Sunday, September 23, 2012

Kaizen without customer is Waste (again)

I would like to share yet another example of an improvement effort (Kaizen) that did not involve the customer and turned out to be complete Waste.  I had the privilege of working for a client in the medical devices business.  Without giving too much away they have a technology that allows a patient to wear a tiny mobile device that reads every heart beat and sends it back in real time to a central monitoring station.  After a week or two of collecting data my client then provides the patent's doctor with days worth of detailed data that can then be used to make accurate diagnoses.

One particular engagement with this client involved their Help Desk.  These are the people who answer the phones 24/7 whenever a patient has a problem that needs to be resolved.  Those of you who read my blogs will immediately recognize a Lean gold mine when you read it.  Sadly this was not the case at first for this client.  For them the Help Desk was simply a part of their process.  As opposed to a continual feed of invaluable customer feedback on Value and Waste.

But as I said we were not there to mine this data but rather to help cut costs for the company.  And that meant understanding why the calls were coming in, prioritizing the most frequent causes and eliminate them in order to reduce call volumes.  I'm not saying I'm necessarily proud of everything I have done in the past.  But my heart is always in the right place.

It did not take us long to put call logs in place that allowed Help Desk operators to simply tick off the root cause for each inbound call on a check list (I love check lists) they helped us create.  After a week or so we had thousands of data points and immediately we saw that "Leads not sticking" accounted for 19% or almost one in five calls.

We sat down with some of the people in the call centre and asked for help interpreting the results.  Not surprisingly they were not surprised.  "Of course that's our number one reason for calls.  Everyone thinks the wet wipes are to clean their skin."  I should mention that when the kit shows up at the patent's home they are required to stick four leads to their chest and abdomen and then attach tiny wires.  It turns out included in the kit is a small square packet that looks exactly like a wet wipe you would get when you order chicken wings at a greasy restaurant.  Not surprisingly the first thing patients do is open the wet wipe and clean their skin before adhering the leads.  Makes sense.

Unless you actually read the instructions and find out that the wet wipe is actually a solvent to help clean off the glue from the leads after the monitoring is finished and you are removing the leads.  So wiping your skin first has the effect of making the leads not stick.  Hence the 1 in 5 calls to the Help Desk complaining that the leads are not sticking.

Not being medical experts ourselves we respectfully asked the question "....so why do you include the wet wipes in the kit in the first place if this is what happens?"

We were told that the folks at the Help Desk (who listen to the Voice of the Customer all day long) had been telling the folks in Operations to please take the wet wipes out of the kit because of this exact problem.  They didn't even need a call log to know this.  But they were repeatedly told by the Operations folks that the wet wipes were necessary to help patients clean off the glue residue after the testing was finished.

Again not being medical experts we respectfully asked "....well they have a point, don't they?  I mean people probably would want to have a way to clean the glue off after they removed the leads."

And here again we were told by those who listen to the Voice of the Customer all day and all night long that most patients have already used the wet wipe to make the leads not stick in the first place so they have nothing to clean off the glue anyway.  If someone does call the Help Desk with this complaint all they do is recommend the patients use a wash cloth and warm soapy water which is just as effective at removing the glue.

We took our information to the VP Operations who was responsible for both areas within the company and explained our findings.  He brought in the heads of both areas and put the idea in front of them.  After a brief discussion the decision was made to take the wet wipes out of the patient kits starting the next day.

I don't have to tell you the effects were immediate.  Fortunately for us as consultants there was a very short cycle time between the time the kits were packed and the patients received them.  That meant that within three to four days we saw a dramatic drop in inbound calls - almost 20% to be exact.  And you guessed it almost all the calls regarding leads not sticking immediately went away.

The lesson is this: at some point the company made the decision to add wet wipes to the patient packages because it "seemed" like something the patients would Value.  And from the point of view of the company this made sense.  However they did not listen to the Voice of the Customer even when the customer called them hundreds of times a week to verify whether or not they had added any Value or Waste.  And even when one in five calls from customers told them that they had added Waste they still did not listen.  They took their own perception of Value and Waste over the opinion of their customers.

This is a lesson in just how difficult it is to overcome internal perceptions and let go of everything you assume is Value.  I recently concluded an online poll where 51% of people responded that the customer is the one who decides whether a task is Value or Waste and just 1 in 10 felt the front line staff could make the distinction.  And in a related poll I am currently conducting I ask how many improvement initiatives directly involve the customer so far 100% of respondents say they do just this

Now I find it hard to believe that 100% of the time people directly involve their customers, especially given I can count on one hand the number of times I have seen this done effectively in practice.  And to demonstrate this I have a 3rd poll where I ask people how they engage their customers for feedback.  Someone please explain to me why after two weeks of having the 3rd poll open only a tenth the number of people have responded as answered the first.

Even if you think you directly involve your customers because you think you know how your customers feel, do yourself a favour and ask anyway.  I guarantee that you will be shocked, amazed, and ultimately far more successful if you do.

@leanmind

Sunday, September 9, 2012

Kaizen - Customer = Waste

Now that I have your attention I'd like to describe a situation where I personally observed a well-meaning Kaizen that did not involve the customer.  And I'd like to show you how it turned out to be a complete waste of time for all involved.

For those of you not familiar with the selling process that most implementation based consultants go through it generally involves something called an Assessment or Analysis.  This is an exercise that the consulting firm performs, usually at their own expense, intended to scope out the project and convince the client that the firm is up for the challenge.  Assessments can take anywhere from a few days to a few weeks to complete depending on the size of the potential engagement.  And at the end of the exercise it is obviously the hope of the consulting firm that they present a compelling enough case to convince the client to buy the project.

The firm where I first worked has a rigorous approach to how they performed a two-week Analysis.  In fact they had the process down to a science where each hour of each day was carefully scripted out.  And the only decision the lead analyst had to make was where to schedule the various studies.

The other thing you need to know about these assessments is they are gruling for the consultants involved.  In fact if a consultant does not work a minimum of 20 hour days conducting and writing up their studies then the firm doesn't feel that the analyst is doing their job properly.  I actually had a partner explain to me that a big part of the assessment is demonstrating to the potential client "just how hard we work."  I noted that the partner usually only popped in and out during the day to see how the assessment was going.

So back to the Kaizen.  As I mentioned a huge part of the effort for the consultants was the time it took usually back at some dingy hotel room to manually write up their studies.  An 8 to 10 hour study could take half as long again to write up.  And if the analyst was feeling particularly grouchy they could make you re-do much or all of your work again.  This colosal waste of time was definitely not lost on bright young minds fully capable of generating masterpieces on Excel or PowerPoint.

That was how the studies were being done when I left the firm almost 10 years ago - long hours spent manually writing out the studies and filling in the graphs with coloured tape.  Then about 4 years ago I had the opportunity to work with a spin-off firm that was basically a pale shadow to the firm where I had originally started.  One of the things I noticed on my first analysis was the fact that spreadsheets and colour printers were now being used to write up the studies.  Apparently this was a process improvement (Kaizen) that the original firm had finally given in to.

I was happy to see that even a process improvement firm could look at its own process and make improvements.  And my immediate assumption was that the length of the assessments must be similarly cut in half.  My mistake.  Apparently all the firms had done was take the additional time available to the consultants working 20 hours a day and assigned additional studies to be completed.  That meant it still took two weeks to compile the findings.  And in the final presentation there were almost twice as many studies taped up around the board room table.

So what's the problem?

Well those of you who follow my blogs and tweets will know that I am passionate about the importance of starting every Lean exercise with having the customer define value.  My point being you may have your own internal perceptions of what adds value and what does not.  But at the end of the day the only person's perceptions that matter are those of the customer.  Despite this I still read blogs and watch pod casts from Lean "experts" who rarely if ever even mention their client's customers.

Take the consulting firm for who I used to work and for whom I have to thank for bringing me into the world of management consulting.  They were right in looking at their own internal process to find ways to reduce waste and add more value.  However by ignoring their customer, they automatically assumed that writing up studies was somehow adding value.  They came up with a method change to reduce the time required to complete this task.  However rather than leaving the number of studies the same and reducing the time they took to complete these highly intrusive assessments, they simply maintained the two week cycle time and piled on more colourful graphs to show at the end.  That's like Toyota designing a clever way to reduce inventories of parts in one location, only to store more parts in the freed up space.

What's even more interesting is I noted that the final presentations to the clients often only focused on a small percentage of the completed studies.  This was because there were simply too many to go through in the time allowed by the busy clients.  The untouched studies were waste in their purest form.

As an interesting aside I had the opportunity to conduct a full assessment at a potential client in just two days.  We only had two days because that was all the interruption (waste) the client would allow.  One other consultant and myself were able to conduct multiple simultanious studies covering all critical aspects of their process.  We were then able to write up all the studies on computers and give a full presentation to the senior executives the afternoon to the the second day.  The point being the client was telling us that to him our studies were waste.  So we utilized the results of the previous Kaizen to shorten our cycle time and minimize as much waste as possible.  I am also happy to report that I remain an advisor to that client to this day.

@leanmind

Friday, September 7, 2012

You don't have to do Lean....

Yes it's true.  In fact you don't have to do anything.  Not...One...Thing.  As long as everything is perfect in your organization and you have and never will have any competitors.  Oh and if you also have unlimited resources then stop fretting about Lean or Value or Waste or anything else for that matter.  Just sit back and bask in the unparalleled good fortune that is your life.

I do a lot of speaking engagements and spend a lot of time corresponding with many many people about Lean and the challenges associated with making changes within organizations.  I am very fortunate in this regard because that means I get to spend a lot of my time talking about something I am very passionate about and in which I strongly believe.  And when I do speak to people, especially people not yet ready to start their Lean journey, there are often concerns about opening up their processes to let their customers decide what adds value and what is waste.  And believe me I can understand this concern.  I have personally lived it in my own firm where before we started our Lean journey we added Value to our customers less than 6% of the time.  I get it.

However it was during a spirited exchange this week with an individual for whom I have a high degree of respect that something occured to me.  He was in full agreement with the notion of needing to improve his processes.  However he was having a difficult time accepting the fact that his customers would truly appreciate all the subtlies of what his organizatoin did.  And as a result his customers would not be the best people to talk to when separating the waste from the value.

We corresponded back and forth a few times exchanging thoughts and ideas.  And then I remembered something.  At the end of the day if you want to reduce the cost and cycle time of any process there are only two things you can do:
  1. Remove steps from your process
  2. Reduce the time it takes to complete steps in your process
It doesn't matter if you're Peter Drucker, Taiichi Ohno or Jack Welch.  At the end of the day that's all there is.  So if you don't want to leave it up to your customer to decide what to change then lock the front doors, draw the curtains, and start removing steps and reducing time as you see fit.  And you won't be alone.  This is how all non-Lean improvement efforts are conducted.  After all we work here so we know best, right?  Who cares what the customer thinks.  It's our process and if they don't like what comes out then they can just.... well you get the picture.

So back to the idea of whether or not your customer knows what constitutes value or not.  Where people get hung up when I talk to them is on the notion of Waste.  Immediately everyone thinks (and sometimes says) "oh so it's waste for us to do quality checks?  It's waste for us to move material around the shop?  It's waste for us to test software before putting it into production?  Ok we'll stop doing it.  So there!"  And then they usually cross their arms, sit back and assume an "aha! Gocha there smarty suit-wearing guy" expression on their face.  At least the ones with enough respect to show me how they really feel do that.

But what they're missing is that Lean divides waste (or muda) into the following two categories for just this reason:
  1. Type 1: Activities that add no value to your customers but can not be discontinued using existing processes.
  2. Type 2: Activities that add no value to your customers and can be stopped immediately.
And what's more the amazig thing is that really the only change in mindset that is required is the acceptance that Customers define value and waste.  Once you and your organization accept that you will find a virtually bottomless pit of opportunities to fix.  How great is that?  I mean seriously.

@leanmind

Thursday, September 6, 2012

Lean for Safety: Labour Day Post

Monday was Labour Day for many people around the world.  A day to celebrate the achievements of the labour movement as well as to honour those workers injured or killed at work.  I thought it appropriate to describe an engagement where I saw first hand the astonishing effects of applying Lean principles to reduce workplace accidents.

I had been working at this particular client, a global food processor, for over a year helping them increase throughput and quality while at the same time dramatically reducing costs and cycle times.  Things were going well and my client was very happy with his results.  Then one day I was sitting in his office and he shared with me his personal Balanced Scorecard against which he was measured by corporate head office.  While most of the indicators were tracking very well, he pointed out their Total Incident Rate or TIR number which was one of the worst of any plant in the company.  This number is a relative measure of plant safety that compares total number of work-related injuries and illnesses to total hours worked by employees.

"Have you ever done any work in improving health and safety?" he asked me, still frowning at his scorecard.

I didn't even have to think about my response.  "No, everything we do has to do with improving processes and implementing effective management systems."  Then I added "I'm sure there are lots of safety experts out there who could help you out."

He sat for a while thinking.  Then he said "No we need more than some safety lectures to fix this.  We need a completely different approach.  I want you to take your approach to processes and management systems and apply them to the safety problem we have here.  I think it could work."

Now every consultant will tell you that the first answer you always give when a client, especially a happy client, asks you for something is "yes, right away."  But I sensed this was completely different.  I knew I was out of my element and the last thing I wanted to do was mislead anyone, especially when it came to the safety of employees.

So instead I gave the him the second answer all consultants learn to give in these situations.  "Let me talk to my partners and get back to you" I told him.  He seemed satisfied with that response so after a while I left his office.

I did in fact discuss it with my partners and at first they were as reluctant as I was and for all the same reasons.  In the end after much internal deliberation and cajoling by my client we reluctantly decided to do the project.  However we made a point of clarifying for my client that in no way, shape or form were we going to attempt to attach any financial results to the reduction of workplace accidents.

Since this challenge was unlike any we had faced before I ended up being directly involved in the strategy and approach for our project team.  We decided to start, as we always did, with the Subject Matter Expert who in this case turned out to be the very frustrated Health & Safety manager for this particular facility.  It was he who told us about something called the Bird Triangle of safety.  For those of you like me who have never heard of this the idea is that Health & Safety can be modeled (more or less) using the following process:
  1. Unsafe Situation
  2. Near miss
  3. Minor Accident
  4. Lost Time Accident
  5. Fatality 
Nothing astonishing there.  But what is amazing about this process is that it turns out the ratio from one step to the next is consistent, at least for a given industry.

The next question was how to use Lean and management operating systems to "improve" this process.  In fact what we did was figure out how to use Lean to make the process worse.  Or in other words reduce the flow of employees.  Using the standard conversion ratios from one step to the next we calculated the number of unsafe conditions the company was "allowed" in order to achieve their target T.I.R..  Doing the math based on the number of employees in each area it worked out to between 1 and 2 unsafe condition per area.  For ease of communication and to err on the safe side the target was set at 1.

To start the reverse-improvement of the process we had the Health & Safety manager conduct twice daily walk-throughs in all areas of the plant looking for unsafe conditions.  For the first few days the inspections revealed double-digit unsafe conditions.  These ranged from minor examples such as hoses left lying in walkways up to and including guards left off machinery and employees not wearing proper safety equipment.

Every morning at the Operations meeting the inspection sheets were presented to each supervisor.  And during the day the supervisors would make it part of their routine to address the unsafe conditions and ensure that employees were aware of what was wrong.

After a couple of weeks the number of unsafe conditions started to fall dramatically as people started to get the message and see the Waste.  So at that point the newly empowered Health & Safety manager raised the bar.  He started reporting situations that had existed for so long that no one even noticed them anymore.  Of course the supervisors we not happy about this.  But the mandate to stick to the program had come from the top and they all new that their safety numbers were being reviewed by our client on a daily basis along with the quality and productivity results.

This continued for a few weeks during what was historically the worst time of year for this facility in terms of accidents.  They were at the height of their seasonal harvest which meant that they had on average three times the usual number of employees to handle the increased volumes.  Most of these people were seasonal employees who had little experience within the facility.  As such they were most prone to getting hurt.

What happened when the monthly numbers came in astounded even our project team.  The previous August the facility had reported a total nine lost time injuries.  After just six weeks of "un-leaning" their safety process they hadn't had a single worker leave the property as a result of injury.

Due to the weighted nature of the T.I.R. calculation one month was not enough to get the company into compliance in terms of their goals.  But the results for August were enough for head office to send a team of Health and Safety auditors to the plant to ensure that everything was being reported properly.  It seems no one could believe the results.

The program continued in that facility and by the end of the fiscal year they received global recognition for their turnaround from worst to one of the best.  While definitely not a typical Lean approach to process improvement, this remains for me one of the best examples of what an organization can accomplish when Waste (or safety) is made to stand out like a sore thumb.