Exclusive Interview with Norman Bodek, Pioneer in American Lean Manufacturing Movement – Part 1 of 4

Norman BodekIn this exclusive interview with Manuficient Consulting, Norman Bodek shares some of the fantastic details of his career as a one of the pioneers in the American Lean Manufacturing movement. Norman is a publisher, professor, and author who has published hundreds of Japanese management books in English and other languages. Most recently, Norman co-authored the Harada Method, a step-by-step process for setting and achieving personal and corporate goals. Listen to Norman’s fascinating story and powerful insights into how American companies can overcome the challenges to achieving world-class execution.

Copyright © Calvin L Williams blog at calvinlwilliams.com [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.

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

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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 calvinlwilliams.com [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?

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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

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 calvinlwilliams.com [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.

Plant Profits: The Whole that is Greater than the Sum of Its Parts

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In a healthy product-driven business environment, value is created in the manufacturing process. In fact, the entire value chain lives within the manufacturing (and supply chain) process. Case in point, if you take the of raw materials, conversion (labor utilities, maintenance, etc.), and overhead and total that all up for one unit; then compare that value to the market price for one unit, the difference is the amount of value created. Now some of that value is real and some of it is perceived which is created by dynamics in the market such as scarcity and other factors. For the focus of this post, lets focus on the concept of real value.

For many people (depending on the product), its just more practical to go purchase something than it is to try to produce it themselves. Lets look at a car for example. If everyone had to build their own car from scratch, the road would be a much scarier place. Not everyone has the time, talent, resources, or desire to build their own car – and there’s nothing wrong with that. By having auto-makers that we can trust to deliver a quality vehicle at an affordable price gives us all the freedom to focus on the things that we are great at or love to do. In other words, having skilled mechanics / technicians, robust quality assurance, and reliable and scalable manufacturing processes to build our cars for us, they are creating value for our lives. And because of this, we are happily willing to pay them more than the combined cost of raw materials, conversion, and overhead for our car. This is the real value that is created by the manufacturing process.

By creating real value for the end user, the manufacturing process is also creating wealth for the company. One of the most important roles of marketing and sales and some of the other demand-side business functions are to transform the value created in manufacturing into cash.

In the previous post titled: Measuring Plant Performance by the Common Denominator in Business, we discussed the importance of measuring plant performance in terms of cash and then having the tools in place to communicate performance as frequently as possible, if not in real-time, down to the value creators themselves, the shop floor operator. In order to do this, you have to understand the value of finished working capital on a unit by unit basis (or series of value-added steps). This allows you to identify the amount of value created in real time, which can be measured against conversion costs in real time. The difference can be viewed as manufacturing profits. This creates the possibility of allowing the manufacturing executors to understand and share in the success of playing their role in driving wealth into the company. This also lays some of the ground work for a culture of continuous improvement since it enables greater financial incentives for increasing plant profitability, which we’ll dive into for our next post.

© Calvin L Williams blog at calvinlwilliams.com [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.