Have you ever asked yourself the Question, “how can I improve my business”, if you have, people generally look at ways to drive sales, increase footfall etc. However have you ever considered trying to reduce your costs by removing waste to improve your business?

What is waste?
Waste is anything that does not add value for the customer. Traditionally wastes have been grouped together under the following acronym SWIMTOO they are:

Scrap/rework – anything that is a defect or failure, do you ever have to redo something?
Waiting – do you ever find yourself waiting for the process before you to hand you something so that you can begin, or waiting for a phone call, or does your customer have to wait for you to find them their required product?
Inventory – do you have too much of a particular thing or not enough of another, if you work an office do you have a stockpile of items to be worked
Motion – do you have to move about unnecessarily, if you are making a cup of tea is everything located closely or do you have to travel the kitchen to get everything?
Transport – once you have your product or a piece of your product do you have to move it elsewhere for it to be completed/worked on?
Over production – do you make too many of something, when you photocopy something do you make 1 extra just in case? Why?
Over processing – if a customer expects a certain service do you bend over backwards to give them more? Is that necessary?

There are also others….

People – do you over burden your people or under utilise a certain skill someone has
Communication – does unclear communication drive unnecessary customer contact
Opportunities lost – do you do all you can to win or keep customers during your interactions with them
Duplication – do you or do you make customers duplicate their actions/answers

Look around your organisation and can you see any of them?

I would encourage you to open your eyes to the above and utilise our GIVE model if you want to answer “how can improve my business”
GIVE Model

The goal is to reduce waste, identify the waste as described above, make it visible and quantify it and then engage with those that work the process to remove it. To remove it you can use our PET problem elimination tool to facilitate your improvements, all available completely free. PET and other tools

As always our complete methodology aligns and will support you through this, if you haven’t already subscribed to this site then please do, on doing so you will receive free videos on GIVE and PET as well as influencing behaviour and a unbeatable offer on our complete methodology.

On with the improvement

Lee

Over the last few months the topic that has intrigued most people and what has generated the most questions has been around demand that is generated due to a failing in the process/system/organisation, commonly referred to as Failure Demand, Bad Costs or Rework (I will refer to these terms from now as Failure Demand).

They 3 main things I have been asked are:

What is my take on this?

How can it be tackled?

How do you visualise it?

Therefore the aim of this post is to address these 3 questions from my perspective

My take on this ‘Failure Demand’

What is it? Failure demand as I define it, is any demand that is generated due to a failing in the process/organisation/company – collectively these are often referred to as an overall system, can you can visualise your whole operation as a system, the inputs, the outputs, the interdependent processes etc?

This type of demand is rife in Service Industries and there are many organisations who deal with this demand as their sole purpose.

Let me ask you a question, do you perceive any of the following to be failure demand ?

Person A who is going to the Hospital/Doctors for an appointment apart from to the maternity functions?

Person B who has got themselves into debt and chooses to use a Debt management company?

Person C who has just been put into prison?

Person D calling a contact centre to report a fault?

Person E progress chasing their bank loan application?

Person F has broken down at the side of the road and calls their roadside recovery company?

If we look at the definition above then all of the examples I believe to be ‘Failure Demand’ however not all the organisations would want you to remove 100% of that demand i.e. the debt management company or roadside recovery company. So this comes back to your purpose (step 2 of the “Your Way” methodology)

How can it be tackled?

Once you have defined your purpose as an organisation you know whether you should be trying to remove this type of demand wholly or not.

A large organisation in the UK I have supported with this, had a customer failure journey costing them over £500m per year and their actual purpose was to generate revenue by providing a working service and not expecting it to fail and having to fix it, so that was £500,000,000 wasted each year.

The approach I would take to tackling it follows a 4 step approach which focuses on Root cause analysis, this has to be completed by/with the management team and more importantly the people who work the process. I would do this initially under trial conditions to prove the approach before allowing everyone to capture everything as you will need to refine it as you gain a greater understanding of the specifics that are hurting you and generating failure demand.

The 4 steps:

1 – Define and agree an understanding of what you mean by the term ‘Root Cause’.

2 – Review with the team the way data is currently captured and does it give you the agreed root cause or not

3 – Develop a data capture mechanism to capture the root cause reasons for demand, I would have a high level selection criteria (to make analysis easier) followed by a box allowing for verbatim comments to capture the true root cause.

4 – Visualise and review the data, feeding back to all interested parties, identifying any opportunities for improvement and implement those quick wins

As you can see the above aligns to the GIVE model, the GIVE model is the approach that will allow you to improve your organisation and that’s why we ensure it underpins everything we do.

How do you visualise it?

The visualisation of failure demand is dependant upon your operation, if your operation is small to medium and you receive growth and cost demand then I would encourage you to plot your findings on a Value/Irritant model this is shown in “Your Way”. However if it is majority failure demand you receive in a particular department, I would say a run chart to display the quantity and a pareto to allow you to prioritise the main reasons for demand followed by a sheet to enable you to problem solve, showing problem,cause & solution.

Once you have visualised it remember the E of GIVE is to:

Enable those who work the process to ELIMINATE it, and continue this cycle ensuring it becomes business as usual activity.

On with the improvement

Lee

Don’t forget to subscribe to this site, via the subscription box to receive a copy of February’s newsletter. One part of it will be looking at failure demand/rework/bad costs.

Cheers

Lee

Over the years I have delivered many 5S sessions in both public and private sector organisations to different levels of people in those organisations and my first question to the groups is generally “Do you know what the 5S’s are?”, I have received mixed replies with varying quality, from the correct 5 to “erm is it Sun Sea Sand Sangria and Sex” which are obviously the deliverables of a girls holiday or “I do 3 of them before I go on a night out, are they Shit, Shower & Shave?” which is indeed a male process or a female process in some parts of the UK. So what are they, well the purpose of this post is for me to dispell some of the myths related to 5S and try and explain what they mean to me, as in my experience I have seen people apply 5S for little/no benefit other than a visually impactful benefit i.e tidying up however I see the true benefits of 5S are an enabler to maximising the flow of the work through the process AND allowing greater visibility of the visual standards in the workplace.

I have seen and worked in different organisations where they have developed their own 5Ss, but, the principle behind what they want to achieve by applying them is the same. I have known both Sort, Set, Shine, Standardise & Sustain and Sift, Sort, Sweep, Standardise & Sustain, I am sure there are probably more. If we look at the Japanese 5S’s these are seiri, seiton, seiso, seiketsu and shitsuke translated these are  Sorting, Straightening or Setting in order, Sweeping or Shining or clenliness/systematic cleaning, Standardising, Sustaining the discipline or Self discipline.

The phases of 5S

Sorting

The first stage is all about removing all the unnecessary tools, parts, paper, books, instructions, posters etc so you can only do this when you define your exact requirements for that role in the process. Go through everything, an option you have is to tag everything you deem unnecessary store this in one area and hold for a period of time, then see if any other step requires the item(s) before disposing. 

Straightening or setting in order

There should be a place for everything and everything should be in its place. The place for each item should be clearly labeled and/or identifiable. Items should be arranged to allow for efficient workflow, with equipment used most often being the most easily accessible. You should consider health and safety aspects such as bending etc to reach frequently used items and minimise this where possible.

Sweeping or shining

Clean the workspace and all equipment ensuring you keep it clean, tidy and organised. once you have defined the next phase (standard) ensure at the end of each shift,  you clean the work area (if required) and be sure everything is restored to its place. This makes it easy to know what goes where and ensures that everything is where it belongs. Maintaining clenliness should be part of the daily work and not seen as a add on or additional duty.

Standardising

Once you have Sorted your work area and aligned it to the process by setting it in order then you have then cleaned the work area. You are now ready to standardise your current area, our definition of a standard is “an OK condition” the current best way. All work stations for a particular job should be identical where possible in terms of materials etc for the role. All employees doing the same job should be able to work in any place with the same tools that are in the same location in every station. Everyone should know exactly what his or her responsibilities are as the standard should be visually displayed.

Sustaining the discipline

The most difficult S is the 5th one to Sustain the Standard by maintaining and reviewing regularly. Once the previous 4 S’s have been agreed by the people who do the particular task this becomes the new way to operate. Ensure you maintain focus on this new way and do not allow a gradual decline back to the old way by applying PDCA, the standard is the PLAN, the current condition is the DO, your visual standard allows you to CHECK and the ACTion you take to close that gap either maintains or improves the standard.

These principles are transferable and I would also recommend you apply these principles to your electronic files & folderson your computer network and even to the number of meetings you have, you may identify other areas where you deem the principles applicable that you can try.

Like what you see? Click below to download our brilliant 5S – Workplace Organisation training workshop

On with the improvement

Lee

I don’t know whether you have considered this before but everything you do is a process, from making your breakfast to driving to work and all you do whilst at work. And because we believe that lean principles are transferable to any process then YOU can apply them to everything you do.

If you want to make a difference to your business or life try applying some of the principles to the processes you complete.

We advocate lean as a complete methodology and not one off tools to be used however we would encourage you to give them a try.

Do you have too many meetings, try applying 5S to them??
Do you order too much stationery? Introduce a kanban??
Do you have a goal to achieve?? Apply our GIVE cycle. GIVE model

Like Einstein said the definition of insanity is doing the same thing over and over again and expecting a different result.

On with the improvement

Lee

Have you introduced Lean or a form of continuous improvement where you are? Do you have a performance board/hub/short interval control board or anything else that you call the place you visualise your teams process performance. If so, do you know how effective it is?

Answer the following 9 questions in relation to your visual management to see if you can improve on it?

1) What is the purpose of the team?
2) What do the customers need from the output the team/business produce?
3) How does the visual management support the above two questions?

4) How effective does the team plan?
5) How does the team perform against this plan?
6) How does the visual management visualise the above 2 questions?

7) What things get in the way of the team producing their outputs?
8 ) What are the team doing about the above obstructions?
9) How does the visual management highlight the above 2 questions?

How did you do? Did you identify any further opportunities to improve your visual management? Is so, give them a go.

Also have a look at our GIVE model this is the DNA that makes up our methodology. GIVE MODEL

On with the improvement

Lee

Enjoy!

 What is ? Who is Pareto

 As far as we know a Pareto is not a breed of Italian Parrot, nor is it a root vegetable. However you may be aware of the 80/20 rule and if you are then you will understand the principle of a Pareto.

What we at Lean Secrets believe it to be is a prioritisation tool, commonly used when presenting data during a lean transformation. It’s simplicity in visually depicting the main areas to focus on make it one of our favourite Visual Management tools.

Now then, where did it come from? Well it is named after the man who observed this 80/20 ratio first, he was Vilfredo Pareto who was an Italian economist. The original observation was in connection with population and wealth. Pareto noticed that 80% of Italy’s land was owned by 20% of the population he then tested this theory on other countries and we believe even tested this on the peas produced 80% of them came from 20% of the pods. In business this can be translated to 80% of your profits come from 20% of your customers, or alternatively 80% of your problems come from 20% of your customers also.

 If you want to create a Pareto without a pen,paper and ruler an option you could consider is excel.

 How to create a Pareto on Excel

 First of all populate your data into a table, and then sort it descending:

 Once you have this calculate the total of the amount column and the percentage each line is of the total (if that makes sense?)

Once you have this add another column and calculate the cumulative percentage

  Select all of the name column, the amount column and the cumulative %age column and click on the make graph icon.

Once this appears depending on your version of excel, if there is a custom tab for choice of graph or there is an option for a ‘Column/Line’ graph select this, preferably on two axis, if not, select a 2 column graph and right click on the Cumulative %age column and change to a line once you have produced the graph.

 Once you have added your titles and created your graph, make sure the axis are correct. The left hand one should go upto the total, in the example it is 147. Then the right hand axis should total 100, ensure both axis start at 0.

Good luck and remember you can email us to answer any queries you have, or follow us on twitter like over 2,500 others @leansecretsuk

On with the improvement

Lee

 Who Said That?

Lean Secrets believe using quotes can be a very important tool when introducing/implementing Lean/Continuous Improvement methodology. As Lean was born in Manufacturing these are sometimes classes as Lean Manufacturing quotes, however we believe these are transferable to all sectors.

 We have comprised a list below that we believe will allow you to engage with your audience and introduce Lean / Continuous Improvement concepts in an interesting way also proving that the concepts you are introducing are not new and are proven. When delivering any element Lean / Continuous Improvement we always use quotes and if you are lucky enough to have used our 21 Step complete methodology you will see our favourite Einstein quote his definition of insanity at the top of the worksheet “To do the same thing over and over again and expect a different result”.

If there are any more you can think of please send them to us, also if we have misquoted any of them please let us know:

There are so many men who can figure costs, and so few who can measure values. ~Author Unknown

“A bad system will defeat a good person every time.” – Deming 

“All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.” – Taiichi Ohno 

“An hour saved at the non-bottleneck is a mirage.” – Eliyahu M. Goldratt, The Goal

“Are you too busy for improvement? Frequently, I am rebuffed by people who say they are too busy and have no time for such activities. I make it a point to respond by telling people, look, you’ll stop being busy either when you die or when the company goes bankrupt.” – Shigeo Shingo

“Costs do not exist to be calculated. Costs exist to be reduced.” – Taiichi Ohno 

“Failure to change is a vice” – Hiroshi Okuda

“Finished goods are products that we have made that no one wants.” “Raw materials are products that we have bought that we don’t need.” – Tom Greenwood, Director of the University of Tennessee Lean Enterprise Forum

“I say an hour lost at a bottleneck is an hour out of the entire system. I say an hour saved at a non-bottleneck is worthless. Bottlenecks govern both throughput and inventory.” – Eliyahu M. Goldratt, The Goal

“If we reduce batch sizes by half, we also reduce by half the time it will take to process a batch. That means we reduce queue and wait by half as well. Reduce those by half, and we reduce by about half the total time parts spend in the plant. Reduce the time parts spend in the plant and our total lead time condenses. And with faster turn-around on orders, customers get their orders faster.” – Eliyahu M. Goldratt, The Goal

“Improvement usually means doing something that we have never done before.” – Shigeo Shingo 

“Kanban is like the milkman. Mom didn’t give the milkman a schedule. Mom didn’t use MRP. She simply put the empties on the front steps and the milkman replenished them. That is the essence of a pull system” – Ernie Smith, Lean Event Facilitator in the Lean Enterprise Forum at the University of Tennessee

“Make the bottlenecks work only on what will contribute to throughput today … not nine months from now. That’s one way to increase capacity at the bottlenecks. The other way you increase bottleneck capacity is to take some of the load off the bottlenecks and give it to non-bottlenecks.” – Eliyahu M. Goldratt, The Goal

“Tell me and I will forget, show me and I may remember, involve me and I’ll understand.” – Chinese Proverb

“The best approach is to dig out and eliminate problems where they are assumed not to exist.” – Shigeo Shingo 

“The only place that work and motion are the same thing is the zoo where people pay to see the animals move around” (not exact phrase) – Taiichi Ohno

“There are three kinds of leaders.  Those that tell you what to do.  Those that allow you to do what you want.  And Lean leaders that come down to the work and help you figure it out.” – John Shook

“We are what we repeatedly do. Excellence, then, is not an act, but habit.” – Aristotle 

“Where there is no Standard there can be no Kaizen” – Taiichi Ohno

“Why not make the work easier and more interesting so that people do not have to sweat?  The Toyota style is not to create results by working hard. It is a system that says there is no limit to people’s creativity.  People don’t go to Toyota to ‘work’ they go there to ‘think’” – Taiichi Ohno 

A bad system will beat a good person every time. ~W. Edwards Deming

A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation. ~Andrew Grove

A relentless barrage of “why’s” is the best way to prepare your mind to pierce the clouded veil of thinking caused by the status quo. Use it often. ~Shigeo Shingo

Amateurs work until they get it right. Professionals work until they can’t get it wrong. ~Author Unknown

An environment where people have to think brings with it wisdom, and this wisdom brings with it kaizen [continuous improvement]. ~Teruyuki Minoura

Different isn’t always better, but better is always different. ~Author Unknown

Don’t waste time learning the “tricks of the trade.” Instead, learn the trade. ~James Charlton

Don’t water your weeds. ~Harvey MacKay

Everything can be improved. ~Clarence W. Barron

Great ideas need landing gear as well as wings. ~C.D. Jackson

He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery. ~Harold Wilson

I don’t like a man to be too efficient. He’s likely to be not human enough. ~Felix Frankfurter

I shall try to correct errors when shown to be errors, and I shall adopt new views so fast as they appear to be true views. ~Abraham Lincoln

If all efficiency experts were laid end to end – I’d be in favor of it. ~Al Diamond

If you don’t have time to do it right you must have time to do it over. ~Author Unknown

If you don’t know where you are going, you will probably end up somewhere else. ~Lawrence J. Peter

If you need a new process and don’t install it, you pay for it without getting it. ~Ken Stork

Improvement usually means doing something that we have never done before. ~Shigeo Shingo

Invest a few moments in thinking. It will pay good interest. ~Author Unknown

It is an immutable law in business that words are words, explanations are explanations, promises are promises but only performance is reality. ~Author Unknown

It is better to stir up a question without deciding it, than to decide it without stirring it up. ~Joseph Joubert

It is more than probable that the average man could, with no injury to his health, increase his efficiency fifty percent. ~Walter Scott

It is not the employer who pays the wages. He only handles the money. It is the product that pays the wages. ~Henry Ford, 1922

Thanks for reading remember you can follow us on twitter @leansecretsuk

On with the improvement

Lee, Lean Secrets

Check out this video!!!

An example of how not to implement lean into your organisation:

Credit to the video creator… Fantastic

http://www.leanblog.org/2010/09/a-video-showing-office-5s-gone-wrong/

Regards, David