Control Charts in Six Sigma is an important topic. In this 7:05 video, we introduce you to the control chart. Specifically, we’ll discuss the following:

• What is a Control Chart?
• What is it used for?
• Where to use one?
• How to use a Control Chart?
• And, we go through several examples where Control Charts are used.

Watch the rest on the screencast video below.

Only Premium Shmula.com Members Can Access This Content

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I was invited to the Nike Headquarters several months ago, where I met with most of the leadership team of the Nike.com business unit, which is the business unit tasked with growing their direct-to-consumer business. I was very, very impressed to see their commitment to Lean and was pleasantly surprised at how far up and how deeply down the commitment to Lean is at Nike. This article will provide an overview of Nike Lean Manufacturing, the business units involved, and how they are tracking progress thus far.

But, wait, real quick here’s a picture of my waiting in the lobby – that’s my water bottle and notebook on the table. . .and, as a side note, the day I was at the Nike Campus, Kobe Bryant was in the cafeteria hanging out. I didn’t get a picture with him, but I could have thrown my bowl of Thai Noodles at him – he was that close.

Reputation Management to Innovation Opportunity

Nike’s manufacturing footprint is huge. As of this writing, they have manufacturing contracts with over 785 factories, across India, Vietnam, Philippines, and South America. And, over the years Nike has been criticized for its lack of oversight of its manufacturers. Initially, they approached the problem as a way to manage reputation. But, now they are seeing their oversight and relationship with contract manufacturers as an opportunity to innovate.

But innovation isn’t in a vacuum. Innovation at Nike must be within the context of (a) serving the athlete, (b) grows the company, and (c) delivers inspiration. While you won’t see Lean lingo, the context matters. This is effectively Nike’s “True North” if we were to speak in terms of Hoshin Kanri.

Nike has 2 overarching goals in their strategy:

1. Make Today Better
2. Design the Future

Pretty simple and can easily be remembered by all employees. Under these two main pillars in their strategy, Lean begins to take context.

Design the Future: Nike Lean Manufacturing

Nike has determined that their finished goods manufacturing is where they have the largest impact on people and the environment. Within that context, they want to be a catalyst for positive change. Consider these numbers:

• 785 Contract Manufacturers
• Over 1 Million factory workers
• More than 500,000 unique products

Those numbers are staggering and humbling at the same time.

Factory Sourcing

Quality begins at Factory Sourcing – that is, the process a contract manufacturer has to enter in order to be selected as a Nike manufacturing partner. The sourcing process is more rigorous than it was and Nike has improved the quality of the manufacturing partner and the time it takes to select a partner.

In terms of time it takes to become a partner, it now takes Nike 152 days versus 246 days. That means it takes Nike 38% less time evaluating a manufacturing partner. This is a massive improvement.

In terms of quality, Nike has increased its requirements but doesn’t leave the partner hanging dry – Nike actually spends time and energy and resources helping the contract manufacturing partner reach Nike’s new standards. As of this writing, Nike has 0 manufacturers in Gold, 1 manufacturer in Silver, 535 in Bronze, 156 manufacturers in Yellow, 77 contract manufacturers in Red. As you can see, Nike’s bar of excellence is high and Nike actively not only audits its manufacturing partners, but also helps them improve ¹.

Manufacturing Excellence

According to Nike, in order to design the future, Lean Manufacturing must be part of the solution for them. In their words,

Lean manufacturing has been a hallmark of our approach with factories and is the foundation of how we advance sustainable manufacturing. Lean manufacturing is a business system and continuous improvement philosophy that aims to deliver the highest-quality product while eliminating waste, including lost time and material. At Nike, we also believe lean can empower workers and teams. The success of the lean approach depends on the implementation of physical changes to production processes, increased leadership capabilities and the development of an empowered workforce. Lean manufacturing seeks to engage the minds of those closest to the work to solve the problems that prevent them from delivering quality product on time, every time.

As we all know, people are at the heart of any operation. Nike has spent a lot of energy in training and upskilling their contract manufacturers in Lean. From their perspective, Lean helps their people in the following ways:

• Leadership: factory leaders use Lean to drive business performance
• People: workers are engaged and enabled to drive business success through continuous improvement
• Process: factory processes are predictable and agile in response to customer demand

And, they believe that

The lean approach also seeks to engage the minds of those closest to the work to solve the problems that prevent them from delivering quality product on time, every time.

In fact, they use Jeffrey Liker’s model found in his book “Toyota Culture, the Heart and Soul of the Toyota Way” as an example of how they need to align people and strategy and lean in their training.

I have to say that this is the aspect of the Lean deployment that impresses me the most. Why? Most organizations will start Lean primarily in the Daily Management section of the model and it stays there. Most of us know this as Shop Floor Management, or even the Toyota Floor Management Development System as I know it.

But at Nike, they go deeper and higher and more broadly. In their words, this is how training is done in order to help their people – notice the level of Lean Six Sigma Training conducted ²:

The curriculum contains 10 modules that each focus on a key area of the Culture of Empowerment Model. Each module is designed to share HRM best practices related to lean manufacturing, and contains interactive exercises that allow factory managers to assess their current state and identify improvement opportunities in areas including recruiting, selection, employee development, performance management, worker-management communication and retention.

The curriculum also contains instruction and exercises on lean problem solving and planning tools including PDCA (plan, do, check, act) and A3 reports, which facilitates knowledge sharing and collaboration in a concise document. These tools are used throughout the capacity building to define follow-up projects that factory managers implement after completing the training.

And, they also take temperature checks with their people, to see if the Lean deployment is meeting their needs. In a survey conducted by an outside firm, the results seem promising and Nike has also take this data from survey results to help further improve their people operations:

And, as with most organizations that are focused on continually improving, Nike is doing that and hold themselves accountable. As of this writing, here is their assessment of their Lean journey so far:

In conclusion, I applaud Nike’s commitment to making Lean Manufacturing part of their strategy. Notice that Lean is not an end in itself, but is an aid to further progress toward meeting the Nike promise and achieving their goals  and strategy.

Here’s an older video of their fulfillment and distribution operations – a part of their supply chain. Keep in mind, this is before they Lean Journey. It’s interesting nonetheless.

The post Nike Lean Manufacturing: An Example of Good Policy Deployment appeared first on shmula.

The purpose of the Hoshin Kanri X Matrix Template for Lean Policy Deployment is to develop and implement plans that are both strategic, tactical, and coordinated across people across the organization. The X-Matrix also ensures there is ownership at all levels and accountability; this approach to strategic planning also encourages organizational learning, faster course corrections, and cross departmental coordination. Hoshin means “shining metal pointing direction” – in other words, it’s a compass that points to True North.

The value in the X-Matrix used in Hoshin Kanri is in the interaction between the sections. The interaction between sections will lead to better decision making. What I’m about to show is one way to do Hoshin planning – there are other ways, but what I’m about to demonstrate is pretty standard.

Now let’s go through each of the sections of the X-Matrix Hoshin Kanri Template.

0. Anatomy of the Hoshin Kanri X Matrix

In what follows, I’ll go through each of the main sections of the Hoshin Kanri X Template and how to complete it.

1. Complete the Breakthrough Objectives

Lean is fundamentally long-term thinking. Hoshin Kanri enforces this by first looking at objectives that are 3-5 years out. There can only be a few of them. In our example below, we show a few. Note that these examples are sanitized and do not represent any specific company or organization.

2. Annual Objectives

Then, we identify a few short-term (usually within 1 year) objectives that align or nests under each of the longer-term breakthrough objectives. In our example, we entered 3 short-term objectives and each of them are aligned with each of the long-term objectives. We note the alignment with a dot.

3. Annual Improvement Opportunities and Priorities

Next, we want to list the specific annual, short-term improvement opportunities. Each of the improvement opportunities should align with an annual objective and each annual objective should align with a 3-5 year breakthrough objective. Do you see the interaction, alignment, and nesting in this type of strategic planning?

In our example below, the annual improvement opportunity of “Parts Spend Reduction” is aligned to reduce “SCM spend by 10%”.

4. Measure, Metrics, Targets to Improve in Hoshin Kanri X-Matrix

Next up is completing the specific metrics we will use to measure each of the short-term initiatives, that are aligned to annual priorities, which are aligned to breakthrough objectives. Are you seeing the alignment? The nesting? The interaction?

In our example below, the annual priority of “Parts Spend Reduction” is measured by the “TTI” or target to improve of “reduce parts cost per unit vs new parts of x%”.

5. Teams and Ownership and X-Matrix Hoshin Accountability

Of course none of this planning matters unless there is ownership and accountability. So, in the last section, you are able to complete the x matrix template by filling in the names of the accountable and responsible people for each project, metric, and objective.

6. Hoshin Kanri X Matrix Video Tutorial

7. X Matrix Hoshin Kanri Template Download

If you’d like to give it a shot or use this template in your own strategic planning, we provide a FREE download. Just click the button below and off you go.

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The Kaizen Before and After Template is simple and effective and can help communicate the results from your Kaizen Efforts. The Kaizen Before and After Template has 5 main parts.

0. Problem

In this section, you want to elaborate in either words or a picture (or both) the problem you are tackling. It is preferable to also indicate the metric you are trying to influence in this section.

1. Action Taken

In this section you want to show the results of your 5 Whys exercise, with a specific focus on the countermeasures that you implemented with your team to attach each of the root causes.

2. Results

In this section, you want to elaborate in a sentence or two the specific results of your work.

3. Before Kaizen

In this section you should show in a picture, graph, chart, or in words (which is not preferable) what the problem looked like before Kaizen.

4. After Kaizen

We know that a picture speaks a thousand words, so if you can show the after Kaizen in a chart, graph, or a picture what the results were after you and your team practiced Kaizen to the problem at hand.

5. Before Kaizen and After Kaizen Video Tutorial

That’s it.

6. Kaizen Before and After Template Download

Go get your free Kaizen Before and After Template by clicking on the download button below.

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The Variation Journal Template is an easy and effective way to identify unwanted variation in your processes, or steps in your process. This simple journal allows your team members to record the following:

0. Activity

In this section you want to record the specific activity you were performing. This can be a step in a process, for example.

1. Undesirable Variation

Was the outcome of your activity expected? If not, then that can be considered an undesirable variation that you can record in the template sheet.

2. Effect of the Variation

If there was undesirable variation, what was exactly the outcome? How did effect the customer? How about the employee? What about the impact on feelings and emotions, not just the process? For example, if you experienced an undesirable outcome, record the actual impact but also how you felt, such as “I hit the wrong button. I felt stupid”.

3. Is Variation Controllable?

This is important. We must note whether the variation is within our control or not within our control. If it is, then those are perfect areas where you can focus your Kaizen efforts.

4. Variation Journal Video Tutorial

5. Variation Journal Template Download

Go get your template download by clicking on the Instant Download button below.

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The Business Objectives Alignment Worksheet is nowhere near the completeness and exhaustiveness of the Hoshin Kanri X Matrix, but it is a simple and easy tool to complete to make sure that your lean and six sigma projects are aligned to a business objective and are attacking a specific metric (moving the needle) so that the project is measurable.

The video below will explain more. Then, you can download the free template below the video by clicking on the link.

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Shmula.com gets a lot of traffic. I’ve been through the website hosting seesaw of trying different website hosting companies. This article will discuss my journey, why I ended up with my current web host, liquidweb, and perhaps share a lesson or two on customer experience.

Click this link to get a discount off the regular price for liquidweb hosting

1. My Experience with Godaddy

When Shmula was just starting out, I went with the web hosting and domain company most people start with – yes, you guessed it, Godaddy. It wasn’t so bad when my traffic was low, but as traffic rose, the difference in website performance was very, very noticeable.

But, I dealt with the pain of frequent outages for a long time. Why? Well, I’m a cheapskate and I didn’t want to fork out money, especially since Shmula about 8 years ago was primarily a hobby and I wasn’t making a penny on the site. So, I dealt with it.

Then, my readers let me know loud and clear.

I then started to receive email after email about how slow my site was and that the frequent website downtimes was impacting their experience. I have to admit, by this time in my blogging career I didn’t really know I even had much of an audience, but they let me know. I’m grateful they did and I was super grateful to know that, at least to some people, Shmula.com was worth keeping around. That was 7 years or so ago.

2. Bluehost Outages and Downtime

Then, I moved on from Godaddy to Bluehost. Why them? I have no idea. I had heard they were pretty decent and I’m somewhat linked to the founder of BlueHost on Linkedin. They seemed reputable and so I went with them.

At first things were good. The performance of the site increased. But then I had several days of very high traffic and, to this day, I’m still not sure why of where the traffic came from. But, that was when bad things started to happen.

On high traffic days I would receive emails from Bluehost telling me that I was over my bandwidth limits and that if I didn’t upgrade they would shut down the site. These emails, mind you, were devoid of any empathy or emotion. Literally, I felt like I was in trouble or something. I felt like I had done something wrong. A criminal.

Fine. I bought more bandwidth. In fact, I upgraded to a virtual private server (VPS for the sys admins out there).

After I upgraded, my problems went away for sometime. Until…Bluehost had frequent – I mean frequent, like several times a week – of serious DOWNTIME. And, when I say Downtime, I mean several million websites were affected because Bluehost website hosting went down.

I endured Bluehost outages for a few months. I dealt with it because moving from one website hosting company to another is a pain. Until December 31, 2013 happened. On that day, Bluehost data centers literally got fried and hundreds of millions of websites were affected.

Happy New Year’s everybody.

It was terrible.

But, I endured it longer because I was lazy and didn’t want to deal with it.

Then, I got an email telling me that my site was using up too much memory. What? So I chatted with the Bluehost customer service people who weren’t helpful. What should I do now?

3. Then, on to Justhost Website Hosting

Fine. I went to Justhost for my website hosting needs. I got their VPS plan which is expensive, but I needed reliable hosting that wouldn’t give me any problems. Things were going well until May 2014 happened. In May, my site went down for several days – in fact my site and tens of millions of other sites went down because Justhost servers were down. But so was Bluehost servers. But so was Hostgator servers.

Wait a minute.

Bluehost, Justhost, Hostgator, and Hostmonster all went down!

It turns out, they are all the same company. Why didn’t I know this?

My website hosting problems didn’t go away – by moving from Bluehost to Justhost, I didn’t eliminate the problem.

So, I was back on the search for good, reliable, website hosting.

But, as I looked around, there were no reliable website hosting reviews – most of the review sites were spam affiliate sites with fake reviews, fake names, and were generally very lame and cheesy websites. I was stuck.

Then, I got lucky and found some information on website hosting downtime and outages. I wish I had known about this previously. In what follows, I present bluehost outages, justhost outages, hostmonster outages, and hostgator outages.

4. Website Hosting Downtime Reports

4.1 Here’s the Bluehost downtime report:

4.2 Here’s the Justhost downtime report:

4.3 Here’s the Hostmonster downtime report:

4.4 Here’s the Hostgator downtime report:

4.5 Website Hosting Outage Reports

Here’s the outage report for all of them, proving that they are all the same company:

I DO NOT RECOMMEND you use Bluehost, Hostmonster, Hostgator, or Justhost for your website hosting needs. Just don’t do it. Really, please don’t do it. Seriously. Just don’t.

5. Why I Recommend Liquidweb

I complained on Twitter that Bluehost and Justhost were down. Then, I received a tweet from liquidweb inviting me to check out their company and offered $100 off my hosting.

Granted, this is smart marketing, but then I checked out their site.

They impressed me right away. I HIGHLY RECOMMEND LIQUIDWEB.

I watched a few customer testimonials – big customers – I mean  huge corporations use liquidweb. So, that told me right away that their service has to be above all reproach and having huge corporations as clients means that they have to keep downtime at zero.

So, I went ahead and got rid of Justhost and joined liquidweb and I am so happy I did.

I went with their VPS Storm Servers, which is massively fast. And, because Shmula is a fairly large site now, liquidweb did the entire migration for me. Literally – no joke, my site was up on their servers in a few hours with very little downtime due to the migration.

And, they communicated with me the status of the migration often. Enough to keep my anxiety down. That part was great. When they claim “Heroic” service, they really mean it.

I couldn’t believe it. I was sold.

So, I highly recommend liquidweb. Yes, these are affiliate links and I make a small fee if you choose to go with liquidweb – but I mean it. I really recommend them. Give them a try. You won’t regret it.

6. Customer Experience Lessons

Here are a few lessons that might be helpful to others:

6.1 You get what you pay for

Sometimes. Liquidweb is not the cheapest, but they are amazing –  great service, fast, reliable servers. Overall awesome for me and for my readers.

6.2 The crowd is sometimes dumb

Just because everyone in the world uses Godaddy and Bluehost, that doesn’t mean you should.

6.3 Communicate, Communicate, Communicate

The liquidweb team communicated with me during the entire migration of my site. I had anxiety and they knew that over communicating helps when the customer is anxious.

7.0 (Video) Liquidweb Review

The post Web Hosting That Doesn’t Suck: A Lesson in Customer Experience appeared first on shmula.

This simple Six Sigma Communication Plan Template will help you gather your thoughts about what you should communicate, how often you should communicate, which stakeholder groups you should communicate to. The template is easy to complete and is flexible, which allows you to adjust it to your business needs.

Ultimately, this plan will help you communicate Lean and Six Sigma projects to the right stakeholder groups.

You can find the download link after the video explaining how to use the template.

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Unlike the communication plan for six sigma projects, the Six Sigma Stakeholder Communicator’s Plan template takes it from the communicator’s perspective. For example, if you a stakeholder group, this template helps you answer the question of who you should communicate to.

For example, if your Lean or Six Sigma deployment is supported by the CEO, the worksheet will help you identify who the CEO should be communicating to and how often and possibly the content of that communication regarding the Lean and Six Sigma initiatives.

The video below will explain what I mean. You can download the template below the video by clicking on the download link.

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The simple but helpful Gantt Chart Excel Template download will save you a lot of time by automating the process of project tracking and documenting progress.

A Gantt Chart is a tool that helps you do the following:

• List the tasks needed to complete the project
• Attach duration of each tasks
• Assign owners to each tasks
• Quickly map out the overall time duration of the overall project and tasks and sub-tasks.

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And click the button below to download the Gantt Chart Excel Template. Hope the template saves you time and helps you be awesome.

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Today I’m giving away the Fishbone Diagram Template in Excel. This template attempts to automate the job of creating a fishbone diagram and should help you and your team get on your way to finding root causes.

The template is simple to use. Watch the video to learn more.

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Go download your Fishbone Diagram Template in Excel by clicking on the button below. Hope this template saves you a lot of time and helps your team rock those Lean and Six Sigma projects.

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Total Quality Management has been around for a long time. If you look at the history of continuous improvement, it formally goes back to Frederick Taylor in the late 1800′s. I believe some even estimate aspects of quality management to back even further. If you think about, wherever there has been operations (such as building the pyramids), then quality will undoubtedly be an aspect of proper management.

Which brings me to this chart that I hate. But, I have to admit, I have a hard time articulating why this chart, which I’ve seen many, many times – irks me so bad. But, let me attempt to give you a few reasons why this Chart, which is peddled by lean and six sigma consultants everywhere – is absolutely wrong.

Why This Continuous Improvement Model is Wrong

Okay, let me try to articulate this for you. I don’t promise to make much sense, but this chart just feels all wrong to me. I’m a bit emotional  right now, so bear with me.

1. Placing Design for Six Sigma at the top of the pyramid is messed up

At all the companies that I’ve consulted and worked at, I can tell you that DFSS is often compared to using a chainsaw, when using scissors is good enough – and even better in most situations. In other words, Design for Six Sigma is rarely needed and often waste time, resources, when a quicker more iterative model would work better.

Yes, I understand the metaphor of “low hanging fruit” and that as operations have less wastes in them, it’s harder to identify and eliminate the variation. I get that. Still, the model as shown above gives off the impression that DFSS is the top methodology and that the others are just stepping stones. That’s wrong.

2. Michael George has really created a lot of havoc

Michael George, the author of the book “Lean Six Sigma” is the root cause of the many misconceptions about Lean and Six Sigma.

Yes, I understand he has two first names and if we transpose them, we get George Michael. That’s besides the point.

Here’s the kicker: Michael George claims that Six Sigma is about quality and Lean is about speed. That misunderstanding has made it into so much Lean and Six Sigma education that it has really impacted everybody’s understanding, teaching, and, sadly, application.

Lean is clearly about quality. So is Six Sigma.

If the Above Model is Wrong, then What is Right?

Great question. I have some ideas, but I want to hear from you. What do you think? If you want to draw an alternative model, then mail it to me at shmula@shmula.com and I’ll post it for debate among my audience. You can draw it on a whiteboard, napkin, or any piece of paper. Take a picture of it and send it to me and I’ll post it. Send your bio along with it too, if you want and I’ll post your bio along with your proposed model.

What do you think?

The post Total Quality Management Models and Why I Hate This Chart appeared first on shmula.

Practitioners of Lean Manufacturing are sometimes criticized for using buzzwords. It’s fair to say that this criticism is party true. In fact, when I sometimes hear common everyday words, I think of something else. Maybe you can relate.

1. “Pull”

Used to Mean: To draw or haul toward oneself or itself. To tug with force as in “Quit pulling my shirt, Jose. That’s weird.” Or, “let’s pull the rope and make all the kids on the other side of the rope fall on their face!”

Now Means: Pull production is the arch enemy of Batch Manufacturing. Pull is often used in describing Kanban and methods such as one-piece flow or single-piece flow. Pull is associated with “continuous flow”. In sum, Pull is meant to explain a concept of building products based on actual customer demand.

2. “Push”

Used to Mean: To place force against an object, such that the object moves away. For example, “I pushed my uncle into the swimming pool because he deserved it and I will look cool to my people”.

Now Means: Push is synonymous with Batch Manufacturing. In Pull, we build to customer demand. In Push manufacturing – in general – we build to stock. Batch Manufacturing almost always leads to over-inventory, which is one of the 7 Wastes we want to reduce or eliminate or prevent.

3. “Supermarket”

Used to Mean: A large retail market that sells food and other items. For example, “I need to go to the supermarket to buy some diapers, apples, bananas, and grab myself the latest Oprah Magazine”.

Now Means: A replenishment process which ensures that all manufacturing components ordered from outside suppliers are available to be loaded and delivered in one consignment. Derived from the system used by retail supermarkets, it levels the occasional spikes in demand experienced in individual factories by requiring suppliers to smoothly and systematically gather unusually large orders to a separate holding area, or ‘virtual truck’, ahead of the regular loading schedule. This process avoids any disruption to the tempo of deliveries and last-minute rushing around to complete an order.

4. Reflection

Used to Mean: An image, representation or seeing oneself on the mirror. For example “I saw a reflection of myself in the mirror in the Gym while I was bench pressing over 1000 pounds. As I looked at myself, I kept thinking how luck I am to be me.”

Now Means: To recognize mistakes and take appropriate action to avoid re-occurrence.

Even if a task is completed successfully, Toyota recognizes the need for a hansei-kai, or reflection meeting; a process that helps to identify failures experienced along the way and create clear plans for future efforts. An inability to identify issues is usually seen as an indication that you did not stretch to meet or exceed expectations, that you were not sufficiently critical or objective in your analysis, or that you lack modesty and humility. Within the Hansei process, no problem is itself a problem.

5. Toyota

Used to Mean: That giant auto manufacturer that makes super cool and reliable cars. You know, that Japanese car maker. Yeah, them.

Now Means: That car company from Japan that developed and codified the Toyota Production System, otherwise known as Lean Manufacturing. The Toyota House is often how the Toyota Production System is explained, as parts of the house contains key aspects of the production system.

The post 5 Words That Have a Totally Different Meaning to Practitioners of Lean Manufacturing appeared first on shmula.

This is a question I get frequently. How to sell lean to your boss is a question we have all asked at one point or another. The more fundamental question is really about influence, persuasion, and change management.

Another thing. And this is super important to understand. Change is NOT an intellectual task. Change, at bottom, is emotional. Influence hearts first, then change their heads and their thinking.

With that said, I’ve also learned that money speaks. To that end, let’s now discuss what is commonly known as the Cost of Poor Quality.

Cost of Poor Quality

Managing the quality function of a company has this much in common with every other business function: it must show a return on the investment the company has made in quality efforts. One of the ways this can be done is by tracking and managing the Cost of Poor Quality (COPQ). Traditionally, the cost of poor quality has been divided into three basic categories.

• Prevention Costs: these are costs that are incurred for activities designed to prevent poor quality in products and services. When companies first begin to track the cost of poor quality, they are usually surprised to find that prevention costs are a small percentage of the total
• Appraisal Costs: these are the costs that we incur by testing, measuring, and auditing products and services. Appraisal costs are basically the cost of any activity required to assess whether or not the product or service meets the requirements
• Failure Costs: these are the costs we incur because the product or service fails to meet the needs of the customer. Failure costs are usually divided into internal failures and external failures
  • Internal failure costs–– are the failures costs that occur prior to the delivery of the product or service to the customer
  • External failure costs–– are the failure costs that occur after the delivery of the product or service to the customer

The total cost of poor quality is the sum of all these costs. Note that the total cost of quality should be of great interest to managers, since it represents the difference between the actual cost of products and services and the improved cost that would result from eliminating failure costs.

Using the Cost of Poor Quality above, let us now categorize these items.

The total annual cost of poor quality is almost $2.6 million. Looking at the costs by category, we have the following.

Clearly, failure costs dominate the cost of poor quality for this company and, so, there are lots of opportunities to drive quality improvement by addressing these failure costs.

Now, my guess is that presenting a case like this to your boss will help a little. But, like I said, start with the heart first, then demonstrate logic to influence the mind. But start with heart.

Who Should Join Shmula Pro Lean and Six Sigma Training?

The post How Do I Sell Lean to My Boss and Organization? appeared first on shmula.

Kanban is an important concept in lean manufacturing. Kanban is a method that enables pull and can help create flow in a system. Kanban has several benefits:

1. Kanban can prevent overproduction because it is the mechanism that tells a station or cell what to create and how much and by when and also where the goods are to be delivered
2. Kanban care enable Pull because the request will come from the process upstream telling the process downstream what it needs
3. When each station is linked to each other in a tight way, enabled by Kanban, then there can be flow.

Here’s a short video on the Kanban Card Template which we are making available as a free download.

Here are the key aspects and what can (and probably) included on a Kanban Card:

• Part Number: This identifies the name of the “thing” that should be created
• Quantity: How many of the “thing” should be manufactured
• Lead Time: This tells the recipient of the Kanban Card how long they have to manufacture and deliver – when the items are due
• Card x of y: There is usually a fixed number of cards in a system and this identifies which card number this one has relative to the others

Depending on the type of Kanban, there are possibly other items needed. For now, these are likely the critical items. Adjust the template to whatever might suit your needs.

The post Kanban Card Template – Tutorial, Video, and Download appeared first on shmula.

Today we feature a lean practitioner – Mikhail Kalinin. He resides in Russia and he helps organizations in Russia implement Lean. In today’s article, Mikhail shares a case study where he and his team implemented lean in a Russian factory and he shares with us the lessons-learned. Go here to read the English Version

На одной из встреч, директор департамента управления персоналом (ДУП) познакомила меня с книгой Джеффри Лайкера «Дао Тойота», в которой автор рассказывает об опыте становления и развития такой компании, как Тойота, об уникальной производственной культуре «Бережливое производство», которая доказала свое преимущество над такой производственной культурой, как «Массовое производство».

Прочитав эту книгу, я захотел внедрить этот подход на фабрике. Для этого мне было необходимо получить одобрение генерального директора.

Мы договорились с директором (ДУП), что она познакомит генерального директора с подходом «Бережливое производство» прежде чем я обращусь к нему за одобрением моего желания. Каково же было мое удивление, когда на одном из ближайших совещаний директоров, генеральный директор заявил о том, что он принял решение внедрять подход «Бережливое производство» во всей компании.

Всё началось с того, что были закуплены все книги по Бережливому производству, имеющиеся к тому времени на российском рынке, всё высшее руководство компании должно было прочитать их и обучать потом своих непосредственных подчинённых.

Т.к. было принято решение о внедрении подхода Бережливое производство прежде всего на производстве, то основные книги были закуплены и розданы всем руководителям производства, включая начальников смен. Кроме книг, я также изучал всё относящееся к этой тематике в Интернете.

К этому времени на самой фабрике мне удалось заинтересовать и зажечь этим подходом первых сторонников. Очень быстро нам стало понятно, что без помощи консультантов, в структуре производственного департамента необходимо создать подразделение, которое и взяло бы на себя больший объём работы по организации внедрения бережливого производства. Возглавил этот отдел один из самых убеждённых сторонников бережливого производства. В состав отдела вошли еще три сотрудника, имеющие опыт работы на производстве. При поддержке и помощи директора по управлению персоналом компании, нам удалось создать предварительный план внедрения бережливого производства. Ключевым элементом плана являлось то, что сотрудники отдела внедрения бережливого производства должны стать лидерами в обучении сотрудников фабрики подходу бережливое производство и способствовать внедрению этого подхода на фабрике.

Сотрудники отдела участвовали в семинарах, тренингах и конференциях по Бережливому производству, познакомились с некоторыми компаниями, уже внедряющими бережливое производство. Ими совместно с сотрудниками департамента управления персоналом была организована одна, а затем вторая поездка на одно из таких предприятий.

Главным результатом этих поездок стало то, что если до поездок количество сторонников ограничивалось 3-5 человеками, то после поездки их количество более чем удвоилось. Сомневающиеся в успехе внедрения коллеги смогли сами убедиться, что этот подход работает, смогли пообщаться со специалистами и рабочими, внедряющими этот подход, смогли задать интересующие их вопросы, которые они по разным причинам не задавали своему руководству, и получить ответы.

Таким образом, за счёт изучения литературы, посещения семинаров и конференций и, главным образом, за счёт встреч на предприятиях, уже внедряющих бережливое производство, число сторонников внедрения среди руководителей среднего и младшего звена (начальники смен, мастера участков), достигло количества, необходимого для начала развёртывания бережливого производства во всём производственном департаменте.

Мы начали с обучения основным принципам и инструментам Лин руководителей среднего звена (начальников смен, руководителей службы главного инженера). В основном мы занимались самообучением; руководители должны были готовить обучающие программы и обучать своих подчиненных. Этот процесс охватил весь департамент и помог, в частности, мне глубоко освоить как философию Бережливого производства, так и используемые инструменты. Мы договорились, кто из руководителей фабрики будет отвечать за обучение и внедрение конкретного инструмента. Единственным внешним тренингом был тренинг по ТРМ (Всеобщее обслуживание оборудования). Его провели специалисты «Центра Приоритет». Очень важно, что вся эта работа шла под руководством и при непосредственном участии Генерального директора.

Сотрудники департамента по управлению персоналом совместно с нами разработали две программы: «Школа мастеров мирового класса» и аналогичную программу для операторов. Эти программы были рассчитаны на 9 и 12 месяцев, соответственно. В ходе обучения участники не только получали знания о бережливом производстве, по ключам бережливого производства, но и участвовали в тренингах по командообразованию, управлению проектами и т.д. Участники программы должны были продумать и выполнить проект, направленный на улучшение работы с использованием подхода «Бережливое производство», а также с использованием знаний, полученных в ходе программы. Участие в программе не было обязательным, но по результатам прохождения программы была создана возможность, как продвинуться по служебной лестнице, так и получить прибавку к заработной плате.

Важную роль в успехе внедрения играло соблюдение руководством следующих принципов:
Лидерство – постоянство, настойчивость и единство слова и дела.

Уважение к сотрудникам – создание безопасных, удобных условий труда, признание заслуг и поощрение за достигнутый результат.
Результаты работы участников программы оценивались комиссией. В работе комиссии по оценке результатов обучения принимали участие директор по управлению персоналом и директор по управлению производством.

За два года внедрения подхода «Бережливое производство» нам удалось добиться следующих результатов:

• Количество переходов производства с продукта на продукт в течение месяца выросло в четыре раза.
• Время переходов с продукта на продукт было снижено в три раза.
• Сотрудниками было подано около 80 предложений по улучшениям работы в год с экономическим эффектом от 70 000 долларов.
• Коэффициент готовности оборудования достиг 85%.
• Уровень качественной продукции до сдачи на склад составил 99,87%.

Для компании в целом эта работа дала следующие результаты:

• Сокращение затрат на хранение готовой продукции в запасах.
• Экономия затрат на отвлечение оборотного капитала в запасы.
• Сокращение объема невыполненных заказов клиентов в три –четыре раза.
• Снижение производственной себестоимости.
• Повысилась удовлетворенность сотрудников от работы (по результатам опросов), а это сказалось на снижении уровня текучести кадров.

Главное, мы убедились, что подход Бережливое производство действительно работает на российских предприятиях и приносит реальные и ощутимые результаты.

В результате внедрения этого подхода вы также сможете добиться высоких результатов.

Выводы

1. Внедрение подхода «Бережливое производство» дает значительные положительные результаты в работу предприятия.
2. Внедрение подхода требует наличия и выполнения, как минимум, семи условий, рис. 1.
3. Необходим системный подход, разработка методологии внедрения, программ обучения, систем мотивации.
4. Необходимо взаимодействие, прежде всего, с департаментом по управлению персоналом, лучше, если лидерство по внедрению возьмет на себя именно департамент по управлению персоналом.
5. Существенные результаты возможно получить сразу после начала внедрения, экономия денежных ресурсов может быть частично использована для финансирования развертывания программы внедрения.
6. Если на предприятии нет возможности сразу создать свою команду по внедрению, то можно и нужно воспользоваться услугами консультантов с четко прописанными требованиями к результатам их работы.

About Mikhail Kalinin

Mikhail has more than 20 years’ experience in manufacturing and supply chain operations. He has worked with multinational companies such as Colgate-Palmolive, Benckiser, Frito Lay, 3M and with Russian companies. He managed to build and run four plants from zero level, develop teams, which delivered expected results. During his work, he managed to learn and implement KPI’s systems, 6 Sigma, Lean Production approaches which helped to significantly increase productivity, quality and reduce costs. He believes that Lean thinking should change Russian companies from poor productivity to world class performance. From 2010, he works as a consultant, helping companies to increase productivity, improve quality and reduce costs and production time. And we are succeeding in our way to continuous improvement.

You can contact Mikhail here:

Lean Union
www.leanunion.ru
kalinin@leanunion.ru
+7 916 6824127
Mikhail Kalinin

The post Support from Human Resources is Critical in Lean: A Russian Case Study (Russian) appeared first on shmula.

Today we feature a lean practitioner – Mikhail Kalinin. He resides in Russia and he helps organizations in Russia implement Lean. In today’s article, Mikhail shares a case study where he and his team implemented lean in a Russian factory and he shares with us the lessons-learned. Go here to read the Russian Version.

At one meeting, HR Director gave me a book by Jeffrey Liker “Dao Toyota” in which the author talks about the history of formation and development of the Toyota production system, the origin of unique culture of production – “Lean Production”, which has proven its advantage over such production culture as “Mass production.”

After reading this book, I wanted to implement this approach in a factory. To do this, I needed to get the approval of company’s CEO.
We agreed with HR Director that she would introduce “Lean Production” to CEO before I turn to him for approval of my desire. Imagine my surprise when at the beginning of one of the next meetings of directors, CEO said that he decided to adopt the approach “Lean production” throughout the company.

We purchased all books about lean manufacturing that were available on the Russian market and CEO asked department’s directors to read them and then teach their direct reports.

CEO decided to start implementing Lean manufacturing approach in the factory first, so the main amount of books was purchased and distributed in the factory. I asked my colleagues including shift supervisors to read the books. And we started to discuss material on a weekly basis. Week by week we were getting more understanding of the approach and how to apply it in our circumstances. In addition to books, I also studied everything related to this subject on the Internet.

By this time, I managed to get first supporters of Lean approach at the factory. We were working without consultants on our lean approach implementation and very quickly, it became obvious that we must create a unit that would undertake more work on the organization of the implementation of lean manufacturing. It was decided that we‘d find necessary people within our organization. And we managed to do it. One of the former shift supervisors headed this department. The department includes three more people: two – from HR department and one from IT department. We named this department “Lean Implementation department”. With the support and assistance of HR Director, we have managed to create a preliminary plan for the implementation of lean manufacturing in our factory. A key element of the plan was that all factory managers and specialists should take part in the preparation of the trainings and promote lean approach in the factory.

Lean Implementation Department staff with Production Manager and me participated in seminars, trainings and conferences on lean manufacturing, visited several companies that were implementing lean manufacturing. Head of Lean Implementation Department together with HR Department organized two visits of our managers and specialists to one of the enterprises.

The main result of these visits was that the number of lean approach supporters doubled. “Doubters” were able to see by themselves that this approach works, they were able to communicate directly and to ask questions people who were already implementing lean, and, what is more important, get answers.

Thus, by studying literature, attending seminars and conferences and, mainly, due to the visits of the enterprises which were already implementing lean manufacturing, the number of supporters among the middle and junior managers (shift supervisors, foremen), reached the number required for starting the deployment of lean manufacturing throughout the factory.

We started with teaching the basic principles and lean tools our middle managers (shift supervisors, chief engineer department staff). The main part of lean implementation culture was that we asked all managers to prepare and conduct training courses to their subordinates. We agreed, who will be responsible for training and implementation of a particular lean methodology or tool. Finally, almost all managers and factory specialists were involved in this process. We conducted only one external training. “Center Prioritet” experts conducted TPM training. It was very important that all works during the training was with the participation of the CEO. It proved to everyone that CEO is taking lean implementation at the factory very seriously.

After half a year, HR department and we have developed two main training programs: “School of world-class masters” for foremen and a similar program for operators. These programs have been designed to 9 and 12 months, respectively. During the training program, participants not only gain knowledge about lean manufacturing philosophy, concepts and tools, but also participated in team building trainings, project management, etc. Participants of the training program also had to develop and implement a project aimed on improving one of the processes using the knowledge gained during the program.

Participation in the program was not mandatory, but it was openly and clearly stated that successful fulfillment of the program will help to improve position at the factory or/and obtain an increase in wages.

Commission headed by Plant manager and HR director assessed the results of the education program. For two years of Lean production implementation, we achieved the following results:

• The number of product changeovers during a month of production has quadrupled.
• Changeover time has been reduced three times.
• Employees made about 80 suggestions for improving work and work places a year with savings more than 70 000 dollars.
• The availability of the equipment has reached 85%.
• Level of quality products without rework reached 99.87%.

For the company as a whole, this work has yielded the following results:

• Reduced cost of finished products inventory.
• Cost savings for the diversion of working capital in inventories.
• Reduce the backlog of customer orders from three to four times.
• Reduction of production costs.

One of the most important results was increased employees’ work satisfaction (from the polls), which has affected in reduced staff turnover.
Importantly, we found that Lean manufacturing approach really works for Russian enterprises and provide real and tangible results.

Important role in the success of lean approach implementation played compliance to the following principles:

• Leadership – persistence, perseverance and unity of word and deed.
• Respect for employees – creating a safe, comfortable working conditions, recognition and promotion of the achieved result.

Conclusions

1. Implementation of “Lean Production” approach gives significant positive results in the work of the enterprise.
2. Approach requires introduction and performing of at least seven conditions. (Pic. 1).
3. Implementation requires a systematic approach, the development of implementation methodology, training, motivation systems.
4. It is necessary to interact, primarily with HR Department. It is better if the lead of implementation will take HR Department.
5. Significant results in improving of operation is possible to receive immediately after the start of implementation, cost savings can be partially used to finance the deployment of the program implementation.
6. If it is not possible to establish a structure within the organization to help in lean production implementation, I recommend using consultants with clear requirements for the results of their work.

About Mikhail Kalinin

Mikhail has more than 20 years’ experience in manufacturing and supply chain operations. He has worked with multinational companies such as Colgate-Palmolive, Benckiser, Frito Lay, 3M and with Russian companies. He managed to build and run four plants from zero level, develop teams, which delivered expected results. During his work, he managed to learn and implement KPI’s systems, 6 Sigma, Lean Production approaches which helped to significantly increase productivity, quality and reduce costs. He believes that Lean thinking should change Russian companies from poor productivity to world class performance. From 2010, he works as a consultant, helping companies to increase productivity, improve quality and reduce costs and production time. And we are succeeding in our way to continuous improvement.

You can contact Mikhail here:

Lean Union
www.leanunion.ru
kalinin@leanunion.ru
+7 916 6824127
Mikhail Kalinin

The post Support from Human Resources is Critical in Lean: A Russian Case Study (English) appeared first on shmula.

This article explains the waste of overprocessing and how it impacts the customer experience. I also show how overprocessing is conveyed using a customer journey map, which you can download at the end of the article.

I once heard a story about a husband who buys his wife flowers every year for their wedding anniversary. This husband goes to the same flower shop to buy his flowers. When this husband asked the flower shop owner about how business was going, the flower shop owner responded

Buying flowers for your wife has nothing to do with flowers. It has everything to do with marriage extension. The marriage extension business is booming.

In this husband’s mind, it was just a business of selling flowers. In the flower shop owner’s mind, buying flowers for your wife for a wedding anniversary is about extending your marriage. That. is. a. big. difference.

It’s More Than Perspective

It’s more than just how we look at things. Let me tell you another story to illustrate.

A few weeks ago, I took one of my kids to the doctor’s office. It seems like whenever I go to the doctor’s office, I repeat the same information that I know I’ve already given. You see, with as many kids as I do (I have 9 children), I’m at the doctor’s office A LOT.

Why am I asked the same set of questions everytime I’m at the doctor’s office?

Waste of Overprocessing

One observation I have is that the waste of overprocessing is literally everywhere. Most times, we expect it and we just deal with it. On the one hand, the most harm providing answers that we know we’ve already given is annoyance. But, could there be more psychological harm than we think?

Let’s take a common situation in our economy: losing your employment. getting fired. losing your job. Now, psychologically, when someone loses their job – especially if that person has a family to support – can be very stressful. So, that person has left the ranks of the employed to the ranks of the unemployed. He’s now a job seeker.

Let’s walk through the journey of a job seeker. As I walk you through his journey, I want you to notice the subtle but very important difference between a customer journey map approach versus the value stream map or even a process map.

Customer Journey of a Job Applicant

Customer Persona

Let’s call our job applicant “Peter”. He lives in Detroit and earns an income of $45,000 USD per year. He’s married with 3 kids and has a bachelor’s degree in business management. One concern that is top of mind for him is that he feels a strong burden to support his family. He’s willing to do anything – get any job – to be able to support his family.

Job Candidate Customer Journey

1. Peter has been out of work for a few days and feels pressure to financially support his wife and kids.
2. He’s worried about paying his bills.
3. But, he believes he’ll land a job that will allow him to support his family.
4. Peter looks on the internet for job openings that fit his background in his local area.
5. He finds a company with a job opening that he’s qualified for.
6. Pete creates an account on the company’s online applicant tracking system (ATS).
7. He uploads his resume.
8. But wait – Peter is asked to complete a form asking for the exact same information that is on his resume that he just uploaded.
9. Pete submits his resume, not knowing what the next steps will be.

On the face of it, it seems like a harmless enough process. If one created a value stream map, then the clear area for improvement would be to reduce or eliminate asking the job candidate the same information they he or she just entered by uploading their resume. But, that approach misses a critical area of improvement: the customer’s state of mind.

Peter is stressed. Asking him to enter the same information he just entered doesn’t help him feel better. If we remove the irritation, that will help.

But, he’s still stressed.

This can be an opportunity to make a simple process that every candidate goes through actually a magical one.

How?

What if after Peter submits his online job application, the “Thank You” page has a one line sentence that said

“We know that the job search process can be stressful. Thanks for applying for this position with our company.”

Simple. But, it conveys empathy and this simple job application process could be turned into a potentially magical one.

This also marks one of the clear differences between a customer journey map and maps as used in Lean or Six Sigma.

Customer Journey Map Template Download

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I’m in San Antonio Texas today, visiting my good friend, Mark Roenigk. Mark and the team at Rackspace are doing some amazing things in the background that ultimately lead to improvements for the customer experience. As some of you may know, Rackspace headquarters is in a big shopping mall that they turned into their corporate office. It’s actually really cool.

Well, during our visit, we sat by a wall full of A3′s (I didn’t take a picture of the A3 wall – sorry). It was clear that Rackspace is using A3 thinking to thoroughly solve business problems and thereby ultimately improve the customer experience.

For those unfamiliar with A3 thinking, it’s simple. A3 is an approach to problem solving that is extensively used at Toyota. If you think of it, A3 Thinking is essentially Lean codified on an 11×17 piece of paper. The elements on the A3 are essentially Plan-Do-Check-Act. Now, I know what you’re thinking – super simple and simplistic, right?

Wrong.

Here’s why: it always takes 2 to A3.

What does that mean? Well, here’s the power of A3 thinking.

A3 Thinking as a Teaching Tool

It always takes 2 to A3 means that there’s a mentor and a student. The mentor is well-versed in A3 thinking and can help the student go through each step of PDCA in solving the problem at hand.

A3 Thinking as a Leadership Development Platform

Because there’s a mentor involved, this gives the student an opportunity to develop both as a problem solver and also a leader. As we all know, almost all solutions to problems involve some level of change management. And, change management is essentially leadership and influence. So, A3 thinking can help one develop as a leader.

A3 Thinking as a Problem Solving Approach

Now, the most obvious benefit from A3 thinking is its capability to help solve tough problems through the application of PDCA. I go through the details of how A3 thinking can help us solve tough problems and I even provide a free A3 Template Download here.

Honestly, explaining the A3 in a blog post won’t do it justice. But here’s what will.

Use A3 Thinking Today.

That’s right. Practice A3 thinking right now, but, well, actually doing it. That’s how you’ll learn. Practice over Theory. At least that’s what Taiichi Ohno believed.

A Real A3 From Toyota

To help you get on your way, watch the brief video below and download a free A3 Template – it’s an actual A3 from my time at Toyota. It’s pretty old, but still instructive. Note: I created this video a while ago and it might as well be an audio file, since I didn’t actually do anything with video. You’ll see. Anyways.

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Ever wonder why Toyoda was changed to Toyota?

Most people know that Toyota began as a company that manufactured looms – or, sewing machines. At that time, Toyota was knows as “Toyoda”, named after the founder, Sakichi Toyoda. It wasn’t until much later – 1936 to be exact – that Toyoda changed to Toyota. Most of us know this as fact, but few of us know why the name was changed. Keep reading to learn how.

Various sources tell a different story as to why the name was changed. According to the official Toyota explanation, the name was changed for 2 reasons:

1. Voiceless Consonants aren’t appealing

Apparently, in Japanese, the letter “D” in “Toyoda” is a voiceless consonant. This wasn’t viewed as appealing. A voiced consonant is preferred, so they chose to make it a “T”.

2. Jikaku and Good Luck

Jikaku is the practice of counting strokes in Kanji and Katakana. The number of strokes determine good and bad luck. “Toyota” has 8 strokes versus 10, and 8 is a number in Japan that is associated with good luck and fortune. So, the official record tells us that pretty much sealed the deal: change it from “D” to a “T”.

But, there are objections to this reason. Some people believe that the number 8 in Japan isn’t a big deal; while in China it is important. It’s hard to verify either of these claims, but is one prevailing objection out there.

There are other accounts of the name change that point to other reasons such appealing to an international audiences and international acceptance.

But, I have another theory.

Reduce Waste in the Toyota Name

Maybe. Just maybe. What if the folks at Toyota fundamentally wanted to reduce the number of strokes, but yet maintain the “Toyoda” name. What if they chose to do that and eliminated 2 strokes – from 10 strokes to 8. What if?

10 strokes to 8 strokes = 20% Reduction in Strokes!

It’s a stretch. But, hey, this is my addition to the folklore that’s currently out there.

Here’s another newsflash item for you. Consider the current Toyota logo. Now look below – did you know that it spells T-O-Y-O-T-A right there in the logo? Yeah, I didn’t either.

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