How to Do a Stress Free Lean Implementation

Manuficient - Top Performers

Lean is said to be the “Machine that Changed the World,” which a fantastic book written by Jim Womack, Dan Jones and Daniel Roos. According to Wikipedia, “Lean manufacturing or lean production, often simply “lean“, is a systematic method for the elimination of waste (“Muda“) within a manufacturing system.” We are now learning that Lean has applicability across far more industries than just manufacturing such as healthcare, finance, education, and many others. However, implementing lean has been a major challenge for business leaders across all sectors, including manufacturing. A study released by McKinsey stated that “70% of Continuous Improvement initiatives fail”. This is a striking statistic considering how popular Lean and other Continuous Improvement initiatives are.

If you go into any of those factories where Lean has failed (and even some where it has succeeded), you’ll quickly find that it generally leaves a bad taste in people’s mouths. Be it because some companies have gutted workforces and administrative jobs under the guise of Lean or that people had to give up things that they held sacred in the name of cutting waste…many people harbor a disdain for Lean. How did an initiative designed to improve product and process quality turn into such a reviled and despised creature?

In conducting and studying many examples of Lean implementations I’ve determined that three key ingredients are needed for success. Those ingredients are:

  1. Technical Expertise. Lean isn’t that hard to learn but somebody needs to know what they’re doing in the beginning at least. This could be an inside or outside person or group. Eventually, everyone needs a strong lean competency and it needs to become a requirement for staying with the company or getting promoted
  2. Commitment. Leaders need to visibly show their commitment and make decision consistent with a Lean culture.
  3. Motivation. If the people at the top or bottom don’t want to do it – it won’t happen. A Lean implementation requires substantial changes in behaviors, the slaughter of sacred cows, and debilitating power struggles. It’s not easy for anybody.

In all reality, the last item trumps the previous two. Let’s face it, people will eventually do what they’re motivated to do as long as management gets the heck out of the way. Do you really need an engineering degree to do 5S or make a few changes to reduce waste and inefficiency? The answer is no. So …the easy way to implement Lean is by pairing the implementation with things people are motivated to do such as:

  • Look good in front of their bosses and peers
  • Get recognized for a job well done
  • Compete and win
  • Have input on the way things are done
  • Prove themselves by getting results
  • Be judged fairly
  • Help others
  • Be a valued contributor to the business
  • Remain gainfully employed
  • …the list goes on and on.

So, to implement Lean, you need to motivate people to eliminate waste and be more efficienct; then give them the tools and support to do what they will be super-motivated to do. To do this, follow these steps:

Step 1Implement OEE. This will tell you and everyone else exactly how much efficiency loss you have, what types of losses you have, and where the biggest opportunities for improvement exist, etc. OEE will serve as your scoreboard for how good everybody actually and undoubtably is. It also puts everyone on the same playing field in terms of measuring productivity. [Week 1 – 8 but continue tracking perpetually]

Step 2Start highlighting success stories for people doing things better. Share Personal Records, Record Breaking Weeks for the team, Best-Practices, Top Performers for the Day or Week, and so on. This will create a culture that feels like winning…and send a message that winning means getting better, which means…increasing efficiencies. All of a sudden, getting better is starting to feel “good” and perhaps even “fun and exciting”. [Week 6 – 15 but continue into perpetuity]

Step 3Provide a continuous stream of tools and techniques for getting better. Teach people root cause analysis, value stream mapping, SMED, kaizen events and anything else they are clamoring to know by this point in the process. You should also consider taking engineers, managers, and key personnel to other factories who have a really good Lean program so they can benchmark ideas. These factories love to show off the great work they’ve done to implement what a vast majority of companies struggle with. [Week 10 on]

That’s it. Pretty easy right? Well there are always varying levels of depth and complexity of tools that can be applied but you can cross those bridges when you get to them. It’s important to follow these three steps in sequence and allow time for each step to take hold in the organization. Most companies try to implement lean by doing step 3 and then step 1 or they just start of with a massive cutting of headcount. Implementing OEE is not as easy as this article makes it sound and neither are the other 2 steps. Fortunately there’s a tool that virtually automates the first 2 (and most difficult) steps called the Factory Operating System (fOS) at This is the best tool out there for implementing Lean or any other Continuous Improvement initiative. In this system, calculating and tracking OEE requires less than a minute per production run to input data and it spits out OEE by line, shift, person, team, product, timeframe, or any other way you want to slice it. It also highlights top performers, record breaking weeks, personal records, and other success stories across your operations chain of command. It’s super-powerful and it’s free, which makes it really great!

Implementing Lean can be a great step toward reducing operating costs, increasing capacity, reducing lead time, improving product quality among many other wonderful things. Don’t make the mistakes most companies make by failing to motivate your people before slamming them with tools, jargon, and complex ideas that will just scare them away. Let the motivation come first, then they will be a) creating their own tools and b) asking you for more tools and techniques to get their systems to operate more efficiently. This way you create a demand for Lean instead of pushing it on people and creating a painful experience for everyone that probably won’t even sustain results. A manufacturing efficiency expert such as those at Manuficient can help you to implement Lean in a non-abrasive way that systematically encourages your people to do better everyday.

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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.

Is Your Performance Review Process Contributing to Poor Manufacturing Performance?

Manuficient - Performance Review Process

One of the most dreaded processes in business is the annual performance review. Rather you sit in the giving or receiving seat of the review, its usually a pretty uncomfortable process regardless of how well or poorly the employee has performed. The problem lies in the fact that most organizations (and subsequently managers) have very poor methods for gauging an employee’s performance. The review is often skewed toward two factors 1) how the employee has made the manager feel since the manager has become more conscious about the upcoming review (usually a few weeks) and 2) how the manager’s circle of work friends feel about the employee. In other words, performance reviews are often driven more by internal politics than by actual performance. This only contributes to diminishing the overall organization’s effectiveness where actual results have less and less internal value over time.

There is often a clear a mis-alignment between what the customer pays for and what employees are evaluated on during the performance review process. Most companies are very good at measuring what the customer pays for. For example, just about every company has metrics in place to manage quality, cost, and service levels. Other metrics may be used to drive business initiatives such as a Lean or Continuous Improvement implementation. These metrics might get tossed around during management meetings throughout the year but too often don’t weigh in to an individual’s actual performance review. In a perfect world, each individual would be measured based on the amount of value they contributed to the customer and no more. An individual’s political prowess should be evident in that person’s ability to drive sustained quantifiable business results. And fortunately, with a little creativity, all business results are quantifiable to some extent.

The politics-based performance review process is the by-product of they way employees are compensated. Employees generally don’t have much control over how much money they make on a day-to-day or week-to-week basis. Employee compensation is basically fixed aside from overtime, bonuses, or annual pay increases. These long-interval compensation management tactics are designed to convenience accountants and not to leverage human psychology, which would call for immediate and real-time feedback (including compensation). Long-interval compensation management creates a comfort-seeking and risk-averse culture that is counter to what really drives business growth and high performance. An employee would be paid the same if they came in to work and created tremendous value as they would if they showed up, put up mediocre numbers, and just avoided any conflict. This environment makes it too easy to be a prosperous – at par – performer.

Contrarily, leading organizations have developed more systematic approaches to performance reviews that do a better job at quantifying the expected value contribution of each employee in the organization. Its proven that real-time feedback is the most effective method for managing people. Managers simply can’t provide real-time feedback at the level needed to develop world-class talent. The most effective performance review comes directly from the customer (or the understood measure of value for the customer). If you follow the links in the value chain through the factory, you realize that an employee’s manager is not their true customer, yet the manager is usually providing the performance review.  In an ideal state, employees would get frequent feedback automatically from the business system, which should be designed based on understood value for the customer. They would be able to quickly assess how much value they have created against the expected value created for the amount of time they have worked. In this type of system, it is impossible to hide poor performance or for someone to get credit for another person’s contributions. This works best when the supply chain is broken down to clearly defined suppliers and customers at each step in the process. Then value contribution and performance management can be set up in a pull system where each employee is measured in real-time using quantitative factors with input from their immediate downstream customer. This would replace the broken and wasteful push system where unfounded opinions, gross assumptions, and biased perceptions are used to gauge a person’s performance. The next step is to evolve to a real-time compensation model that matches value creation on short intervals, which will be covered in greater detail in a future blog post. This significantly reduces the need for artificial motivation and performance management tactics that are typically used in modern business. A manufacturing efficiency expert such as those at Manuficient can help develop data-driven performance evaluation systems to put your organization on the path to World-Class performance.

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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.

Intro to Continuous Improvement in Human Resources – Organizing for Wealth Creation

Butterfly metamorphosis

Is your Human Resources function geared up to tackle the challenges of a Continuous Improvement implementation such as Lean Six Sigma or other? Is your company leveraging it’s training, recruiting, compensation, and performance review processes to instill a culture of CI or one of stagnation and status quo? The ultimate function of the Human Resources system in acquiring, developing, and retaining the optimal mix of people needed to deliver the goals of the business. If your business is serious about driving out waste and optimizing the customer experience, shouldn’t your HR function be able to demonstrate how it systematically delivers to these expectations? In many businesses, Lean concepts have begun to infiltrate administrative and non-value stream functions. However, the approach has been to streamline administrative processes to reduce lead time for given tasks. This series of posts looks at re-designing the critical functions of HR such as recruiting, training, performance evaluation, and compensation to embed the incentives that help generate the momentum needed for a CI implementation, especially in American manufacturing. The four areas of focus are as follows:

1) Training Future CI Leaders at All Levels – When the business sets the ambitious goal of implementing Lean, Six Sigma, or other improvement initiative, the company has committed to a full throttle operational transformation. The biggest change happens with the behaviors and attitudes of the people doing the work. It is no long enough to just go to work and do your job. Just hiring one or two CI Leaders is a recipe for failure if everyone else is given the option to buy-in or opt-out. This type of transformation requires all hands on deck. The training function needs to re-tool itself in a way that employs every set of eyes in the organization on eliminating waste.

2) Data vs Non-Data Based Performance Reviews – One of the most dreaded processes in business is the Performance Review process. If you get to the root of why this process is so painful and damn near impossible to do right, its because the feedback is coming from the wrong direction. The people most closely connected with the actual customer are the ones doing the work that the customer is paying for. Yet, often detached managers are providing feedback to those who are closer to the customer. This opens the door for managers to carry out their personal agenda for or against lower level employees and erodes the credibility of the process. It also erodes the capability of the organization. Ideally, the “noise” of the performance review process needs to be removed and made real-time and data-driven so those doing the work can readily see when there is a problem and can simply take corrective/preventative action on the fly. Then systematize the process of escalating production system issues as needed in effort to create a perfect system.

3) Merit-based Compensation – As any Lean practitioner can tell you, the most efficient way to organize a supply chain is to link the elements together so that production can be pulled from downstream (as opposed to pushing from upstream). This concept also applies to compensation where pay can be linked to value created for the customer, which from the factory’s view is income created for the company. In other words, its possible to tie individual employee income directly to company income. In this model, the employee makes money based on the amount of value they contribute. This gives the operator more freedom to create greater wealth for themselves by making a stronger contribution to the company’s bottom line. It also creates a dynamic where those who make wasteful decisions struggle to make a competitive wage.

4) Hiring, Firing, and Promoting for Growth – During a CI implementation, every job description should come with a disclaimer. WARNING: Transformation in Progress – Yield to Change Agents. There are two types of people in manufacturing and in business. One seeks to make themselves comfortable and the other to make things better. In a non-CI culture, comfort seekers rule. When the company decides to undergo a transformation, the scales need to be tipped toward the change agents by hiring and promoting based on people’s track records for successfully driving change. Even better, driving change without leaving a trail of bloody victims in the wake. Comfort seekers in critical leadership roles need to be moved to positions of lesser consequence, then have their talents re-deployed when stabilization (or conformance to standards) is needed as the next phase in improvement.

The HR function plays a critical roll in implementation of any CI initiative. Gaining alignment between HR practices and the goals of the organization are critical for growth and wealth creation in a manufacturing environment. A poorly structured HR system can stagnate growth and add to the stresses inherent in driving change. A well structured system can accelerate growth by embedding the incentives needed to turn the corner.

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 Genius of the Fishbone Diagram: A Staple in Any Lean Implementation

Manuficient - Fishbone Diagram

The Fishbone Diagram. One of the most versatile tools in the Lean toolbox. It can be summed up as a tool for facilitating a root-cause brainstorming session. Effectively facilitated, a problem-solving session using a Fishbone Diagram (also called the Ishikawa Diagram), can uncover unimaginable realities about your business or production process. It can be argued that this tool (along with other Root Cause Analysis tools such as 5-Why) is the cornerstone of any Lean Manufacturing implementation. What makes this tool so powerful though? And why is its use so widespread? Below I’ve outlined some of the ingredients in the secret sauce of the Fishbone Diagram’s power. If you’re not already applying this tool in your business, you’re already falling behind!

1) Simplicity. Simply stated: simplicity is genius. The learning curve for a Fishbone Diagram itself is literally 5 minutes. It may take a lot more time to learn to be an effective facilitator; but given a strong background in facilitation, this is an easy plug-and-play tool. The key components are: a list of potential sources of problems (usually 4 to 6 items), a well defined problem statement, space to write ideas where everyone in the group can see, and a follow up action list. You’ll also need some process for prioritizing which “potential causes” will be investigated and in what order. The process itself doesn’t fully “solve” the problem; it just gives you a list of likely suspects which is a great place to start. The problem is only truly solved through rigorous trial, observation, adjusting -> wash, rinse, and repeat until you get the result you want. The beauty of simplicity is versatility. I’m convinced that this process can be applied to any problem big or small from machine downtime to world hunger (which, depending on what industry you’re in, could be very related problems).

2) Team Calibration. One of the most impressive things I always get out of Fisbhone sessions is the multitude of issues that different people believe are causing the problem. It seems that the root of the problem in people’s minds depends highly upon your personal perspective, which is shaped by your position in the organization. Furthermore, people often believe the problem is being created by something outside of their immediate control. During these sessions, what is usually discovered is that everyone has some role in what I call “feeding the monster”. Everyone has some behavior/action that is immediately causing or could have taken to fix or avoid the problem. One of the keys to a great Fishbone session is having a cross-functional group of people who are close to the process attend and engage in the session. This might be line operators, mechanics, QA technicians, supervisors, training and admin personnel, and others who support the business system. You also need to create an environment where people are free to contribute ideas without judgement or fear of retribution. Then you need to prioritize, as a team, the most likely root causes that will be acted upon, in which order, by who, and by when. This makes the action list manageable and helps to capture the biggest bangs in improvement up front. This also helps everyone involved to see the problem the same way and decide collectively what exactly will be done about it. The key is to understand that in almost all cases, there are several contributing conditions and triggers that result in a problem. The goal is to eliminate the possibility for that specific problem to reoccur. Then jump to the next problem and eliminate it as well. This is the process of continuous improvement.

3) Unintended overall process improvement. As you fix issues identified during one Fishbone session, you’ll start to see symptoms all over the plant go away, leading to organization-wide process improvement. Case in point: One of the issues that repeatedly showed up in Fishbone sessions with a prior client was that the operator was not fully certified before being released to work independently on the line. Under further investigation, several gaps were identified in the organization’s training execution. We were able to close several gaps in the training program, which contributed to a significant increase in plant-wide efficiency in just one quarter of the year. In essence, just doing the Fishbone analysis on one small part of the manufacturing process led to significant improvement in overall process efficiency and employee morale. This is the beauty of getting to the root of an issue – that same root is usually responsible for multiple weeds. Finally, a well documented Fishbone session can be used for similar issues that occur elsewhere in the plant or in the manufacturing network at large. Its easy to share the document with sister facilities to use as a starting point for their problem-solving process.

The Fishbone Diagram is one of my personal favorite Lean tools because anyone can learn and apply it effectively. If you can manage to get your floor operators walking through an informal Fishbone process as issues occur on the production floor, you have a very solid foundation for a Lean implementation and problem-solving culture. Just make sure your manufacturing support teams, including management, have the capability to support the floor operators as needed in their problem-solving efforts.

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.

What is Manufacturing Strategy and Implementation?

Manuficient - Strategy & Implementation

What is Manufacturing Strategy and Implementation?

Manufacturing Strategy

Manufacturing strategy consists of bringing the three primary pillars of manufacturing effectiveness into perfect alignment. The three pillars include organizational leadership, customers (or consumers), and operations execution. Let’s dive into each of these pillars to better assess the role of each in manufacturing strategy:

Organizational Leadership – The role of Organizational Leadership is to first decide who the company will serve and how. There is an art to choosing your customer, which is an optimization of two primary criteria: easy (for the company) to please and happy to pay what the company needs them to pay. Granted your company may not have a tremendous degree of control over either of these levers but getting this as right as possible at the onset primes the company for growth and success. A less than optimal arrangement sets the company up for some painful realities of doing business. Leadership needs to decide if its worth the trouble / effort to keep a segment of customers happy or if it makes sense to simply choose another customer to serve. This has to be weighed along with the company’s mission, financial goals, and other business obligations.

The Customer – The customer’s role in manufacturing strategy is to define when to deliver it, how many to make, what variant to make, and where to put it. Since no one customer can explicitly provide this information for you (unless you only have one customer, ie Walmart), excellent data needs to be collected and used as a guide to understanding these expectations. Customers speak to the manufacturing process in two ways:

1) By pulling their wallets out and making the purchase. This is the single most powerful way that customers communicate. Here is where the data is extremely useful. Ideally, you would be able to capture the entire body of purchasing data within your industry or sector for analysis. This would include not only your own company but your competitors’ data as well. Again, the answers you want to glean from the data are when, how many, what variant, who buys it and where to put it in order to meet or exceed business goals.

2) The other way customers communicate is through feedback. In today’s world, feedback is readily shared through both formal and informal channels. In the information age that we live, there is no excuse for companies to not know, with intimate detail, what their customers are experiencing with the company’s products. This is vital information that needs to be systematically aggregated and used as a critical input to the company-wide continuous improvement processes. The sooner the company can identify patterns in feedback (including feedback for competitors’ products) and get positive changes incorporated into the manufacturing process, the stronger case that company makes to win and keep business.

Operations Execution – Once the customer is chosen and you know how they like it, its the job of Operations to execute to perfection. This means optimal quality, cost, and service levels with perfectly healthy and happy employees on the shop floor doing the work. This means having a robust culture of innovation to not only meet customer expectations but to be able to continuously delight above and beyond the competition. This also means having the agility to change capabilities on a dime to keep pace with changing customer tastes and preferences. And finally, this means leading the way on technological advancement to continuously drive greater agility and perfection in execution.


Implementation is the ability to establish absolute alignment between all three pillars mentioned above and taking the steps needed to create perfect synchronization between the three. This is evident when the vision in the C-Suite can be witnessed in action on the plant floor. This is only achievable by establishing and cultivating a culture of problem-solving, and the problems being solved can be tied directly to the results from the aggregated feedback analysis from customers. If the business requires V quantities of W product at X price to be delivered to Y customer by Z time, then perfection means achieving this standard without fail and with outstanding quality. Implementation is engineering the business system to deliver perfection. The implementation process includes three primary steps: assess, design, and test. These steps should be repeated until the business system verifiably delivers to your standard of perfection. Once this is done, you have achieved optimal manufacruring efficiency.

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.

Measuring Plant Performance by the Common Denominator in Business

Manuficient - Money on Mind

For the sake of its own survival, a business must make money. And it must make more money than it spends. A business that spends more money than it makes is cannibalizing itself – and if not corrected will eventually fail. This is not controversial; it is a fact of reality for all commercial entities. Because of this fact, the default “language” of any business is cash. Sure there are many aspects that all make up the DNA of a business such as company culture, employee safety, product quality, and so forth. However, you can look at cash flow as the end-all-be-all indicator of the company’s health. Granted every company experiences periods of heavy investment where cash out may be greater than cash in. This is not necessarily a bad thing, especially when you can draw a logical and justifiable link to how the cash being invested will result in greater cash flow in the future. On the other hand, if cash out is greater than cash in but there is no clear link between investment and greater future returns, some serious questions need to be asked about what is happening and what needs to be done about it.

With that said, people know cash. Everyone on earth has some relationship with and some degree of understanding of it. Good or bad, its a fixed part of the human existence and has been since the beginning of documented human life. Cash is also the life blood of any manufacturing process. At the highest levels in just about all manufacturing organizations, cash out is managed to varying degrees of granularity. At the lowest levels in the org chart, the focus of the manufacturing operation is simply to hit schedule for the day. It doesn’t matter if hitting schedule means producing way more or less than anyone will buy; it just matters that we hit schedule. The point is that there is a disconnect between what happens in the boardroom (where the priority is increasing cash flow) and the shop floor (where hitting schedule among a host of other things is the priority). Somewhere along the chain of command, the focus on cash gets lost in the mix as you progress to the shop floor level. At some point, performance is no longer measured in gains and losses in cash and it gets measured by all these other things that just create room for misalignment to breed. At the end of the day, the shop floor operator or mechanic has the power. On a day to day operational level, they make the decisions that will greatly influence rather the factory will gain or lose cash (or equivalent value) for that day. Unfortunately, since the typical manufacturer doesn’t measure the performance of the shop floor operator in terms of cash (or value), it becomes very difficult if not impossible for that operator to understand how their minute by minute actions are helping or hurting the company.

In an ideal arrangement, a line operator would know in real time how much value they are bringing to the business in terms of cash. This might mean quantifying the value of one finished unit (or set of value added actions) and subtracting material, conversion, and overhead cost, and presenting the result in real time. It would be made clear what specific area of the overall cost that operator has complete control over so they can quickly and easily test the financial result of one action versus another. The overall cash impact of quality failures would also be factored in to keep the system honest. This puts the shop floor operator in a position of true ownership for their process and lays the foundation for continuous improvement at a daily / micro level.

Such a system might require a respectable investment and may not be feasible for many manufacturers. However, all manufacturers should seek to increasingly improve the frequency at which value could be quantified and reported at the shop floor operator level. Monthly financial reports just aren’t sufficient for leveraging the financial function as a driver of a continuous improvement culture. At least once or twice a day, an operator or mechanic needs to be able to quantify exactly how much value they have brought to the business given the amount of time they have been on the clock. This also lets the operator know if they have more or less contributed their fair share for the day. This makes the job of the operator, their managers, on up to the CEO that much easier.

© 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.