The New World Class: Beyond TPM in Continuous Improvement

The New World Class: Beyond TPM -

Okay so you’ve achieved and are sustaining base condition across your entire plant, now what? Does Continuous Improvement end there? Machines are running in peak condition and unplanned failures are at an all time low. Meanwhile you’re getting higher OEE results than you’ve ever seen. Even changeover times, safety, and quality incidents have come down dramatically. You’re thinking – this is fantastic! It feels like the plant has turned the corner and we’re finally winning. But then you get the news. Your products aren’t doing well and the market and the business is failing. The plant may be shut down if drastic action isn’t taken. “But how can this be?”, you ask. The plant has executed AM to perfection. What could possibly be beyond Autonomous Maintenance or is there something we’ve missed along the way?

Okay let’s just go through the checklist:

AM Step 1) You’ve eliminated abnormalities (defects) and installed centerlines – check

AM Step 2) Sources of contamination have been identified and rooted out – check

AM Step 3) You’ve implemented a Cleaning, Inspection, and Lubrication plan that operators are executing to perfection- check

AM Step 4) Operators are completing general and component-level inspections to identify and repair defects there as well – check

On top of that, operators are now capable of doing over 75% of the work that mechanics use to spend their time doing a year ago. Some could quite possibly be qualified as mechanics fairly soon here. Even the plant’s Preventative Maintenance program has reached a state of maturity. How is is possible that we’ve become a World-Class Manufacturing organization and are facing shut-down?

This scenario, as dire as it may seem, is becoming more common, especially in fast-moving markets. Autonomous Maintenance is a powerful method of helping operations to achieve and maintain base condition, or peak machine performance, by developing operators to become more autonomous from the maintenance function. But does that guarantee long-term success and viability of the business? This article covers how Continuous Improvement goes beyond helping operations achieve more autonomy from maintenance and why it needs to.

What’s Beyond Autonomous Maintenance?

In the scenario above, the plant successfully progressed through AM Step 4. Although this is excellent progress and produces incredible benefits in itself, there are still 2 inherent vulnerabilities that need to be addressed. Let’s cover each:

AM Steps 5, 6, and 7 (Autonomous Management)

Beyond AM Step 4 is where operators, or the people working directly to create value for the customer, start to become more autonomous from the Management function. Up to this point, management has probably been engaged in some form of Leader Standard Work in order to drive AM progression. Management has been performing routine reviews, coaching, and perhaps some degree of intervention to keep the good work from backsliding. What happens when those highly competent managers move on or there’s a reduction in salaried staff? Many times plants do begin to regress in their AM progression over time. This is why AM Steps 5, 6, and 7 exist, to put the mechanisms in place to perpetuate operational excellence at the value stream level despite what is happening at the administrative level. This includes building capability into the workforce to make key decisions, solve problems, and sustain base condition with limited or no management input. Information technology and artificial intelligence has aided dramatically in making autonomous management easier to reach.

Market Mis-Alignment

Even when all is well inside the business, there could be complete turmoil on the outside. There are 6 rights that keeps the customer happy. Those are: right product, right price, right place, right quality, right quantity, and at the right time. AM (and TPM in general) only enables four of these rights: quantity, quality, time, and price (indirectly). Failing to address the others means failing in the market; and the others (product and place) are where many established companies are being killed by upstarts. These two items are the reason why Jeff Bazos is now the richest man in the world – because he closed this gap that many companies have left wide open. Lean Manufacturing is intended to bring value to the customer, not only by achieving internal operational excellence, but by keeping the internal operations in perfect synchronization with the needs of the ever-changing market.

Click here to calculate your savings opportunity with Impruver’s transformative Lean Manufacturing software

How to Achieve Autonomous Management?

When operators struggle to meet the demands of daily operations autonomously, managers spend too much of their time fighting fires. This requires managers to “take their eye off the ball”,  meaning to lose touch with which way the market is moving. This also makes them incapable of developing and / or deploying winning strategiesbecause they don’t have the knowledge or time needed to do so effectively. Autonomous Management allows leaders the space to lead the company to a better station in the world. To achieve this, leaders need to consider what they spend their time doing and how they can pass this capability into those working the value stream in a practical way, especially when it comes to the execution of “normal operations”. The ideal state is to have progressively more decisions made and problems solved at the value stream level. To achieve this, leaders can start by doing these 3 things:

  1. Standardize decision-making processes
  2. Create a knowledge management system where market and administrative knowledge flows into people at all levels, especially the value stream
  3. Engage value-stream-level people as partners in key decisions as if they will ultimately be making similar future decisions autonomously

This will start to connect the people on the value stream more directly with the customer / consumer so that layers of “noise” can be removed from the process of delivering an excellent service and winning in the market. This concept is similar to the inverted pyramid where the customer is on top, who are being served immediately by the people working the value stream. In this model the role of management / leadership is to enable and support success but not necessarily to command-and-control people.


Coaching and Improvement KATA – How to Do It and Why You Should

Coaching and Improvement KATA -
There’s a damn good chance that coaching and improvement KATA are the missing ingredients in your Lean or Continuous Improvement recipe. KATA comes from the martial arts world as an approach to building skills through practice and repetition. Over time, this practice leads to the rapidly development of process improvement capability and has produced incredible results across industries.

I have personally used this process to drive a 25% increase in productivity in 6 months, including a 40% reduction in quality defects at a leading global CPG company.

Lean’s AHA Moment – How Lean Met Improvement KATA

Lean thought leaders, Mike Rother and others, have identified that the leading reason that over 70% of Lean and Continuous Improvement initiatives fail is due to a lack of development of improvement skills and understanding within the workforce. Coaching and Improvement KATA addresses this shortcoming by transforming every employee into an agent of improvement and every leader into a coach, whose role is to develop CI capability into their teams. This multi-layered approach engages employees from the shop floor up, where the true culture work is done.

In the Improvement KATA framework, each process owner (the person executing the process every day) is issued a challenge, for which they need to develop the target condition. The challenge should be aligned with the broader business strategy and target condition should be the next performance goal the learner, or process owner, is trying to achieve. The learner and coach should also agree on a target due date for either the result to be achieved or for the next experiment to be completed.

Learners run a set of controlled experiments (PDCA) to drive progress against their target condition and 1st level leaders provide coaching on established intervals. 2nd level leaders provide coaching to 1st level coaches. This helps build coaching capability into the organization as well and engages multiple levels in driving improvements.

In this model coaches don’t provide learners with the “just go do this” answer, but help the learner find the answer for themselves; which in a sense, teaches the learner how to learn on their own. Over time, learners begin to take initiative to resolve issues that exist in their work areas instead of waiting for management, who also have limited time and resources available to work on issues. They key for management is to ensure that all employees understand and keep their improvement work aligned with the company strategy.

At the end of it all, the workforce builds the skills and capabilities to drive Continuous Improvement in their work area, resulting in more rapid progress against the company’s goals. This method, in combination with an effective strategy deployment process, enables greater speed of improvement in the direction that can help the company excel in the market.

So, here’s the Coaching and Improvement KATA process:

  1. Deploy Strategy
  2. Assign a challenge to each employee in alignment with the strategy
  3. Each employee should develop a target condition
  4. Collect data and make observations to understand the current condition
  5. Experiment with changes to see what difference they make to performance (here’s where many other Lean tools fit into the puzzle)
  6. Collect data to measure the impact made
  7. Review the findings with 1st level coaches to determine what should be done next
  8. 2nd-level coaches work with 1st level coaches to improve coaching capability

This is very much like the PDCA process with a slight twist, placing more focus on the skill-building than on actual results, which are a product of developing the right skills.

Click here to calculate how much you can save with Impruver’s transformative Lean Manufacturing software

For coaches, there are 5 Kata Questions that help the learner progress to their desired future state:

  1. What is the target condition?
  2. What is the current condition?
  3. What obstacles are preventing your from reaching your target condition?
  4. What is the next step (or experiment)?
  5. When can we go and see what we have learned?

This cycle is repeated on some frequency agreed upon by the coach and learner until the desired result is achieved and sustained. In this model coaches are most likely to be the learner’s (or executor of the process) direct supervisor, who’s 2nd level coach is their direct manager. This model supports deployment of continuous improvement through the direct chain of command instead of being owned and driven by a support function.

We are now learning that this is the secret sauce in Toyota’s CI success. Toyota has generously opened their doors on the tools and methods they used to rise to sustained market dominance. However, many have copied and pasted these tools verbatim without putting in the work to develop the workforce. As a result, leadership ends up pushing changes that the workforces are not capable of sustaining, leading companies to be further behind than where they started.

Improvement KATA turns the focus of CI from tools and methods to coaching and experimenting to solve problems through the application of the scientific method. Coaching and Improvement KATA are not viewed as a tool or process to be implemented but more of a behavior to be practiced so that the skills to solve problems of ever-increasing complexity can be solved. Over time, a true culture of continuous improvement develops as people become conditioned and skilled at overcoming the challenges they see all around them. This approach can be combined with cross-functional engagement in the application of Lean tools such as Root Cause Analysis can produce powerful effects.


Market-driven continuous improvement -

Continuous improvement can be tricky. There are examples abound of companies applying all the tools and methodologies to perfection and still failing in the market. But how can this be? you ask. Isn’t Continuous Improvement supposed to give a company a significant competitive edge in the market?

Well the fact is that CI can be used to do whatever you want it to do. It can be used to increase profitability, reduce operating cost, or improve quality, morale, or safety. But winning in the market is a little bit different. To do this, Continuous Improvement must be coupled with strategy. Toyota called this Hoshin Kanri, where strategy is used to focus any improvement effort on making gains in the market.

This is a stark difference from the way many companies approach Lean and Continuous Improvement. Many tend to consider Lean an approach to eliminate waste and drive cost savings. Often, they never stop to consider if these areas of focus will actually help make gains in the market.

Market-driven Continuous Improvement might look at the few strategic imperatives needed to increase sales, market share, or even customer retention. For example, company XYZ might be getting a signal from the market that customers want suppliers to provide products in much shorter lead times. In this case, the company realizes that it could increase sales, market share, profitability, or some other key area of performance by being the supplier with the shortest lead time. The company can then deploy its limited Continuous Improvement resources against cutting lead time down as low as possible in order to win in the market.

Click here to calculate how much you can save by using Impruver’s transformative Lean Manufacturing software

In the absence of a clear strategy, improvement efforts are more random, which can be wasteful in itself. Even when using prescribed Lean tools as flawlessly as can be done. This is what can create a dynamic of succeeding at Lean and failing at business, which can be counterproductive.

In today’s CPG business landscape where retail is gradually moving online and brand loyalty is waning, companies are competing in three key areas:
1) Product fit – this means the more flexible or agile factory wins
2) Quality – the factory with the most consistent and reliable processes wins
3) Price – the factory with the lowest operating cost (and ultimately best value for the price) wins.

The market is changing toward more of a direct-to-consumer model where big box retailers have less influence over which manufacturers get more exposure to the customer. Smaller companies are growing at 6% year over year and larger ones are at less than 1% growth in CPG. The game is changing – so make sure you’re in position to win.

Can OEE be Used to Reduce Operating Cost?

OEE or Overall Equipment Effectiveness measures manufacturing performance against perfection. It is regarded as the global benchmark for managing and improving manufacturing efficiency. Any deviation from perfection drives up operating cost. OEE looks at three different losses and multiplies them across to assess total losses. Those losses are:

Availability – This is a measure of downtime (both planned and unplanned)

Throughput – This measures rate loss against the theoretical maximum run rate

Yield – This measures the amount of efficiency lost due to quality issues

Each of these factors has a cost impact. There are measurable financial and other costs associated with having people at work, the lights on, and machines operating. Anytime these things are happening and you aren’t producing at theoretical maximum levels, you are suffering efficiency and financial losses. Most factories are operating at or below 60% OEE but have no idea. Additionally, most factories do not measure productivity, and many who do, use methods that exclude significant losses such as changeover times, start-ups, throughput loss and many others. Again, anytime you have people on the clock and product yet to be made, anything less than the theoretical max output is a loss…for whatever reason – controllable or uncontrollable. At the end of the day, all aspects of running your business are controllable; the only real question is: are you willing to do what it takes to “fix” something that is perceived as “uncontrollable”. I’ve worked with manufacturers who, for years, wrote off “bad raw material” as uncontrollable but have never talked with the supplier about fixing the problem or investigated sourcing with other suppliers. In almost all cases, uncontrollable is synonymous for “we don’t want to deal with it”.

The Logic

For a factory with a direct operating cost of $10M annually and an OEE of 60%, the total efficiency losses are 40%. Therefore 40% of the direct operating costs are also losses, or $4M in this case. At 100% efficiency, the operating cost would be $6M.

World-class execution is 85% OEE, which equates to a direct operating cost of $8.5M in the example above. For the same factory, there is a $2.5M savings opportunity for improving from 60% to 85% OEE. What would you do with an extra $2.5M dollars per year? Expand production? Pay bonuses? Acquire a new business? Buy a small yacht and sail around the world?

Achieving 85% OEE is challenging but attainable for the vast majority of manufacturers. Click the link below to receive a free report on how much savings opportunity you might have based on your direct operating costs and efficiency performance:

My Total Savings Opportunity

If you don’t know your OEE, we can get you up in going on Impruver in less than a month. It will help you track OEE by product, line, shift, team, and even individual. It’s a great tool for highlighting exactly where to focus improvement efforts. For the sake of the tool mentioned in the above link, input 60% as a reference point and see what you get for a savings opportunity if you’re unsure of your current OEE.



The 8 Lean Wastes and Their Potentially Disastrous Effects – Excessive Processing

Manuficient - Excessive Processing [Healthcare]

Excessive Processing – applying features or process steps that have no value to the end user. In this series titled “The 8 Lean Wastes and Their Potentially Disastrous Effects”, we examine case studies for when companies, government organizations, or entire industries have allowed a specific type of waste to escalate to a disastrous effect. In this post, we review the waste of Excessive Processing to understand what causes it, how to see it, and how to eliminate it.

Jump to:

The 8 Wastes and Their Potentially Disastrous Effects:

Defects | Overproduction | Waiting | Non-utilized Talent & Ideas | Transportation | Inventory | MotionExcessive Processing


In 2002, a study was completed by the Congressional Budget Office to understand healthcare industry waste. The study revealed that 30 – 50% of all healthcare procedures (and costs) are wasteful and add no real value to the patient/customer. Another study conducted by Donald M Berwick & Andrew D Hackbarth, “Eliminating Waste in US Healthcare” JAMA 307, concluded that between $265B – $615B of the annual dollars spent in healthcare are wasted on overtreatment and administrative complexity, both of which are forms of excessive processing. This highlights a tremendous opportunity to reduce the burden of healthcare cost and the time it takes to make a person suffering from health problems whole again. This has an immense impact on the cost of health insurance and all other costs associated with getting treatment.

Manuficient - Healthcare Waste
Copyright 2016 Manuficient Consulting

Interesting Fact:

A 2011 study found that the price tag for the 12 most commonly overused tests, such as annual electrocardiograms (EKGs) for heart disease and imaging tests for lower-back pain, was about $6.8 B. Also, according to the McKinsey Global Institute, the US spends more than $650B more than other developed nations on healthcare costs in 2006. This difference in cost has nothing to do with US patients being sicker, it’s more driven by wasteful processes, greater availability of services, and technological innovation.

For more information on this study, visit the Health Affairs at:

Excessive processing can take many forms. Manufacturers must be vigilant in determining what specific product attributes customers find valuable and seek to remove those that aren’t necessary from their products – resulting in reduced processing time and resources consumed in production. Excessive processing waste can either result from the product’s design or during the manufacturing process. During production, activities such as over-mixing, over-heating, over-drilling, or just about over-anything is classified as excessive processing. These activities sometimes show up as defects and other times not. Either way, the objective is to enhance your ability to see and eliminate this type of waste as urgently as possible. A good customer feedback loop combined with a systematic tie-in to your continuous improvement program helps to both see and eliminate excessive processing waste. Ideally, you’d like to see and respond to the waste before it gets out of the factory but customer feedback is usually required for excessive processing resulting from an inadequate product design. However, excessive processing resulting from over-doing something in production is usually detectable and addressable by setting clear standards and guidelines for executing activities. Automatic data collection and process validation are great tools for identifying this type of waste. Other tools include auditing protocols against clearly defined standards for time and activities required for completion. Tools such as Standard Work Documents and Layered Auditing Protocols can be used to minimize excessive processing as well.

Impruver also helps you see waste from excesive processing. In Impruver, this type of waste could either show up as downtime, rate, or yield losses. Performance against production standards help to identify exactly how much waste or room for improvement exists for your manufacturing operation. It helps to be able to pinpoint which specific areas, products, production lines, or team members are most wasteful in order to prioritize improvement efforts. Impruver allows you to filter and group performance data in a way that shows you exactly where to focus. As you continue to eliminate excessive processing waste, you’ll realize continuous improvement and performance breakthroughs.



Copyright © Calvin L Williams blog at [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

The 8 Lean Wastes and Their Potentially Disastrous Effects – Motion

Manuficient - Motion [Katrina]

Motion – any movement that takes time and / or effort that does not directly add value. In this series titled “The 8 Lean Wastes and Their Potentially Disastrous Effects”, we examine case studies for when companies, government organizations, or entire industries have allowed a specific type of waste to escalate to a disastrous effect. In this post, we review the waste of Motion to understand what causes it, how to see it, and how to eliminate it.

Jump to:

The 8 Wastes and Their Potentially Disastrous Effects:

Defects | Overproduction | Waiting | Non-utilized Talent & Ideas | Transportation | Inventory | MotionExcessive Processing

Case Study:

In 2005, Hurricane Katrina broke the levees in New Orleans’ lower 9th ward, resulting in catastrophic flooding. Despite the desperate and obvious need for relief, local, state, and federal emergency response agencies failed to supply sufficient aide with any level of urgency. Officials deliberated, stalled, and wasted critical time deciding when, how, and rather or not to respond. An estimated 1,836 lives and $108 Billion were lost due to the flooding. It’s difficult to quantify exactly how much of this loss can be attributed to the poor emergency response; but we can all agree that the amount of time and effort wasted prior to providing aide was a complete disaster in itself.

Corrective Action:

During the event, aide, although debatably insufficient, began to arrive for some affected by the flood. Many people have fled the northern gulf coast to cities like Houston, Nashville, and others around the US – never to return home. Programs to help Katrina victims to resettle elsewhere sprang up around the United States. After Katrina, FEMA was granted authority and tools to respond to crisis more urgently, including the Post-Katrina Emergency Response Act (PKERA). This new system was tested a few years later during Hurricane Sandy and the results were markedly improved.

Interesting Fact:

All major studies concluded that the US Army Core of Engineers (USACE) were primarily responsible for the failing levees. However, they were granted immunity under the Flood Control Act of 1928. The USACE cited budgetary constraints for installing the insufficient levee system. This is one case where saving perhaps a few million dollars ending up costing thousands of lives and hundreds of billions of dollars in the end.

For more details on this case study, check out the Wikipedia article at the following link:

Motion waste occurs in abundance in just about any manufacturing or supply chain operation. Anything from reaching across a table to grab the next unit to shuffling pallets in the warehouse to get everything to fit can be considered motion waste. It is nearly impossible to eliminate all motion waste but it can definitely be reduced greatly. Reducing motion waste reduces process cycle times resulting in an increase in throughput. The best way to measure motion waste is the perform a detailed breakdown of the work needed to execute a process called a Time & Motion Study. In this case, the more granular, the better. For example, a time & motion study output might look like this:

Manuficient - Motion Waste Chart


Observe how over 30% of the time spent processing this unit was wasted motion. This type of waste can be reduced by identifying the waste from time & motion studies on critical process steps and optimizing workstation design to increase efficiency. This method allows you to optimize for efficiency within a process step at a very technical and granular level; but can yield tremendous cost and lead time savings if you can increase throughput at the bottleneck step by 30%.

Impruver also helps you see motion waste. Motion waste reduces throughput, increases operating costs, and lengthens lead times. Impruver helps to motivate employees to reduce motion waste by highlighting achievements such as Raising the Bar (outperforming the previous standard). When motion waste is reduced, it can lead to the previously established standard being exceeded, at which time best-practices and operator recognition is distributed across your manufacturing network. This helps others to make progress toward creating breakthroughs in performance as well.



Copyright © Calvin L Williams blog at [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

The 8 Lean Wastes and Their Potentially Disastrous Effects – Inventory

Inventory – any materials or other resources stored or staged until demanded. In this series titled “The 8 Lean Wastes and Their Potentially Disastrous Effects”, we examine case studies for when companies, government organizations, or entire industries have allowed a specific type of waste to escalate to a disastrous effect. In this post, we review the waste of Inventory to understand what causes it, how to see it, and how to eliminate it. defines inventory as “materials (and information) present along a value stream between processing steps.”

Jump to:

The 8 Wastes and Their Potentially Disastrous Effects:

Defects | Overproduction | Waiting | Non-utilized Talent & Ideas | Transportation | Inventory | MotionExcessive Processing

Case Study:

In 2007, Toyota issued a massive recall that affected 9 Billion vehicles worldwide. The recall was triggered by several reports of gas pedals “sticking” and causing unintended acceleration. At the time of the incident, dealerships across the US were holding substantial amounts of inventory, which could not be sold until they were all serviced to minimize the risk of further unintended acceleration issues. A study was conducted to estimate the losses associated with all of this inventory that was placed on “hold”, which revealed that dealerships were losing the staggering amount of $2.5 Billion per month in combined income.

Corrective Action:

In response to this issue, Toyota conducted an investigation to identify the root cause of the unintended acceleration and concluded that the configuration between the floor mat and the gas pedal was defective. They also began to experiment with an alternative supply chain model with the Toyota Scion where a base unit would be built to about 70% at the factory, then buyers would be allowed to customize how the vehicle would be finished. Finally, the base unit would be shipped to the buyer’s local dealer to complete the final manufacturing steps; a process known as Late-Stage Customization. This kept inventory low for the Scion at the dealerships and allowed consumers more control over the features and functionality that would be included with their vehicle. Unfortunately, the Scion did not perform well in the market; however, I don’t think the supply chain model was the problem. It simply isn’t a very good looking car.

Interesting Fact:

Even though Toyota distributes vehicles all over the world, the only reports of unintended acceleration came from the United States. Also, there was never a definitive conclusion for a mechanical failure that was causing the problem. However, once the floor mat / gas pedal configuration was changed, no further issues were reported.

For more details on this case study, check out the 24/7 Wall Street article at the following link:

This case study exposes one of the many major problems with building and carrying inventory. Building inventory has the same issue issue as batching, which is a form of inventory in itself. When there is a quality defect that needs to be contained, many times the entire batch needs to be recalled and investigated due to limited granularity in traceability.  This requires the manufacturer to cast a wide net instead of being able to pinpoint the specific units that are affected by the defect.

Another major issue with carrying inventory is that it enables poor manufacturing execution and erodes operational discipline. Part of the equation for determining how much inventory you need is how unreliably your factory performs. In other words, being unreliable means you need to maintain higher inventories to meet service expectations. The path of least resistance is to build inventory as opposed to addressing your factory’s reliability issues. A little trick to kicking off a lean implementation is to cut your finished inventory gradually and challenge your teams to maintain service levels with lower inventory stocks. This will require improving factory reliability and becoming more lean in the process. Finally, inventory hurts your factory’s lead time on special order and rush items. This is because orders often need to wait in inventory buffers in between process steps before the next value-added step can be completed.

Impruver also helps you see waste from inventory, which often manifests itself in the form of unreliability. In Impruver, unreliability shows up as downtime, rate, and yield losses. By addressing these issues, you can increase plant reliability and subsequently reduce safety stocks. When inventory is reduced, working capital is freed up to be invested in other more important matters. Impruver also allows you to quickly estimate the savings to be gained in just one click by driving out efficiency losses. This powerful functionality is made available to everyone from the shop-floor up to be used for justifying continuous improvement ideas.


Copyright © Calvin L Williams blog at [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.