Oct 12 2013
Silos, “Value Streams,” and Lean Implementation
The on-line chatter about Lean is all about how you need to break down functional departments — or silos — and organize the company around “Value Streams” that encompass all the resources needed to fulfill orders for a product or product family, and are close cousins of BPR’s business processes and Wickham Skinner’s focused factories. When discussing implementation, however, the same value stream boosters/silo busters recommend that you start by setting up a “Kaizen Promotion Office” or “Lean Department.” This reminds me of the 1980s BBC series Yes Minister, in which an effort to streamline government starts with the creation of a new “Ministry of Administrative Affairs” and the hiring of 25,000 more civil servants to do the streamlining.
While it is ironic to create a new functional department while talking value streams, it reflects a reality: the notion of organizing everything by value stream is simplistic. As discussed in my comments on Deming’s exhortation to break down barriers between departments, there are many activities in a manufacturing organization that we cannot or should not distribute among value streams, including the following:
- Processes like heat treatment, painting or plating that we have to operate as common services performed on monuments for multiple value streams because we technically do not know how to execute them on smaller machines that can be dedicated by production lines.
- Support services like maintenance that require a minimum number of members of members for at least one to be available when called. If you have 20 technicians in a central maintenance department that are busy 80% of the time, then at least one will be available if a machine breaks
of the time. If you split this department into 4 groups of 5 technicians each assigned to a value stream, then, if a machine breaks down within any value stream technician availability will be reduced to an unacceptably low $latex 1-.8^{5}=67\%$ of the time.
- Support services that deal with external entities on behalf of the whole company or plant, like Quality or Safety for certification, or Shipping and Receiving with truckers.
- Support services whose job it is to maintain a common environment for operations, such as technical data management or IT.
- …
As for the Kaizen Promotion Office or Lean Department, mission creep all too often takes it from a feasible facilitation and communication role to a direct implementation role, which is hopeless because:
- The operations groups have no ownership of the changes made by the Lean Department, do not understand them, and frequently reverse them as soon as they have a chance.
- The Lean Department cannot be large enough to have the capacity to do everything that is needed.
For the changes to happen and to stick, there is no alternative to leadership from within the organizations responsible for the target operations and participation by individuals who are directly affected.









Oct 22 2013
Employees are Colleagues, Not Assets | Eric Bigelow | IndustryWeek
See on Scoop.it – lean manufacturing
“A lot of organizations claim that employees are their greatest assets. To many this seems like a very profound way to view the employees. I disagree. I think that this terminology can be very harmful to organizational culture.
The word asset means ‘anything tangible or intangible that is capable of being owned or controlled to produce value.'”
This is a point I have grown tired of making in vain. Assets are things you own and, unless they are slaves, you don’t own the people who work for you. Saying “People are our greatest assets,” is not only inaccurate and distasteful, it also suggests that you want to have as many assets as you can.
In private life, it may be true: the more you own, presumably, the better off you are. Business, however, is different: you want to generate income with as few assets as you can get away with. That’s why you monitor ratios like “Return on Assets.”
Assets and liabilities are mistakenly viewed as positives and negatives. They are in fact technical terms from accounting to designate respectively what you own and what you owe. Whether you like it or not, you own excess inventory, and it is an asset you would rather not have. A 0% long-term loan, on the other hand, is a liability you are happy to have.
In and of themselves, employees are neither assets nor liabilities. On the balance sheet, what the company owes them in benefits appears in the Liabilities column. So does the shareholders’ equity. There should be no value judgement attached to terms like Asset or Liability.
See on www.industryweek.com
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By Michel Baudin • Management 1 • Tags: asset, liability, Management