May 18, 2011 | Lean, Operations
In a recent conversation I again found myself between two smart blokes, one who was a black belt 6 sigma consultant who believed the problems of the world could be fixed by some aggressive, numerical focus on process improvement, and an exponent of Lean, who was of the “build the right culture and they will come” school.
To my mind, they are both right, and both wrong.
Six sigma means defects of less than 3.5/million. This requires rigorous emphasis on elimination of anything that creates variation in a process, or series of processes, ensuring that the output is exactly the same every time. Good six sigma implementations take great care to ensure that the output of the processes that are so exactly the same are adding value to the customer, but this can become lost in the welter of statistics and process control mechanisms.
Lean, by contrast starts with the macro question of “what customer value does this process add? What would the consumer prepared to pay for it?” Anything that does not add value to the customer, inventory, rework, excessive movement, and others, is deemed to be “waste” and is rigorously targeted for improvement using the old “Plan, Do, Check, Act” process, the ultimate objective of which is “flow” through a process.
The tools of lean and 6 sigma are widely interchangeable. I have seen 6 sigma implementations going through a 5S process, essentially a lean tool, and Lean implementations using SPC extensively to identify and manage out waste in a process.
It can be said, as my conversationalists did, that 6 sigma is an analytical, quantitative tool box, and Lean is a Cultural, management alignment toolbox. They they are both right, and both have their place, indeed elements of both are essential to competitive improvement.
May 18, 2011 | Lean, Operations, Strategy
We humans like to do things in a consistent manner, each time we do something, it is comfortable to do it the way we did it before.
This is great if the way we have done it delivers the optimal outcome, but presents difficulties when the outcome is sub-optimal, and that is probably 99.99% of the time.
The management challenge therefore is not just to see a better way of doing things, but to institutionalise the process of identifying problems, and improving outcomes as a part of the way things have been done in the past, make continuous improvement so automatic that nobody notices.
May 16, 2011 | Management, Operations
Last week I attended a seminar run by www.Salesforce.com a very impressive dissertation on the capabilities they and their partners can bring to bear on the CRM challenges faced by all businesses. Obviously, the objective is to sign you up, and the challenge for non IT management is to understand the offer , stripping away the sales pitch, and understanding the value it can bring to your organisation.
Cloud computing is coming at us at a rapid rate, as the costs for installing an IT infrastructure drop, but the costs of maintaining that internal infrastructure increase. This is outsourcing of a capital item that is rapidly becoming commoditised.
When considering the options, there are a lot of opinions that will can be offered, usually from a perspective driven by commercial outcomes, but this discussion by two acknowledged experts is one that lays out a logic without an agenda, other than to acknowledge the reality of cloud computing.
May 1, 2011 | Collaboration, Lean, Management, Operations
Process improvement is all about slow adoption of the tiny opportunities that arrive, by any number of means, that together enable adaption of the system to the environment around it to improve performance.
My favorite metaphors usually come from the natural environment, where natural selection enables minute differences over time to become different species.
In organisations we do not have the time, so the process needs to be encouraged, speeded up a bit. Experience suggests there are a few pre-conditions for success:
- There is a willingness to make change, and that willingness is shared through all levels of an organization.
- There is a willingness, indeed pleasure in embracing mistakes, as it is by making mistakes and understanding why the mistake occurred, that we learn.
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There is a coherent plan, strategy, budget, whatever you choose to call it, that provides a framework for decision making, performance measurement, and allocation of responsibilities in a transparent, ordered and consistent manner.
Apr 28, 2011 | Lean, OE, Operations
“Gemba” is a Japanese term, literally “the real place” and is a term used extensively in lean management, meaning, in effect, go to where it happens and look to understand. This originally meant the manufacturing floor, but just as easily translates to anywhere real work happens.
So often I see people doing dumb things, not because they want to, but because that is the way the process was designed, usually by someone who had not done a “gemba walk” but who had relied on a model that seemed sensible for some reason, but bore little relationship to the way things worked in real life.
Most things I see that lead to problems are caused by self indulgence, ego, and isolation, not incompetence or lack of care, so next time, stop yourself, and do a “gemba walk” to see how the users will interact with and use whatever it is you are designing.
Mar 30, 2011 | Lean, Management, Operations
The clarion call for improvement, in everything from the minor shop floor activities to big picture strategic implementation is clear. We all need to do more with less, and this requires that we identify which bits of our current activities should be changed, redirected, or trashed.
In effect, there are three questions that should be answered:
- What are the underlying drivers or causes of problems?
- How can we build predictability of outcomes from any particular activity, and group of activities?
- How can we ensure the mistakes of yesterday are not repeated today?
These seemingly simple questions lie at the core of all improvement I initiatives.
