By Larry Cote, President Lean Advisors Inc

In the past few years there have been rumblings from the North American manufacturing community about the desire to return some of their manufacturing to North America.

There have been many changes in the economics and the markets since the early 90s both here and in Asia (China specifically).  Some of those changes are that China’s economic environment has evolved and grown.  As it happens in every economy, growth and competition puts pressures on the cost of doing business, the infrastructure of transportation/logistics of shipping higher volumes and more products becomes stressed.

In the meantime while this evolution has been happening in China, North American productivity has improved, especially in the US through technology and advancements in process thinking.  All these factors (and many more) have caused CEOs of manufacturing companies to reassess the decisions that they made a decade or two ago to move production overseas.  They are realizing that it may be more profitable now to do some of their manufacturing here on this continent.

This opportunity should not be missed by Canada or the US.

Management teams must first recognize that they can be competitive in quality, cost and speed of supply.  Once this realization is made then they quickly must re-examine the importance of dramatically and quickly transforming their current methods and thinking – both culturally (value thinking) and processing.  We must not kid ourselves, this opportunity to take advantage of ‘repatriation’ or ‘re-shoring’ will not last long.   CEOs are constantly searching for the next place to invest, where they can drive profits and a better ROI.

The one solution that is being touted for attracting manufacturing back to North American soil is to adopt the latest technology as well as investing in innovation.  This is a simple solution that on the surface is an obvious statement to make.  The reality though, is that over the past decade, our margins have been squeezed so tight that survival has been the primary focus.  In this scenario, very little money can be freed up to buy new technology let alone spend time on research and innovation.  So, what do we do??

Our belief is that expensive technology should not be the first step in becoming attractive to foreign business.  Technology should be the second step in turning around your company.  “Leaning out” your existing processes is the first step and will give you the knowledge and understanding of what technology you really require and should invest in.

Initially, North American organizations should be focused on ensuring their current processes are ‘waste’ free.  Without this customer focus of ‘value’ as the major driver of the corporate strategy, we will miss the opportunity to attract the manufacturing industry we lost to foreign countries over the past few decades.  This “leaning out” will also give organizations the profits they need to move to the next phase, which is purchasing new technology.

I know this sounds like the same old preaching Lean has been teaching since the mid 90s, but ‘off-shoring’ of manufacturing began well before Lean could have an impact.  Now we’ve had the past 15 years to become experts – let’s call the last 15 years ‘practice time’ – and we are ready to actually demonstrate to the world that North America is the place to invest if you want the best quality, service and cost.

Manufacturing is the backbone of our economy.  Let’s not miss this small window of opportunity to bring back some of the manufacturing we lost and even to develop new opportunities for growth.  We have been given a second chance, let’s not miss out!!

A very commonly-implemented intervention when attempting to “mistake-proof” a process involving humans is the double-check.

Double-checks are, by their nature, waste.  Often, double-checks are put in place as temporary stop-gap measures while more effective, value-adding countermeasures are devised and implemented.  While a perfectly-implemented double-check does indeed improve error rate, it does not come close to serving as effectively as a prevention-based mistake proof device (poka yoke) and should therefore be considered a weak intervention.

The prevailing theory behind a double-check is that, while a person will occasionally err when undertaking a task, with probability A, the process will be made more robust by inserting a double-check of the work of the original person.  The presumption is that the person doing the double-check will also occasionally err, with probability B, but that the combined probability of error emanating from the double-checked task will be geometrically lower (improved).  For example if the error rates of the original person performing the task is 10% (A=0.10) and the error rate of the double-checker is 15% (B = 0.15), the combined error rate of the double-checked process is now (0.10)(0.15)=0.015, nearly an order of magnitude improvement.

Actual results of such interventions in practice rarely match the theoretical improvement.  By understanding the factors leading to gaps in performance of double-checks, we can set out to implement double-checks in such a manner that efficacy is enhanced.

Factors leading to sub-optimal performance of a double-check

Often, a double-check step is inserted into a process “on the fly” without thoughtful planning to eliminate possible failure modes of the check itself.  Following are some common situations to avoid when considering a double-check for your process.

• Lack of clear definition (standard work) of how the double-check is to be performed
• Ineffective training of staff who are to perform the double-check
• Failure to design an independent double-check; one that only involves the person originating the work has a high likelihood of error due to confirmation bias, which can blind the person performing a check on his/her own work .
• When a second person is assigned to perform the double-check, confirmation bias can blind this person.  This can be caused by specific information being passed from the first to the second person prior to validation, the second person subconsciously deferring to the authority of the first person, or simply trusting that the first person could not have erred.  Any of this leads to the second person missing errors.
• Creeping complacency, due to a person knowing that someone else is in place to catch any mistakes he or she will make
• Interruptions during the double-check
• Rushing the double-check

Related, and equally common, is the issue of nobody being tasked with examining errors caught during the double-check and using that insight to drive focused root cause analysis and interventions upstream to eliminate as many of these failure modes as possible.

What can you do?

1. Assess and analyze any double-checks you already have in place.  Look for evidence of any of the above issues.  Ask to see the data showing what errors are being found.  Investigate what actions have been initiated as a result.
2. Before assuming that a double-check is the strongest mistake-proof device (poka yoke) that can be designed and implemented for a particular task within a given value stream, challenge yourself and your team to seek out stronger interventions.  Estimate the relative strength between multiple intervention ideas.
3. Where a double-check is the only course of action, either for the short term or for a longer time period, infuse these design principles:

• independence of the check, separated by time and space if possible to mitigate risk of “contaminating” the checker with information about the person originating the work, inputs, outputs, calculations, and judgement applied
• to simplify and make visual the double-check, create a checklist showing the specific steps to be undertaken
• create a physical environment for the double-check that will be free from distraction and which will make the task simplest
• carefully document the standard work, train those involved, and assess skill/capability of those who will be performing the check
• avoid having the same two people serving as checkee-checker on a sustained basis
• periodically assess efficacy of the check, in a blinded fashion and provide feedback
• instrument your check and specify roles to include those who will prepare, analyze, and act upon the errors caught by the check

4.   Seek to continually improve, through successive cycles of mistake proofing, until you can evolve beyond the use of double-checking

Mobilizing Our Ingenuity Through Good Management.

In this video, Mike Rother shares valuable insights into the importance of ‘structured’ change methodology, called Kata.

At Lean Advisors, we believe Kata is the next major critical concept organizations need to grasp in order to create a sustainable transformation. Mike has uncovered, through his research with U of Michigan another important piece of the puzzle necessary for success and taking your team to the next level of competitiveness

Message from Larry Cote, President, Lean Advisors Inc.

I recently came across this video of Mike Rother who spoke at the Lean Summit in 2012. I had the privilege to work with Mike back when Lean was just gaining interest in the mid 90s.

At that time, much of Mike’s research and efforts were focused on Toyota and the primary transformational tool known as Value Stream Mapping (VSM).

We wanted to share this with our online community.

Lean Summit 2012 – Mike Rother – Toyota Kata

In this webinar, Larry Cote, President, Lean Advisors Inc. shares an objective assessment of Lean 15 years after the concept was coined ‘Lean”.  He highlights his own experiences as well as examines and identifies how different organizations from all industries have succeeded with Lean implementations.

Watch Webinar

By identifying how health care organizations and other industries have both succeeded and failed at improving timely access across their organizations and examine how to improve timely access across your organization or the system in which it operates.

Click to learn more about the 2013 conference.

About Taming of the Queue

Since 2004, the annual Taming of the Queue (TQ) conference has brought together a community of interest from across Canada to discuss access and wait time issues. Representing a wide range of perspectives, conference participants assess progress being made on wait-time measurement and management. Sponsored by several national health stakeholders, these events have enhanced knowledge about the issue, while exchanging best practices and helping to shape the public policy agenda.

First, let’s alleviate the misconception, apprehension or anxiety that Lean doesn’t work.  It does work!

The caveat is that you must discover the ‘right’ or proper adaptation of the thinking and concept to  your unique situation!

Once you have acknowledged the above, you can then begin to search for the proper solution and resources to lead your Lean Transformation.

Chances are you will try to find the expert internally first and then if you feel you don’t have the internal expert, or need additional resources or guidance, you will go outside your organization to either hire someone or find a credible consultant.

The problem with trying to select the expert talent is that you may feel a little hesitant as you may not know what to look for (or not look for) in an individual in order to make this important decision.

This decision becomes even more stressful because you know that you get one chance to make the right decision and that if you select the wrong person(s), you alone are responsible for taking your organization down the wrong path and it is extremely difficult to start again.  We acknowledge that much of this confusion has been caused by consultants and trainers that have misguided their clients and/or students and given them the incorrect or incomplete knowledge which in turn the leadership unknowingly uses to select what and who they need to guide them.

So we thought it might be helpful in this post to at least highlight some of the red flags to be aware of when hiring a person(s) to lead the change in your organization and that you are willing to put your reputation on the line for.

Here is a list of some of those Red Flags to keep in mind when deciding on the expertise you are looking to engage:

1)      The transformation costs tons of dollars.

2)      The person doesn’t know the difference between Process and Value Stream Mapping and where both are critical.

3)      They speak about tools instead of cultural change.

4)      They have a solution prior to properly assessing the situation.

5)      They will do it for you – your staff won’t be that involved, the staff only have to utilize the changes once the consultant is done.

6)      They use the word ‘bottleneck’ or project to focus on one area.

7)      They call it Lean Sigma and it is really mostly Six Sigma (a tool).

8)      They use a matrix type chart to determine the priority of projects i.e. the one axis is normally large and little impact and then the other axis is little or most effort.

9)      They give you a long list of projects to assign to staff or themselves with no sequencing analysis.

10)   Their plan requires them to be on-site for, what seems like, an unreasonable length of time.

These are only some of the Red Flags you should keep in mind.  If you ‘see’ any of these types of ‘flags’, take notice and do some additional analysis and research into the credentials and approach.  Doing this analysis properly could save you years of regret, not to mention thousands of dollars, and in the end- frustration and disappointment not just for you but for your entire staff.

Lean does work when implemented properly!  The challenge for you is to choose the distinctive and effective adaptation of the theory that is right for your environment/situation that will not only transform your processes but also transform your culture into a sustainable continuous improvement organization.

For more information, contact us at corp@leanadvisors.com.

Universities and Colleges represent an immense opportunity for the application of Lean Concepts. Lean Advisors Inc, Senior Advisor Sav Pota P.Eng, will share his insights on how Lean principles and practices apply to educational processes.  He will also provide highlights from his own experiences in higher education, including success examples, lessons learned, and advice on how to best engage university/college staff in order to create a culture of continuous process improvement to achieve the most effective and efficient results.

Date: February 28,2013

Time: 1300 – 1345 EST

Space is limited. REGISTER TODAY

About the Presenter:

Saverio (Sav) Pota P.Eng

With over 25 years of practical experience in various industries, both manufacturing and non-manufacturing, (healthcare, government, justice, logistics/distribution) Saverio (Sav) Pota has a unique ability to “make complicated systems simple” using Lean. His passion has always been to pass on this ability to adapt and apply Lean to challenging situations and to others.

Sav’s Lean experience includes many sectors – manufacturing, healthcare, college/educational institutes, government, design/architecture and service. From his early days in the electrical industry where traditional production management (e.g. EOQ and the big batch) was prevalent, he saw firsthand how North American companies latched onto individual concepts, such as Just In Time (JIT), which led to disappointment because benefits could not be sustained. Sav then worked in the Auto Industry where he was first indoctrinated in the Deming management philosophy. This led to an understanding on how company culture is a fundamental requirement for sustaining continuous improvement.

Subsequently, Sav worked for a major Crown Service Corporation where Lean was introduced as a new direction (a direction that lives on 15 years later).The basic principles of Lean, (Define Value, Map the Value Stream, Make in Flow, Pull and Perfection) became the driving force for both cost and service improvements. Mapping the Value Stream clearly identifies the end-to-end flows of a product or service and is paramount for any sustainable improvements. Sav also led a major initiative (Kaikaku) in a product processing overhaul, but more importantly he led a team of his peers in the development of a Value Stream Management organization. Sav believes that it is imperative to have internal value stream owners to ensure that Lean becomes imbedded into the culture of any organization.

Sav’s work continued into the private courier industry, where he planned and managed the start up of new facilities based on Lean principles. As a director at a major North American transportation company, he applied the concepts of Lean in the creation of their long-term vision. This vision was the guiding principle of their business transformation initiative.

Recently, he was part of the design team for the new Children’s Hospital in Saskatchewan. He led teams comprising of Ministry reps, Hospital leaders /staff and designers to analyze existing processes and establish new, more efficient , flexible flows throughout the facility that would be incorporated into the design of the future hospital.

Presently, he is working with several Health Regions in Ontario, College Administrations and Municipality Administrations to transform them using Lean.

As an owner/partner in a manufacturing company, Ontario, he has also managed to benefit from Lean principles. Significantly growing his own company over the years. This company has survived and thrived even throughout the latest recession.

A graduate of Industrial Engineering from the University of Toronto, Sav has furthered his professional development by keeping abreast of manufacturing management techniques by attending seminars and conferences. Sav even had the opportunity to attend a Deming seminar lectured by Dr. W. Edwards Deming. He led a presentation at the “Lean Summit” in Atlanta, Georgia, plus was asked to present at two other Lean Manufacturing Conferences hosted by the Institute for International Research. He was also a co-presenter, with his Lean Advisors colleague Mike Boucher, at the ASQ conference .

Challenge: Not all senior leaders have the vision, understanding and/or have “bought in” to making Lean a priority.

This is one of the critical steps and foundation blocks that must be in place to ensure the success of any Lean Transformation and Organizational Culture Change.

Root Cause: In our brainstorming sessions, the following were identified as some of the possible reasons this occurs.

• Lack of Knowledge/Education about what lean truly is and its benefits.
• Not aligned with Strategic Goals
• No clear metrics or goals associated
• Unclear about the Return on Investment
• Lack of ongoing communication
• Cultural issues internally
• Conflicting priorities
• Control
• Trust
• Resources to support and sustain lean
• Fear of this being just another “flavour of the month”

Each root cause listed above impacts leadership support and each one of those challenges requires an investigation to determine what would need to be in place to most effectively address them.

Possible Solutions:

Some of the possible solutions or ideas that could help to begin to address the challenge of achieving Senior Leadership buy in were as follows:

• Help Senior Leadership understand the value and overall system impact to create the vision
• Learn to speak the language of the Sr Leadership team and what is important to them
• Demonstrate the ROI of Lean through metrics meaningful to Leaders and its Strategic Alignment within the Organization
• Create capacity with staff and allocate resources to support the vision
• Create small wins which tie into the larger picture and work towards winning over naysayers
• Establish Goals and Focused Scope of Project
• Within you sphere of influence, create a pro-active and empowered culture

These are some of the potential solutions that were identified from our session and are worthy of investigation and strategy. Lean Advisors employs senior consultants who are veterans in the industries they serve. To learn more about how we can help you make your organization everything that it can be, contact us.

With the objectives being to reduce stress on staff while meeting higher demands, being more responsive and lowering the cost of care and determining the technological advancements/innovation needed to support the new improved processes well into the future.

The end-to-end process in several areas will be assessed and redesigned in order to improve the flow of information, communication and the patient throughout the ‘system’.