How the world's largest electric vehicle hauling tons lime and marl off the side of a mountain quarry to a cement factory...
Lean Accounting Is Simpler, Faster, Cheaper, and More Accurate Than Traditional Management Accounting, so Why Don’t More Companies Use It?
“To sustain a lean transformation, top executive and financial managers must know how to transform traditional accounting practices to a new system that not only is lean itself but also supports lean practices.”
Are you ahead or behind in current Management Technology adoption?
An easy comparison with something tangible help you quantify your management gap:
in the same way datacenters are on the cusp of adopting liquid cooling - businesses are on the cusp of adopting Lean.
Tangible Example: Datacenters & Liquid Cooling Technology
The following comparison from CoolIT Systems shows Liquid Cooling Technology typically produces the following results compared to conventional datacenter air cooling:
Capital expenditure 25% decrease
Operating expense 22% decrease
Rack density 80% increase
Intangible Example: Businesses & Management Technology
The following comparison from A. Ward’s work shows Lean Product and Process Development potential compared to conventional business:
Development time 75% decrease
Quality problems / Schedule & Cost overruns / Failed products: 90% decrease
Innovation 90% increase
I charted his data to make this visual:
Example “5 years ago, it took us 14 weeks to introduce a new chip to our factory; now it takes 10 days” - the first Intel factory to achieve these times using Lean principles.
Similar to CoolIT Systems products like Revelstoke whose parts are available to anyone, but the success was due to how it was put together;
Lean Product & Process Development is also available to anyone, your success is due to how you work together.
With many companies playing catch up to where their industry is in the transition, where do you stand:
are you holding on to obsolete management practices and falling behind?
or learning current methods and staying competitive?
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#Lean #ContinuousImprovement #CoolIT #LiquidCooling #Datacenters #LeanProduceandProcessDevelopment #intel #Computing #Technology
Getting at the Larger Purpose of 5S
Top tier content by Karl Ohaus
- will help most people who don’t understand 5S; however only those who so will truly appreciate it
https://www.linkedin.com/pulse/getting-larger-purpose-5s-karl-ohaus
Legal Sea Foods’ new problem-solving philosophy brings a sea change
How a firm never opened a 2nd plant - despite soaring production needs - saving the company millions of dollars.
example of a lean restaurant
article link: https://www.restaurantbusinessonline.com/operations/legal-sea-foods-new-problem-solving-philosophy-brings-sea-change
Learn from Charlie Luck’s business savvy with respect to Luck Stone’s family business succession
Learn from Charlie Luck’s business savvy with respect to Luck Stone’s family business succession, who points out:
“Figuring out a way to keep the enterprise in family hands;
means deciding whether anyone in the next generation
— if any or all children —
will have the right skills and passion to run the firm.”
“One of the worst things in the world you can do is put any person in a company role, family or non-family, that does not align with who they are, with their skill set and their capacity. That is unethical.”
Value Added: The Lucks try to keep good fortune in the family
7 Wastes for Crushing in Quarry & Mine Operations
Not everyone easily spots the waste in their disorganization, including mining & quarrying operations, yet it still adds cost & time, impacting your tonnage, output, and profits.
The ability to identify waste enables people to a problem to solve, a starting point to develop them.
Waste: Any activity that consumes resources without creating value for the customer, or Any activity for which the customer is not willing to pay.
All wastes fall into 7 categories (below).
Use this as a checklist draft to help you identify where the wastes are in your quarry or mine and remove them to make your work easier. *draft – looking for more examples of these:
1. OVERPRODUCTION
What is it? Producing what is unnecessary, when it is unnecessary, and in an unnecessary amount; - more, earlier, or faster than is required by the next process or customer.
Quarry / Mine Examples:
Producing products/aggregates which are not required customers
Producing products during a time of the year when they will not be used
Producing more product than there is demand for by customers
Providing copies of reports to people who have not asked for them & will not actually read them
CC’s on emails
Mining capacity surpassing the plant’s ability to process, or making more aggregate than is required by the next process - before it is required/can be processed, or faster than needed (that waits before the next step can process or consume it)
Causes
Misalignment to customer demand. Inaccurate forecasting. Large volume shots. Batching. Equipment breakdowns. Weather (preventing processing). ‘Making the month’ instead of making to demand.
2. TIME ON HAND (WAITING)
What is it? Waste of which the causes originate in waiting from materials, operations, conveyance, inspection, as well as idle time attendant to monitoring and operation procedures.
Quarry / Mine Examples:
Delays when parts haven’t arrived; stock outs; waiting for equipment, parts, tools or supplies
Waiting for a meeting which is starting late
Waiting for upstream operations such as drilling and blasting
Waiting for break downs to be repaired before doing work
Trucks waiting at a dump site, queuing or standing empty;
Operators may sit idle waiting for material or do nothing while their machines are processing
Waiting for information, decisions, clarification of instructions, replies from engineering, management, head office
Excavators waiting for haul trucks to return
Waiting for people or contractors to show up
Anything that stops, slows or hinders production.
Causes
Unclear direction / instruction / manuals. Unlevel workloads or schedules. Supply chain delays. Lack of planning. Lack of preventative maintenance; unplanned maintenance or quality events. Not having the right tools or equipment. Cone liners & wear parts not changed once worn, trying to ‘get a bit more’ out them causing catastrophic failure & downtime.
3. TRANSPORTATION / CONVEYANCE
What is it? Conveyance itself is waste because it creates no value. Created by conveying, transferring, picking up/setting down, piling up, and otherwise moving unnecessary items. Also created by problems concerning conveyance distances, conveyance flow, and conveyance utilization rate. Obviously parts & product must be transported, but any movement beyond absolute minimum is waste. - Any inefficient or avoidable transit/conveyance of material, information, equipment or people.
Quarry / Mine Examples:
Moving processed product from one location to another before it can be further processed
Collecting items from various locations for an assembly/repair (as opposed to having them all kitted one place)
Long travel distance caused by process-oriented layouts
Moving supplies into and out of a storage area
Moving equipment for processing in/out of locations
Moving individual files from one location to another
Moving parts and products unnecessarily
Driving
Hauling material further than necessary
Transporting rock, work-in-process and finished product around the site
Back haul trip of empty trucks
Causes
Poor layout. Using haul trucks instead of conveyors (in most cases). Availability of customer-specific material. Lack of flow planning. Fuel transportation. Crushing too far from blast site. Sub-optimal pile placement.
4. WASTE OF PROCESSING ITSELF (OVER PROCESSING)
What is it? Unnecessary processes and operations traditionally accepted as necessary; & incorrect processing. Actions that add no customer value.
Quarry / Mine Examples:
Extra of anything - multiple screenings of same aggregate, excessive conveyance, etc.
Performing incoming inspections when supplier processes already guarantee defect free products
Continuing to train employees in tasks/skills which are no longer needed
Overwatering roads
Performing steps that have become unnecessary because of design or process changes
Making ‘tidy’ piles
Processing steps that are not technically justified
Hard copies of reports available online
Redundant capture of information (ex. writing by hand, when directly inputting to a word processor follows)
Multiple recordings & logging of same data
Unnecessary data collection
Excessive greasing (can also blow seals or generate friction/heat)
Achieving a tighter specs than the customer requests, can make use of or benefit from; higher grade than customer is willing to pay
Drilling more holes than necessary
Causes
Inefficient equipment/components. Outdated technology. Not maintaining/updating standard operations, training, etc. Narrow focus on specific parts of the operation instead of looking at the entire system. Handing off notes for input instead of direct input. Unclear requirements or specifications.
5. STOCK ON HAND / INVENTORY
What is it? Inventory waste is when anything – materials, parts, assembly part – is retained for any length of time. This includes not only warehouse stock, but also items on site that are retained at or between processes. A buildup of material or information that is not being used; the direct result of overproduction; keeping unnecessary raw materials, parts, WIP & finished goods. Having more than the minimum stock required for a precisely controlled pull system.
Quarry / Mine Examples:
Finished products for which there are no orders
Making more than is required by the next process
Making it earlier or faster than needed; underproduction or overproduction
Items that can be ordered on a JIT basis
Excessive spare parts; parts sitting in storage facilities
Paperwork/email to be processed
Unutilized equipment
Excessive ‘safety’ stocks
Stock queues before machines
Any material or supply in excess
Causes
Large volume shots. Batching. Supplier ‘minimum order quantities’ or buying extra ‘because it’s a good deal’. Equipment breakdowns. Weather (preventing processing). Inaccurate forecasting. Ordering more than needed ‘in case,’ or items that ‘might’ be needed. Quality or yield problems. Inconsistent rock supply.
6. MOVEMENT
What is it? Unnecessary movement, movement that does not add value, movement that is too slow or too fast. Operators making movements that are creating no value. We can also identify waste in the motion of machines & equipment.
Quarry / Mine Examples:
Excessive walking - between work stations, to look at online information, to get a tool or materials
Moving to catch up with production
Driving to job locations or to get supplies/raw materials
Awkward loading patterns
Searching for tools, parts, papers which should be clearly labeled with a location
Changing locations for meetings
Operators walking long ways for meal breaks or hand off
Lifting
Reaching for things
Haul trucks navigating suboptimal roads
Causes
Poorly located tools; disorganized tool boxes. Feed conditions causing uneven screen load; unused screen area. Ordering more inventory than needed, maintaining & marshalling it. Lack of ergonomic design & placement. Loss of material (poor fitting skirts, holes, flashing; transfer points). Unclear locations for parts; disorganization. Failure to review mine/quarry layout & adapt as material stripping proceeds. Trickle feeding/failing to choke cone. Road conditions, surfaces & obstacles.
7. MAKING DEFECTIVE PRODUCTS
What is it? Waste related to costs for inspection of defects in materials and processes, customer complaints, scrap and rework/repairs. Anything that does not meet customer specifications or requirements of form, fit, function, or timing/delivery. Results in inspection to catch quality problems or fixing an error already made (inspection, rework, and scrap).
Quarry / Mine Examples:
Product does not meet customer specifications:
Oversize/fines
Hardness/durability
Cubicity
Late delivery
Recirculation - material through the crusher more than once
Costs of processing complaints
Making large lots of bad product instead of catching a problem after one or two units
Fixing errors made in documents
Dealing with complaints about service and/or repeating the service
Making incorrect documents
Repairing trucks/equipment after oil overfills; replacing seals after over greasing
Using defective raw material or parts
Repeating an equipment repair done incorrectly or with wrong/failed part
Causes
Variance in: raw material, processing methods, equipment maintenance or setup, employee training/experience, customer communication. Stockpile segregation. Wrong cone liner configuration or closed side settings; wrong screen cloth. Using work arounds instead of addressing root cause. Poor drill patterns. Poor quality or defective parts.
Which do you have in your operation?
What’s missing from these examples?
*adapted from previous article to include all 7 wastes & more examples
points from "How Amazon Became Agile"
some great points by Steve Denning, Senior Contributor: (my comments in italics)
“Think about how most large companies operate, (and where YOURS exhibits these traits - is your management mature enough to have an open discussion about each and honestly admit where they fall short?) :
- Big-company politics tend to rule the day. Discussions are not forthright.
- Meetings are layered in so much posturing and subtle deception, they are downright Shakespearean.
- Seniority and titles matter more than having the right data or insight.
- People speak out of both sides of their mouths. They smile and nod their heads yes without agreeing. In this world, civility is more important than being right. Results suffer for the sake of harmony.
“pervasive customer-obsessed mindset. Customer obsession is not just for top management, sales and marketing. Everyone is expected to be obsessed with knowing about and enhancing the impact of what they do for the customer.”
“CEO Jeff Bezos announced this in his 1997 letter to shareholders and Amazon has relentlessly stuck to that obsession ever since.”
“As Rossman explains:
In most big organizations, customer data—where it exists at all—is spotty and soft, while financial data is hard and ubiquitous. Guess what drives decision-making? The hard financial numbers consistently trump any soft customer numbers”
“customer value” wins battles that it wouldn’t win in firms run with a financially oriented mindset.
Amazon doesn’t start an activity or develop a capability unless and until the team has figured out how it will measure customers’ response.
the single biggest opportunity for companies operating today is to completely rethink their concept of metrics.
Today, you need real-time data, real-time monitoring, and real-time alarms when trouble is brewing—not lag-time metrics that hide the real issues for 24 hours or longer. Your business should operate like a nuclear reactor. If a problem arises, you need to be aware of it immediately.”
6 page narrative imagined future press release describing benefits customers are getting, answers to 'frequently asked questions' and how activity was developed.
A set of metrics by which customer benefits of the activity will be measured in real time.
Senior managers are doers, not merely overseers of others
Communication between teams is unnecessary & even wasteful.”
Forcing function - ... teams dedicated to creating innovation need to be separated from the teams representing the status quo...
More about independence from the legacy bus & having unfiltered comm & collaboration with a company's CEO or senior leader.
70-90k/650 empl build capabilities 11-14%
(some different view points to mull. If you can’t print this out, circle where you see an opportunity for the company to improve behaviour, and have an open discussion with executives about it, you fall into the category of ‘most’ disorganizations.
It’s easy for most disorganizations to see where they fall short. It’s actually more work to do nothing about it) - yet this is their typical behaviour - stay disfunctional & burdensome).
Full article: How Amazon Became Agile
https://www.forbes.com/sites/stevedenning/2019/06/02/how-amazon-became-agile
Guerrilla Marketing - North Face Wikipedia hack
North Face apologizes for its Wikipedia hack
North Face’s Brazilian office touted a new campaign in which the brand updated the imagery on the Wikipedia pages of popular outdoors destinations to include pictures of athletes wearing the North Face products. The effort was designed to pull the brand to the top of Google search pages without costing the brand a cent.
https://adage.com/article/cmo-strategy/north-face-apologizes-its-wikipedia-hack/2174591
GE's CEO 'stunned' to learn that a major factory had only recently started using Continuous Improvement.
- how many other people share this experience when they walk into a company and see how behind it is with current business practices?
Lean is creating a 900-strong CI team in a gold mine
Lean really has spread to every corner of the world – no matter how remote – and to every sector of the economy
‘Our aim is to ultimately have a 900-strong Continuous Improvement team.
To get there, we need everyone at Round Mountain to buy in.
Once that’s the case, we will be able to stand on the sideline and support people in driving change themselves.’
Canada’s energy policy, and its increasingly fact-free discourse, demands a rethink
Some really good points to consider even for those against oil: if you want the highest environmental, regulatory, and human rights standards, who do you support?
Canada – 4th largest oil exporter in the world
upholding the highest standards for energy development includes our pipeline system, which is the safest in the world. When measured relative to production, pipeline incidents in Canada are about one-tenth that of the United States’.
We also have an enviable marine safety record: There are about 20,000 tanker movements a year, with 85% taking place on the east coast, and there have been no significant oil-tanker spills.
New oil sands projects are generating GHG emissions that are on par with – or less than – the average barrel refined in the United States.
Where is the moral justification to allow other oil suppliers – with little to no environmental or regulatory oversight, an indifferent commitment to the climate-change fight and, in some cases, a record of human-rights abuses, poor labour standards and troubled governance – to capture markets that we can supply, with our world-class standards and high ethical approach?
full article: https://www.theglobeandmail.com/opinion/article-canadas-energy-policy-and-its-increasingly-fact-free-discourse
Applying continuous improvement to maintenance
‘time it takes to fully overhaul has gone down (51%) from 7.1 weeks to 3.5 weeks’
“in the past we have focused too much on the execution of what we had learned, rather than on the preparation needed to ensure it would work.”
Full article: Applying lean thinking to the maintenance of train bogies
https://planet-lean.com/stork-railway-service-lean-management
How Leaders Sabotage Lean
Required reading for senior executives:
”Senior managers with good intentions have a handicap:
They possess inherited knowledge from the past which they apply to the present, even though it is no longer relevant.”
”Whether it is intended or not, this sabotages the practice of Lean management, whose intent it is to produce better results for business & society than can be achieved with Classical management.”
Love Bob Emiliani’s response also:
“Money (gain or loss) often puts top management to the test of whether they are serious about something. I suggest you negotiate a compensation package that requires the company to pay you 3 years of salary and benefits if current or future senior management obstructs your efforts - whether termination is voluntary or involuntary. You will need to carefully define obstruction in your compensation agreement. To do that, you can pick items from this comprehensive list https://tinyurl.com/yyevlkag . That way you will feel safe with them.”
Full article worth reading twice:
Optional change doesn’t deliver.
How 'They' Undermine Change
“Optional change doesn’t deliver. It takes longer, costs more and doesn’t provide the return on investment.”
As a senior manager you need to let that sink in. Read it again. Audit whether you are up to task. Your job & company depend on it.
*also falls into my required reading list for management
full article:
How 'They' Undermine Change
https://www.industryweek.com/leadership/article/22027259/how-they-undermine-change
Leadership: A New Paradigm for Organizations
“How you behave in your leadership role will impact the final outcome”
“A command and control approach is likely to receive push back from multiple directions and will have limited ability to do either command the direction of the team, or control individuals who make it up. Leaders who attempt this approach find themselves forever tightening control mechanisms with diminishing effectiveness. The more you “police” the work of your team, the less responsibility and accountability they have for their own work. You end up creating a group of individuals and companies who have limited ability to contribute, and are forced to follow orders, defend their actions, and watch out for the interests of their own companies over those of the project.”
Some great introductory points in this write up, and alternatives to being a problematic command & control manager (even though article ends with a link to buy their book).
full article: https://www.linkedin.com/pulse/exponential-leadership-new-paradigm-project-driven-klaus-lemke
Lean Construction in Calgary
Encouraging to see the evolution of construction in Calgary adopting current business practices to such a degree the self awareness exists Lean Construction practices will be vetting criteria for buyers concerned with on-time on-budget performance.
Unlike most firms that are ‘all hat, no cattle’ regarding continuous improvement, many Calgary construction firms exhibit progressive management learning to execute in their industry.
https://westcor.net/how-lean-construction-benefits-our-clients