The house of Toyota is a perfect representation of a production system being linked together. Each pillar supporting the goals and the entire home resting its weight on a solid foundation. The model has been used for thousands of operating systems over the years and each time the house seems to do the trick more and more effectively. So, what does each of the elements of this house represent in an operating system?
Whether you celebrate Thanksgiving or you're just getting ready for a hearty dinner, planning for the big meal can be quite the task especially if you have lots of guests to provide for. Hours of cooking, ordering and booking travel plans. It's no wonder turkey makes you tired. Allow us if you will to share 5 principles that will keep you lean this thanksgiving.
Twas the night before kaizen when all through the value stream, not a value added activity was flowing not even engineering. Stickies were hung on the wall with great care, In hopes that Lean Strategies International would soon be there.
The teams thought of processes, visions and hoshin kanri while waste sat in the value stream acting quite ornery. Transportation, inventory and even some waiting... their work would be hard, but with ©Treat 1,2,3 in their toolbelt the waste was not so large. Somewhere in the process of examining, a constraint showed up. The team ran to the gemba to see what was up. They grabbed their cameras, glasses and measuring tape, only a moment would pass before they had their current state. With review and examination not far behind a future state was almost ready, the improvements close behind.
Those team members were passionate, lively and quick it became very obvious this was not St. Nick. More rapid than eagles they wrote up their action plan, they whistled and shouted while improvements began. "Now kanban! Now 5S! Now TPM and Standards! To the top of the metrics to the top of the charts." They improved like crazy while employees bought in. Shortly thereafter the transformation came to an end.
The plant stood there watching as the consultants walked out, not a word of a purchase order not a face with a pout. Certificates, belts and knowledge in hand this plant became another successful lean six sigma land. Shortly thereafter the events continued on, kaizen had begun and it was far from gone. With tools, methods and strategy held tight in their belt, the organization realized quickly Lean Strategies was there to help. The coaches turned with a smile and a tilt of their ear we all felt their good spirit and joyous holiday cheer. Whether Lean, Six Sigma or Kaizen, every strategy takes time for new culture and behavior to set in. But as the minutes turned to hours, organizations found solutions igniting their powers. As the new year approaches and strategy begins remember Lean Strategies will help you earn the wins. As we close out this holiday week and approach the new year we just want to wish a Happy holiday to each of you and a joyous New Year.
As the new year approaches we all have to wonder, what will happen with the economy? How will the United States respond with presidential changes and what will become of the unemployment rate? There is a lot to consider as the new year approaches and yet we do have to acknowledge this is not the worst of times. But where does lean and six sigma stand in these changing times?
Before we all start jumping off of the Lean or Six Sigma journey let's consider a few reasons why the lean six sigma organizations are so well equipped to have their biggest years just around the corner.
1. Knowing where you are headed - Most lean six sigma companies started their strategic planning by establishing a clear direction for your company. This is a huge advantage because you know where you want to be and can pivot if necessary to stay on course. Most companies that fail during economic shifts and downturns do not have stable processes in place and rely mostly on sales and marketing or reactive behaviors for their growth. The key advantage of knowing where you want to be or having a "future state" in mind is that you can consider both leading and lagging economic trends and plan accordingly. Lean organizations can be confident in knowing that with lower inventory, waste and strong flexible teams in place their profit margins will certainly be higher in both dowturns of the economy and upward swings.
2. The time to improve - Shifts in economy and "slow" times are even more of a reason to push the improvement journey. It's a well-known fact that the one asset that grows and appreciates with time is people. With that in mind we know that like every other business "shift" in history it will only be a matter of time before economic conditions "change" once more. When that happens the organizations who cross-trained, developed and invested in their people will have an enormous advantage over companies who laid off and let go.
3. Capital? - Stable organizations with less waste need less capital to operate efficiently. Using "times of change" to focus on improving the first three P's referenced in The Toyota Way supports the 4'th P. This type of long term thinking will leave you much better prepared for future changes that undoubtedly will come in time. Additionally, solving problems when you have
4. What gets measured, gets improved - Both Six Sigma and Lean use quantifiable measurements to track results. As times change it is much easier to develop effective, repeatable strategy for the future when you are tracking and gathering measurements already. Consider making this your focus in the new year, establishing metrics that can show the performance of the organization through the ups and downs of the economy. Remember keep the measurements simple. You don't need to gather scientific algorithms that can only be understood after years of study just track the basics: Lead time, Error rate, on time delivery to customer, on time delivery from vendor, Takt time, Improvements, Inventory turnover.
Change is bound to come; good or bad. Now is the time to focus on strengthen your business plan and build excitement around your company’s direction. The organizations who develop their people, relentlessly remove waste from processes and build a long-term mindset will be able to withstand the changes of time and grow stronger and stronger with each new year.
It's not always easy to get buy in on a project or a strategy. Fortunately many have blazed the dusty road of pitching ideas and many have succeeded. But, how did they do it?
Obtaining buy in is one of the most overlooked elements of both lean and six sigma. Especially if you are on the front lines and see the issues first hand. That frontline connection with what is going on often makes the ideas you have, something that you're passionate about. Well the solution is simple, make others passionate about that same thing too and you will obtain buy in. Okay, not so simple. But let's look at a few important elements that will help show others just what, why, how, when and where we gained this passion for a specific improvement or strategic initiative. These tips will help you gain buy in on both strategic and tactical level initiatives.
The first step towards gaining buy in is to share what it is you want to do. Believe it or not most great ideas fail at this first step. Either the improvement never gets brought up or for other reasons it gets turned down and that's the end. Before identifying what it is you want to do, understand first the direction the organization is headed. This may require you to become more familiar with either the organization or the leader's vision and mission in order to ensure that what you want to do is aligned with the direction of the organization. Another good idea when seeking buy in is to speak with others about what it is you would like to do, this gives you an opportunity to gather support and in many cases hear what others think about your pitch. Speaking with others may also give you insight pertaining to other attempts at similar projects and challenges. Historical evidence and support can give a much firmer grasp on your business case and will pay off big time when the opportunity arises for you to present your business case.
After defining what it is you want to do, be sure to keep your ears open. Sometimes after you express what you want to do others will agree and anymore explaining may frustrate or talk yourself out of the initiative. Most of the time you will need to back your business case with why you are making the suggestion. This can come from any number of evidences. The first one might be to show the current performance of what it is you are trying to improve. Highlight critical issues and try to show others why it is the issues are causing so much pain. After showing the current state performance, assessment or analysis providing a benchmark helps your audience to understand not just why you're suggesting the improvement but it helps clarify why you feel the improvement will be a success. By gathering benchmarks you can show others success and help them understand what is possible. Just be sure the benchmarks that you share are somewhat similar or that you have a very clear model of "how" you will make your why connect. The last very important thing to share with executives or managers is the ROI. Typically the ROI is the why most people are interested. For instance, "If we invest 40 hours of resource time, we can generate $200,000 dollars in savings." That statement provides a very definitive answer to why we should move forward and segways perfectly into our next topic for gaining buy in. How.
The how connects all of the dots for you. It brings context and reality to your benchmarks, interviews and every other piece of your business case. The how should lay out a very clear plan for how you will correct, improve or fix what it is you are suggesting and document how you will accomplish results related to your benchmarks and or ROI. Be sure that those you are suggesting your initiative to understand that training alone will not be enough for success. There must be buy in and continued action after training is complete. A change in culture and behavior is often the hardest how to explain, but it is a necessary explanation if you hope to gain support.
One common method of laying out the how is to first suggest or offer a "pilot project." The pilot project if a success will give executives a taste of how the how can be successful. It is a good idea to also lay out a 1 year plan that shows 2 years of results. Your one year plan can include projects, training and any other activities that might be needed to reach your objective. At each step of your plan no matter what the timeline you need to show how the plan will result in a return and accomplish the "what" that you first suggested. This makes it very easy for others to understand, they can connect the dots and see clearly how each piece forms a complete concept or initiative.
As part of your explanation of how you plan to accomplish results, you will also need to give a timeline of when you plan to execute the necessary activities. This allows the organization to plan for resources and funds that may be needed to support your initiative.
When we talk about where, we are not talking about where the projects will be conducted or where the strategy will take place. Although that may be helpful for large organizations. The where that we are talking about is where it will affect the company's bottom line. For example if a black belt completes three projects per year, where will those savings be applicable? The important thing here is to not just show where savings are applicable, but also where investments such as training, software, travel, supplies and other investments are applicable too. This gives executives or sponsors a clear understanding of what they need to put in and what they will get in return, allowing them to make a more educated decision. It is common knowledge that when all facts are laid out if buy in is accomplished you will have a much deeper level of support than if everything was not laid out.
Coordinating and connecting all these pieces of information will help you to gain buy in on suggestions and ideas. Most of the time connecting all the pieces to your proposal and making it easy to understand will get the job done. Although being able to tell a good story and supporting your story with real facts may have you leaving the room thinking, "did he just say, okay?"
What decision would you make if your manufacturing plant could make a product for $40.00 but the same product could be made for $15.00 in another country? Would you outsource the product or would you make it?
This is a situation that almost all supply chain professionals professionals face every single day. Depending on where you are at in the world the economy may have drastically underpaid workers, material costs could be inflated or maybe technology just doesn't meet the needs. We all face different problems within the supply chain but the issue of outsourcing or not outsourcing can only be made accurately with one measurement. Total cost of ownership.
I recently had the opportunity to attend a manufacturing summit organized by the Coalition for a Prosperous America. Many manufacturing, pharmaceutical, consulting and government organizations came together to network and brainstorm the seemingly declining state of manufacturing in California. Although I won't outline the entire conference I would like to touch on two topics that were brought up.
Total Cost of Ownership
The total cost of ownership is defined by Apics as; the total cost of ownership of the supply delivery system is the total costs associated with every activity of the supply stream. The key word in this definition is "every." Often times when a decision to outsource is made it is based on the material and labor "piece price" used in quoting and proposals. However this piece price fails to account for, logistics, possible storage, travel fees, additional packaging and any other costs you might receive as a result of outsourcing activities. Let's create an example to help us understand. If a company were making a screw they would most likely quote the material, labor associated with making the screw and any processing fees that may be associated. Let's say that total adds up to $33.00. Now, supposing you receive a quote from a supplier with a piece price of $12.00. Well that sounds like a good price $21.00 off for me and my customer to split. Sounds like a pretty sweet deal right? Well not exactly. The piece price and the total cost of ownership are two very different pricing points. When a piece price is used as the basis for a subcontract opportunity we miss out on quite a few "hidden costs" and we factor in the variability of an organization's "shop rate."
Here is one thing that you can do when making the decision to subcontract or to manufacture.
1. Map the value stream out at a high level for manufactured products or services and for subcontracted products or services.
2. After mapping the value stream out review value - added items and business necessary items such as first articles, set-up and any other charges that may be necessary to the products compliance. Be aware that business necessary items are non-value and many will not pay for these items entirely.
3. Compare the two charges in order to make your decision based on the entire value stream not just the unit price.
Suggestion - After you have made the value stream visible, standardize a template that can be repeated for other similar items or activities, allowing you to analyze the total cost of ownership with minimal modifications.
Once you begin to see quotes and proposals as a value stream and not a unit or piece price then you can truly factor in everything that should be. This type of approach allows you to really see which is the better approach; make or buy.
At one point in the conference one attendee asked what I thought to be a very important question but do to time constraints I was not able to address the topic. I'd like to do so here. The question as accurately as I can recall was: "We've been talking a lot about trade and total cost of ownership, do you think that we should focus more on automation opportunities instead of labor opportunities?"
1. Before considering any level of automation to a process a cost to benefit analysis should be performed in order to see what level of automation fits your needs. As a side note the highest level of automation (level 5) is not always the best option.
2. Before even considering a cost to benefit analysis remove every form of waste possible from the process. Dare I say but this is often the one that is most overlooked of the two. With technology at such an advanced state we have a tendency to buy a much higher level than we really need. But the first step before pouring heavy investments into expensive high maintenance machines is to remove all forms of waste and variation prior to purchase. Taking an intricate view of our organizations various value streams often reveals that we have opportunities to improve changeovers, reduce setups and streamline processes which requires much less investment than automation. Then and only after removing all possible forms of waste should we consider automation. The other important data you can gather from reviewing the value stream is how safe the process is for employees. Of course it goes without saying but if a process is necessary to produce the required product or service and proves to not be safe for an employee to perform automation is something you should consider.
In closing both concepts elude to the fact that by applying lean principles in our organizations we often times can not only create a more efficient, effective and resourceful organization but we can make decisions based on real data and information. Of course establishing a strong supply chain is a given as it will assist your organization in getting what you need, when you need it without concern. However we should also consider ways to maintain a level of manufacturing that is healthy for our organizations based on true analysis which often results in reduced logistics costs, better control of product and services and often cuts down on many other forms of waste.
We've all seen the battery life on our phones drain as the hours pass by in our days. Eventually that annoying red bar shows up and the thought passes, I need to charge my phone. But of course with emails to answer and tasks to complete, eventually it becomes the last task on the priority list. Inevitably you begin dipping into reserves: turning off applications, dimming the screen and logging out of important screens until finally your phone is no longer capable of accomplishing much of anything anymore. In a scramble, you begin looking for a charger: asking friends, plugging in for a quick charge and turning off and on until finally the phones just turns off.
This analogy is a lot like many lean transformations. We deploy visions, missions and strategic initiatives all while accumulating a wealth of tools. Eventually along with all these deployments and collections the thought begins to approach that as a business you must still generate revenue, meet demands and answer informative questions. Over the weeks, months and years the statements, missions and tools begin to be less and less present until one day the thought approaches, "I need to re-charge my strategy." Actually you're probably not alone in receiving that revelation it can happened in both successful initiatives and in failing initiatives. So how do we put that same spirit back into the re-start, re-charge or renewal that we did in deployment?
Here are a few key actions that are critical steps in recharging your transformation.
1. Asses the sincerity of your deployment - Sometimes asking ourselves with sincerity can be a hard process. It's important to ask why we first began a strategic journey. It probably goes without saying but if the desires were not sincere motives, the journey may have never really started. In this case your restart may begin by identifying the actual needs of your organization and acknowledging the current culture and historical behaviors that contribute to the established culture. A few projects here and there and using capital to ramp up production will not always be the answer. Remember that our three key drivers are people, processes and technology and we must be sincere in improving all three of those elements. For instance involving all levels of the organization in training rather than only mid-level or senior level can be a powerful way to establish culture "throughout" the entire organization. This may involve bringing in outside trainers, programs and services or development a "curriculum" of your own to meet the needs of the organization.
2. Constant Contact - While the marketing software of constant contact is a fantastic software, the principle is what we want to acknowledge here. People are much more at ease and in support when they know what is going on and how it affects them. The initial deployment may have been a fantastic event, but if daily updates and communication do not continue initiatives will fall to the wayside among the many other tasks employees have. Eventually like our phone dying above we are left in a scramble to try and put power in our battery. This is sometimes referred to as fire fighting. By keeping people involved and utilizing techniques like huddles, one on ones and town halls we can keep our teams involved in the most recent updates. If you can establish a consistent method of communication and recharging you won't have to worry as much about your "phone reaching a "worn out limit or dead level."
3. Yokoten - Yokoten is the practice and pattern of sharing best practices and learning laterally in an organization. The principle of "sharing" is not only a core concept in the establishment of culture but a key element in driving daily improvements. If we think of this concept like our phone analogy shared above, it makes sense that charging a phone once a week is a recipe for disaster. But developing a pattern of plugging your phone in every night will ensure that it stays charged throughout the day. The same concept can be applied to our organizations. If we have a project here and there we might see some improvements but if we drive improvements everyday and look for others to share them with, we can ensure that we are consistently moving in the right direction.
4. Make it measurable - When you look at your phone throughout the day your bar indicates a percentage of life the battery has left in it. When we make initiatives measurable we can see, monitor and track how much that initiative is affecting the organization. By establishing appropriate metrics to monitor your "strategies" life you are better able to pivot when you need to or continue improving. If it get's measured it will get improved.
5. Coach instead of direct - While there may be times when direction is required, teaching others why it was required and how they can recognize when it's required put's more momentum behind the change. We certainly would not want to call a friend every night to tell them to charge their phone but rather offer a true learning experience for them to do it on their own. This sometimes requires senior level executives and mangers to take a step back and become more personal with teams. Using policy deployment methods such as hoshin kanri can assist in:
1. Establishing a direction.
2. Providing a clear focus for that direction.
3. Aligning the organization.
4. Helping to understand the reason why.
This method of deployment is an effective way to give your internal customers a voice.
Whether it's a phone dying or a strategy that needs a recharge these critical elements will provide some level of support and guidance for your lean batteries and help get you back on track to a full charge.
As we all are aware the PDCA method is cyclical in nature. continued repetition of PDCA that brings you closer and closer to your objective/vision each time the cycle travels around. This concept makes the PDCA model a perfect model for strategic Implementations. We have now traveled through P-D and C leaving us with only A left in our cycle. If you remember we referred to PDCA as Prepare, Do, Continuous Improvement and Again.
The again stage may hint that the cycle starts again and inevitably it will, however it is very important that as you end your cycle you realize first that it is only the beginning. In the beginning of the deployment we had our vision (assumed in our case) and keeping in line with the concept of Hoshin Kanri we pointed our needle in the visions direction using reason and logic through analysis in the prepare phase. Additionally we established appropriate metrics in order to control and channel the organization's strengths while harnessing new opportunities and mitigating to the best of our ability any threats at hand. Eventually after "doing" we came to a point where progress needed to be checked in relation to benchmarks and scorecards. If you remember this third stage was our continuous improvement phase where we focused on the continued development of teams, training and moving forward. Now our cycle is ready to begin again.
Chart the course, are you on the right path?
At some point or another you probably caught yourself thinking, "are we headed in the right direction?" Uncertainty can begin to swelter and that lack of faith can affect the strategies positive effects on the organization. Although strategy is usually a 3-5 year journey (at the least) you should plan for regular check in's throughout the journey.
You can think of Lean as the vehicle to reaching your vision. The course you chart is the route or method that will get you there. In both situations you may need to fix, maintain or refuel the vehicle, course and even the people riding with you, essentially this can be compared to PDCA, cyclical in reaching its objective it must happen in order to keep moving forward.
Remember it takes time
Strategic implementations can be quick, however most of them require resources and focus on three elements: people, process and technology all of which can require significant investments. Along with time each tactical action may require a certain level of investment. The investment comes in the form of money, buy-in, time and often times with the change there is a need for repetition. Be aware that lean is not a light switch that can be turned on and off but rather it is a journey that requires significant planning and execution. The PDCA method provides a clearly laid out "system" for implementation. Although your metrics, plans and tactical objectives will no doubt be different than other organizations with time your lean strategy can be just as fruitful as any other.
If you have been following along with our Lean Implementation series you have now completed analysis and assessment in the planning stage and your organization is fully engaged in training, improvement projects and the actual tactical initiatives that support the building of a kaizen culture. By now you are probably seeing some results in very specific areas of your organization and are starting to ponder the thought, "how do we keep all these great changes?" Well that is where stage 3 begins, continuously improving and sustaining the changes. Here we will look at 3 key elements that will support the changes that have already began and help to continue improving your department/organization.
Continue developing and training teams
In the spirit of kaizen we want to ensure that the three key elements of our strategic implementation stays focused on people, processes and the systems or technology the organization is currently engaged in improving, which leads us to the first important tactic of continuing to develop and train teams that are focused on removing waste and transforming areas of the business, in short keep training your teams. Additionally we want to ensure that trainers are trained in order to spread the new knowledge and skills that each individual is currently developing. These types of activities are commonly referred to as train the trainer. By developing leaders that can turn around and develop other leaders you will support a community based culture where everyone can not only understand the dynamic changes occurring around them but can also assist in ensuring the capability of each team.
Utilize a balanced scorecard and make your metrics visual
A balanced scorecard is a list of the financial and operational measurements that can be used to continue evaluating the results of your activities and the organization's performance against those measurements. Generally the scorecard focuses on 4 overarching areas of measurement: Customer perspective, financial perspectives, process perspectives and learning and innovation. Using a scorecard connects the measurements to the goals and objectives and allows you to continuously monitor progress towards the goals. Although the balanced scorecard might not always be streamed across television screens in your shop the key performance indicators that you have set to measure progress towards objectives should be shared with appropriate individuals. When setting your key performance indicators keep in mind that lagging indicators can not be influenced as well as leading indicators which tells us if we are setting indicators for change it may be best to establish a leading indicator in order to influence and change results towards the overarching objectives.
Find a way to share and benchmark
The concept of yokoten can be very powerful in sustaining change. Yokoten refers to the sharing of knowledge or experiences laterally within an organization. Since we are building a lean community and culture sharing can be a very effective and quick way to apply positive results to other parts of the organization. One other aspect of sustainment can be found in benchmarking other great companies. this can be done on three levels which are: process level benchmarking, best-in-class benchmarking and competitive benchmarking.
Sustainment and continuing to improve can be a challenge as it is natural to want to "return" to what you feel comfortable doing, however by establishing measurements, training teams and looking for guidance outside of the bubbles we work in the act of continuously improving or sustaining results can be achievable with some work. Next week we will address the most important aspect of our PDCA based implementation, again.
Last week we left off our Lean implementation with a clearly laid out plan on a 1 year road map. If you remember we first went through analyzation by mapping the organizations "door to door" current state value stream. This value stream helped us to understand what was going on right now not what should be going on. Next we identified the organizations strengths, weaknesses, opportunities and threats by conducting a SWOT analysis. Having analyzed every portion of the organization it was then time to start the assessment and establish metrics/key performance indicators that would help us gauge our journey and ensure it stays on track. Then after measurements were established to track the course towards our vision we were able to identify some "Gaps," those gaps helped us to plan out the actions needed in order to begin closing the gaps. So, ultimately the output of our analysis and assessment is a clearly laid out plan of tactical activities that will guide the organization towards the vision and objectives. Now we are ready to begin the "Do" stage.
The do stage is all about the execution of the plan we generated in the prepare phase of our lean implementation. There will be 3 key elements that will go into this phase of the journey, which ultimately should begin moving the strategy further ahead.
Training and development
Like any other strategy "training and development" are one of the first big steps for the organization. Employees not only need to know what the strategy is but they need to understand how they can support it so they can do just that. The training should ensure that employees have the necessary skills and experience in order to complete any new roles or responsibilities they will have as a result of the deployment of a new or further initiative. If everyone is setup to succeed the overall strategy will succeed too, think of it like water around a boat as the water rises on each of the sides the boat inevitably begins to rise too and so will your organization/department and individuals.
Very Specific Kaizens
Of course there is no standard recipe for what kaizen event or projects should be deployed, but there is the prepare phases roadmap and assessment that was performed. The specific kaizens that are on your road map are the gaps that were identified in the assessment of the organization, they may also simply be some of the "opportunities" found in the SWOT analysis that you can now move forward with. Your very specific kaizens should be those that were laid out in the 1 year plan of the preparation stage, now it's time to execute each of them. Remember metrics were established not just to gauge the journey but to ensure the tactical events are infact pointing you in the right direction. You will know if they aren't and You will know if they are.
Application of appropriate tools
Now your lasered in on specific improvement events and employees are trained in the basic elements of your new lean strategy. You may even have some experienced employees on staff who have been through different implementations before, those individuals can be a great asset. With experience and trained resources we need to give them opportunities to now execute and develop their skill set. This stage will begin to apply tools such as: 5S, VSM, SMED and Poke yoke to the appropriate processes and areas in your organization.
After the application of appropriate tools your organization should be looking more efficient and have noticeably less waste in both the overall value stream and some targeted areas of the organization. Finally after completion of your road map the resources you have may be starting to notice they have more time for improvements after they get through the initial J-curve of the strategy.
Well it may seem like at this point of implementation that everything is done and complete, it's not we're only halfway through our PDCA implementation and a small percent towards the reults years of repetition can bring. Next week we will advance one more stage into the "C" or continuous improvement stage.
A little over sixty years ago, Dr. W. Edwards Deming visited Japan. His purpose in going there was to share what we know today as the PDCA cycle. Based on the scientific method the PDCA cycle works in cyclical iterations, with each step moving the practitioner closer to their objective.
Over the years the PDCA cycle has been used for process improvements, quality projects and developing critical thinkers. In more recent years the PDCA cycle has been utilized with great success at a strategic level. Yes we are hinting that aggregate activities that impact the bottom line and resources can experience transformative results when the PDCA cycle is applied. In today's Tuesday tip, we will talk about the first stage of lean implementation and how continuous improvement can be driven using the PDCA cycle.
Assuming you have a vision established, we are ready to begin. Oh and our apologies but we refer to PDCA in this article as Prepare, Do, Continuously Improve and Again. So let's jump into the first part of implementation "prepare."
What does it mean to "prepare?"
One definition of the term prepare is: to make something ready. In order for us to make our organization ready for a lean implementation we must first look at the current state of the organization. This look at the current state is your opportunity to strategically analyse where we are at. A few key steps in analysing your organization will be understanding what is happening and preparing a plan for implementation.
Step 1- Understand
The purpose first is for everyone to understand exactly where you are. One fantastic tool you can use in your understanding of the current state is a current state value stream map. You will want to map the "door to door" process at a fairly high level (note- eventually you should look at an extended view). The objective of this value stream map is to take a hard look at the organization and identify opportunities to improve.
Step 2 - Take a SWOT at it!
Okay, now that we understand the organization much better we are ready to start fixing everything. Wrong! taking a SWOT at it would not be the best swing at the hundreds of flies you most likely have found, however performing a SWOT analysis will keep you on track. Before we go fixing everything we first should identify what are our strengths, weaknesses, opportunities and threats from both an internal and external perspective.
Step 3 - Measure it
After all of the analysis and understanding we are now ready to establish some metrics for assessing and measuring our journey towards the vision. These key performance indicators should be linked to the strategic objectives that are specific for your organization. Hurry up and take your time establishing these KPI's they will be used throughout your strategic implementation to show performance levels and track progress towards objectives. This is the stage where benchmarking can be very powerful. Some possible key performance indicators you may want to use are; On-time delivery, first pass yield, Inventory turnover, fill rate or even our T.E.M.P. Assessment which takes a broad look at both qualitative and quantitative measures.
By now you should have a very clear understanding of where you are at, additionally your strengths, weaknesses, opportunities and the threats that may be creeping up are out in the open and key leadership has been made aware. Finally establishing key performance indicators will help you track progress and notify you of GAPS which points us to the next step of the "prepare" phase.
Step 4 - Plan of attack
Now it's feeling like strategy. We have understanding, Strengths, weaknesses, opportunities and threats and gaps and issues that have been preventing us from reaching goals and objectives are all laying on the table ready to be improved. Those gaps may be thinking "let's just close" at this point. Why? Because they are being measured and what get's measured can no longer hide. The last and final step of preparation is to plan your implementation and how the organization will handle behavior and culture changes that will undoubtedly come. This stage is all about laying out the appropriate "tactical activities" that will support accomplishing strategic objectives. A Yamazumi chart like the one shown below will be helpful in laying your plan out and showing everyone where the plan is at.
Remember just as the saying goes if you fail to plan you can plan to fail here too, so be sure that your preparation phase includes a deep analysis of opportunities in the current state and that you have established KPI's that provide a clearly defined assessment of exactly where you are at. In the next Tuesday Tip we will jump into the Do Phase of our 4 step Continuous improvement implementation.