Ready to change?

by Mark Gooch, Simpler Consulting

Last time we discussed value streams, value stream analysis and how to use that analysis activity to develop, plan and begin transformation. My final question was, “Will you, or will you not embrace radical improvement? If so, begin implementation.”

Well, what is your response? Why are you considering or wanting to embrace a lean transformation? If it is because you have heard of some nice, impressive improvements or results for someone else, STAY AWAY! Once a transformation begins, many things are launched into motion and some may initially appear to be worse, not better.

Tough times ahead
The demands on leadership are not for the squeamish. Tough times and second guessing are ahead and only those truly committed to the process will stick with it. Why else do surveys show that fewer than 10 percent of leaders who embark on transformation achieve successful results and follow it to the end?

Transformation is not easy, nor does it always seem like it makes sense. Planning can be challenging, but the actual activity required for transformation is tough. We call it the “dirty hands” activity. If you are responsible for the transformation, you have to be involved in the work — not every event, but you have to be knowledgeable of the emotional stress event members experience, and what personal activities they have to be willing to forego or change. Asking team members to acknowledge that many of the tasks they perform are non-value-added in respect to customer needs and value creation is extremely risky for everyone.

If you have ever been part of an executive team building weekend, this is the equivalent of a trust fall: “Come on, tell me all the wasteful activities you do everyday, how much time and cost we can cut from this operation — and trust me to not judge you personally or take your job away when we get done.” Can you relate to falling backwards into the arms of your peers from a six-foot-high platform with your eyes closed — intentionally?

What a hurdle to overcome! The good news is that the more people participate in events and feel the excitement of creating their future, the more readily they offer up wasteful steps and suggestions to improve. But the road to that point can be rocky and unpleasant at times. Leaders must remain patient, focus on the desired end results and encourage the teams to push the envelope of change.

Work the plan
The calendar of events you derive from your value stream analysis becomes your timeline and guide for transformation. What areas will we focus on, when will we perform the events, who will be on the events and what are the expected outcomes of the events?

Next, how do they tie together in the march to improvement? This is a not a “rule,” but I believe it works well to always think in terms of creating pull for the transformation.

If the transformation begins at the front or beginning of the value stream, you are in effect “pushing” change into the stream. As you improve area 1, then 2 and so on, the next area or step is not necessarily ready for the change from the preceding steps.

Example: A typical process
Let’s follow a transformation through a typical manufacturing process: purchasing to receiving; turn; mill; outside processing; finish machining; assembly; pack and ship; and finally, transport to customer.

If we begin our transformation with the purchasing area, material and parts will begin arriving differently than before, yet the receiving area and the first machining area will be completely confused as to what is happening to their material support.

The question begs to be asked, “What are the needs for material to support the first processing area, what do the needs look like and how will the area ‘request’ or pull the material?” You are in essence ‘pushing’ change down the stream.

A better approach begins with asking what the customer wants. How can we progress the value creation through the stream rapidly and flow that value to the customer smoothly with minimal hand-offs? This approach helps create pull for the transformation. If change ‘pushes’ through the value stream, the impact on flow is not as readily recognized as when you begin at the end of the process.

Every time a step or process is improved, the flow is improved and noticed by the customer; backlogs or bottlenecks at the end of the line are eliminated and product begins to flow faster immediately. However, when improvement is generated in the front of the line, parts and products back up more quickly down the line as those steps/areas are not yet addressed.

Begin with material supply
There are times when business needs dictate changes early in the process, such as when the company needs cash and is sitting on a ton of inventory. Start with the material/inventory supply. Slowing inventory input will not reflect to the customer quickly, nor will overall cycle times immediately improve, but improved cash flow can save a company when cash is required NOW!

It also demonstrates dramatic physical changes to employees as stockpiles of inventory begin to diminish quickly, freeing up space that was once required to house excess/early inventory. It can signal to employees that things are changing and things can be changed fast — thus rapid improvement.

Use these gains to show your commitment to the transformation. One warning — if inventory levels are reduced and lot sizes and process flows are not dealt with quickly, schedules may appear to be negatively affected since large amounts of inventory will no longer be available to start the “planned” batch jobs. When a job is released into the system (if you are still using an MRP-driven scheduling system and push production is the methodology), the job will start late. Again, the value stream must be dealt with systematically and as a whole, not as independent, disjointed processes.

So, commitment is required and two primary questions must be answered: 1) What do we want from Lean, and 2) Are we willing to hang in there when many will want to change back to the old way?

Mark Gooch has held senior level positions with GE Aircraft Engines, Goodrich Aerospace and Williams-International. He has worked with operations ranging from 15 people to organizations of 30,000. Contact Coach Gooch at 641-620-1320; E-mail: goochm@simpler.com. 

This article appeared in the February/March 2006 issue of MRO Today magazine. Copyright 2006.

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