Friday, June 24, 2011

Calgary AME Conference day two morning

The Tuesday was a day of tours and talks.  For the morning I joined Ram from Eaton as one of the bus captains going to the Safeway Lucerne Bakery.  Part of my background was running the Callebaut factory in town and I have done a lot of consulting work for Alberta Agriculture so I was excited to see a mature Lean implementation in the food industry here in Calgary.
As an aside, food plants are interesting from a Lean viewpoint.  The vast majority don't carry a lot of excess inventory.  Food is highly perishable so if you make extra you are very quickly aware that you have made a mistake.  Food plants also by their nature have to be kept clean to meet sanitation requirements. This often gives them a head start on any 5S implementation.  The down side for food plants is that the product is often easy to rework so this is not often seen as a waste and many processes are inherently batch.  Making a dough is a batch operation, brewing beer is a batch operation.  These are processes that are very difficult to do singly.
Back to the tour.

The tour was an exhibition of the value of 5S.  The bakery has been running its 5S program for at least 5years, my apologies for not remembering how long.  I'm impressed for two reasons.  The first that they have kept 5S going for that time, they have not got bored with it, they have not forgotten how things were before and they are keeping going at Sort, Set, Shine, Standardize and Sustain.  The second was they were using 5S as the foundation to grow Lean program.
I want to expand on those two points.  5S is one of the strongest Lean tools and often one of the poorest used.  Most lean practitioners have experienced a 5S program which was really just a clean up the shop program.  In reality 5S can and should be used as one of the drivers of improvement activity.  The great 5S programs Sort everything in the work area.  The Sort question is used to ask is this necessary?  Is this tool, process or material necessary to add value; is there a simpler, cheaper, better flowing, or more reliable option?  Why do I need this process, these 4 different bolts or 2 different screw drivers?  In fact I would go so far as to say if your 5S program is not driving improvement and change are you doing 5S at all and only maintaining the old standard?
The second point is using 5S as building tool.  My preference for growing Lean is to use what already works for you and to keep it simple.  If you are building from 5S to visual metrics as Safeway bakery is then having the visual metrics as an extension of 5S is perfect.  Why invent and implement another system, which you will have to monitor when you have everything already at your finger tips.
So excellent work Safeway.  Only quibble, not allowed to take pictures to share.

Printing and why we Value Stream Map

Great graphic from the Globe and Mail on printing plastic money.
Looking at it from the lean angle the graphic concentrates on the value adding parts of the process. The printing, laser etching and adding serial numbers are all stressed.  This is how we are taught to think and map processes in the 'non lean' world. 

When we look at it from a Lean prospective we want to see waste in the process, only by seeing the waste can we start to reduce and eliminate it.  This is where value stream mapping comes in.  The strength of value stream mapping is not the value that it maps but the waste it maps. 
With a value stream map we can start to ask questions; where do defects happen, where and when does waiting happen, where does the over production happen?

And how can we cut down on the unnecessary motion and transport happening? 
An interesting question for this situation, what is the value of excess finished product?

Monday, June 13, 2011

Sad News

On June 11th, 2011 at noon, Eli Goldratt passed away at his home in Israel in company of his family and close friends.

Dr. Eliyahu M. Goldratt
1947- 2011

Like many others my introduction to  Lean and process improvement came through reading The Goal.  Goldratt has probably done more than anyone else to communicate that change management is not just possible but essential.  I thank him for opening my eyes.


picture from wikipedia

Friday, June 10, 2011

Calgary AME Conference day One

Catching up on some blogging.  The AME regional conference was held in Calgary this year.

The Monday I had been asked to prepare a presentation on 3P, however the potential audience decided that wasn't what they wanted to do.  With only a few people signed up to do the session and 10 people required for the hands on workshop part of the session it was a no go.  I am hoping to do the session in the future having been part of numerous 3P project and wanting to try out the idea of setting up competing hot dog vendor stalls.  Takt times, product variation was all worked out, only thing to do was try it and see if me idea worked.  I also had my AP partner Carla all primed to do a section on trust between companies and their suppliers.  One of the downsides I see in lots of 3P sessions and similar is the lack of investment between manufacturers and their suppliers.  When it's likely that 80% of the end product value has come from your suppliers it is a real loss not having them involved in process design and improvement.

Back to the conference, so instead I was asked to sit in on the Lean Enterprise workshop.  I had lots of fun and learnt lots as well.  The simulation was similar to the Lego simulation I have run with many companies.  It had a couple of differences.  The first is how the rounds were played, a more 6sigma approach than Lean and flow.  The second was a much stronger emphasis on standard work and quality. Lego blocks are fantastic, which is why we all fondly remember playing with them through our childhood (at least I do). One of the strengths of Lego is how they fit together the bricks line up exactly with each other.

Stickle bricks are different, their orientation is critical to how they line up.  If you look carefully you can count different number of 'fingers' on each face.  The edges are also different with either 1 or 2 rows of fingers so they can be pushed together.  This little detail allowed for far more variation to enter into the assembly process.  And this variation was quickly demonstrated in the success or failure of the company.  It also powerfully underlined the need for good standard work instructions and inbuilt quality.  Lots of food for thought for me.

Thanks to Robert Burke of the VIP Group for letting me sit in.

Updated simple SMED

My first blog was on how simple SMED can be.  In this example using large binder clips to organize laptop cables so one can quickly unhook or hook up your laptop to your keyboard, monitor etc.  Yesterday I came a across these tidy little alternatives. It also demonstrates just how critical 5S is to any SMED or Lean activity.  Using these 'cordlets' to Set and Shine the workplace automatically has set the way for SMED. 

Tuesday, June 7, 2011

Calgary AME Conference day two afternoon sessions

Lean in a Small Business is Big Business
Combine World
Charlie Smith, President 

Charlie gave a great presentation, showing how Lean helped his business survive a rapidly changing market.
The nugget I took away from the presentation was from when Charlie was talking about value stream mapping a sales process.  They would take a call from a customer for a part and then spend 20/30 minutes getting the part off a Combine to call the customer back to only hear the customer now didn't want the part. They remapped the process.  Now when you ring up, before they go and get the part they take your credit card number to ensure you are serious.  Brutal but an effective elimination of waste.

Hotel-Dieu Grace Hospital
Patricia Somers, Senior VP Patient Services, Chief Nursing Officer

The journey that Hotel-Dieu Grace Hospital has gone through is awesome.  The nugget here is that people want to do the right thing.  Bad processes conquer them.  This was demonstrated by how carts ended up in the reception area because they didn't have a good home and then all the problems this created.  Not because people were bad or lazy the system absorbs them.  This was reinforced by the challenge they had in sustaining.  Management loved and appreciated what they were achieving, but the processes they were having to work within were conquering them.  The solution they are striving to achieve is the use of standard work for managers from VP down.

From both sessions one powerful Lean tool came out, the huddle board.  More on that another day.  In the mean time download the presentations and enjoy.

Thursday, June 2, 2011

Low cost go south

Interesting article in the Globe and Mail highlighting re-shoring and the giant strides the US has made overall in increasing productivity.
Average wage rates also don’t reflect the productivity difference between the two countries. U.S. manufacturers have achieved such high productivity that real labour costs are less now than they were in 1995 – and, for all practical purposes, operate in a huge zero-inflation zone. The decline in the value of the U.S. dollar, along with the gradual, grudging rise in the value of the Chinese Yuan, makes U.S. exports more competitive still. 

The full Boston Consulting Group report estimates that net manufacturing labour costs between the US and China to converge in 2015.  That is not far away.  Rising Chinese labour costs (15-20% annually) and higher shipping costs have eroded the Chinese cost advantage.  Increasing US productivity has lowered US costs. The situation for the US especially their low cost / non unionized States looks optimistic.  How the US will be able to tool and more importantly skill up over the next decade will be interesting to watch.  I suspect it may be harder than it should as educators and politicians do not now see the opportunity that may be ahead of them.
Where Canada sits in comparison is probably not favourable, there historically between a 25% productivity gap between the Canada and the US.  And where Alberta sits within this equation is probably worse. 
Here in Alberta we have very different labour challenges to the US with Oil and Gas having an almost insatiable appetite for labour often at any price this leaves the rest of Alberta industry in a difficult situation.  In competing with foreign (including US) companies we have little control of labour cost, the only function we do have control of is productivity. 
What can we do about it?  Alberta Productivity are working hard at raising awareness.  How much change is happening in Alberta is harder to gauge, time will tell.