team members is not, and never will be a continuous improvement goal.

CI 101

How can you create changes in your business?

Often business owners see something that tells them that something different needs to be done. Perhaps it is a recurring problem or realizes that the business is not reaching financial goals. What is the solution? You need to identify what areas need change and prioritize. How can you create changes? There are two major ways to create change: innovation and continuous improvement.

More often than not, innovation is a high-cost solution. While it is necessary to keep yourself ahead of the game, I like to start somewhere else. My first stop in creating improvements is to use common sense, low-cost solutions.

What are common-sense solutions? It is to approach a problem using good judgment. For example, let’s use one of my favorite low-cost tools: housekeeping and organization. Will you agree that keeping a clean and organized workplace is common-sense? Why do you think it is? Perhaps because you know some of the following facts:

  • Clutter and disorganization are against productivity, reduces the ability to concentrate.
  • A messy workplace causes anxiety, stress, and has the potential to foster a negative state of mind, like feeling overwhelmed.

Your good judgment tells you that an efficient workplace is cleaned and organized. A lack of cleaning and organization is a visual indicator of inefficiency. You know that this condition has to change.

To improve housekeeping, you can buy a fancy computerized program or use a simple low-cost solution. Your new high-cost application will help you to create checklists, assign responsibilities and follow up on the cleaning activities. But it will not help you to ensure the workplace is clean and organized.

An alternative is to use 5S, a housekeeping and organization program. This program along with waste elimination and standardization are the basics of practicing continuous improvement. CI is about creating small changes using common-sense solutions that are easy to implement and follow. When you add up all those changes you will see a huge improvement in the overall performance of your business.