Seeking the LEAN MACHINE

Leading the Lean Enterprise Transformation

Leading the Lean Enterprise Transformation

By Koenigsaecker, George

Publication: Manufacturing Engineering

Monday, March 1 2004

excellent article, highly recommended you find and read more than once.

Key points:

They had increased their product range by four-fold to grow out of the "oil crisis." This type of growth usually messes up productivity, but they actually doubled enterprise productivity during the same period, and reduced average unit cost by 26%.

They also could make every product every day, had 90% fewer customer complaints, etc.

Conversion of the operations side of a business typically proceeds in three waves…

One of the things that make this stage difficult is that you have to do it yourself. My sensei would deride us for buying equipment-"catalog engineer" was one of the worst things they could say about you. But you find that to do this on your own you need to build up a group of skilled associates who can design and build machines-and more importantly, conceive of different approaches to designing such machines. This means that you may need to add skilled trades personnel, and some key engineering/design folks. These people look like "overhead" in traditional manufacturing thinking, and are usually the first persons fired when business slows.

…calculations indicated that this feature alone increases the productivity of a cell by 140% -i.e. output per person is 2.4 times that of the basic cell

*Design to takt time. A machine was not to be able to make a part in less than 1/2 of takt time. Like many of the easy-to-understand aspects of lean, this one is hard because it is 180 away from normal practice, which is to design a bigger, more capable, and faster machine than we need-"just in case."

A Manager's Guide to Implementing Lean

Leading the Lean Enterprise Transformation

George Koenigsaecker, Leading the Lean Enterprise Transformation

From Manufacturing & Technology News

May 16, 2001 Volume 8, No. 9

another long article, full of learning, highly recommended for the CEO learning to turnaround their org to obtain and read.

KEY POINTS

I'd put Jake Brake today as approaching lean. They are making 4.8 times as many engine brakes per hour than they were a decade ago -- a 480 percent output increase. That is the kind of metric that is possible with a full-scale lean conversion.

Q: What are some of the difficulties in starting a conversion away from batch and queue to flow manufacturing?

Koenigsaecker: We have a mindset that if you apply a tool, you've done it and you're done. So we go in and build cells, apply standard work and typically get on each pass a 40 percent productivity gain. But to get the 400 percent gain you have to pass it at least 10 different times. You must restudy the process over and over.

That is a counter-intuitive thing. People say the words continuous improvement, but we just don't believe in continuous improvement. The idea that you can take a series of tools and apply them again and again to the same area and every time you apply them you find new levels of waste and new ways to improve doesn't feel right. If you take 10 firms that started on lean, eight of them quit after the first pass because they got a significant improvement of 40 percent. They thought that was the end of the journey. It's a small number that have actually learned the lesson that if you keep applying the tools the gains keep coming.

… they were producing four times as many product models because they were trying to grow their way out of the recession with proliferation. So their job got four times as hard but they got twice as productive and reduced their unit costs by 28 percent.

It caught my attention. I thought, "Wow, if they could do that we can be in big trouble."

Rockwell Automotive was a producer of heavy truck components and was usually number one or number two in North American market share in every product we made. We thought we were a pretty good benchmark. We found firms making identical products that were running at 400 percent of our productivity level and 10 times our inventory turns and one-tenth our defect rates. There were huge, order-of-magnitude differences.

One of the shocks for us was that they weren't just four times as productive in the factory. As we double checked, we found that they were on average four times more productive in all the staff departments when you measured in terms of company sales per person in the finance department. That really reaffirmed the magnitude of what I had seen at Yanmar, which wasn't even lean yet.

Topics from George Koenigsaecker Articles

CEO's, executives and leaders - the following articles will help you understand continuous improvement and its bottom line impacts.  They are written by George Koenigsaecker, a principal investor in several lean enterprises, and is President of Lean Investments, LLC, a Private Equity organization with an emphasis on manufacturing.  Koenigsaecker is a Board Member of the Shingo Prize, the international award for "lean enterprises," and is a board member of The Association of Manufacturing Excellence, Ariens Outdoor Power Equipment, R W Baird Capital Partners Advisory Board, Simpler Consulting, Watlow Electric Corp., and Xaloy Inc.

From 1992 until 1999, he led the lean conversion of the HON Company, a $1.5-billion office furniture manufacturer. During this period, his efforts resulted in a tripling of volume, and culminated in HON Industries being named by

Industry Week

magazine as one of the "World's Best Managed Manufacturing Companies."

Prior to joining HON, Koenigsaecker was with Danaher Corp., where he was President of the Jacobs Vehicle Equipment Co. (whose lean conversion is featured in the book Lean Thinking by Jim Womack and Dan Jones), and Group President of the Tool Group, the largest business unit of Danaher. In addition to leading the lean conversion of these operations, Koenigsaecker developed and implemented the "Danaher Business System," a comprehensive lean-enterprise model.

In addition, Koenigsaecker has held senior management positions in Finance, Marketing, and Operations with Rockwell International and Deere & Co. He is a graduate of the Harvard Business School.

Start with:

Leadership 2005

Manager’s Guide 2001

- restudy the process over & over

- How he found out about lean, some examples

- Make problems visible so they must be solved

- Discipline

- Build the lean office

- Too busy to apply lean

- Learn by doing

Seeking the Lean Machine 2004

- 3 phases

- Reconfigure production tech.

- Right sized Machine design & build

- Auto unload

- Sheet metal & press brakes

Leadership 2005

- stats, 3% success

- due to lack of senior leadership involvement

- productivity gains 400%, understanding how much waste exists

- typical results & payback time

- financial effects

- required kaizens

- 4 levels of learning

- Free up the best person

- No successful instances where CEO did not have hands on

Strategy Deployment 2006

- 4 key areas

- ROI, income statement

- Improvement efforts expected results each pass

- 2 parts to strategy deployment

- Not knowing what org will look like

Sustaining Lean 2007

- firefighting, today’s predominant culture

- leadership change

- process improvement payback 90 – 120 days

- learn through personal application

- 1st step for leaders

- Required kaizens for managers

- Necessity for leadership participation regularly

- Continuous improvement is never ending

Perseverance Pay Off 2008

- 10:1 payoff investing in employees

- Organizations should not focus on any one quality improvement tool but on the appropriate tools for each specific problem.

- Reducing lead times to grow 3-4 x industry rate

- Strategies for a recession

- Freeing up working capital

- Cost of labour, revenue per square foot

- Rarely lay off people, engaging in productivity measure

- Freeze hiring during recession

- Dealing with slower sales

Interview AME 2010

- Danaher

- Change senior leadership behaviour**

- Measurement & payback

- Financial effects

- Works anywhere

Author of Leading the Lean Enterprise Transformation

A Whole New Mind with Daniel Pink

my notes for easy access to key points when away from my computer

1/6
[https://www.youtube.com/watch?v=pVFQ78HbJK0&w=480&h=390]

2/6
[https://www.youtube.com/watch?v=hI3gkwxc_Ds&w=480&h=390]

3/6
[https://www.youtube.com/watch?v=rqvCj-J8noE&w=480&h=390]

4/6
[https://www.youtube.com/watch?v=ePUwc2wFlq4&w=480&h=390]
Automation

5/6
[https://www.youtube.com/watch?v=u45s8hk-zf0&w=480&h=390]
The back stories products, services, experiences are now very important differentiators.

Notice the arrow between the Ex

6/6
[https://www.youtube.com/watch?v=1KCZzSKT-HE&w=480&h=390]

Lean on Government

The City of Cape Coral, Florida

The City has initiated a “Lean Government” program for simplifying and streamlining various business processes. The goal is to reduce overall process times, increasing quality and lowering cost.


3. What other governmental entities are doing "Lean"?

In Florida, the Jacksonville Sheriff's Department uses Lean. Nationwide, the City of Fort Wayne, Indiana and the State of Iowa have been leaders in this effort.

Staff’s goal is to take this effort completely in-house within just a few years.

Link to this excerpt here

July 2, 2009

Cape Coral’s “Lean Government System” Program Receives International Recognition

The City of Cape Coral’s “Lean Government System” has received the Strategic Leadership and Governance Award from the International City/County Management Association. Cape Coral was one of 10 local governments receiving recognition for outstanding programs.

In August 2007, the City of Cape Coral implemented the Lean Government System. A cross-functional team of City employees is established to map and dissect existing processes, eliminate the unnecessary steps and redesign the process to allow service or information to flow more efficiently. All employees (front line, managerial and executive) are included in the evaluation, planning and implementation of the Lean processes, which ensures that all employees have a voice in the changes.

Some of the many successes include:

• Team reduced the time to obtain a permit for construction from 21 days to 8 days.
• Time required to hire a firefighter went from 66 days to 30 days.
• Lot mowing time was reduced from 52 days to 19 days to mow the grass once and send a notice of violation to the property owner.
• The cycle time for first reviews in Site Plan Development initially decreased to five days from 28 days. The time currently is eight days.

The City of Cape Coral is working with other local communities to share and assist in implementing a Lean initiative in their areas. In October 2008, the City partnered with the Florida City/County Management Association, the Center for Florida Local Government Excellence and the John Scott Dailey Florida Institute of Government to offer a Lean Government workshop to surrounding municipalities. Participants included Marco Island, Collier County, Punta Gorda and Palm Beach County.

The ICMA advances professional local government worldwide. Its mission is to create excellence in local governance by developing and advancing professional management of local government. ICMA provides member support to more than 9,000 city, town, and county experts and other individuals and organizations throughout the world. The management decisions made by ICMA's members affect 185 million individuals living in thousands of communities, from small villages and towns to large metropolitan areas.

more examples here

Improving Restaurants

Lean techniques seek to improve product and service quality while simultaneously reducing waste and labor costs. For food service operators, the additional trick is to link such improvements to customer loyalty.

For one operator, this effort meant tackling unpredictable demand and excessive error rates and wait times (ten minutes for simple sandwiches) on orders. The operator mapped daily changes in demand to highlight fluctuations, introduced a self-service counter, and redesigned kitchen and food preparation procedures to standardize sandwich making and eliminate waste, which consequently fell by 40%.

Meanwhile, labor costs dropped by 15% and service times improved by one-third. Best of all, sales increased by 5% and margins on affected products more than doubled, since employees could spend more time influencing customers and less time apologizing to them.

Lean Thinking in Agriculture

Leadership

What does it mean to move from 'command and control' to leadership?

The role of leaders does change in a lean organization.

In the traditional organization, leaders are successful and rewarded for getting results, directing, and delegating to people and often “fire fighting” with quick solutions to problems.

In a lean organization, the focus shifts from the results to the process needed to get the results and from directing people to coaching and facilitating. This coaching and facilitating is toward building both personal and organizational capability around PDCA and problem solving.

Read the entire letter by Michael Hoseus, Lean Enterprise Institute.

Leverage LinkedIn for the job searcher

After creating a profile:

o make it a point to add all of your daily contacts
o list your accomplishments
o Consider a Professional resume writing service; $100 is a small price to pay for several thousand in salary
o Deal with recruiters who deal in the right areas; some are in manufacturing; some are in IT; project management; etc - if you're going to deal with a recruiter *once you do, ANY company they deal with is obligated to pay them if they hire you, even if the recruiter didn't get involved with the process* navigate carefully
o Keep in touch with people & companies you previously interviewed with – they may hire you in the future
o Learning more about your interviewer before the interview. If I see they went to school somewhere, I ask them what it was like to break the ice in opening conversations.

Follow Company
- to find out who’s hiring & firing (openings)
- Has a replacement been hired for the position? find out (call if needed) “What company did he come from?”
o Chances are that company had to back fill the position and their may be a position there. Contact them.

Join groups
- (not so much social groups) – alumni groups, associations., company groups
- This lets you message other people in the group free

Advanced search
- For people who have your skills & background to find companies that employ people like you.
- Get to know a company. Advanced search on a company and uncheck “current companies only” to see what kind of talent has left the company, and how fast. Contact them to see what they have to say about their former employer & add them to your network

When you get partial info.
- if the person is “Out of your network” you may only have restricted access to their details, and receive only their First Name and Initial of last name
- To find the last name, open a separate window run a google search on their name and position/company. Google usually locates their LinkedIn public profile which displays their full last name and details.

Advanced search by:
o title
o current employment
o company
o postal code

- to get name of employees
- CALL and ask to speak with them
- leave msg if needed “Hi this is ______ I’m a _______ and wanted to talk with you.”

Your goal is to establish contact
o Once they call you, there may only be a 1-2 minute window
o “I’ve been _____________________ for (x) yrs. at ____________, and have also helped other companies with parts of their ___________________.” (this is what I’ve done).
o “I’m interested in _______ and have been doing ________. I was on LinkedIn and noticed you ________.”
o Ask them “Where in (co. name) can you use _______ (my skills)?”

**Do Not mention the position, there may be others they will bring up you don’t know about.

He may try to pass you off to HR
- If you need to speak with him more “I understand HR has an important role but they don’t understand ________ as well as you do”; or “I will definitely take the name of the person you recommend in HR, but I’ve found those who are currently involved with doing the work have a much better understanding of that area and what’s involved; who I really need to speak is your manager, what’s his name?”

o If you end up speaking with HR, say “(name of the person who passed you off) the (their position) asked me to contact you regarding ____________.” HR is more likely to listen if it sounds like an internal recommendation.

Jobs
- when doing a job search, the job will often display who it was posted by, usually the person hiring. Contact them directly as well as add them to your network for future opportunities.

Even better than LinkedIn is to find events you can attend to meet/network with people face to face.

Microfinance

Microfinance

Giving people access to credit & training that can help them move into self employment, freeing them to generate an income that will eventually let them save, send someone to school or build better shelter. Repayment rates tend to be better than for rich borrowers, though interest rates are typically higher because the loans cost more to administer.

Microcredit has evolved into microfinance: services for the poor ranging from health insurance to savings programs. The sector had 107 million poorest of the poor borrows globally at the end of 2007, a 14x increase in a decade.
It has reached the developed world. Grameen Bank branches opened in 2008. The US now has 362 outfits, and loan applications doubled this year.
In Canada, NFLC, Desjardins & Vancity are offering microloans, particularly to immigrants who lack a credit history in this country. Vancity has dispersed almost 400 microloans in the past 4 years, growing about 10%/year, and says need is outstripping its ability to supply the loans.

Other ancillary services – training, business development, health. Financial services with financial education.

- Tavia Grant

Globe & Mail
Nov. 13, 2010

Humanitarian Aid, Being Gifted, SILVER over gold - Globe & Mail

Is Humanitarian Aid bad for Africa?

Most of us believe that humanitarian aid is a morally pure way to respond to suffering in the world.

The colonial mindset of ‘we know best’ has surely persisted; the trouble is that we haven’t learned the difference between doing good and feeling good. Until we do, many of our aid efforts will be worse than useless.
- Margaret Wente

The Curse of giftedness

Their intellectual gifts mean they are even more aware of the flaws in their clay, of how short they fall from self-imposed goals. “People are forever telling me the achievements of my life and yet I feel I’ve accomplished nothing – nothing compared to what I might achieve

Success in school does not predict success outside of it.

Empathy, like creativity and imagination, is not something that intelligence tests are good at identifying.

…was an overweight couch potato, depressed at his failure to live up to his parents’ expectations, but once he escaped, he blossomed as an adult to become happy…

Love all the child’s gifts and faults. The concept of ‘gifted child’ is a man made phrase, an arbitrary line.
- Elizabeth Renzetti

Do we want to be remembered as people who categorized and labelled children (to their detriment), or as people who helped all children fulfill their potential?
- Tralee Pearce

An Industrial Strength Argument for Silver over Gold

Silver is essentially an industrial metal, and should trade on supply/demand fundamentals.

It typically outperforms gold in times of economic recovery; it responds to the increased demand that an economic expansion implies. Financial demand for precious metals can be fickle. Gold has much greater exposure to ‘financial demand – purchases made by investors – leaving it more exposed to the changing moods of the market. [Bulsing] feels most comfortable with the metal that has the strongest fundamental demand.
- David Parkinson

“To me it comes down to choice. I am not interested in imposing my views on anyone any more than I’m interested in having their views imposed on me.” – Danielle Smith

Globe & Mail
Nov. 13, 2010

Training within Industry - TWI

Original TWI Manuals are available here:
http://www.trainingwithinindustry.net/JI.html

and can all be downloaded as PDF files for you.

"Deep practice is built on a paradox: struggling in certain targeted ways -- operating on the edges of your ability, where you make mistakes -- makes you smarter."

"Before we make product, we make people."
What capabilities must we ensure are embedded in our people, in ourselves?