Driving Improvement Through Systems Thinking | Gregg Stocker

“[…] When starting an improvement effort, I usually ask about the minimum target the team is attempting to achieve.  The answer is often something made up on the spot or a generalization, like as much as possible.  Improvement efforts should generally be driven by the actual requirements of the business.  For example,  if a company determines that the time between a customer placing an order and receiving the product is too long, it should determine an improvement target based on what the business needs.  If it currently takes 42 days and customers expect to receive the product in 22 days because of their needs or what competitors are offering, the minimum improvement needed is 20 days.[…]”

Sourced through Lessons in Lean

Michel Baudin‘s comments:

Gregg Stocker illustrates abstract principles with concrete examples, which makes his meaning clear and unambiguous. The above excerpt is meant to show the need for employees and managers to understand the consequences of local actions on the organization as a whole. As he points out in the rest of his post, it’s not always easy.

In Gregg’s examples, the need for improvement and project goals can all be expressed in quantitative terms, like “reducing an order fulfillment lead time from 42 to 20 days.” In the 2nd example, about the reduction in the time needed to change a filter in the oil and gas industry, he admits it is difficult to connect a project this deep inside the organization to externally visible results but insists that it must be done.

In this as in many other cases, a thorough analysis of the benefits of a project may require more time and effort than carrying out the project itself. Another example could be the mistake-proofing an assembly operation. More generally, quality improvement falls in this category. The only way most organizations know how to quantify it is in terms of cost-of-quality (COQ) reductions, which ignore the effect of quality problems on market share.

Where the company’s reputation for quality is treated as the crown jewels of the business, managers take on quality improvement projects that cannot be supported in terms of COQ. Other parts of Lean Manufacturing whose benefits are generally not practically quantifiable include 5S, yet it is the object of considerable implementation efforts.

In yet other cases, the analysis is simple: an external organization mandates the company to make certain changes, regardless of their impact on any performance metric. These may be imposed by government regulations or by customers who will only buy from suppliers who are “certified Lean,” or comply with ISO standards, or use a particular ERP system… The economic benefit is staying in business.

What a project in a section of a plant does for the business as a whole is, of course, a question that must be answered, even if it is in qualitative terms. The criterion I have been using for this is whether the proposed local changes move the plant as a whole towards takt-driven production, which others have called “True North.”

This is what I had written about it in this blog 5 years ago:

The takt time allows you to define an ideal state, that John Shook and Pascal Dennis call True North, but that I prefer to call takt-driven production. In this state, you perform all operations one-piece at a time with process times that exactly match the takt time, and with instant transfer to the next operation at every beat. Of course, it is never perfectly realized, even on an assembly line. Real lines can only be approximations of it. The point is that it gives us a direction.

All deviations from takt-driven production translate to Ohno’s waste categories, overproduction, waiting, excess inventory, etc. Since any local project that moves production in this direction eliminates waste, it can be undertaken with the confidence that it contributes to global improvement and is not sub-optimization.

#ContinuousImprovement, #Improvement, #Kaizen, #CostOfQuality, #Takt

One comment on “Driving Improvement Through Systems Thinking | Gregg Stocker

  1. The original goal of TPS was to give the customer what they want, in the quantity and with the quality they want, when they want it. This concept was captured in the first western translation of TPS – JIT, Just in Time manufacturing. Sadly this clear focus was lost in the later translation, Lean Manufacturing. —
    I think we should get back to the basics at the heart of TPS.
    When lean thinking was being extracted from TPS not enough emphasis was given to Shigeo Shingo’s writings on the structure of productive activities. This created a serious flaw in lean thinking and the ability to identify waste. “Mr Shingo had a real knack at taking what we were doing and stating it in very logical terms. “Isao Kato. Toyota manager. —

    In 1989 I had a one hour session by myself with Shingo & his interpreter. The major part of the time was Sensei Shingo explaining his concept that the production mechanism should be seen as a network of two flows; Processes & Operations. My reason for asking him about this was the fact that the same two pages on this subject appear in all his books. When I asked him how important this concept was, he said it was fundamental that these concepts & their relationships were understood in order to make effective improvements in productive activities. The comments below are based on the notes I took at the time & my subsequent experiences. —-

    He explained; Production is a network of two activity flows. Processes & Operations. —-

    Processes. These are the sequence/flow of events that products & services pass through on their journey from raw material/information to being finished items. —
    I.e. Storage —Transportation — Storage/delay —transformation — storage/delay —- transportation. Repeat
    Within the process flow there are two types of storage/delay; Lot Delay & Process Delay. —
    Lot Delay. An item is delayed while the rest of the lot/batch is produced.
    Solution. One piece flow. —
    Process Delay. An item is delayed while it waits for items in the previous lot to be processed through the next machine/activity.
    Solution. Synchronise cycle times. —-

    Operations. These are the sequence/flow of activities conducted by people, machinery & systems on the raw materials/information & products at each process stage. —-
    I.e. Set-up — *Essential motion — Auxiliary motion — Marginal allowances. Repeat—S.E.A.M
    *(Essential motions are those that produce what the customer requires; are valuable to them. i.e. P.S.E. P — Product- the physical item. S — Service to support the product. E — Experiences the customer enjoys acquiring, using & maintaining the products & services). —-
    If you see processes as the vertical flow & the operational one as a horizontal flow along from each process stage you can see this network. What then becomes obvious is that only the essential step of the transformation process is valuable to the customer, everything else is waste & is a candidate for elimination. The first rule of our improvement activities is then; ‘CAN WE REMOVE IT, BEFORE WE TRY TO IMPROVE IT.
    The fundamental rule is to improve the process before the operation. Don’t improve transportation eliminate it.
    THE ULTIMATE GOAL IS ONE PIECE FLOW WITH SYNCHRONISED CYCLE TIMES & A FLOW RATE THAT REPRESENT CUSTOMER DEMAND RATE – TAKT TIME. —

    When you see all these elements you can appreciate Toyota’s and Shingo’s genius for simplicity. They should be the basic principles for all lean thinking, waste elimination and continuous improvement activities. —

    When you understand this network, which I understand came from Shingo’s work with & studies of the activities at Toyota Motors, it becomes easy to see the waste in any system. You can see this methodology being applied by a shop floor team in a 1994 BBC TV series on YouTube, under ‘Sid’s Heroes’. —

    The true effectiveness of any methodology lies not only in the simplicity of the methodology itself; but in the engagement of the combined ability of all the people who will be applying it.
    Good luck releasing focusing your own Heroes!

    When trying to understand TPS, Lean or any other subject, we should always remember the words of Pavlov and Ohno. —
    “Don’t be a collector of facts. Try to penetrate to the secret of their occurrence, persistently search for the laws that govern them”. Pavlov.
    “Understanding is my favourite word. I believe it has a specific meaning. To approach an object/subject positively & comprehend its nature”. Ohno. T

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