Upgrading Standardized Equipment

I’m an engineer by training and for years specified new equipment for my employers.  When my colleagues and I went looking for new equipment, what did we go looking for?  The newest, the latest, the most bells and whistles.

As I discussed in my post on Standardization of Equipment, buying the latest and greatest often militates against sound business practices, but what happens if the newest equipment provides a technological advantage? 

The answer is simple: design your own equipment modifications.  Who better than you?  Who knows your product better?  Who knows your equipment better? 

Moreover, if you modify your own equipment, you keep your modifications internal and avoid giving your competition insights into how you’re achieving your unique results. 

To do this, you either need to develop internal machine design & modification talent, or enter into a contract with a firm who can provide those capabilities.  In Toyota-speak, this concept is called “Moonshining.”  It refers to the practice of using inexpensive, and often repurposed equipment, in the manufacture of (alcoholic) products.

High on the list of modification techniques is simplicity.  Changes should be as easy as possible to install, use and maintain.  They must also be standard and interchangeable. 

In the photos (above), I’ve provided an example of a machine shop workhorse: the Bridgeport vertical milling machine.  The design of the base machine (illustrated by the photo on left) has changed little since it was introduced prior to WWII. 

One of the few disadvantages of this machine is that it is all manual.  That means that variation from part to part could be significant. 

As new CNC equipment was introduced, many machine shops moved in the direction of new designs and manufacturers; however, the manufacturer of the Bridgeport, and aftermarket suppliers, developed add-on computer systems that turned the manual mill into a CNC mill (photo on right). 

Applying the CNC upgrade gave users the best of both worlds: tried & true equipment, matched with the latest in technological advancements.

The take away from this example is that there are many advantages to upgrading existing equipment as versus buying new.  To recap, they are:

• Continued ease of use
• Same spare parts
• Same maintenance training
• Same operator training
• Ability to seamlessly flex operators from one machine to another
• Improved capability

Standardization of Equipment

Most of us are familiar with Standard Work and the need to have only one standard way we build a product or provide a service.  We know that having only one way to do things makes our processes more reliable.  Standardizing equipment provides the same benefits.

I’ve been in plants where there were machines from 5 or more different Original Equipment Manufacturers (OEM’s), all performing the identical function.  I’ve also been in factories in which they had standardized on a single OEM, but had multiple different models of the same equipment.

Although there are a plethora of reasons to standardize equipment, I’d like to focus on only three: spare parts, maintenance and operator “flexing.”

SPARE PARTS:  Consider this.  Most OEM’s change key components of their machines whenever they change the overall design. When you have multiple models of the same OEM’s equipment; or, the equipment of multiple OEM’s, that means maintaining spares of each unique critical part.  Failing to do so could mean prolonging downtime by days, weeks or even months.

MAINTENANCE:  Each time you add a different machine design, it means training maintenance personnel in the maintenance of each new variation, or purchasing an expensive repair contract.

OPERATOR “FLEXING”: Flexing is the practice of moving operators from one process or machine to another as demand changes.  When a process has multiple types of machines, it often limits the number of operators trained to perform their job on all pieces of equipment.  That, in turn, reduces the ability of leaders to flex, thus limiting their ability to react to changes in the product design, market or workplace.

I’ve been in factories that had been around since WWII.  There were seven or more different models of machines from the same OEM performing the same job.  Can you see how big the problem becomes when you try to stock all those motors, gearboxes, control station components and ancillary spare parts?  The cost of all those parts ties up valuable working capital.  

Then factor in the cost of the brick and mortar necessary to warehouse them all.  That space generates no income, nor can it be used for anything else.

So, rule of thumb: find the most reliable equipment and, as you expand, purchase more of it: same make, same model.  

Where should you look?  The used equipment market.  Often, there are firms that specialize in refurbishing such equipment before it even arrives at your facility.

RECALL: 

• you only need to store spare parts for one model
• you can train maintenance personnel in maintaining only one model
• you can train operators in operating only one model

Each of those will provide you competitive advantage in the world of ever hastening global competition.

Control Your Message

Control Your Message

We’ve all seen it.  Something happens within an organization: someone leaves under suspicious conditions, plans goes awry, a schedule is missed.  That's life, but what happens next makes all the difference.

Far too often, leaders don’t acknowledge the bad news and get out in front of it.  Instead, they hang back and see if it will go away.

It never does.  Instead, others usurp the right to broadcast the message and "spin" it.  We often refer to these others collectively as The Grapevine. 

A couple facts about the grapevine: 

1.  It almost always gets the facts wrong.
2. Its message contains enough truth to seem plausible.
3. It often twists the facts to fit its own sinister message.
4. Its message is, with rare exception, unflattering of legitimate leaders. 

So, ask yourself, why would the legitimate leaders allow someone else to control their message?

I had a boss once that used to say, “Unlike wine, bad news never gets better with age.”  He was right.  If you wait until conditions are right, you’ve made two egregious errors.   

• First, you open the door to the conjecture and speculation. 
• Second, you give up your right to control your own message.

Lean has deep belief in “Respect for People.”  One of the manifestations of that belief is the act of transparency.  Transparency often translates to telling the truth.

Good leaders get out ahead of the bad news and truthfully state what happened and, often, why.  That is, they control their own message.

And, good leaders do it immediately.  They don’t sleep on it, because once the wrong message is out there, anything new raises the suspicion that someone is lying.  Who do you think will win that battle?

No, the best leaders control their own message and to do it promptly. 

Human Capital

Human Capital

You hear the term Human Capital from time to time.  What does it mean?  Is it politically correct jargon for people being sold as slaves?  Hardly.

You may remember the slogan: "Our employees are our most important asset."  Well, look at your balance sheet and see if employees show up there under Assets.  There is no such line item.  Nor do they show up on your chart of accounts.  Where, then, do these terms come from?

They come from people who understand the value (another accounting term) of well-trained, hard-working employees.

Some things to consider:

• Depreciation:  If you buy a machine, its value as a book asset depreciates over time until gone.  Even with continued maintenance, the best it can do is continue to perform the function for which it was built.  A human, on the other hand, will appreciate in value the more they learn, and the more skilled they become.  Hence, it only makes sense to continue to provide employees with opportunities to learn new skills and knowledge.
• Flexibility:  A machine is built to perform a select number of functions, humans however, can adapt almost infinitely.  In Lean, we use the term flexing to refer to the ability to move a flexible employee through multiple positions throughout the day.
• Continuous Improvement:  Employees who perform the same task over and over begin to see ways to improve the task.  Given latitude to do so within prearranged guidelines, these employees can help the organization continuously improve.  Whether they are turning a wrench, inputting data, completing online functions or leading an organization, repetition leads the mind to identify and eliminate waste.  A machine cannot do that.
• Morale:  Machines are inanimate.  They have no feelings or sentiments.  So long as they are maintained, they will do the same function the same way, leading to the same results, day in and day out.  That's one of the values of a machine.  A human employee, on the other hand, can be led to do better.  Handled with dignity and respect, a human can be led to work longer, faster, harder for the sake of a common good.

In short, if machines are a smart investment, human employees are a brilliant investment.  Why, one might ask, do some organizations treat their employees as if they were less important than their machines?  Makes you wonder, doesn't it?

What's a Lean Culture?

What’s a Lean Culture?

When you walk into an organization that has taken lean seriously, you notice certain things immediately.

First, the site is clean ... unusually clean.

Second, workstations are laid out logically, things are labeled and employees are able to work with purpose.

Third, you start to realize that things flow, they move from station to station fluidly.  There’s not a lot of WIP standing around and you may even view Kanban squares on the floor, benches or desks.

Fourth, no one seems to be in charge, but things are getting done.  No one is barking orders or standing over the folks doing the work, yet products and services continue to flow.

You'll often see a profusion of graphs and charts.  If you inspect them, they’re all current and the things they are measuring all seem to be improving.

Despite the fact that things are improving, there are lists of actions below charts; each action intended to improve the performance measured by the chart.  Moreover, every action has someone assigned to complete it by a certain date.

If you spend time actually watching the work, you start to see photos and short instructions at each station that clearly explain how to do that job.

Workers all seem intent on their work and conversations between employees all seem to focus on questions related to the product or service.

Looking more intently you note that it’s been forever since they’ve had a lost time accident or a finding from an OSHA inspection. 

You may not see it taking place, but you shouldn't be surprised to find that the leaders of the organization spend a lot of their day in Gemba (where things are really happening).  

Leaders are reading all those graphs and asking questions, and not just of the managers.  They seek input from the people who actually do the thing that interests them.

Some of the questions they'll ask are: "What would you do to improve this?"  "What can I do to help you?"  "What do you need?"

On-time delivery and quality routinely trend at or near 100%, but perhaps the most telling statistic is the number of implemented suggestions per employee.  In a Lean culture that number is usually at or above five.

When you see these indications, you know what we’re seeing is a genuine Lean culture. 

Leading Change: Setting the Vision for the Path Forward

Leading Change: Setting the Vision for the Path Forward

“Where there is no vision, the people perish”

Proverbs 29.18

If you’re like most senior leaders, you’re buried in minutiae: paperwork , eMail, meetings and phone calls.  When you have time, you sift through data to see how things are going.  If they aren’t going according to plan?  Then more meetings, eMails and phone calls.  The question begs to be asked, when do you find time to lead?

If you believe leading is important, I hope I don’t need to convince you that managing is not leading. 

Don't get me wrong, both skills are needed, but without leadership, the organization just bumps along.  It does what it did yesterday, hopefully better, yet never achieving greatness, and sometimes, not even goodness.

And what is it that leaders do?  They provide VISION.  As the quotation from Proverbs states, “Where there is no vision, the people perish.”  And who are the people?  It’s your organization.  Your organization perishes when you don’t have a vision for where they’re going.

How do you change that?  First, acknowledge that if you do nothing, things are likely to get worse, not better.

Next, you need to shed load.  You need to start training those below you to shoulder more of the burden.  

How?  You begin to mentor and coach them.  Explain what’s really important and what is less so.  Using the Socratic method, ask them how they'd resolve the problems they bring to you.  If their answer is good, send them off to execute it.  If not, explain why and ask them for a better approach.  Once they've got an acceptable approach, send them off to execute it.

In other words: don't give them fish, teach them to fish.

As your subordinates begin to shoulder more of what had been your load, you now have time to look forward.  What are you looking for?  Industry trends, technology trends, market trends.  You look over the horizon and plan where to go next.

You now make time to discuss these trends with your colleagues, your staff and with industry experts.  You make time to think deeply about the trajectory of the future and what your organization will need to do to lead it.

When you’re ready, you bring your staff together and conduct a Hoshin Kanri event.  Hoshin Kanri is a process to guide your organization through the determination of its strategic destination, what some call True North.  The result of a Hoshin Kanri is a detailed plan to achieve the breakthrough objectives that will set your organization apart from others in your industry.

Once your plan is complete, you begin assigning people or teams responsibility for pursuing each element of the plan.  They’ll report to you no less frequently than once a month until the plan is achieved.  Each year, you'll conduct a new Hoshin Kanri.  At it, you'll refresh last year's plan, eliminating things you achieved and adding new.

In the space of a few months, you have:.

• Turned your personal focus from the “tyranny of the inconsequential many,“ to a plan to achieve the “critical few.”
• Demonstrated to your direct reports how to cascade important decision-making skills.
• Grew your subordinates' capabilities to make good decisions.
• Made your organization more nimble by making good decisions closer to the level where they are needed.
• Developed new capacity in your own day; and, no doubt, grew closer to the image you’ve always had of a great leader.
• Made time in your day to Go and See for yourself what’s really going on in your organization.
• Set the expectation that, in the future, your staff and their direct reports are going to move from a model of reactive management to proactive leadership.

All in all, not a bad day’s work.

Keep the faith.  Meanwhile, Get Lean and Stay Lean.

Leadership vs. Management 

Leadership is to management as compass is to stopwatch.  

Both the compass and the stopwatch are important tools, but they perform completely different functions.  So, too, leadership and management.

Let’s start with a discussion of management and how it works.  In a macro sense, managers gather data and make decisions therefrom.  It’s an important skill, but ask yourself, where in time do data come from?  Do data come from the past, present or future? 

If you think in those terms, you realize that data come from the past and that what managers actually do is to look to the past to plan for the future.  Does that seem like a sound practice?  Certainly not for long-term success.

Leadership, on the other hand, looks to the future.  Leaders follow trade journals, industry trends, technology trends and financial trends.  They do their best to understand what the future will look like and how they can best position their organization to be successful in that environment.

Good organizations need both leaders and managers, but ask yourself where each is needed.  Are leaders needed in greater abundance at the bottom or top of the organization?  Area managers needed in greater abundance at the top or the bottom of the organization?

Note that mine weren’t either-or questions.  It’s not that you don’t need leaders and managers throughout the organization.  It’s more a question of where their skills can provide the greatest benefit to the organization.

I welcome your thoughts and would be grateful if you'd provide your rationale.

Meanwhile, Get Lean and Stay Lean.