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Lean2.0 next steps

2010-01-12T14:28:00.004Z

Jim Womack, Founder and Chairman of the Lean Enterprise Institute, Inc. has asked where does Lean go from here ( see link above for his January 2010 e-letter)

My contribution is that I believe that recent events of market crashes, the speed of recessions, booms and busts along with the prevalence of quarterly corporate earning rigours drive us to achieve greater PDCA velocity.

To enable fPDCA (faster PDCA) requires us to:

Make use of modern communications to speed up our links with customers and other PDCA groups (think of them as nested PDCA loops within and alongside each other). For example, think how to use Twitter to provide quick punchy feedback
Build the skills into everyone so that they can use improvement tools, and have the attitude and confidence to try
Give them the authority so that they can exercise PDCA at their own Gemba
Make greater use of statistical tools (like six sigma) to turn data into information far quicker, and
Encourage experimentation, piloting, trying out new things, firmly embedded in a PDCA cycle

Colour and Value Steam maps

2009-12-08T08:14:00.002Z

A team was mapping the site activities required to deliver to the customer, so a Value Stream map for all of the complex customers of a modern site, as well as the "users". One of the team came up with the idea of using a different colour for the actual product... it created a tiny pool of pink amoungst a sea of yellow. A Very visual way of seeing where the value is!

China bound

2009-11-11T16:26:00.003Z

At the end of November I will be travelling to China to deliver training on problem solving and Value Stream Mapping. My first trip to China, working with Chinese and British people. Should be really good.

Currently working with a client to put in place a Business Continuity Planning project for one of their key buildings. Excellent involvement by all departments and some very well thought through plans.

Site development - first phase of Going for Gold expansion plan for Penn Pharmaceuticals

2009-10-13T16:44:00.003+01:00

Specialist pharmaceutical company Penn Pharmaceutical Group, is embarking on the first phase of a five year long £12m expansion programme which will see the complete redevelopment of its manufacturing site in Tredegar, South Wales, and which will, when complete, increase capacity as well as improve operating efficiencies. The expansion programme will create 133 jobs and safeguard the future of a further 100 jobs at its Welsh headquarters.

Following an operational efficiency review carried out by Machan Consulting, four major improvement initiatives were identified under the 'Going for Gold' theme, fitting perfectly with the company's sponsorship of Paralympic swimmer David Roberts CBE, who is an eleven-time gold medallist. The four initiatives are Site Development, Materials Management, Quality Improvement and Organisational-wide Training, all of which have overlapping elements.

The Site Redevelopment initiative will play a key part in improving operating efficiencies. The site layout will be redesigned in order to improve the flow of materials and staff. It will involve much large scale groundwork and will transform the shape and appearance of the site.

Penn Pharma has already invested in some additional capacity, including an off-site storage and distribution facility near its headquarters, and in the extension and refurbishment of its laboratories.

Penn will move existing stores to a site at Oakdale to allow the expansion of its clinical trials supplies and manufacturing facilities. Further redevelopment phases will include the extension of existing buildings, the refurbishment of the staff restaurant and the laboratories.

"All the phases of the work will make significant improvements to the appearance and operation of the site," said Peter George, CEO of Penn Pharma. "In the longer term it will also allow for expansion of the site on a single level, in line with a longer term site development strategy; a improved environment for our workforce and improved material and people flows."

The site development project is the most visible of the four projects which have all now started.

Lecturing

2009-06-29T06:13:00.003+01:00

In December this year, I have been invited to provide a lecture to some Masters students on the topic of Management Consultancy at Cranfield University in the School of Applied Sciences. If any students attending that course read this then please email me with a few points on what they would like to learn from the session.

Black Swans in a post six sigma world?

2009-04-28T17:04:00.002+01:00

Black Swan is the name of a book by Nassim Taleb. His life work on the topic of randomness raises good questions for us all in the current situation. Before Black Swans were discovered, accepted wisdom was that all Swans were white. It's a short hand metaphor for surprisingly likely, unusual, extra-ordinary events that can have enormous impacts, unpredictable in a six sigma, normal curve mindset.

Think of monitoring a production line using control charts, working on reducing variation, identifying special causes and then.... the Power supply line to the whole factory is cut by contractors (its happened to me, in my case it was a continuous steriliser in a food factory, and manual control of the steam became essential).

It's outside of your "system envelope", unpredictable, but with a massive impact.

Nassim Taleb shows us that we can't predict these black swans, but we can identify what types of endeavours are likely to suffer them, and hence we can prepare, and maybe react quickly.

On the other side of this are the unexpected, big win black swans. The sort of big impact, highly unexpected wins that are beloved of entrepreneurs. Again we can't predict them, but you have to be in the game to win them...working hard at getting lucky!

Operational excellence

2009-04-01T17:05:00.002+01:00

Operational Excellence: Pharma’s Missed Opportunities by Thomas Friedli, University of St. Gallen and Prabir Basu published in March's edition of the Pharmaceutical Manufacturing Magazine (Link above to the article) is well worth a read.

It is drawn from a europe-wide benchmarking study conducted by the University of St. Gallen, Switzerland, and the International Association for Pharmaceutical Technology (APV). It reveals that an average pharmaceutical plant could save up to € 6.5 million per year by achieving the degree of operational excellence equivalent to that achieved by the top 10% of the sample. About 100 pharmaceutical manufacturing locations all over Europe were analyzed in this study.

Measurements and distance

2009-03-23T08:03:00.004Z

Despite my previous Athletics Coaching experience, I'm not referring to Long jump measurements here.

Performance measures are good, applying stats to them is good, looking for trends is good. Why wouldn't you want to track key numbers?

However, I have recently seen examples where performance measures are being used to substitute for closeness to key operating areas and customers. Don't rely on performance measure to replace time spent understanding what is really going on. The Japanese call it going to the Gemba (see http://www.amazon.co.uk/Operations-and-Supply-Chain/lm/R3E73X9KNKKDJP/ref=cm_lm_byauthor_title_full).

Put in place and use Performance measures to ensure that you are achieving your strategy, but let them guide you to where you should be spending your valuable time.

Some of you may have seen our recent Spring Newsletter. In this issue we point to the article in the March edition of the Manufacturer that was based on Hugues Charrat's work at Cranfield, an MSc student that we worked with. His Thesis is on the resources page of our website ("Operating in the UK as a strategic Choice"), and the article can be found at http://snurl.com/e4ua5

This work builds on Greg Bacons Thesis from 2007 (see again our resources page and click on "Offshoring: An Industry insight into the benefits and challenges").

A system for Success?

2009-02-08T13:18:00.005Z

Last month, Oliver Burkeman wrote a column in The Guardian (click on the link for the full article), that quoted the question "Can there really be a system for success?"

The thrust of his argument is that the promise of a successful system is that it will render self-improvement "automatic, bridging the excruciating gap between knowing how to change and actually changing."

Although Oliver is talking here about dieting, time management and the like, the parallels with Industrial and Operational improvement improvement ideas are uncanny. The promise of Lean, Six Sigma, ERP, 360 degree feedback, Management by Objectives, "Managing by Walking about" all promise a little of that.

In practice of course, making change is a combination of knowing what to do, and then employing a lot of graft, keeping a clear direction and sometimes the helping hand of someone who has been there before. Successful change is frequently predicated on how you go about achieving it. This emphasises the need to plan what you have to do carefully, remembering we deal with real people.

How you change frequently determines your level of ultimate, sustainable success; not just which system you select.

PS, if you are looking for what is coming next, there is an excellent article by Dan Gilmour on Lean Manufacturing 2.0 and TLS (Theory of Constraints, Lean, Six sigma) Follow this link: http://www.scdigest.com/ASSETS/FIRSTTHOUGHTS/09-02-05.Php

Works Management Magazine Jan '09

2009-01-25T20:26:00.002Z

Annie Gregory interviewed me for the January '09 edition of Works Management Magazine on the topic of the next steps for Lean. Here is the intro to the piece from Annie:

"Joined-up thinking

Once the basics are in place, what’s the next logical step for lean?
As Annie Gregory discovers, the lean path runs best when it heads
straight for your customers’ door"

In the article I was quoted as being a committed advocate of pinning lean’s second steps to the voice of the customer (VOC). “Especially in difficult times, the pursuit of lean should mean more than just removing waste. Pockets of lean good practice need to extend to the customer, so that not only is the stream focused on delivering the right value but that customer sees your value stream as being better than their other choices.”

I also point out that it is relatively easy to copy products but incredibly difficult to emulate the things that make a value stream special.

Click on the link to find a PDF copy of the mazazine and read the full article.

Support Services

2008-12-17T17:09:00.003Z

Machan Consulting, while striving to be the leading Operational consultancy in the UK, is not without help. Christmas is an especially good time to remember the businesses that support that goal, so a special thanks to:

The Business Centre Nottingham (www.clicksecretary.com) for our admin support whenever we need it
Kimeera Ltd (www.kimeera.com) for all of our web and graphics expertise

and most recently:

Gemini PR and Marketing (www.geminiprmarketing.com) for our PR and Marketing smarts.

Finally, remember during this downturn/recession/credit crunch to focus on your customers, their customers and deliver value greater than your cost, standing out ahead of the competition. That's what real Value Streams and Value Stream Mapping is all about!

Useful guidelines when off-shoring

2008-09-30T19:07:00.003+01:00

For this blog we are grateful to Paul Gagg, a Global Operations Manager, based in the UK but with extensive experience in this field for his business.

"The continuing shift of manufacturing activities away from Developed to Low Cost Countries (LCC’s) shows no sign of abating. Despite well documented stories of organisations “near shoring” or repatriating manufacture, the flow remains overwhelming toward LCC’s. Much of the shift has been driven by the pursuit of cheaper Costs of Goods (COGS) and, in the majority of cases, LCC’s ex works COGS have proven to be considerably cheaper. However, there an increasing awareness of the need to take a holistic view, assessing the true cost to serve and deliver products to the end customer; a realisation that the perceived benefits of moving to LCC’s are less dramatic than initially projected.

Aside from the obvious costs associated with manufacturing further away from the historic centre such as logistics, tariffs and higher inventories, there are other costs to consider. Travel costs (both time and financial) to undertake audits and supplier meetings and the increased risk of loosing brand equity due to IP and trademark infringement are more difficult to capture, but should not be underestimated.

Whilst LCC governments, particularly China, have made concerted efforts over recent years to bring legislation in line with Developed economies, there remains significant scope for improvement in the control and regulation of manufacturing businesses and their interpretation of “legal” business practices. Compliance to World Trade Organisation regulations is at best patchy in countries such as China and it is important to ensure that robust procurement practices are put in place.

Organisations wishing to transfer activities to LCC’s need to ensure that infringement of IP, Know How and Trademarks are mitigated and the impact on COG’s and brand equity minimised. The following should act as useful guidelines throughout the off-shoring process and should help to reduce potential issues surrounding IP and Trademark infringement:

1) Ensure signed Confidentiality/ Non Disclosure Agreements are in place before any detailed information is transferred.
2) Extensive due diligence needs to take place. Visiting facilities is imperative. Developing personal relationships, however difficult given cultural and language barriers, must be done.
3) Employ a local team who can act as the in-country liaison. Managing suppliers in this manner continues to build on the relationship and ensures that policing of the LCC supplier can be carried out regularly.
4) Take a balanced approach to your portfolio. Undertake full cost to serve modelling to ensure that “Material” benefits exist by moving to LCC’s. Once complete weigh against the perceived risk of IP and trademark infringement inherent within the product that you intend to offshore.
5) Ensure commercial contracts are in place. Create separate Trademark and Patent agreements in both English and Chinese and ensure that the Chinese version is registered with the Chinese IP authorities.
6) Do not underestimate the speed with which designs can be transferred into sellable copies and undermine your market share.

Whilst the above list is not exhaustive, it should give some insight into the actions that should be put in place to mitigate the inherent risks in LCC sourcing. Transferring manufacturing to LCC’s clearly has many benefits."

Off-shoring revisited

2008-09-08T13:26:00.003+01:00

In a continuation of the debate about off shoring, you may be interested to read the latest report from McKinsey (link: http://www.mckinseyquarterly.com/Operations/Supply_Chain_Logistics/Time_to_rethink_offshoring_2190_abstract), that looks at recent data and trends from the US point of view. In essence it looks again at the impact of oil prices, wage inflation and currency movements.

In a future Blogging we will also have an article that introduces you to a 2008 MSc. research thesis of why some businesses may choose to remain in the UK.

Remember to keep your Supply Chain balanced around your business aims!

Checklists

2008-07-14T12:15:00.000+01:00

Checklists: Humble yet effective

Yet again I am amazed by the simple effectiveness of having a checklist. We all know (and take comfort in) the need and application of pre-flight checklists for an airline pilot, but how often we forget their power in dealing with complex office activities.

The mapping of a well constructed internal process both “as is” and “future state” was coming to the end, and the issue remaining was to ensure that the checking step was complete and understood. We pondered, added and challenged until we came up with a 25 item list, making it clear which function checked each item (using their unique skill and knowledge set). The outcome was crystal clear clarity on what had to be done right in the upstream process steps, and rock solid ownership of what was to be checked by whom. This was evidenced by comments such as “... and that’s why xyz happened, because it wasn’t right” and “that re-work cost a lot!”

Is the list perfect? Probably not.
Can it be improved? Certainly.
Can it be used as a training tool? Of course.

Can we use the list to work out how to make errors less likely? Now we are talking....

Uncertainty

2008-06-13T09:43:00.004+01:00

Critical Chain thinking (see Critical Chain, 1997 by Eliyahu M. Goldratt, ISBN 0-88427-153-6) extends our thinking about how to plan projects, bearing in mind how people think and respond to uncertainty. The Germ Theory of management by Myron Tribus, (1992, ISBN 0-945320-33-7, download at http://www.idea.gov.uk/idk/aio/7259676) talks about the “Germ of variability” and how its effects can be seen everywhere.

Variability and uncertainty are everywhere. Particularly in a Global economy, we are subject to changes that are hard or near impossible to predict. Why then do we persist in creating expectations and plans that make no allowances for them? If the success rate of a difficult process is historically evident as 8 out of 10, then why only plan to make 10 when you know the customer wants 10?

On the other hand, sometimes luck sends us some good news and we can move more quickly. Perhaps the long awaited approval came through quicker than expected. The danger there of course is in hiding the gain, in case it builds expectations of a faster response every time. If we come in under budget just because of natural variation, the budget surplus gets spent, so as to avoid a cut next year. In that next year we might over spend because we only have limited control... the result of natural variation. The outcome? Higher spend for a questionable gain.

Uncertainty and variability is everywhere. What makes the difference is how we plan and respond to it. Recent work on Supply Chain design is recognising the need for flexibility and robustness. These are attributes that can handle shocks to the system and still perform. Lean, process visibility, clarity of your constraints can all help in this, but at the heart of it all is our understanding and use of variation.

Where are you on the bell curve?

Business Bottlenecks

2008-04-19T14:26:00.002+01:00

For those familiar with TOC thinking, bottlenecks or constraints are a good thing. To those not familiar that comes as a surprise.

A business bottleneck makes improvements easy to manage. If your bottleneck is an internal one, and you know what it is, then your improvement will come from maximising its use and increasing its capacity. That means making sure it does no unnecessary activities, especially re-work. The capacity of the business to increase is limited only by how well you use that bottleneck. Your role as manager of that bottleneck is clear.

What about if you aren't the manager of the bottleneck? What is your role?

Well if you are a "near bottleneck" it's to make sure that you don't take over that role. Process improvements, careful managing of your resources is the watchword, and if bottleneck improvements are likely to put you in the pinch point, shout loudly.

If your area is far removed from the bottleneck, then your role is different. First don't take on work that has to go through the bottleneck that is over their capacity (learn to say "No", even if you can handle the task), then make sure that the quality of your inputs to the bottleneck area are of the highest order. Lastly but not least, what can you do to relieve the bottleneck of work, or better support them to increase their limit?

So whichever role you are in, you have a clear focus to improve the business.

Best Practices in Lean Six Sigma Process Improvement

2008-03-25T14:01:00.004Z

Dr. Richard Schonberger has published this year (2008), his latest review of Lean proficiency. The link in this blog takes you to the UK Amazon page should you wish to buy it.

The publication draws heavily on Richard Schonberger's excellent and growing database of Companies' Lean practices. The book uses the data to draw messages and conclusions on the adoption, and retention of Lean practice. While weighted in this data, the author manages to take a balanced and incisive discussion without overwhelming the reader. I recommend this to any involved in the development or pursuit of Operational and Manufacturing excellence.

Balancemark

2008-02-24T22:08:00.001Z

Balancemark

Just finished another key meeting? Worked hard, challenged the Status Quo, pulled the team to a consensus?

Did you spend your time on the right issues?

If you are a senior or executive team, the benefits of rapid reporting, accessible data and of course your own team’s deep knowledge of the operation can blind you to your real role.

Should your team be focusing on the last and next day, reflecting on the last or next month, or the next year or two? And then if you decide you are looking ahead, who does focus on the other timeframes?

Balancemark™ is a new process designed to show you where you and you team’s heads are now and where you want to be. Get that right, empower your Operations teams to manage the here and now and start carving out the future your business deserves.

Site strategy

2008-02-01T08:04:00.001Z

What’s the difference between a site with a strategy and a site without?

It sounds like a one-liner joke, a simplistic question, but it is at the heart of a site’s success. Machan Consulting has helped numerous businesses develop a strategy for their future: a plan to overcome far eastern competition, a roadmap to reverse poor efficiencies and customer service, a means to forge a unified workforce.

Can every site strategy deliver on all of its aims?

No, of course not. Can a site achieve them without a strategy?

Sometimes, if you’re lucky. So the answer to the one-liner? One believes in luck and the other doesn’t. Which do you want your team to follow? Have a look at our site www.sitestrategy.co.uk for how to engage us and reduce your dependence on those dice. If you just feel the need for some guidance, go to our contact page on this website and ask for our free one pager “Sitestrategy guide”.

Off Shoring

2007-12-20T08:46:00.000Z

The movement of production to low cost sources has been going on for centuries. The difference with Offshoring is that the current Market leaders are looking to do it themselves, and stay in position, rather than have it done to them.

Successful competition in all markets drives many companies to look at Offshoring solutions. For some that may be the right decision, or part of the solution. While the impact of the distance to market has many implications for Supply Chain design, including working capital impacts and responsiveness, the opportunities can be unquestionable. Having decided it is a valid theme to pursue however, you must get it right.

Wedgewoods much publicised offshoring exercise (see http://www2.theiet.org/oncomms/sector/manufacturing/magazine.cfm?issueID=209&articleID=C8968999-DB8B-F8ED-F597FE6FA7ECCDBA) talks of the hard won experience from their relocation of Johnson Brothers Tableware.

For the very lastest review of the key challenges facing companies when looking to offshore please follow this link to the IET's website for an article in their latest Manufacturing Engineer Magazine
http://www2.theiet.org/oncomms/sector/manufacturing/magazine.cfm

Happy reading and all at Machan Consulting wish you a very peaceful Christmas.

Website renewal

2007-11-27T15:20:00.000Z

November 2007 sees the renewal of the Machan Consulting Website, part of the continual evolution since 2003. This Blog will provide a regular, monthly look at the challenges facing UK Operations and will include guest entries from selected clients and colleagues.