NC State of Business

Back in September, Terri Helmlinger Ratcliff discussed several opportunities for collaboration and earlier this week, Phil Mintz posted an article that discussed how the current economic situation is affecting some of the small to medium sized NC manufacturers. Maybe we can put these two outlooks together. Although we see chaos and uncertainty in this economy, a positive outlook both personally and in our business can be a contributor to our success. Setting aside ½ hour at the end of our day to think through some strategic ideas for our business may put us one idea ahead of our competitor. Or if we were too busy during the good times, now may be time to start a dialogue with some neighboring small to medium sized companies and exchange ideas. Thomas Freidman, author of “The World is Flat”, comments that the best companies are the best collaborators. And this means small to medium sized companies too. This may be the time to pull together and form a purchasing alliance for some common commodities. Or start to discuss creative ways on how to keep cash flowing. Or even borrow people or manufacturing processes from your neighbors to better level load your plant. If your business has idle floor space, maybe your neighbor can use it for one of his processes or inventory. Yes, it’s tough but some will succeed even in this environment. And we are pulling for you!

In the Lean world, we define Visual Controls as simple signals that provide an immediate understanding of a situation or condition. They are efficient, self-regulating, and worker managed. Examples in the workplace include:

• * Pictures and diagrams
• * Color-coded dies, tools, and pallets
• * Lines on the floor to delineate storage areas, walkways, work areas
• * Improved lighting

All of these contribute to allowing us to perform a task mistake-free or to understand the status of a situation immediately. We call that the “30-Second Rule”…the ability to tell whether we are in a normal or abnormal condition as quickly as possible.

Now here’s a question. Would you consider it acceptable to be driving to your job today and encounter:

• * No lane markers
• * No traffic signs (e.g., stop, yield, speed limit, etc.)
• * No highway information signs (e.g., the blue signs for gas, food, and lodging)
• * No electronic advisory boards (e.g., “Accident ahead approaching Exit 54”)
• * No traffic lights

…to guide you and your fellow motorists? When you reached your destination, what would you think if there were no delineated parking spaces? Or signs directing visitors where to proceed? What if when you jumped into your car, you had no indicator as to how much gas was in the tank, whether your antilock brakes or airbags were malfunctioning, or if your engine oil level was low?

And yet, while we can’t imagine a morning commute without visual aids and controls to help us get to our destination safely and efficiently, it is common for us to reach and enter a workplace with few indicators as to production or sales status, safety or quality information, or where things belong in the plant or office.

If we expected anything close to the level of visual controls in our workplace as we do in our everyday world, imagine how effectively we could perform our job and how much waste we could eliminate in our business processes.

Effective problem solving is a crucial issue facing hospitals today. The literature and industry experts agree that the hospitals in the United States have "major system problems" in terms of management and control of delivery processes [1]. To deal with the quality problems, the healthcare industry responded by utilizing problem-solving approaches based on Plan-Do-Check-Act (PDCA) cycle. However, if inappropriately used, these approaches often generated additional work for the professionals and very little apparent reward -- does this sound familiar?

Recently, a few healthcare organizations have responded by using another systems improvement strategy inspired by the PDCA, namely the Toyota Production System (TPS) (also called "lean") approach to help solve their system-related problems. However, what is the fundamental difference between a "lean" and "traditional-healthcare" PDCA cycle? In a recent webcast Durward Sobek suggested that perhaps the fundamental difference is inherent in efforts that organizations spend on 'planning' (P) and 'doing' (D) steps of PDCA cycle [2]. The figure inspired by Sobek’s suggestion graphically represents such difference in healthcare industry.

Traditional-healthcare vs. Lean PDCA Cycle

The PDCA as indicated by the lean approach places significantly more emphasis on the first step of the cycle -- the planning step (P) -- to allow for rapid improvement cycle for step 2 -- the doing step (D). For example, at the middle manager level, where process problems can be identified and tackled daily, the planning requires a close cooperation of problem owner(s) -- middle manager(s) -- and front line healthcare professional(s) that highly understand activities that are needed to complete the process. Such cooperation in terms of lean is based on rigorous and systematic approach that promotes problem solving at the 'root cause.'

The real magic here is that the process owner(s) take accountability for putting the countermeasures in place and sustaining them. This means that this type of accountability is not simply a check mark on the chart, but it is making sure that front-line staff actively participate in the development of what they believe is the best countermeasure for a problem and energetically strive to sustain the implemented change(s).

At Toyota, the problems solvers realize that the devil is in the details [3]. The detailed planning and rapid improvement cycle as proposed by lean PDCA cycle is critical for effective problem solving in hospitals.

Despite the enormous potential of the TPS approach for problem solving, I fear that the inefficient uses of lean principles and tools by healthcare professionals could lead the organization's management to premature and negative conclusions about how the lean tools and principles fit into the healthcare environment.

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[1] Institute of Medicine. Building a Better Delivery System: A New Engineering/Heath Care Partnership, A Report of the Institute of Medicine, Washington, DC, 2005.

[2] Sobek, D. K. "A Primer on A3 Reports: Better Thinking for Stronger Organizations," Industry Week Webcast, September 18, SAP and Intelligence, 2008. Available here.

[3] Spear, S.J., and Bowen, H.K. "Decoding the DNA of the Toyota Production System," Harvard Business Review, vol. 77, no. 5; pp. 97-106, 1999.

Lean efforts often mention savings that result from "picking low hanging fruit", and such projects do very often yield quick savings to the bottom line of the company or facility involved. The initial success is exciting and usually is greeted with enthusiam by all employees. Many times however the initial focus on cost reductions does not address the system aspect of continuous improvement and the subject cost savings are short lived. The 5th S, sustainability therefore suffers and the basic previous routine returns.
Successful companies recognize that Lean is over 80% culture, and that to change the culture to focus on continuous improvement and create an enviornment of positive change is the real goal. When we think of long term sustained change using Trees as an analogy fits. Trees typically are strong with good root systems, in most cases live for many years, and provide positive impact annually. Yes, even trees sometimes fail to survive and can suffer, but if properly cared for can live for generations.
When we begin on a Lean Transformation and Journey, it is important that we build a solid system to support that effort. We have to focus not only on the moment but the future as well. We have to tend to our system and make the solid business decisions to sustain and maintain our progress.
We need to plant "Trees".

One of the things I’ve noticed as I’ve been visiting different hospitals and working with them on implementing lean is how self aware the staff is on what the real problems are in their organizations and facilities. Unfortunately, it seems that they have difficulty in turning their awareness into results. What seems to be most prevalent is that a team is established which meets once a month to discuss the problems and potential solutions but is unable to generate the necessary passion and momentum necessary to actually implement their solutions. This is actually a very common problem faced not only in healthcare but also in manufacturing as well. One of the lean tools which has been particularly successful in breaking through traditional barriers and producing the desired results are Kaizen events. In these events a team is compiled and dedicated to identifying and implementing solutions over the span of a couple of days. Because of the focused activities and synergy of the team, the problems which had heretofore lingered are eliminated. Furthermore, because of the immediate success of the team and visible results, energy and passion is generated which helps to carry the improvement beyond the specific Kaizen even performed.