Category Archives: Identifying Waste

A Different Take on Waste Walks

As you are likely aware, a “Waste Walk” is a planned visit to where work is being performed  (often referred to as gemba) to observe what’s happening and to note the waste. In many organizations Waste Walks have primarily taken place in manufacturing, warehouse or shop-floor environments; and certainly there is much to be gained by “going to gemba” in these areas.

However, while Waste Walks are most often put into practice within the above-mentioned areas, many that take place in other organizational areas have also proven to be extremely worthwhile, as we discussed with our Partners in Improvement groups.

For example, a supply chain management company used these walks as a way of solving a recurring order-processing problem that had become a hot issue with one of their mid-sized customer locations. They involved a number of their team members, including representatives from management, customer service and their CI group. It worked out so well that they now do Waste Walks at customer sites on a regular basis. Not only do the teams solve problems and make design changes in ways that benefit both parties, but their relationships with these customers have also grown significantly, which has boosted revenue and customer retention.

Based on the success of gemba or Waste Walks at customer locations, the company has recently started conducting them with suppliers, and anticipates similar positive results.

Other companies send their employees to observe how their own customers use their products and to look for complexities, errors, of troubles that the products cause the customers. Having done that, the employees are able to look at their own work through a different lens, and see more opportunities for Improvement.

In the retail sector, one company conducted a series of Waste Walks during their inventory season, watching and documenting the process at different stores. While some best-practices were certainly documented during the Waste Walks at the top performing sites, the greatest gains were made during Waste Walks at the stores in which performance was traditionally mediocre, where, as a result of the initiative, average cycle time was cut in half!

Even though Waste Walks are used less frequently in areas where the work is “less visible,” such as administrative offices, purchasing departments, and R&D labs, some of the greatest opportunities reside in these places. When the work is less visible, the Waste Walk team needs to ask many more questions of the people doing the work in order to learn what they are doing and to gain valuable insights

During one of our Partners discussions, CI leaders agreed with this perspective and identified some best practices for conducting a waste walk in an office environment, which included:

  • Communicating in advance with the people whose work will be reviewed, making sure to let them know the intent is not to take on a “big brother” approach, but rather to interact and learn from the workers themselves —the people closest to the work!
  • Communicating openly and in a “two-way” fashion during the waste walk. Administrative work can not really be understood by simply observing; the waste walk team must ask questions and engage in a bi-directional dialog with the office workers and thus learn about obstacles and challenges faced by those workers.
  • Focusing on the process rather than the tools. It can be easy to conclude that the best opportunities for improvement involve investing in new IT solutions or software programs.
  • Quantifying the opportunities for improvement and following-up with the office personnel afterward to share what was learned and to discuss specific steps for improvement.
  • Measuring gains and celebrating wins!

Six Pitfalls that Lead to “Discontinuous” Improvement

Many, if not most organizations make attempts to improve their work. But no matter which specific methods predominate, almost all of these initiatives aimed at gaining greater efficiency, quality, speed, and/or customer delight have two important things in common:
  1. They generally produce some improvements
  2. Then they peter out

For an organization to go through a cultural change so that continuous improvement becomes the new way of working (not just a one-time ‘program’), we need to pay close attention to the ‘soft’ part of the improvement model.

This will enable us to smooth the path, remove the obstacles, and continue to lead, communicate, and motivate both emotionally and intellectually.
Following are six common causes of discontinuous improvement:
  1. Neglecting aligning individual or team goals with those of the organization
  2. Insufficient communication between management, the workforce, project teams and CI leaders
  3. Delegating leadership, which is a responsibility that should stay with senior management
  4. Manager’s or Sponsor’s failure to remove obstacles
  5. Lack of quick success
  6. Letting-up on the “gas” when initial results are made

Study Your Work & The Work of Others to Promote Internal Change

Continuing to analyze the concept that “knowledge” is one of the most powerful change agents, today’s focus is on what is arguably the most important source of that knowledge — your own value stream, which includes your organization’s work as well as the work of others.

What is going on in technology? What methods are others trying out? How is it working for them? How could it work for you?

In most organizations, there is a knowledge barrier that holds the waste in place: the people who know the work best are seldom in a position to know the big picture so when they see waste, they
often assume there must be a reason for it. And if they know of better ways of doing something, they often lack the influence to make any significant changes. Similarly,  those with the broader perspective and the influence do not really understand how the work as it is done today well enough to arrive at the ‘Eureka!’ moment.

One of the fundamentals of the Lean approach is that you must “go to the work.” Don’t just talk about the results or listen to people talk about the work — go to the work (a.k.a. Gemba).

Look at the work, and learn from the people who do it every day. Without this knowledge, little can be substantially improved, and effective “change” will be difficult or impossible to implement.

Engagement & CI Correlation

In one of last year’s posts we noted that, while enterprise engagement has emerged as a key objective in today’s business world, a surprising number of organizations have no formalized engagement strategy.

At this year’s Engagement World Conference in Galveston, this fact was once again recognized, along with several other connections between enterprise engagement and Continuous Improvement (CI).

For one, an ad-hoc approach is almost never effective.

Whether attempting to engage a workforce or drive continuous improvement, a formalized plan with clearly-stated objectives and measures is required.

Similarly, without the buy-in and support of top management, engagement and improvement efforts alike are bound to fail… they will not become the “cultural way,” and instead will simply peter-out as priorities shift.

Another correlation is the importance of quantification. Just as a CI project requires us to quantify waste and the gains our effort will generate, a successful engagement initiative will include the calculation of an anticipated return on investment or ROI once objectives are achieved.

Finally, just as ISO 9001 helped bring-about the use of more standard procedures in CI, ISO 10018 will now encourage organizations to standardize their engagement efforts. 

As noted in our previous post, the emergence of these new standards brings into focus both process improvement and quality people management/engagement, both of which are necessary to achieve and sustain high levels of quality and performance.

 

 

Engagement vs. Disengagement – What’s at Stake?

Recent posts have focused on various ways of promoting workforce engagement, which has been among the most popular topics among business leaders over the past 12-24 months.

However, it is less common to hear people speak in specific terms about the real, often hidden, costs associated with disengagement.

During recent meetings with our Partners in Improvement, a group of Improvement specialists from across North America, these costs were discussed in detail. The Partners’ conclusions were well-aligned with those published by numerous sources, including the Enterprise Engagement Alliance and Gallup.

Simply stated, disengaged employees create a negative and expensive ripple effect throughout an organization, and drive-up costs in five specific ways:

Higher turnover: Disengaged employees leave their employers as soon as they see a better opportunity. This turnover increases the costs of recruiting, on-boarding, and training, which typically range between 16% – 22% of salary for low-to-mid-level employees, and significantly more for higher-level executives based on a Center for American Progress study. In addition, every new hire brings a risk of a bad fit, and every employee leaving an organization takes with them some organizational knowledge that might have been helpful to that organization in future decisions.

Lower productivity, lower profitability: Disengaged employees don’t go the extra mile; they do not make an extra effort when faced with a challenge, and don’t put forth the same discretionary effort that an engaged person will make. An article published by the Harvard Business Review said that organizations with high levels of employee engagement yield a 22% increase in productivity over the norm.

Similarly, the Engaged Company Stock Index, which tracks the long-term results of companies with high levels of customer, employee, and community engagement as determined by independent data sources compiled by McBassi & Company, has outperformed the S&P 500 (including dividends) by 36.2 percentage points since October 1, 2012.

Little or no process improvement: Improvement requires engagement — a willingness to design and conduct experiments, a willingness to take risks to try something new and potentially better. However, disengaged employees tend to focus on their personal agendas and see little upside in trying something new to forward the organization’s goals.

Higher pay: When we say about someone, “They are only in it for the money,” we are observing disengagement. While money is important to nearly everyone, if that is the only motivation, there is no genuine engagement. As the behavioral economist, Dan Ariely, said, “Money is the most expensive way to motivate someone.”

Organizations that are unable to create an environment that intrinsically engages their employees must pay them more to keep and motivate them.

The associated cost of lost opportunities is difficult to calculate; but our experience and data surfaced over the past three-plus decades has consistently shown that, of the four primary forms of waste (capital waste, lost time, material waste, lost opportunities), the “lost opportunities” are the greatest.

Considering the above-listed realities, it is not surprising that ISO 10018, which provides guidance on engaging people in an organization’s quality management system, has become more prominent and a new certification created.

Our next post will focus on specific ways to reduce or eliminate these real costs of disengagement.

Focusing on Waste Part 3: Three Ways to Find it!

Completing our series of posts about focusing on waste, people often ask how they might best nurture the ability to recognize the waste that is undoubtedly embedded in business processes.

Here are 3 proven methods:

  • Constant questioning. Ask yourself and everyone else if you would need this if everything were right, and right the first time.
  • It sometimes helps to bring in outsiders to help you look for waste, because it is easiest to think “outside the box” if you are “outside the box.” Customers and suppliers or people from adjacent processes may challenge assumptions we don’t even realize we are making.
  • Benchmarking internally, within the industry, and in different
    industries can also raise questions and help you recognize waste
    that you have overlooked before.

If you can take a path of searching for WASTE rather than just improvements, regardless of whether you already have a solution, you can avoid the “road of diminishing returns,” and instead delve into the underlying causes to make truly important improvements.

Focusing on Waste: Part 2 – Trade-offs

Continuing with the theme of focusing on waste rather than “just on improvement,” the secret to making breakthrough gains or “optimization” is in surfacing and addressing the hidden assumptions.

Optimization is the process of evaluating the trade-offs between two things that seem to be in conflict.

For example, as you increase inspection, you increase costs but you decrease the defects that get through. If you shorten your production runs, you can reduce your inventory but your production will decrease because change-over time required to change machines from producing A to producing B means more downtime.

With optimization, you try to find the exact point that minimizes the total cost.

But every optimization problem has some “givens.”

Taiichi Ohno, creator of the Toyota Production System, and his followers achieved breakthroughs by shifting their focus from finding the best trade-off to working on these “givens.”

When we talk about root cause analysis, we mean to focus on those “givens”  or “underlying assumptions” that cause you to try to find the path of least waste.

Once you find and address the underlying cause, assumption, or given, you can find and move to an optimum that is at a totally
new level – often referenced as the “Imagineered level,” or the way things could or should be if everything was right! 

Focusing on Waste vs. Improvement?

Ted Williams was considered the greatest hitter in baseball….

His .406 batting average for the 1941 season is legendary, and he finished his playing career with a .344 overall average, 521 home runs, and a 0.482 on-base percentage — the highest of all time.

A newspaper reporter once said to Ted, “Gee Mr. Williams, you’re the best batter the game has ever seen — you must be a great student of hitting.” Ted replied, “No sir, I’m a great student of pitching!”

Just as there is a difference between focusing on hitting versus pitching in baseball, there is a big difference between focusing on “improvement” versus “waste” in the Continuous Improvement arena.

One of the key differences in Conway Management’s Right Way To Manage© approach has always been a focus on the waste, as opposed to simply improvement.

What’s the difference?

Most of the big waste is hidden in plain sight — long-standing business practices that compensate for a problem that has
not yet been solved. The root causes of the problem have not been addressed, and compensating steps have been built in to avoid bad outcomes such as poor quality or lost productivity.

It’s the understanding of what waste is, and how to search for it, that makes all the difference… which will be our focus in the next few posts.

CONQ?

In a recent CI discussion on LinkedIn, Rob Kooijmans, a quality manager in the Netherlands, referenced the importance of quantifying waste and opportunities for improvement.

“The best way to know the strengths and weaknesses of your organization is to get good insight in your cost of non-quality (CONQ),” he said.

As noted in several previous posts, we certainly agree.

Bill Conway always said, “At least 50% of improvement is working on the right things.”

Thus a “waste and opportunity” search is key. We must identify waste and then act upon the opportunities for improvement that will potentially yield the greatest results – i.e., the “right things.” Once this quantification step has been completed, it is much easier to gain the buy-in of all stakeholders – leadership and colleagues alike –  because it is easier for everyone to see what can be gained (or lost!).

“The biggest reason why CONQ is so important is that it is expressed in money – and money is the universal language all managers and company owners understand. If you need to convince management to invest in your team and to invest in quality in general , you need to be able to substantiate the benefits,” Kooijmans said.

We have found that when organizations “identify and quantify the waste,” people are able to more readily recognize the best opportunities for improvement, allocate resources, and then set effective priorities and time-frames.

 

10 Good Reasons for Defining (& Improving) the Sales Process

Have you formally defined your organization’s sales process?

In other words, have you documented the specific steps you or your sales team must execute to move from identifying a lead to closing the sale?

If so, are they the right steps?  Have you mapped the key objectives and activities for each step? How about measuring team performance on a step-by-step basis? Are people working on the right things? Have you identified the best opportunities for continually improving each step and, as a result, the entire process?

We’ve found that those who place a strong focus on these things are able to execute the sales process much more effectively and, as a result, enjoy a number of advantages, which include:

  1. Consistent approach which can more easily be analyzed and continually improved, most often resulting in a greater competitive advantage
  2. Common language throughout the organization, facilitating more effective strategizing
  3. More consistent and diligent lead qualification, thus promoting efficiency and reducing waste
  4. More precise definition of transaction status and progress, thus more accurate forecasting
  5. More comprehensive need assessment, which promotes a consultative selling style and higher margins; better assessment also tends to bring-about a heightened responsiveness to customer needs, interests and priorities, and often yields larger average order size
  6. Heightened ability to incorporate the voice-of-the-customer into organizational decision-making
  7. Higher levels of conscious competence and team development
  8. Shorter sales cycles
  9. More natural closing
  10. A better customer experience, as the “diligent” execution promotes differentiation