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Process vs Product. Innovation & Lean

I was taking to my friend Emma yesterday about what we were doing to keep it together during Melbourne’s second Covid19 lockdown. She knits and I crochet. I said I found crochet relaxing and mindful as I could just create patterns and shapes with no rules. Emma said she didn’t find knitting that relaxing, probably because she was focussed on finishing the item, following the pattern and she wasn’t enjoying the process enough. This led on to how we cooked. I use a recipe as inspiration and then make it up. Emma follows a recipe exactly. Emma’s results are no doubt much better than mine in the kitchen, and I can only hope that I strike a reasonable balance between the enjoyment I get from creating a meal with the enjoyment my family gets from eating it. Debatable, perhaps.

The surprising thing about Emma’s & my approach to cooking and textiles is that Emma is an architect and one of the most creative people I know. I’m an engineer and have been in manufacturing for almost all my career. It seemed that we behaved the opposite way from our work life in our down time. Perhaps we all need balance in our lives.

Unfortunately our permitted one hour lockdown exercise hour was up before we could dig much deeper into the issue of process vs product, creativity and innovation, but it got me thinking more about it and usually when I get ideas swirling in my head, I like to write them down. Hence this article.

Innovation & Lean

I sometimes hear that Lean stifles innovation as it is focussed on standard work. This view sees standard work as static and does not include the continuous improvement element of lean thinking. Standard work is just a tool to enable effective communication. Standard operating procedures and other standard work is a way to document the best process we know today. It’s a way to train new people and capture some of the years of experience that many have so there is less learning through trial and error. Data or drawings displayed in a standard way make them easier to read and interpret. It’s applicable to any industry or workplace as it’s about getting the basics right and easy, to free up headspace for innovation or ideas. If we come up with a better way to do something tomorrow, we will update the standards to reflect the changes.

Creative people often don’t need to document their processes as they are working alone, so the need for effective communication isn’t there. But most will have a process they follow to get the results they want. If they have a team working with them, they will want that team to follow processes, so they are aligned with whatever their creative vision is. The alternative tends to be chaos or confusion, a harder environment in which to create ideas and innovate.

Focus on the process, not the product

At kindergarten, both my children were prolific painters, usually on large pieces of paper and I remember asking Malcolm, their amazing kindergarten teacher, what to do with them. I thought I should keep them all but he suggested to focus on the process, not the product as that’s what the children were doing. Children will be imaginative when they are exploring and enjoying the process of creating and it doesn’t really matter what their painting looks like. Later on, school will focus on the product, or results. I’ve tried to remember what he said and recognise effort rather than results, as effort is something that individuals have more control over. Although, like I’m sure many parents do, I did still keep quite a few of my children’s paintings.

When I admire something that has been created, it’s easy to think that it was just created out of thin air. The painting, sculpture, recipe, film or book. The product. What I don’t see are the sketches, inedible meals, clips on the cutting room floor (pre-digital!) or chapters left out. Artists often have a vision of what they want to achieve, but if they just focus on the final product, they can get stuck with writer’s block or equivalent. They need to take the steps necessary to get to their vision. The process. This might include habits, have a working space, writing random chapters or characters to see how they fit, going for a walk or creating late at night. Each creative person will have a unique process and they may change that over time, but it’s still the best process they know today to create the product they want in the most effective way. Their standard work.

In lean, the overall continuous improvement cyclical process is plan – do – check – act. The creative process would be similar starting with an idea or vision and having many trials / sketches / revisions which will all inform the final product.

Manufacturing (by definition) makes products. It can be seen as repetitive or boring as you are doing the same thing every day, following procedures. The interest and excitement come from creating better procedures or processes, which will produce better / faster / cheaper products. If you only focus on the outputs (how many produced, how many rejects, cost to produce etc) you will miss opportunities to improve. Instead if you focus on the process – the inputs, you will have more control over the output, the product. That’s what lean thinking does.

Do you focus on the process or the product? What processes create innovation in your workplace?

Molly’s False Teeth & Lean

Yes, there is a connection between a lost set of false teeth and lean!

A few days before Christmas, my sister took Molly to the hospital emergency department from her care home. During the admission process, Molly’s false teeth went missing. I imagine that having no teeth would be stressful enough at any time of year but made worse by the thought of having to eat Christmas lunch out of a blender.

The nurses could not have been more helpful once they had realised Molly’s teeth were missing. They tried to work out what had happened and spent a lot of time looking for them.

In the Lean world, time spent looking for teeth is ‘non-value added’ time or ‘waste’. And it feels like a waste of time. Nurses’ time is valuable and better spent on nursing. Lean coaches help people look at processes from the customer’s point of view and how waste can be found and removed.

So how do false teeth go missing? Judging by the reaction of the nurses, it wasn’t the first time they had had to look for teeth. Problems usually occur when ‘things fall through the cracks’ or there is no clear process or responsibility for a task. All the individuals involved in a process may be doing their part exceptionally well, but something gets missed on a handover or when one person makes an assumption about what others might be doing. In most organisations the staff are good in their areas of expertise. In a hospital, the doctors, nurses and other staff are generally well trained, knowledgeable and experts at their job. Keeping false teeth safe does not require any technical expertise.

Value vs Waste

Most workplaces involve many processes. In manufacturing, the product moves through the plant from raw material from suppliers through to finished product delivered to the customer. We often call this process the value stream. Value is added along the way when the product is changed in a way the customer wants. There is also usually a lot of waste in the process, when the product is waiting, or being moved, or something is missing, or has to be reworked. This waste is all the stuff that normally happens which the customer is either unaware of or wouldn’t appreciate paying for. Customers are usually happy to pay for value. Wastes are the opportunities to improve.

In a hospital it is the patient who is the value stream. Value is added when the patient is being treated. Lots of professionals interact with the patient and do their part of the job well. That might be taking a temperature, administering drugs, assessing what to do next. But each time a patient moves from one person to another there is a risk that something gets missed. Which is why everything gets documented on the patient charts, the risk of mistakes being made is minimised.

Safety – quality – delivery – productivity KPIs in that order

In most workplaces, people are measured through KPIs (Key Performance Indicators).

Safety should of course be the top priority, and that would be equally true in a hospital as in a factory. As loose false teeth in a patient’s mouth is a hazard, then the teeth should be removed.

The next most important KPI is quality. Removing mistakes and the chance of mistakes being made. Hospitals are good at minimising the risk of a mistake causing medical harm. Keeping false teeth safe is perhaps not an urgent medical issue, but you could argue it could become a medical issue over time, so it’s important to keep them safe.

Delivery means shortening the time of the value chain. How can we get the patient through the admission process, through any treatment and back home in the shortest time. Often this is interpreted as needing to do work faster, but instead focussing on removing non-value added steps, or waste, can improve delivery times without sacrificing quality.

Productivity is the one measure that will improve on its own if quality and delivery are focussed on first. An example of this is the lost teeth. It might take an extra minute to bag and label Molly’s teeth when she was admitted, which if you’re being measured on how productive you are and you have some more urgent medical issues to address it might not be seen at the time as a priority. But how much time did the nurses spend looking for the teeth after they had gone missing?

There is a rule of thumb that if a task that takes 1 minute gets missed and goes to the next stage it takes at least 10 minutes to fix later. Keep multiplying by 10 as the problem goes further along the process. Getting it right first time and improving quality therefore directly improves productivity. But if you focus on productivity first, then quality can suffer. If an individual is measured on productivity and the KPI doesn’t include the time spent fixing up an error, then there is no incentive to do it right first time. Even if you know it’s the right thing to do, people will often do what they are measured to do, which is be ‘productive’.

Root Cause Analysis

There are two types of problems. Those you have seen before and those you haven’t. Typically when we ask people in their workplace about which types of problem they have the most, it’s the former. Molly wasn’t the first patient to have lost her teeth, so this wasn’t out of the blue, but a repeat problem. Family members who visit hospitals regularly know to take teeth home with them so they can’t get lost. Even a big sign in the waiting room saying “there is a good chance we will lose your loved one’s false teeth – please take their teeth home with you” might reduce the number of lost teeth. A sign like this would be what is generally called a quick fix to a problem. It’s a band aid solution until you investigate the root cause and come up with a countermeasure.

Why? not Who?

When something goes wrong, there should be an investigation. Unfortunately, this is often when everyone dives for cover so there’s no chance of them being blamed. There is no incentive for anyone to be open about what had happened and it’s hard to get to the bottom of what occurred. Instead of asking who did something, try asking why something occurred. Typically you ask why 5 times as you dig deeper to find out what has happened. You know you’re getting somewhere when you get past a person’s involvement and start looking at changes to processes to stop recurrence.

Go easy on the person and hard on the process

In getting to the root cause of the problem you have to go past blaming someone. It’s not the nurses’ fault, or my sister’s fault. If you keep asking why a problem occurred you will eventually come up with one of 3 causes:

1. No Process

Is there are process for managing false teeth? If not, create a process, document it in a procedure and train everyone on the procedure.

2. Ineffective process

Is the process any good or does it need to be modified to prevent teeth from getting lost? Auditing a process to see whether it is followed, and if not why not, can determine if the process actually works.

3. Process in place but not followed

If there is a good, well documented process, why was it not followed? Does everyone know about it? If not check how people are trained. Does it need to be included in an induction training program?

If there is a good process, everyone knows about it but it was still not followed then you need to ask what is driving that behaviour. Often it’s because someone is pushed for time and it’s not seen as important. Realigning KPIs can help modify behaviour. For example if the nurses have a KPI around how fast they can admit a patient there may be incentive to take some short cuts that have no impact on the medical outcome, but may have an impact on the quality of the patient’s experience (such as losing false teeth).

Most people (me included) are in awe of what doctors and nurses do. It’s much closer to rocket science than keeping a set of false teeth safe. Which is why patients and their families are particularly frustrated with something like lost false teeth. Keeping teeth safe is not a hard thing to do on its own, but there are so many things that doctors and nurses need to do to keep their patients safe, keeping false teeth safe needs to fit into the overall process of caring for patients., with a process to follow.

It seems like there is a simple solution. Whenever you go into hospital they print lots of labels with your name and details on them. Why not have a ziplock bag for false teeth, hearing aids and other items and stick one of those stickers on it. Then have a safe place to put the bag. At least with a label if they did get lost, you’d know who to return them to.

On this occasion, Molly’s long hospital stay was remembered more for her not having her teeth than for the excellent medical care she received. The good news is that one of Molly’s sons found an old pair of teeth in time for her return to her care home, which made the move back a bit easier for Molly.

Covid-19 Testing & Lean

Artist impression of Corona virus — Artist impression of the corona virus

Over a Zoom coffee recently, a friend had been telling me about her day at work, which hadn’t been great. She works in a doctor’s surgery and had received numerous phone calls from people waiting for their Covid-19 test results. They had been told they would get their results in 2 days but the tests were taking longer. The patients had to self-isolate while the tests were being processed, which was at the very least frustrating and in many cases impacting on their work or health. It seemed that her job would be a lot less stressful and more productive if the tests could be sped up so she’d get fewer phone calls chasing test results.

Go easy on the person, hard on the process

So, what has this got to do with lean? Many think lean is just something to do with manufacturing, but the principles apply to any process. And getting Covid-19 tests done is a process.

It’s no-one’s fault that the tests were taking longer that the promised 2 days. Certainly not the fault of a receptionist on the other end of the phone. Or the nurse taking the test. Or the lab technician processing the test. It’s the process, or system that needs fixing.

What is a process? It’s just a series of steps between a supplier and customer. In the case of Covid-19 testing, the patient is both the supplier and the customer. The steps would be something like this:

Patient’s swab is taken at clinic
Enter test details into the computer
Label, bag sample and put in out-tray
Sample sits in out-tray until picked up by courier
Courier sample over to lab
Sample waits for machine to be free
Process the sample through the test machine
Enter test results into computer
Provide test results to patient

Disclaimer – this is for illustrative purposes only to show how lean principles apply. And if this were for real, the people in the process, who know the details, would be the ones analysing it, not me. And each step would be further broken down and the time taken for each step noted. I’m just using Covid-19 testing as an example of a (non-manufacturing) process.

Bottlenecks & WIP

Any process will only be as fast as its slowest step – the constraint or bottleneck. Usually increasing the capacity of any step other than the bottleneck will not increase the overall capacity. It’s easy to tell which step is the bottleneck as the work-in-progress (WIP) piles up before it. There is no flow.

In the case of Covid-19 testing, many drive-through and other clinics opened up quickly and people were encouraged to get tested. If the capacity of taking swabs exceeds the swab processing capacity, then there was going to be a problem, which would only get worse over time as the swabs (WIP) build up.

The more tests you have backed up in front of the bottleneck, the worse things get. You may get queue-jumping for some tests which are seen to be more urgent. And as anyone who has been in a queue knows, that means that others in the queue will take longer.

In an ideal system, there is no queue. In practice there may be buffers between steps, but the amount is planned for – not just a pile of tests waiting.

I imagine that test machines are expensive and it is difficult to just build more in a hurry. And train more people to use them. But there are other ways to increase the capacity of a machine. You need to measure its uptime (also called OEE – overall equipment effectiveness). Is it running at 100%, no quality issues, no breakdowns? The time between tests, time setting up the machine, putting information into the system, checking names or other necessary paperwork are all opportunities to increase capacity quickly.

Pull vs Push

If testing capacity is increased through more drive-through and other clinics, these test swabs are ‘pushed’ onto the next step – processing the tests. Tests at clinics may be done as fast as possible, particularly if there is a target number to reach each day. Having a large pile of tests to process doesn’t make the processing any faster. It can even slow things down as there are more tests to sort through and possibly prioritise if some urgent ones come along. Or decide which to do first. Or be stressed by the big pile knowing everyone is relying on you to speed up, which is when mistakes can happen. How do you ensure that there is ‘first in first out’ with a big unmanageable pile of tests to process? Test times will probably vary, so some customers will get their results sooner than others.

What can work better is using ‘pull’. You need to know the customer demand rate (how many tests do we need to get back to customers) and work back through the system at this same rate. Any constraints or bottlenecks within the system must operate at the required customer rate. The capacity of the bottleneck steps may need to be increased, but until you do that, it’s important to be honest with your customers. Only promise to deliver what you can achieve, which is the rate of tests through the bottleneck. Other steps in the process, which have more capacity than customer demand don’t have to run flat out. This bit is often hard to get your head around, but to optimise a process, some steps will slow down and that’s OK! It’s only the bottleneck that has to run flat out.

Value vs Waste

Lean is a very simple concept. It looks for waste and reduces it. Waste is anything the customer doesn’t value. In the example of being tested for Covid-19, the only steps that add value are those in bold above – getting the swab taken, processing it through the testing machine and getting told about the result. If it takes 10 minutes to take a swab, 3 hours to process a test and 10 minutes to send a text result, then the value-add time is <4 hours. Even with a promised turnaround of 2 days, value is only being added 4/48 or 8% of the time. 92% of the time is waste such as waiting in a queue, waiting for the courier pick up time or being couriered to the lab. The longer the queue, the more waste and WIP and the longer it will take for someone to get their test results back.

So whether you’re involved in Covid-19 testing, manufacturing or any other business operation, you have processes. Understanding the steps in a process, the capacity of its bottleneck and applying lean principles can improve processes usually without spending a lot of money. There are benefits too as the customers’ experiences improve, which in turn leads to employees’ jobs being less frustrating and stressful. In the case of Covid-19 testing, there is no reason why a 2 day turnaround (or better) can’t be guaranteed as long as too many tests aren’t pushed into the system.

Let’s hope those involved with Covid-19 testing have a good understanding of the bottlenecks of their processes and have improved things, so my friend’s day at work will also improve. I’ll find out at our next coffee catch up, which happily will be in person, rather than via Zoom.

Sourdough & Lean

A few fails along the way but finally a success after a week of cultivating sourdough starter.

It seems that during these weeks of Covid-19 lockdown, people fall into 2 camps. Those who make sourdough and those who don’t. I used to be in the latter camp and didn’t understand what all the fuss was about, but after a week investing in a smelly starter on the bench, I’m now officially a sourdough baker.

What has sourdough got to do with lean? Well, it’s just a process. Lean is all about looking at processes, continuous improvement and the engagement of people. Judging by my first attempts at making sourdough, improvement was definitely required.

Successful organisations are those with a continuous improvement culture. But organisations are just made up of individuals. When managing change, we can look big picture (vision, skills requirement, incentives, resources, action plan etc.) and we can look at where each individual is at in the change process (awareness, desire, knowledge, ability or reinforcement). It’s the same with continuous improvement. In the case of me making sourdough, there is no big picture. I don’t have to get better at making bread. There are lots of great bakeries in South Melbourne. There’s no burning platform. For some reason I was invested in the process of making sourdough enough to want to get better at it. So why was that?

Engagement
I was engaged in the process, enjoying learning something new. I realise it’s only worth talking to other sourdough enthusiasts about it. Otherwise I can see their eyes glaze over (even over Zoom). If you’re not engaged, you’re not interested in improving. This applies to any process.

At a recent client, one of the team leaders regularly laughed at me when I got excited by the possibilities for improvement in some of her team’s processes. She didn’t get it but was happy to humour me during coaching sessions. A few months later, she came up with a brilliant idea to set up assembly stations for products, drastically reducing waste (in particular overproduction, waiting, motion & inventory) in the process. She was genuinely excited by the changes and the improvements and kept building on her successes.

The best ideas for improvement come from people within a process. They know the detail. They might need help with how to fix the problems, but they usually know what the problems are. I know a lot more about making sourdough by getting my hands dirty than I could ever learn from YouTube.

Control the inputs, not the output
Although organisations measure the outputs – safety stats, financial performance etc., these cannot be directly controlled in the same way the inputs can. Outputs are used to feedback whether the input control needs improving.

In making sourdough, the experts all recommended weighing the flour, feeding starter at the same time, keep the temperature the same ie control what you can. But as sourdough starter has life of its own and is variable, some inputs could not be controlled enough to guarantee a good result. This is where control points along the way are needed. Adjustments to time or temperature depending on how much the dough has risen etc. I learnt what to control and what to measure along the way to increase the chance of an Instagram-worthy product.

Feedback
It was exciting to see how the bread was going. Feedback was the sight of a great looking loaf coming out of the oven and in the tasting. Similarly as in the above example if the improvements can’t be measured there’s no real incentive to keep doing it. It’s why teams keep score, or you try to beat your PBs. We like feedback to see how we are doing.

In continuous improvement speak, we call that process PDCA, or Plan, Do, Check & Act. By checking results and making adjustments that feed into your next plan (or next batch of sourdough) you keep the feedback loop going and keep getting better.

So, making sourdough is just like any process. Control the inputs, measure the outputs and feedback results. Engage those within the process and get improvement ideas from them.

Making sourdough is better than many processes I’m usually improving though, as I get to eat the output.

Why do 5 Whys? Remember the Oscars 2017?

…and the best picture academy goes to La La Land…or Moonlight…

2018 Oscars seemed to go smoothly, but who remembers last year? Did you watch the 2017 Oscar ceremony? When the best picture Oscar was announced as La La Land and the producers were half way through their acceptance speech before it was corrected and the award was given to Moonlight?

It turns out they mistakenly opened the Best Actress envelope, which was for Emma Stone in La La Land. Emma Stone said they couldn’t have as she had the envelope. Turns out there were two envelopes.

The headlines the next day were scathing. “You had one job!” Yes they did have one job but if you look at the process with a mistake-proofing and risk assessment mindset, the process called for a lot of improvement.

Many just called for the two accountants doing the job to be sacked. It’s not always fair to blame the operator, but it’s a very common reaction. Sacking the people involved might make the people in charge feel better but it doesn’t really address the root cause of the problem.

You could do 5 Whys?

Why was the wrong winner announced? Because the wrong envelope was handed over.

Why?

Because there are two envelopes for each award.

Why?

Because they might go on from either side of the stage. (Really? Is the Oscars not completely scripted?)

Why was the wrong one handed over?

Because the person handing the envelope over was distracted by his phone being on social media.

Why was he on his phone at the same time as handing out envelopes?

Because no-one had analysed the risk of distraction and no-one had implemented a no-phones policy. Or there was a policy but it had not been followed. I’m sure it’s not the first time he had been on his phone. Just like if you text and drive – the first time you do it you might not crash, but the risk is still there, which is why the police try to catch unsafe behaviour. Before the accident happens.

Why was the wrong winner allowed to give an acceptance speech?

Because there was no process to analyse risk and have an action plan in place. No risk assessment appears to have been done.

As with most workplace incidents, a number of things need to go wrong for a disaster to happen. It is possible to put in place some process improvements to reduce the chance of a similar incident happening in the future. Many of the changes ‘mistake-proof’ the process. An important aspect of lean or continuous improvement.

Have only one copy of the envelope and ensure the winner keeps the envelope.
Have both accountants have a list of winners to check the right result is announced.
Have a clear procedure to follow in the event of the wrong winner being announced.
Do not allow mobile phones at the workplace to avoid distractions.
Review the lettering on the front of the envelope to ensure it is legible.
Consider repeating the lettering on the back of the envelope to ensure it is checked before opening the envelope.
Ensure both presenters check the envelope for the correct award.
Rehearse. Otherwise known as training.

So there was good reason to make the writing on the envelopes larger in 2018. No mistakes this year!

My Mini

A few months ago, I got a new Mini. Very exciting as my old car was almost 20 years old. Minis are made to order and shipped from England, so it was a 3 month wait. Worth it. But after a couple of weeks, the back bumper looked crooked and rubbed on the tailgate, causing the bumper to get scratched. I took it back to sales, who asked me to speak to warranty. Warranty passed me onto service. Mini service was being renovated, so I had to go to BMW service a couple of km away. Service took it in, gave me a BMW hire car and passed it onto their body shop. I rang service every week to see how my car was getting on and eventually 5 weeks later I was told that it had been fixed.

I went in to pick up my Mini and the bumper looked the same. Still crooked, but the scratch marks had disappeared. I pointed it out to the service man, who called over the warranty woman. They both looked at it and agreed that it had not been fixed. So I left in the hire BMW and my Mini went back to the body shop for another go. Another week later, I picked up my car. All fixed. But a few days later it was crooked again.

This time I went straight to the body shop. They fixed it on the spot. But after a few weeks later the bumper was crooked again and getting scratched again. I took it back (again). They booked it in for another visit to the body shop, another respray and I had another hire car for 2 days. This time, however, they appeared to get to the root cause of the problem – a faulty bumper clip – which they replaced. The bumper is now straight and doesn’t rub on the tailgate.

As a customer I had to deal with 4 departments: sales, warranty, service and body shop. They all had different priorities on cost, time and quality. Body shop told me they had a spare bumper and wanted to replace it, but warranty told them to fix the original. Service was telling body shop it was urgent, but there was no follow up to get it back to me. I just wanted my car fixed within a reasonable timeframe.

Some lean concepts or tools highlighted by this:

Value Stream Mapping – if Mini looked at the number of people that had to interact with the customer, they might reconsider their process.

Misaligned KPIs – warranty, body shop and service all appeared to have had different things being important to them.

Right First Time – obviously if the bumper had not been faulty at the beginning, there would have been huge cost savings for Mini/BMW.

Communication – So important. Communication both between departments and with the customer could have been better.

Waste – DOWNTIME – Defects, Overproduction, Waiting, Not utilising talent, Transport, Inventory, Motion, Excessive processing – at least 5 wastes identified here.

The whole experience did make me wonder whether Minis and BMWs were expensive because they were great cars and therefore provided value for money or whether they needed to cover the wastes in their processes.

I still love my Mini, though.

Keeping Score – KPIs

Why do we have KPIs (Key Performance Indicators)?

If you’re playing sport, you usually keep score. Scores tell you whether or not you are improving. Footy players keep score. Athletes keep track of their PBs (personal best). Coaches measure yet more statistics. KPIs are just the scores or measures for your business or organisation.

Most organisations either have too few measures, or too many. I recently worked with a business which supplied products to the building industry. They all agreed that the reason their customers chose them was for the quality of their products. Yet they had no quality measure anywhere in their business. It would be very hard for them to know how they were performing and whether they were getting better or worse. They were relying on their own installers to fix up quality problems before the customer became aware of them, but at what cost?

It’s important to get the balance of measures just right – both in the number of measures and in the spread or balance. At organisation level, this is often called a balanced scorecard. Not everyone in the organisation needs to know and manage all the measures (just like the players don’t know the level of detail the coaches do on a footy team) but the measures any individual has needs to mean something and be within their control.

The KPIs for an individual or a department must also drive the right behaviour and be aligned with the organisation’s targets. Be particularly careful of department specific measures – those ones that make a department look good at the expense of others. An example is purchasing having raw material unit price as a measure. Reducing unit price can drive ordering in large quantities, causing headaches for the warehouse, increased storage costs and risk of damage or obsolescence. It might also result in decisions being made on price at the expense of quality. In this case the purchasing department also needs to have overall stock value or stock turns and product quality or warranty costs as a measure.

Keep it simple. Just as players are too busy playing the game to study the stats, operators are usually too busy working to study pages of numbers, even if they are visually displayed. 4-5 measures is a manageable number. Number goals (e.g. good parts produced) often means more than percentages. The measures need to be within the person or team’s control.

Keep it balanced. People will do what is asked of them, as they will think that is what is important to the business. So if production volume is the only thing measured then quality or safety may suffer.

Priority of KPIs or measures

Prioritise KPIs in the following order, so that people get to learn what the organisation’s priorities are. Quality is high up the list because in most cases, if you try to drive productivity, quality will suffer. However, if you focus on quality and improving processes, productivity will improve:

Safety
Quality
Delivery
Productivity
Improvements – projects or ideas

These points can form the basis of a tool box talk agenda, or month end review meeting.

Some examples of possible KPIs or measures are below. But make sure you review your measures and targets regularly to ensure they are driving the right behaviours.

Suggested KPIs or measures

Safety – no of days since MTI/LTI (medically treated/lost time injury). Don’t have a target on first aid injuries, as people may be tempted to hide minor injuries. A great proactive measure is the number of times someone is ‘caught’ behaving in a safe manner such as wearing the right PPE. 5S (workplace organisation) score or no. of 5S audits completed is another option.
Quality – no. of parts made right first time (RFT). This should be recorded positively and is one example where percentages works OK as % RFT of total parts (similar to % free throws by a basketball player).
Delivery – DIFOT (delivery in full on time). The main problem with this is many sites change the dates – usually with the customer’s agreement – so always have 100%, which doesn’t reflect the chaotic reality. Schedule adherence for manufacturing is good as it is more within their control and is a good indicator of stability.
Productivity – no of items per team or cell per hour or day. Or number of batches or jobs. Ideally there is also a per person or per manhour measure so that if one if the team is missing, the rest pull together to make their numbers look good.
Improvements – no of projects on the go, no of projects completed, savings as a result of these projects, training hours. This may be an input measure. A footy team might measure attendance at skills training sessions.

Input vs Output measures

This is a blog post in itself but if you trust the process, getting the right inputs will result in the outputs you want. Checking outputs is often too late.

Lean, Six Sigma and Theory of Constraints

Process improvements. Which should I use? Lean, Six Sigma or TOC?

There is an ongoing debate between consultants on which is better – lean, six sigma or TOC (theory of constraints). There is a tendency to use baffling jargon – often in japanese – and overcomplicate things. In reality most continuous improvement tools are similar, just with different focuses:

Lean focuses on minimising waste.
Six Sigma focuses on minimising variation.
Theory of Constraints focuses on reducing bottlenecks.

An approach that usually works is to use TOC to help you decide which part your process to tackle first. You can then use some lean or six sigma tools release capacity.

Inventory is what we use to cope with less than perfect processes as it hides issues such as delays, poor quality, process time variations, supply shortages etc. Lean and six sigma will tend to push to reduce all inventory, while TOC will accept that some inventory is of value as a buffer. This is especially true for jobbing shops, where day to day balancing of work is difficult.

Continuous Improvement Blog

Welcome to my blog. All about continuous improvement.