Category Archives: Identifying Waste

Continuous Improvement, Identifying Waste, Root Cause, Theory Blindness

WYSIATI?

Continuing the theme of keeping improvement projects on track, CI leaders should be very careful to avoid falling prey to “theory blindness.”

Theory-blindness is an “expensive” pitfall that extracts a huge economic toll in organizations of all types and sizes. In some cases it leads companies to invest in expensive solutions that completely miss the real cause. In other instances, organizations will live with costly problems for years because of a shared but erroneous theory about the cause of the problem.

Psychologist Daniel Kahneman, (the only non-economist to win the Nobel Prize in Economics) describes the phenomenon in his book, Thinking, Fast and Slow.

The human brain, he illustrates by describing decades of research, is wired to apply a number of biases, theory-blindness being one of them. Understanding the biases gives us the tools to overcome them.

The most powerful mental bias underlying a great deal of the flawed decision making is what he calls: WYSIATI (which is a acronym for “what-you-see-is-all-there-is”). It occurs because we are inordinately influenced by what we see, and greatly undervalue information we do not have. As a result, paradoxically, the less we know, the more sure we are of our conclusions.

Based on research and many years of experience, we’ve determined the best way to avoid theory blindness is to rigorously adhere to an improvement process; one that includes a comprehensive method of identifying and quantifying root causes and the real waste.

Continuous Improvement, Identifying Waste

The Ohno Circle: Watch & Learn!

circle

The most important responsibility a manager has is to continually improve the system of work so his or her people can work more effectively and efficiently, producing higher quality and greater value for the customers. We surface and eliminate the waste in a variety of ways, asking people close to the work for their input, studying how other companies have achieved improvements, bringing in consultants and studying journals.

However, the most effective and least expensive process improvement method may be the simple method of looking and thinking about what you see.

For example, a small team of professionals was asked to determine how to fix the problems with a multi-million-dollar robotics line. This robotic line was designed to prevent stock-outs and excess parts inventory on the assembly line by using bar-coded totes, an overhead conveyor belt, and scanners and switches to send a new tote of replenishment parts to exactly the right workstation.

When a tote was emptied, it was placed on the return conveyor and when the return scanner read the barcode, the tote number would be captured. The scanner would record the emptied tote numbers, and every three minutes this list would be transmitted to the inventory software. Inventory would be decremented for workstations that had been assigned that tote number and a replenishment order would pop up at the material handling station.

The system failed so miserably that the supervisors had to take a complete physical inventory at the start of every shift to correct the inventory records.

The improvement team spent several weeks conducting interviews and studying the floor layout diagram, the process flows, and the computer code to crack a mystery that, as it turned out, could have solved in 20 minutes using the ‘Ohno Circle’ method.

As you may know, Taiichi Ohno is credited for much of the thinking behind the Toyota Production System, and he invented a novel method of making improvements. He would go to where the work was being done, draw a chalk circle on the floor, and stand in it.

He would stand for hours, watching and thinking about what he was seeing. He would look for what was getting in the way of people creating value and he would study the situation to determine what was causing it. This gave him the insight he needed to make lasting improvements.

Of course, the team of problem solvers had toured the line, but while they had looked, they had not watched. If one or more of them had stood in one place long enough to watch carefully, they would have seen the returned totes drop off of the return conveyor and nest one inside another. The next minute, they would have seen someone take the newly dropped empty tote from the top of the stack and use it for the next order. The material handler would key in the tote number, the new workstation destination, and the part numbers being sent there and send the tote on its way — often less than a minute after the tote had dropped off the return conveyor.

That is, the observers would quickly have realized that the tote re-use process was too fast for the information flow — which reported the list of emptied totes only once every three minutes.

Whenever a tote was reused before the list was sent, the inventory of the new workstation would be decremented instead of the inventory at the workstation that had returned the tote. With this insight, the problem was easily solved — change the frequency of the systems updates or change the return tote process so that no totes were refilled within 3 minutes of dropping off the belt. The latter was the easier solution, and a poka-yoke was quickly implemented to make it impossible for a recent tote to be selected and keyed in.

A little bit of watching can tell us a lot.

Identifying Waste

what should we improve?

Spring boarding off of our previous two posts on decision making, people often fall into the pitfall of missing the biggest opportunities for improvement because they ‘decide’ on a solution before evaluating the best opportunities for improvement.

In other words, instead of trying to identify waste, they come up with lists of idea driven improvements.

This happens very simply when someone comes up with an idea for an improvement (usually some new technology or equipment that will do something faster or better), puts together a proposal, and then tries to implement it.

The problem with the idea-driven approach is that there is very little correlation between the list of ideas for improvement and the biggest problems or opportunities for improvement within the organization. As noted above, the idea-driven approach to improvement depends on someone identifying a solution at the outset.

The biggest opportunities are usually buried in the tough long-term problems for which solutions are not immediately obvious to anyone! If a solution doesn’t occur to someone, the problem doesn’t make the list. If it doesn’t make the list, it is never studied sufficiently to come up with a solution.

Organizations get further faster by identifying the waste first and choosing the best opportunities from all of the areas of waste you have identified. A portion of the waste is easily spotted and addressed if you take the time to collect the information. But much of the waste is hidden — built into budgets, accepted practices, current operating procedures, and shared assumptions. It is built into processes that are compensating for problems that have not yet been solved. This waste is difficult to see without expanding the vision of what is possible.

How to identify the waste?
Over the years, we have seen several approaches to identifying the waste put into practice. Four such approaches will be the subject of our next post.

waste walks

Waste Walk Perspective

As noted in our previous post, gemba or waste walks are effective ways of identifying waste and opportunities for improvement. Generally speaking, efforts-to-date 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.

For example, during one waste walk n a manufacturing area, those involved focused on process constraints, and identified several bottlenecks and, ultimately, solutions that increased overall capacity; in another similar setting the gemba team was able to separate value added work from that which was non-value added, and then created data images to document the changes they believed would maximize the former and eliminate the latter.

Taking a slightly different twist, one manufacturer’s gemba team pre-selects a theme each month, such as safety or process inefficiencies, and during the walk they search for activities or process steps that impact the theme.

However, while waste walks are most often put into practice within the above mentioned areas, many that take place in other organizational areas have proven most worthwhile.

For example, a supply chain management company used waste 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 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 go back to their own gemba 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 gemba or 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.

Continuous Improvement, Identifying Waste

Identifying Waste?

waste is often the elephant in the room that nobody sees

As suggested in our previous post, our approach to Continuous Improvement (CI) has always involved a focus on the waste, as opposed to simply focusing on ‘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 instead, compensating steps have been built in to avoid bad outcomes such as poor quality or lost productivity.

Compensating for Unsolved Problems
For example, a maintenance organization for a power plant “walks down” each preventive maintenance job to make sure the instructions are clear and the parts are available. A financial services company sends every transaction to “QC” for inspection and corrections. A financial services company sorts all of the transactions by client and by transaction type before processing them. Inventories are built up just in case, and long production runs are scheduled to avoid long set up times. Each of these is compensating for and masking an underlying problem that has not been addressed.

In fact, whenever you find yourself trying to find the best trade-off between two evils), you can be sure that you are masking underlying root causes which, if addressed, would lead to breakthrough business improvements. Nearly all the breakthroughs of the past forty years are a result of seeing waste and addressing the underlying causes where the competitors simply saw standard operating procedures.

The secret to doing better than the “optimum” 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! And more room for improvement opens up as you make more progress on the “givens.” Instead of diminishing returns you have expanding opportunities!

But people are most often risk averse. It is very uncomfortable and difficult for most people to acknowledge waste before they can envision a solution for it. An organization will not embark upon a sincere search for waste without strong leadership questioning why, encouraging and rewarding the identification of waste, and challenging conventional wisdom.

The ability to recognize waste is a rare and valuable skill and it grows with practice. Senior management needs to nurture the practice if it is to take hold within the organization. Until an organization recognizes the waste for what it is, there will be no full court press to eliminate the underlying problem.

3 Proven Steps
If you’re wondering how your organization might nurture the ability to recognize the waste embedded in your business processes, here are three suggestions for getting started:

  • 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.
Continuous Improvement, Identifying Waste, waste walks

Learn From the Work

Deming Cycle
The Deming Cycle

In an earlier post we pointed-out that the most important knowledge of all is knowledge of our own work and value stream — we must know it in detail.

Bill Conway often said, “All of the waste comes from the work…what we work on and how we do that work. To improve it, we need to get closer to the work.”

This means we must know how long it takes, where it piles up, and how well it is synchronized with the needs of the customers.

A simple but proven way to learn more about the work is a Waste Walk or by “going to gemba.”

As you may know, “Genba,” which has been popularized as “Gemba,” is a Japanese word meaning “the real place.” The word is widely used in Japan, where detectives frequently refer to a crime scene as genba, and Japanese TV reporters often refer to themselves as reporting from genba/gemba. In the business realm, gemba refers to the place where work is done and value created; in manufacturing the gemba is typically the factory floor, but looking further afield it can be any location — a construction site, administrative office, or sales bullpen — where the actual work is being done.

When it comes to Continuous Improvement (CI), problems are most visible in these areas, and the best improvement ideas will come from going to gemba. There is no substitute for ‘going to the work’ and there are things that can only be learned by going there and watching the work with a purpose. Thus a gemba walk, or Waste Walk, is an activity that takes management and other stakeholders to the front lines to look for waste and opportunities for improvement; to observe the work where the work is being done, and to identify what goes wrong or could go wrong, how often it does or could go wrong, and the associated consequences. It fits nicely into the “Deming Cycle” shown above, as it is a method of “checking” our work.

The Waste Walk is designed to help everyone understand the value stream and its problems; it is not to review results and make superficial comments. Gathering input from the people closest to the work is an important element of making improvements as well. After all, they are the ones that know the most about the work!

Unfortunately, and as noted in the above-referenced past post, 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. Including their input in a waste walk can help remedy this problem.

Our next post will focus on best practices for executing an effective waste walk.

Continuous Improvement, Identifying Waste, Identifying Waste, waste walks

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!
Continuous Improvement, Identifying Waste, Project Management

Six Pitfalls that Compromise Improvement Efforts

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
Change, Identifying Waste, Identifying Waste, waste walks

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.

Continuous Improvement, Engagement, Identifying Waste, Identifying Waste, Process Improvement, Quantifying waste

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.