CASE STUDY – This automotive parts supplier based in southwest Spain is discovering the power of lean thinking applied to recruitment and Human Resources.
Words: Eugenio Serrano Ylleras, CEO; José Manuel Tirado Fernández, HR Director; and Sheila González, HR Manager – Deutz Spain.
Many lean people think that “respect for people” – one of the two pillars of the Toyota Production System – is about greeting employees in the corridors or not yell at them. That is important, of course, but there is more to it: respect for people means to give everyone the opportunity to excel at their job.
We have learned this the hard way. Deutz Spain has been on a lean journey since 2012, and we are quite strong on the technical side of lean and on the application of its principles and techniques in production. Until recently, however, we felt we weren’t doing enough to engage and develop our people – which invariably resulted in the difficulty to sustain results and ensuring that lean is embraced consistently across the business.
That’s why, in 2017, we decided to change the way we manage our HR Department, focusing its efforts on the employee. It sounds obvious, but it isn’t: what we experienced in the past two years was a radical change in our department and in our way of thinking. We essentially reached a point where we knew we only had two ways of doing it: either we kept assuming we knew what our employees wanted and acted accordingly, or we admitted to ourselves that we didn’t know everything and that we had to try something different. We picked the latter.
We started by reaching out to our people with surveys that aimed to understand what we did well, what we didn’t do so well, and what we could do that we were not doing. The surveys were organized as part of voluntary sessions with 20 people maximum, and it was great to see that 84% of our employees took part in them (a total of 303 people). This goes to show people were hungry for change!
Once we gathered the results, we segmented them in five areas – each corresponding to a different level in our management system. Our goal was to create a HR system that would enable us to improve the engagement of our people, so that we could provide more value to customers and, in turn, make our stakeholders happy. We believe that improving engagement is the first step, after which everything else comes naturally. In our vision, the sustainability of our growth (and therefore the future of our business) is directly related to the engagement of our employees. That’s what we based our new five-year HR strategic plan on.
A PLAN FOR EVERY PERSON?
The lean HR strategy includes some of the most common communications tools a business has its disposal – from an internal magazine to an App that we used for announcements (we built it in response to the fact that information typically reached the shop floor completely distorted), which has been an incredible success with an 85% opening rate for new messages in the first hour.
Our efforts to engage with people are not limited to one-to-many. We also invest a lot of time in one-to-one conversations. In this sense, the most important initiative we introduced (and perhaps the most impactful) is the 30-minute meeting the HR department organized for each person working here – typically on the day of their birthday. This informal get-together is an opportunity to discuss the performance of the company and touch base with the individual to address any questions they might have about their career plans. More importantly, it’s an opportunity for people to open up about the problems they experience – on the job and at home (it would be hypocritical of us to say that our HR strategy is based on the employees and then not even know what they look like). At the end of the meeting, the employee is given a thank-you card they can use to buy sweets at a local bakery here in Zafra. Our surveys tell us that people really love the meeting: they tell us it makes them feel listened to.
Speaking of listening to people, we have also improved our suggestions system. In the past, this lacked a standard, which meant that people made a suggestion and rarely heard back. They didn’t know whether or not their suggestion had a chance of being implemented.
Offering equal opportunities is very important for us. To this end, we have introduced an objective system to rate each candidate for a given position, whether they intend to join Deutz Spain or simply get a promotion. Our criteria are very much oriented towards people development: so, a candidate’s skills set weighs in for a 70% and their experience for 30%. Different skills levels give you access to different positions, and each position has a specific salary linked to it.
Internal people can access a ranking any time they want, which tells them what they can do to improve their situation and increase their chances of success. Knowing exactly where you stand helps you to make the right decisions you need to make in order to progress; it’s an incentive to develop your capabilities. We do whatever we can to allow a person to join a course, whether it means assigning them a different shift or giving them a paid leave (nobody should be punished financially for wanting to learn new skills).
We offer as wide a range of training programs as possible, from English language classes with native speakers to lean training. For this, in particular, we partner with Instituto Lean Management to offer our people the Lean Practitioner Program. We have also offered “Dual Professional training” since 2012, as well as a High Potential Program with the University of Extremadura. Under this program, the four best performing students from the School of Engineering and the two best performing students from the Dual Professional training have the opportunity to participate in a year-long rotation in the Quality, Engineering and Production departments. The goal of the program is to identify potential managers (60-65% of participants end up staying with us).
We are currently in the middle of a very exciting project: we are building a not-for-profit Business School on our premises, which will boost our ability to give people the skills they need. The school will mainly provide professional training (like post-graduate courses in Industry 4.0), including two masters on lean management and lean six sigma. The site will also host workshops and conferences.
At Deutz Spain, we want to create an ecosystem in which we can recruit and retain talent and better manage the way people move across the company. To us, all this has to happen within a meritocratic system, in which everyone has access to the same opportunities. So, we evaluate people’s capabilities and performance and help them see where their gaps are. Based on that, we assign them to a different course (we have 27 for capabilities development and 27 for performance improvement). The best part of this system is that it allows people to see what skills they need to develop – every job has a set of skills the person holding it has to have – and makes it impossible for anyone to cut corners, ensuring everyone gets a fair shot.
Finally, we couldn’t strive for respect for people if we didn’t address salary inequities. Based on our internal data and statistics we gathered from the market, we identified a range: so long as salaries are within that range, we are being fair to our people. It is our job to raise the salaries of those who, for one reason or another, find themselves below that range. Those whose salaries feature higher on the graph than the range are typically given more responsibility.
A company that treats people equally and respectfully will be able to engage everyone, and better engagement is a win-win for everybody involved. We truly invest in our people here at Deutz. Our biggest failure would be to have someone work for us for years and not see that person grow in that period of time: to us, untapped potential is waste. Pure and simple. That’s why, in the HR department, we want to make sure that everyone has the opportunity to develop all the capabilities they need to have to do their job well.
Eugenio Serrano Ylleras is the CEO of Deutz Spain.
José Manuel Tirado Fernández is HR Director at Deutz Spain.
CASE STUDY – Starting with a series of pilot sites, the NHS is hoping to engage the Kata coaching approach to really spread an improvement culture to staff and patients.
Words: Ann Hill, Improvement Practice Consultant, NHS Improvement
The Health Foundation describes an organizational approach to improvement as one that “aims to embed a culture of continuous improvement and learning, along with the means to make it a reality”. The arguments as to why improvement is necessary are well rehearsed: the need to reduce variation in patient outcomes, improve patient, carer and staff experience, and effective stewardship of resources.
There have been a number of improvement approaches and methodologies used within the NHS. Lean has featured regularly, and lean-based activities are cited frequently in many NHS Trust board reports. However, systematic and sustained implementation is not common.
In 2015, NHS Improvement (NHSI) – the national body that regulates delivery of healthcare – announced a five-year partnership with Virginia Mason to work with five NHS Trusts to develop a lean culture of continuous improvement. Following the success of the Virginia Mason Partnership, in 2018 NHSI started the Vital Signs program, whose vision is for every NHS staff member to “know what their team improved last month, what they and their team is striving to achieve this month and the next” and to enjoy the improvement work and learn every day from it. The program focuses on delivering transformation through improvement, creating a learning culture and developing the right management behaviors.
Vital Signs is working with a number of health and social care providers to support their lean transformations. Each of the organizations within the Vital Signs program has been given the opportunity to test the Toyota Kata methodology and incorporate it in their approach to improvement.
Mike Rother describes Toyota Kata as a tried-and-trusted way to develop a test-learn-adapt, “growth” mindset. The significance for the NHS is that this approach can help us to develop new ways of working and enable our staff to improve, adapt and innovate as part of their job – which is critical in the ever-changing and often unpredictable world of healthcare. (We are grateful to Mike and Beth Carrington who have been very generous in sharing their knowledge and providing advice, challenging and coaching us.)
The first step was to develop an understanding of Kata within the Vital Signs team, so that we could consider the approach going forward. My colleague Dr. Joy Furnival (Practice Consultant) and I attended the Kata for Daily Improvement workshop offered by the University of Michigan, which proved invaluable in helping us to understand. A visit to Zingerman’s Mail Order enabled us to see both familiar traditional lean production and Kata working seamlessly side by side. We have also developed a fruitful relationship with Maurene Stock at Mercy Health in Muskegon.
Working with Beth and Mike, we created a series of four short modules to guide the development of the kata “advance party” in each site. Joy and I delivered these in November 2018, with a second coaching session from Beth. Each delegate was then to practice the Starter Kata (the first step in our deployment of the Kata methodology) themselves, identify their own “advance party” i.e. begin their own deployment of the Starter Kata.
Development block workshops have been attended by executives, management staff, senior and junior clinical staff across medical, nursing and Allied Health Professional groups.
We are learning how to deploy kata, using it to create the conditions for daily experimentation in the workplace. We now have some insight into how much practice is needed to acquire scientific thinking skills.
Our initial aim is for learners to practice both starter learner and coaching kata. As we develop proficient learner and coaching capability, the intention is then to formally align kata challenges to delivery of organizational True North objectives.
Our learners have chosen a mix of personal and professional challenges. Personal challenges have ranged from acquiring new skills, improving fitness and creating a morning routine to ensuring there is time for breakfast (not always a given). Early professional challenges focus on areas we know are pivotal to the provision of successful care – quality and delivery of services, safety improvement and contract management. Examples include the timely and consistent triage of patients on arrival in the Emergency Department, improving the compliance with hand hygiene standards or HIV screening of patients on admission with Community Acquired Pneumonia.
Dr Aklak Choudhury, Consultant Respiratory Physician, University Hospitals of Derby and Burton Foundation NHS Trust, provides a patient story demonstrating the impact of his kata practice. A patient told him: “Looking back, it explained why I had been so ill recently. I wondered however why none of the doctors before offered me a HIV test. If I was detected earlier, I could have been commenced on treatment earlier. I might not have had deteriorated so badly.”
Practicing kata provides a mechanism to directly influence individual patient’s lives. From a clinical perspective, this is often underplayed in lean programs in which we talk about value vs waste, and the perception is that the focus is on efficiency rather than care. In the face of this perception, clinical staff is often skeptical about lean thinking: they see it as non-sustaining and managerially led, with clinical staff following after.
As we began to tackle these challenges, we realized we can indeed delivery improvement. But what else did we learn?
To begin with, our teams are telling us that the hardest part is to get started. Initially, Kata feels like an alien way to work compared with how we currently approach our problems. For example, one organization is struggling to ensure consistency of practice among their advance party due to the impact of differing shift patterns. (This is both an obstacle to overcome and an important learning in how we choose our advance party.)
In the early days, discipline is key. Both learner practice and coaching sessions are essential. Rhian Slattery, Executive Lead at Livewell Southwest, systematically scheduled daily sessions across her organization. Rhian says: “When I didn’t practice, I didn’t berate myself; instead I did a learning cycle and learned from the experience understanding what the obstacle was that prevented me from practicing. This proved motivational to carry on.” Sarah Pearce, Community Urgent Care Service Manager at Livewell Southwest, now begins her day with Kata – before even “switching on her computer”.
Learners had said it has taken between 10 and 30 coaching cycles to feel comfortable in practicing. They have quickly gained confidence to experiment and they are developing new target conditions. In some cases, they are even asking for new challenges. Charlotte Power, a QI Facilitator East Lancashire Hospitals NHS Trust, told me: “I feel that Kata helps to make improvements more manageable. Practicing Kata has helped me to focus on a specific improvement aim and allows me to conduct tests related to this aim on a daily basis.”
There has been a much more systematic approach to achieving goals. A regular reflection is that people have experimented with ideas they would not have considered previously.
Reflecting on her experience with Kata, Julie Pearson, a therapist at East Lancashire Hospitals NHS Trust, said: “It’s great to be able to learn with someone, and break down the task into bite size chunks, try to resolve it, learn from what you have done, and try something else. To reflect on what happened is also great, rather than just do it and change it.”
Feedback from management has also been positive. They tell us that through practicing Kata, they are moving from knee-jerk reactions to problems to scientific problem solving and engaging their staff at the gemba. As managers, we are learning to be quiet and let our learners do the talking!
The structure provided by the kata storyboard guides learners to use data systematically. This is beneficial in that it not only demonstrates evidence of progress, but also teaches learners to be understanding of improvement data in other areas of their working life.
We need to consistently work to maintain the integrity of the kata: we have experienced the reaction of staff wanting “to be a coach” without having developed the discipline and understanding that comes from being a learner. We know, for example, that if Kata is seen as a tool, the five coaching questions are seen as a “miracle cure”. Creating an environment for learners and learning to improve through practicing scientific thinking isn’t an attractive marketing ploy for executives who short on time and high in demand, which has taught us we need to improve our messaging.
There is also a sense that ultimately the burden of assurance reporting will be reduced. Managers coaching at the front line are seeing real-time progress, whereas previously they would have asked for a report to be presented at a committee.
Relationships have improved and the rigor and safety of the coaching questions means security and predictability are provided through the coaching conversation. Dr Choudhury commented: “Traditionally, the NHS is used to command and control (as can be seen in the way managerial hierarchies are split into divisions in most NHS trusts). The learner-coacher dynamic in Kata is different: the coach supports the learners through their learning by experimentation and provides mentorship rather than giving the learner direct commands to carry out. The Kata coaching is more aligned to the relationship between the learner pupil and Mr Miyagi in Karate Kid than to Darth Vader and the Emperor in Star Wars!”
It is the close relationship people are creating with their line managers, enabled by coaching, that is making it safe to experiment. Interestingly, there has been reflection on the impact that scientific experimentation and coaching may have on the clinical educator and student relationship. Could kata also enable better relationships and understanding of the often differing perspectives of medical staff and management teams?
Using the starter kata model, we have been able to practice the coaching kata to support current learner practice. Our current experiments aim to understand how to spread the practice. Our first learners are now taking on their own learners.
High-quality coaching is key to success, which is why it is our next major development priority: we are planning a coaching development block in September. To access the coaching block our current learners will have to demonstrate basic competency with the Improvement Kata pattern, through their story boards.
There is so much we don’t know still, but through experimentation we will understand more and more. We know that conditions for success are different in each of our organizations.
A question we have been asking ourselves is whether or not a strong background of quality improvement or lean improvement skills and knowledge are critical to success with Kata. Early indications seem to suggest that this is not the case, and that diligent and systematic practice is much more important.
So will the kata be the breakthrough enabling the NHS to develop that “learning culture” that so many programs – even the “successful” ones – have failed to deliver in the past?
Our early experiments have demonstrated the potential of kata to unlock the creativity and potential of all of our staff. With demand for care going up every year, the NHS is constantly struggling with staff capacity. This means that taking people away from their daily work to participate in improvement events is not always an option; we hope that Kata will help build the improvement into our every-day work. We certainly see it as a great way to engage staff and patients.
Using kata is enabling us to learn to learn the conditions for success, thus enabling the Vital Signs vision to become a reality.
Ann Hill is an Improvement Practice Consultant at NHS Improvement.
FEATURE – What can the world of lean and the world of education learn from one another? The author reflects on the synergies between these two realities.
Words: Dave Brunt, CEO, Lean Enterprise Academy
I believe we have a problem in the lean community. Too many people still think that all it takes to learn lean thinking is to take a course or get certified. I fear that this over-reliance on certification will cause the essence of lean as a learning system to be lost.
The reason behind this is that lean can only really be learned on the job. That’s why lean coaches always insist on “going to the gemba”: we know that is the only place where lean principles and techniques can truly be understood.
The education world, we often hear, has similar issues: students rarely leave school with the practical skills they need to face up to the challenges the world will throw at them. The educational world needs to produce students who have the willingness to learn, enjoy learning, and have the ability to unlearn and re-learn. Why is this important? Because the idea of staying in the same job for life, a given for many in my generation, is simply no longer a reality for today’s students. We live in a different world now, and we can’t expect a 20th-century education system to meet the needs of 21st-century students. We need life-long learners.
Over the last few years, as I reflected on this topic, I came to the realization that exploring the synergies that exist between the lean business world and the education world is one of the most important things we can do to meet the challenges of our changing world. Think about the common criticism that traditional education provides theoretical, rather than practical skills: lean thinking naturally lends itself to offering an alternative to this, because it is based on hands-on learning that takes place on the job. In fact, there is an increasing number of educational organizations that are embracing lean thinking, and I have no doubt educators have a lot to teach lean practitioners too.
To me, there are five key questions we currently need to answer if we are to find a solution to the problem of traditional education. Here they are:
What is lean learning?
How can we improve the way we learn lean?
What’s the lean approach to problem solving?
What can lean organizations learn from the world of education?
What can the world of education learn from lean thinking?
In a bid to answer these questions and get a conversation started within our community, the Lean Enterprise Academy has partnered with Tony Lamberton and The Learning Trust in Chester to organize the 1st Global Learning Lean Summit. The reason we are working with Tony is that his organization has been running pioneering experiments with lean in education for years. It all started at one of their schools, Christleton High School, a large high performing secondary, which introduced lean principles back in 2013 with the help and guidance of Toyota.
With our summits, we at LEA have always strived to bring practical, hands-on learning to participants. Over the years, we have had companies like GKN teaching attendees problem solving, or Toyota teaching them standard work. The idea was to give participants takeaways they could use right away, as opposed to just theoretical knowledge. With our event in October, which builds gemba walks into the program, we are going one step further. Not only will attendees have the unique opportunity to learn how Toyota – the leanest company in the world – develops the capability of its people and contrast it with the way too many organizations do it (sending people to a course, giving them a badge, or getting them certified); they will also be able to visit and experience The Learning Trust, as well as Chester International School (CIS) an innovative government funded lean secondary school which addresses some of the key problems in learning and readiness for employment.
Both at the Trust and at CIS, trail-blazing lean experiments in education are taking place: one of them encourages students to influence the teaching they receive by defining what’s valuable and what is not. Another year-long experiment, at Queen’s Park High School, is leveraging Rosenshine’s Principles of Instruction to encourage 500 students to explore kaizen and independent learning. Both experiments reflect Tony’s vision of introducing the lean idea of “pull based learning” in school, with the purpose of turning students into independent, life-long learners. This is truly inspiring work!
The aim of the Global Learning Lean Summit is to bring people together to explore the interrelations between the business and education environments and see what one can learn from the other. Join us on October 24th and 25th in Chester and let’s figure out together how we can incorporate the best business and education have to offer.
Join the conversation! Click here to view the agenda of the event.
Dave Brunt is the CEO of the Lean Enterprise Academy in the UK.
INTERVIEW – A former VP of Operations from Thales tells Catherine Chabiron how he and his team turned around their department by committing to lean thinking and focusing on people development every day.
Interviewee: Norbert Dubost, former Thales VP Operations
Interviewer: Catherine Chabiron, lean coach and Board member of Institut Lean France
Catherine Chabiron: As VP Operations in the Microwaves & Imaging Sub-systems Division of Thales, you and your teams achieved some incredible results over the last two and a half years – a 50% reduction in late deliveries, a 50% reduction in customer returns, a 30% increase in cash, a 20% increase in productivity, 30% less scrap and reworks, 50% less work injuries, a 20% drop in absenteeism, and the number of improvement ideas by year was multiplied by 10. How did you achieve this?
Norbert Dubost: Lean management is designed to work seriously, deeply and with method. I would say it is a machine to transform industry and make it successful. Lean is a long-term commitment and I believe the role of the executive is to transform his or her company in a sustainable way.
Yet, if you asked my former bosses and shareholders, they would not be so enthusiastic because the non-quality costs we could measure only showed a 20% reduction versus the 40% I promised. I have always been too optimistic when playing cards, that’s my weakness. I was probably too confident when I took over the position, but I thought I could use this last step in my career before retirement to show what lean could do in as dire a situation as MIS was in. I wanted to show them what lean had taught me and how I could help them achieve a complete transformation or recovery. Come to think of it, I wanted to prove it to myself.
CC: If you had to start over again, what would you do differently?
ND: In large corporations like Thales, operational communication is in the hands of Finance. If you can’t convince the CFO, you are doomed because he or she is the communication channel that is listened to as far as results are concerned. Corporate won’t fully hear you when you improve industrial KPIs, because they prefer to keep their eyes on the bottom line. They might be convinced to check the non-quality costs. So, if I had to do it again, I would pay much more attention to two things:
Use their language to prove my point (for example a combination of my lean strategy hoshin and the roadmaps they use to plan ahead).
Spend more time with the CFO, link everything I do to something he can relate to (like non-quality costs), and negotiate more realistic interim P&L results.
A CFO’s thinking and budgeting is built on the Bill of Materials routings and data entered in the system by technicians from the Methods Department. They use it to calculate what the results should be, but routings in the systems are far from real life: I have seen routings in SAP with operations lasting two weeks! How accurate can that be? In the end, they build standard costing and consequently budget on sand.
CC: Can you give us a real-life example of a routing?
ND: On any given routing, what you will find is something like this: one operator will do it in 10 minutes, another in 100 minutes, the average of the team will be 70 minutes. Our real challenge is not to explain gaps versus budget, but to bring down everyone to 10 minutes.
CC: Are you saying there were no standards for this in the Microwaves & Imaging Sub-systems Division?
ND: Very few indeed! The size of our stock was directly related to the absence of standards. When you have no repeatability, you cover up with inventory.
By the way, when you are educated, hired and developed into a manager, you are totally unprepared to see the importance of standards and yamazumi. Routings in SAP are at best a sequence of operations but they are far from the minute details we need to go into to define the best gesture in time and quality.
Nobody is interested in standards. The disconnect between operators and management is huge. They are in two parallel worlds that never meet in our big corporations. One of my predecessors had simply stopped going to the gemba. And my middle managers were afraid to go, like a tourist arriving in a developing country who is afraid to leave the beach resort to go see the slums.
Conversely, Toyota works on the capillarity of the two worlds, using “fertilizers” – such problem solving or quality circles – to grow ideas and nurturing both worlds with kaizen. Thanks to the lean approach, as you can guess from the operational results you mentioned, we did put MIS back on track.
CC: How did you manage the lean transformation in MIS?
ND: I started by introducing pride in the work. We implemented Jidoka (we call it Stop-and-Fix) and introduced takt time in minutes when everything before was counted in days or weeks – if not months. When on the gemba, I was at times tempted to select different elements to focus on – for example, trying suggestions but leaving pulled flows aside for a bit. But real lean calls for the complete application of TPS principles: Just-in-Time, Jidoka, standards, kaizen, mutual trust, employee satisfaction, and of course an ever-lasting focus on the customer.
One must not underestimate the technicity of lean. To fully understand and develop lean techniques takes longer than one thinks (think of pulled flows, or problem solving). I see this like an orchestra playing music, a sophisticated technical language that requires people to work together, so that they hit the note at the same time without looking at each other.
And just like in an orchestra, you must invest time and training to: 1) learn to play your own instrument (deepen the understanding of your job with kaizen and standards); 2) read the music (learn to recognize the signals for action and timely send your own signals); 3) practice as a team to play to the beat (learn to react to anomalies, practice teamwork, keep to the takt).
Lean is sophisticated, and you have to work hard to succeed at it. Luckily, you can derive a great intellectual and scientific pleasure from it.
CC: Can you tell us more about this notion of time, beat, and takt?
ND: When you introduce takt time and Kanban, you change the overall beat of your plant. With Kanban cards piling up on your launcher, your time becomes that of the Takt. In Thales MIS, the takt is still around one hour on average (which is very far from the automotive standard of roughly one minute – as in, one car produced every minute). But to see a new Kanban card added to your launcher every hour leaves little time to deal with reworks and anomalies.
One of our biggest issues in MIS was that, as we had left the operators alone on the shop floor and failed to properly train new ones, the quality of the right-first-time assembly varied immensely. In some instances, 70% of the product actual cost was scrap, rework of parts and gestures at work stations, waiting time, lack of training and, generally speaking, non-quality costs.
Now that we had the tension provided by takt time, we could implement Stop-and-Fix, which was not exactly stop at each anomaly, but stop at first doubt (we practically had no clear standards). Fix did not mean we had found the root cause to resume production, which was impossible if we wanted to stick to takt. What it meant is that we had determined the best conditions to resume production. Containment measures, small kaizens at the workstation and improvement ideas can be managed within the team and the takt time frame, but we had to find other ways to deal with major or transversal issues. This is when we started with Fix Experts and A3s, to try and improve the problem solving (which caused me quite a number of hot discussions with my sensei as he pushed for Quality Control circles with people in operations, and was wary of the development of experts in problem solving). Still learning, as you can see.
CC: What did lean teach you?
ND: I am passionate about visual management at the gemba. I like asking lots of questions about things I don’t understand, and spotting anomalies to start working on them with the teams. I am amazed by the total disregard some people have for visual management. “Why do you want me to implement clear signals? I don’t want to offend them by explaining in detail the next task they have to perform”. What they don’t see is that clear signals take a mental load off operators, making their jobs easier and more fluid.
My big revolution was to start going to the gemba very regularly (every Tuesday, for a full day). When I came out of a gemba session, I felt both elated – “Great, we learned plenty” – and frustrated – “We see the problems, but how to handle them?”. What I learned is that a transformation is fastest at the gemba. I am fascinated by the operators’ ability to engage: Thales operators have been there for 30 years holding the fort and are proud of their products (and sad to see the waste around it). They never let go. Kaizen and kanban signals talk to them, but so do muda and mura. People on the floor in MIS have really reacted well to lean.
Another important thing I did was to apply lean to my own activities as Operations VP. How can you entice people to think lean if you don’t live it every day yourself? I started changing my relationship with time, which up until then had been defined by project planning, milestones, long meetings, days, weeks, months. I started introducing shorter time deadlines in my day, put a clock in my office, and reduced the length of the meetings to a maximum of 30 minutes.
I also maintained an Obeya in my office that managed KPIs, of course, but also transformation projects led by my staff, Stop-and-Fix alerts that could not be solved in time in Operations and were escalated to me, major customer issues, things to learn (deep dives), and TPS tools under construction.
One critical thing I learned on the gemba is that no sustainable progress can be achieved without detailed attention to people development. Take the example of the Thales MIS site of Thonon Les Bains. They worked hard on the subject and found that the mastery of 250 different technical processes was needed to build our products right-first-time. And those processes needed to be taught and rehearsed again and again, like in sport, because some of our products are not manufactured at a high frequency. What they are looking at now is pulling the training need based on the next products to produce, instead of pushing a massive deployment of training that is hard to manage and will become obsolete within days if the gesture is not required immediately.
By the way, we created an internal school in MIS, called the “Tube Academy” (this is what MIS makes, electron tubes and transmitters at the heart of many of today’s high-tech systems. When you connect to the Internet via satellites, wherever you are in the world, nine times out of ten you do so through a Thales tube). We need such internal schools in each site.
CC: Why do we underestimate this need for people development?
ND: We, at top management levels, generally make two wrong assumptions:
Industry is a complex subject. To survive, we fail to understand that specific techniques and detailed know-how are just as hard to acquire and retain as it is for a top-performing sports team.
In large corporations, we believe we have recruited the best people, with the best know-how, but that is wrong. We all need to continue learning, all the time.
CC: What would be your recommendation to other top managers?
ND: I am frustrated to have discovered lean so late in my career, so do not delay investigation and learning on the subject. I truly started to understand lean in 2010 and have been a convinced advocate of the approach ever since.
Another thing I learned and would like to pass on is this: you can actually count on your teams, if only you take the time to explain. Trust them, and they will repay you ten-fold. But no lean transformation will work unless you lead it yourself. That’s the role of an executive.
As you start, don’t underestimate the importance of the guidance and support a sensei can provide you with. Mine gave me a completely new sense of what my job was.
Norbert Dubost is a former VP of Operations at Thales.
Catherine Chabiron is a lean coach and member of Institut Lean France.
CASE STUDY – The story of this NGO shows how visual management enables improvement and removes barriers among teams. It is a first, fundamental step towards a lean transformation.
Words and Copyright: Steve Bell and Karen Whitley Bell
“Who are these visuals for? The leadership, or us?” one team member asked as the practice of Obeya was introduced at a large organization launching a full-scale transformation effort complete with an enterprise-wide reorganization and newly formed multi-disciplinary, multi-location teams (Value Stream teams parsed into “tribes” and “squads”). Teams were also coping with a host of new roles, new reporting structures, and new ways of work. Given the scale and speed of change within this organization, it’s easy to understand why this question was being asked. As master coaches halfway around the world, we pondered how to help this newly minted coaching community help everyone across the enterprise unpack this question—understanding not only the question, but, more importantly, why it is being asked. At its core lies a deeper question, which keeps C-level leaders up at night: “What does it take to realize transformation success?”
Travel with us from this Asia-Pacific enterprise to Kampala, Uganda, where six years ago we engaged in some pro-bono work to help NGO Grameen Foundation scale a successful innovation from Uganda to other developing countries in Africa and around the globe. This innovation involved hiring locals with knowledge of farming and customs, and equipping them with specially programmed Smartphones to visit rural farmers, where they shared information to help these farmers optimize crop yields and sales value. Thus, they enhanced local knowledge using digital capabilities to help improve the lives of those who otherwise would not have this knowledge. They called this information delivery system the Community Knowledge Worker Program (CKW). We were there to help the CKW team transform their heroic, just-make-this-happen approach to scalable, repeatable processes that could be adapted across different cultures and government practices.
After a learning day on the field with the program’s customers deep in the countryside of Uganda, we turned our gemba to Grameen Foundation’s Kampala office, comprised of two large rooms, one with movable tables arranged as a single long table to seat everyone and the other arranged as an open area with small cubicles serving as a working space for each person. Clustered on one side of this room were the cubicles of the CKW team (about 25 people) and on the other side, “IT”, another 25: two very distinct areas with what felt like an invisible line between the two.
We moved to the long table to kick off the session, and were surprised when the IT team did not join in. The Country Director explained that the IT team delivered the NGO’s principal product—phone-enabled financial services—and that the revenues from this, coupled with donor support, had enabled the development of the rural CKW program, including expanded hiring to operate it. The IT team saw the CKW program as drawing resources away from them and from their principal work. He shared that for many NGOs, the pay scale was less than local for-profit organizations, and since programming and technology service management were in-demand skills, it was common for for-profits to hire away entire IT teams. All technologists were in demand, and those with experience in financial services even more so. The Country Director was carefully weighing the needs of the startup CKW program with the needs of his existing operations – a balancing act many leaders face on a daily basis.
So, we proceeded with the CKW team and without IT. We started by mapping the process. Based on our conversations in advance, we’d recognized that the traditional value stream map approach would not convey the complexity and inter-relationships. This was not a linear process. It was multi-dimensional. We guided the team to visualize this complexity. This approach became the basis of what we would, over time, evolve into what we call a Multi-Dimensional Value Stream Map. We handed out Post-Its and pens. After the first few rounds of facilitated questioning and encouragement to write what had just been said, the team caught on and the tenor of the room rose, from silent, individual writing, to full-blown animated engagement as the team began to see the connections—and challenges of their work—in a way they never had before. Now and then, as the energy and noise level rose, members of the IT team would periodically look in. At breaks, one or two would come examine the wall, occasionally picking up a pen and silently filling in a blank left for IT, or add a missing IT input, but for the most part, the IT team remained aloof.
We followed this with a speed course on disciplined problem solving, stand-up rituals, and team and individual visualization tools like kanban. On our last day, the IT team asked for some of our time, and we provided some coaching, blending Agile, Scrum, and Lean as appropriate to the situation. Too often, in too many organizations, these practices are viewed as competing domains. Yet they are founded on many of the same principles and share the same goals. Each discipline has much to offer, and the enterprise that recognizes this and brings these approaches together has, in our view, an advantage in this increasingly digitally enabled, global economy.
When we left Kampala, the walls around the CKW team were covered in visuals, including team flow boards with demand prioritization and WIP, problem boards, metrics toward targets, and team status boards with information like who was where during the current week. At each desk, personal kanbans were bordered by pictures of kids and family and friends. The team visuals oriented everyone to the work that needed to be done right now, the problems or obstacles associated with that work, and the work that was waiting to be done once resources became available. The personal kanbans offered this same information at the individual level, providing additional depth behind the verbal daily standups.
A few months later we caught up with the Country Director. Something remarkable had happened. Productivity was up, waste was down, processes were continuing to be refined and improved and standards were being readied for roll-out in the next wave of countries. The Monday morning “all hands” ritual at the long table had transformed from a multi-hour time suck to quick daily standups. The CKW team was in full-on collaboration mode, with people constantly viewing and updating the team visuals, and leaning over their colleagues’ shoulders to view the personal kanbans. All day long he’d hear, “I can help with that.”
He too started visiting the teams’ visuals, though he admits that, at first, the team was a bit unsettled by this. While it did help him to see the status, the real value was seeing the obstacles that were holding the team back, obstacles that often required his involvement to resolve or remove. They now invited him over whenever something came up. He was now a collaborator, not just “the boss.”
All this was great, he added, but there was more. The IT team had been quietly observing all of this. Now and then they’d step close to examine the visuals. Before long similar visuals began to appear on their side of the room. Then one day, as an IT team member was studying one of the CKW team’s visuals, he leaned in and said, “I can help with that.”
Back to Asia-Pacific, and to your own organization. What is the goal of a “transformation”? To transform means, quite simply, to significantly change. What are we changing to? Billions of dollars are spent in organizations around the world in pursuit of this question. Ultimately, we are seeking what this NGO senior leader sees: a highly collaborative learning environment, where everyone brings their knowledge and experience together to create and continue to improve great customer experience and value.
To learn we must invite learning, actively sharing where we are, where we hope to go, and where we’re stuck. Making the work visible (physically, and when appropriate, virtually) is a way to help us improve our work. It’s also a way to invite and enable collaboration with our peers, with our colleagues who bring diverse knowledge, skills and ideas, and with leadership who can remove the obstacles that hold teams back. Of course, transparency requires trust, and collaboration at scale requires disciplined practice and structures, but one of the simplest ways you can begin to transform the way work is done is to visualize the work. Across a room, a campus, a company. Across time zones, capabilities, and cultures. Across any invisible line that separates one person’s capabilities and knowledge from another. Transforming the way we engage and work. Learning and collaborating. “I can help with that.”
For a view into transformation at scale, you can read about ING Bank’s journey blending Lean, Agile, DevOps and other disciplines to enhance agility and value in the book Accelerate, recent recipient of the Shingo Institute Publication Award. A free download of the section on High Performance Leadership and Management, including the ING learning journey, is available here.
Join Steve, Karen and many others at the Lean Digital Summit 2019.
More information here.
Steve Bell and Karen Whitley Bell are Master Coaches supporting enterprise transformation. They are the authors of numerous books and articles on the subject. Their most recent publication is the section on High Performance Leadership in the Shingo Publication Award winning book Accelerate. Steve is a previous winner of the Shingo Publication Award as lead author of the book Lean IT.
FEATURE – Following the recent CXO Summit in Singapore, a team from the Lean Global Network reflects on the partnership with SIT and its potential effects on Singapore.
Over the past three years, the Lean Global Network and the Singapore Institute of Technology’s Lean Transformation Innovation Centre (“the SIT Lean Centre”)have joined forces to bring lean capabilities to SMEs in Singapore. The primary purpose of the partnership was to create a sustainable path towards competitiveness for companies in the island nation, by developing local lean capabilities.
This has quickly turned out to be a multi-faceted, one-of-a-kind lean experiment that has produced learning at several levels. We believe our partnership represents a new model for academia around the world, one that combines classroom training with on-the-job learning (a staple of lean thinking). With this in mind, SIT faculty members joined LGN coaches as they supported the lean transformations of several Singaporean companies, so that they too could learn lean thinking at the gemba and later use what they learned to coach their students. At the Lean Global Network, we believe that the value of our work is determined by what happens when the project is completed – which is why both the SIT faculty members and LGN coaches have worked together to put in place a system to ensure that the companies continue their lean journey with the help of SIT Lean Centre.
On April 24, the SIT Lean Centre – the first product of the LGN-SIT partnership – held its fourth CXO Summit, which attracted over 400 participants. The theme for this year’s summit was “Transform Fire-Fighting into Lean Leadership”, with Mr. Ng Cher Pong, Chief Executive, SkillsFuture Singapore, as the Guest-of-Honour.
John Shook, Executive Chairman of the Lean Global Network, delivered his keynote speech on Organizational Stability, sharing ways to achieve stability and predictability at the workplace so that leaders can build effective strategic plans for their organizations. His presentation (which you can check out here) was followed by companies sharing their experience with lean transformation, applying the five core principles of lean, and striving for stability within their organizations. The companies presenting their stories included Four Seasons Group, Shalom Movers Pte Ltd, and Particle Measuring Systems Inc. SIT Faculty Assistant Professor Jawn Lim and Assistant Professor Lim Chun Yee shared their insights and main takeaways from the companies they were attached to on the Lean Skills Development Programme.
As ever, summits are a fantastic way to reflect on what we have learned. So, below, some of our Lean Global Network colleagues share their thoughts on the CXO Summit and the partnership with SIT.
Jikku Mohan, Product Strategy Manager, Lean Enterprise Institute
Our partnership with SIT was established three years ago with the twin objectives to improve the competitiveness of Singapore companies on the global stage and to develop local capability to spread lean thinking and practice.
Our journey with SIT has involved working with 25 companies across multiple industries such as healthcare, manufacturing, logistics, and food and beverage. It was a pleasure to hear the stories of lean transformation from these companies at the CXO Summit. The stories were inspiring and highlighted how organizations overcame challenges and grew in their problem-solving capability. SIT professors have done great job understanding and incorporating lean principles into their curriculum ensuring that future generations will have greater awareness and understanding of lean thinking.
We look forward to serving Singapore and further strengthen our partnership with SIT in the upcoming years to establish SIT as a hub for lean thinking and practice in South East Asia.
Matt Savas, Director, Lean Global Network
The Lean Global Network is a tremendously diverse consortium of 31 organizations that share a common purpose: make the world a better place through lean thinking and practice. The network – operating together – is much stronger than the sum of its parts.
There is no better evidence of this than our relationship with the Singapore Institute of Technology. SIT has made the most of LGN’s diversity and ability to influence a variety of industries. There is no doubt our work together will greatly benefit the entire country of Singapore.
It was a privilege to observe the work of LGN coaches and SIT faculty in organizations ranging from catering to healthcare. Even more encouraging was listening to students – mentored by SIT professors – who have braved challenging organizational environments to make positive change on workers and their work. SIT has clearly transformed the thinking of their students and enabled them to turn that thinking into effective action.
The long-term consequences of a steady stream of lean thinkers leaving SIT to join the Singaporean workforce is exciting. It is an honor for LGN to be a part of it.
René Aernoudts, President, Lean Management Instituut, The Netherlands
The CXO summit was another excellent example of what the collaboration between SIT and LGN has brought. The inspiring stories told by the organizations who attended the Lean Skills Development Programme showed how fruitful their work with the SIT Faculty was. It was very gratifying to see so many amazing results in terms of Purpose,
Process and People. It was great to run the Lean Learning Game Show both at the summit and in a one-day masterclass. This has proven to be a very interactive, fun and engaging way to learn about lean for all the participants. We at the Lean Global Network are very honored and proud to be a part of the lean journeys of these great Singaporean organizations.
Denise Bennett, Coach for Transformation and Improvement, Lean Enterprise Australia
Over the last 18 months, I have been working with SIT as one of the LGN lean coaches. it was a privilege to attend the CXO summit this year for the second year in a row. I was able to join John Shook for a session with Nursing, Hospitality and Food Services students from SIT, where they presented posters sharing their improvement experiences within industry. The quality of their work, application of the concepts, and depth of learning was heart-warming. The SIT faculty involved are doing an amazing job of integrating lean thinking and practice into undergraduate training. This is trail-blazing work. The Lean Global Network and broader lean community can learn a lot from it.
John Shook, Executive Chairman, Lean Global Network
The annual CXO Lean Summit – organized by our friends at the Singapore Institute of Technology – is always a great way to check in on the state of the adoption of lean thinking in Singapore.
SIT itself continues to grow and evolve at a rapid pace as faculty, staff, and students learn about and promote continuous improvement and innovation. University President Tan Thiam Soon shared with members of the LGN team his ambitious plans for SIT’s new campus. SIT is a very young (10 years old) educational institution and is expanding rapidly. Its youth and status as a newcomer present both challenges and opportunities.
As an institution of higher education dedicated to facilitating life-long adult learning, SIT is taking advantage of the relative lack of entrenched interests and legacy programs as well as the normal inevitable impediments to change. An example of the kind of experiment that may be possible: SIT’s new campus (to open in early 2023) will be the first university in Southeast Asia to have a multi-energy micro-grid network. As a distributed energy system, the micro-grid can operate independently from the national grid in times of emergency. What kind of energy experiments might that enable? I recommend you stay tuned (I will).
Arthur Poh, Director of the Technology, Innovation & Enterprise Division, Singapore Institute of Technology
We are heartened to have partnered with the Lean Global Network in 2016. Since then, SIT Lean Centre has achieved good progress in transforming the Singapore workforce and our enterprises, especially in the healthcare, engineering and service innovation spaces. Within the SIT Lean Centre, we work closely with companies to scope out the project statement. We give special attention to the organizational needs, goals and what the company aspires to achieve as a result of this lean journey. With the LGN, SIT is able to tap into selected global expertise to share best practices and solutions within our local companies. These can then adapt and deploy the solutions to meet their needs. This model has thus far been successfu and sustainable and we will continue to work with the Lean Global Network to achieve lean excellence in Singapore.
THE NAKED GEMBA – Value stream mapping is a fundamental tool in any lean transformation. The author takes us the most common mistakes companies make using it, so that you can avoid the pitfalls.
Words: Severino Abad, Lean Coach, Instituto Lean Management – Barcelona
When we are faced with the challenge of transforming our processes in order to deliver value to the customer, we need to have tools at our disposal that will help us make the right decisions. Getting to know how the process works and to detect interruptions in the flow is particularly important to achieve our improvement goals. This is why Value Stream Mapping is a fundamental tool for any lean practitioner.
We are lucky to have many resources to tap into as we try to understand how to make use of this tool, starting from the book Learning to See by Mike Rother and John Shook (essential reading by two of my favorite lean authors).
In this piece, I will share some of the lessons I have learned about the implementation of Value Stream Mapping over the course of many years and in many different environments.
First, we need to understand what this tool brings us:
VSM allows us to simultaneously visualize the flow of materials and information, through the flow of the process leading to the delivery of the value the customer expects. (In fact, Toyota refers to these maps as MIF – Material and Information Flow.) The goal of this representation of the flow is to identify waste. Moreover, as a good lean tool, VSM relies on standard symbols that make a map readable by anyone, whether or not they know the process at hand.
VSM established a common language that is used to find synergies among the activities necessary to create value. Think about this: when we talk about process flow, we are talking about process engineers; when we talk about material flow, we enter the realm of supply chain; and when we talk about information flow, we are really referring to logistics. We are all aware of the problems stemming from the difficulty in communication that often exists among different company departments (this is linked to both the fact that departments report to different people, who might very well have conflicting objectives, and to the fact that they typically use different indicators to evaluate their contribution to value creation). A tool that aligns different functions helps us to bring out the best in each of them.
VSM allows us to focus on a critical element in lean thinking – lead-time – and helps us to identify which places, activities or management approaches significantly contribute to influencing it – and whether or not this contribution is positive in the eyes of the customer. In this sense, through lead-time, VSM also allows us to evaluate the situation of a process from an objective and quantitative point of view.
VSM enables us to create a plan for the transformation of a process, by helping us to evaluate first thing the effort and impact that each improvement opportunity will have – thus ensuring the success of the transformation.
THE MOST COMMON PROBLEMS WITH VSM
So, what are the difficulties most commonly encountered when one tries to create a Value Stream Map? (To learn how to actually draw such a map, I once again encourage you to read Learning to See.) For me, one of the hardest things to do is differentiate between “how things happen”, “how we say things happen”, and “how things should happen”. This is a huge problem: the further away we move from reality and from what takes place at the gemba, the deeper we dive in the dark underworld of uncertainty and, worse, discussions and looking for culprits rather than root causes. We are not used to correctly “seeing” what happens around us, and too often we base our observation on guesses, interpretation and assumptions coming from our previous experience. All of this leads us further and further away from the reality of the gemba. But if we can’t reflect on how things truly happen, how can we agree on the best way to improve our situation?
The situation described above worsens when we have to quantify things like takt time, cycle time of operations, first-time quality, OEE (Overall Equipment Effectiveness), changeovers, batch sizes, or even the size of intermediate stock. Sometimes it’s a miracle we can still manage the process, despite all this! When real information is missing, we tend to use averages or worse, the numbers someone had put together when they tried to complete an analysis of the process.
A critical lesson for me refers to that person – let’s call him Manolo – who is able to greatly influence the different flows in the processes to the point that he can change the production plan (because he knows a more efficient way of completing the work) or change the strategy around materials supply (because he is able to foresee future problems). It is very important that this person be included in the VSM exercise, at least in the definition of the current state. Otherwise, we won’t be able to understand the real mechanism of the process and the tools won’t tell us where to attack. You might wonder how you can find Manolo in your organization. It’s easy: when he is on holiday or on sick leave, the process works in a completely different way or doesn’t work at all.
Another risk inherent to VSM activities is getting lost in the detail. It is tempting to go from 0 to 100 in a couple seconds, from not having mapped any process to wanting to map everything. This is, however, very dangerous for the team because it can lead to analysis paralysis rather than mapping the flow. There is a reason we decided to map a certain process – it’s what we need to “change” to provide value to customers – so we must avoid the “what ifs” and “what abouts”.
Another potentially dangerous situation we can find ourselves in is disconnecting the process of mapping the work and identifying waste from improvement and problem-solving activities. The risk here is to frustrate the teams who took part in the VSM exercise by not allowing them to pursue the opportunities for improvements they worked hard to uncover. By tying the two processes together, we would always know the potential impact of a project before getting started and use the value stream map to prioritize accordingly.
At times, I also see VSM used more as “decoration” and as a tool for information-sharing than for functional purposes. It’s all too common to find companies that believe that Value Stream Mapping has to be completed one time and that after that rely on the very first iteration of the map to inform and develop people. A good value stream map, however, is alive – reflecting the changes in our processes over time. This misunderstanding on the potential of VSM inevitably leads to information becoming obsolete (either following process improvements that changed the initial situation or, indirectly, because of the deterioration of unsupervised processes). Furthermore, when we merely use this tool to “explain how we work” we are not rewarding the giant effort made by our people to capture information at the gemba.
In the same way, limiting the VSM activities to certain functions in the business will necessarily result in a limited vision of the “reality” we face in our processes, which in turn will affect the results we can achieve. This approach turns a value stream map into another reason for conflict among people who no longer feel part of the results and conclusions achieved (when it could have been a document facilitating the vision of our current and future state and creating consensus on the measures to take to move from one to the other).
Finally, it’s common for organizations operating in non-manufacturing sectors to struggle to adapt VSM to their environments, where flows are typically less linear and homogeneous as they are in a production setting. So, how we map processes in an office, for instance, or in the development of projects? How can we reflect in our map the fact that the main interruptions in the flow occur when the process moves from one department to another? This is normally not an issue in manufacturing, where activities tend to either be “departmentalized” or affects flows that are mapped in the VSM. When it comes to describing these processes in non-manufacturing environments using the techniques used in manufacturing, I have witnessed some wonderful creative thinking over the course of my career. A great way to map processes and their interactions in complex environments is using swimlane diagrams (also known as makigami in Japanese) to indicate which function or department an activity refers to and separating them in lanes. This tool is particularly useful in environments where we are trying to map information flows.
In conclusion, Value Stream Mapping is a fundamental lean tool, but its application doesn’t always lead to the expected result. I hope this article helps you to avoid some of the most common pitfalls lean companies encounter when they try to implement it.
INTERVIEW – Atlantis Foundries was able to achieve zero defects for three months in a row thanks to machine learning. Here’s why the human component can’t be discounted.
Interviewee: Pieter du Plessis, former CEO, Atlantis Foundries – Cape Town.
Interviewer: Anton Grütter, Director, Lean Institute Africa – Cape Town.
Cape Town is sometimes called the “Silicon Valley of South Africa”. Yet, it was a pleasant surprise to learn that Atlantis Foundries became not only an African, but a global leader in the foundry industry using AI and machine learning to achieve zero defects on the truck engine block castings that they delivered to their customers in Europe and the United States.
In this interview Pieter du Plessis, the CEO of Atlantis Foundries at the time of this initiative, tells the story of how they used AI to solve a strategic business problem that you can read or view below. Given the hype about Industry 4.0, there are some valuable lessons in here from someone who actually made AI work in the real world.
There is much to learn from what Pieter shares with us, but I would like to highlight one aspect in particular. It has become fashionable to talk about going “beyond lean” in the rush to market Industry 4.0 technologies. To be sure, these new technologies are game-changing and cannot be ignored, but I think that referring to them as “beyond lean” is the result of a fundamental misunderstanding what lean thinking is about.
Before introducing AI, Atlantis Foundries invested in continuous improvement for many years to improve their casting defect rate from very poor to industry standard. This meant that, by the time they started experimenting with AI, there was already a problem-solving culture in the organization that they could build on. You will hear Pieter refer to AI as another “tool” in the improvement journey. In other words, just like we use 5 Whys as a tool to find root causes, there is now this very powerful tool called AI that can be used in situations where humans cannot cope with the amount of information that needs to be processed.
Like any other problem-solving tool, AI can be used incorrectly or inappropriately if you do not apply lean to the problem at hand. Asking what issue we need to solve has to be the first step, which will inform our problem-solving and make it effective. Atlantis Foundries thought very carefully about this question and that guided them as they figure out how to tap into AI.
This story shows us how important lean thinking is in making a success of new technologies like machine learning and AI.
Anton Grütter: Pieter, can you introduce us to Atlantis Foundries?
Pieter du Plessis: Atlantis Foundries is a spin-off of Atlantis Diesel Engines, an engine plant bought in the late 1970s. The brand then died away, but the foundry was bought by Daimler/Mercedes Benz to continue to cast cylinder blocks for trucks. Daimler has a foundry in Mannheim in Germany, and with the severe environmental laws in Germany they couldn’t expand their capacity. They were bought by Daimler in 1999 to make these castings. Atlantis Foundries exported all its engines to customer in the UK, USA, South Kores and Germany.
AG: Can you please explain to us why quality was so important to Atlantis Foundries?
PDP: Being so far away from the customer we served meant that, if you have any quality problems detected at the machining operations in the customer’s plant, the whole pipeline could potentially be contaminated. The cost of looking for quality defects in the pipeline – which could take six to eight weeks – is enormous. That’s why first-time right quality was so critical for us. Our quality costs were significant.
AG: How did you try to address this quality problem initially?
PDP: With the classical quality tools, like statistical process control, control plans, process sheets, and so on. Anything that traditional companies would do to improve quality. Yet, we reached a plateau, because the feedback loop was so long and the process was so complicated and full of variables. To find a pattern in those variables was difficult. A benchmark foundry making the parts that we made was typically running on 4-8% scrap, and we were running at around 6% – with an extra 1.5% at the customer’s site. We were mid-range.
AG: What made you decide to give machine learning a try?
PDP: We wanted to predict which component would be defective after machining in the US or Germany, and not ship it in the first place. Because your defect is a function of your process, there must be a pattern in your process that can be recognized. This way you know that, if the process is in a certain way, it will produce a defective casting. We are talking about defects that are below the surface of the cast and can’t be seen physically, nor found with ultrasonic methods because of the sheer size and volume. We wanted to predict, based on what the process was at that point in time, whether a casting would be scrap or not. At the end, we had a 70% success rate. We would say, throw these 10 castings away and we knew that seven would be scrap. We knew we’d throw three good ones away, but the cost associated was insignificant compared to what casting in the US.
AG: How long did you make that decision?
PDP: We started with machine learning in March 2017, giving Data Prophet [machine learning specialists in Cape Town] 18 months’ worth of data of the process and of the quality results (both internally and externally).
We didn’t have to generate new data. We only took the data that we had on a daily basis, which we never used. The most difficult task is matching the data to the component you make: we normally use time series – checking the process every half an hour, 40 minutes or once a day – but we still made a component every minute. We used to make 700 components a day, an enormous number if you think about it. Out of 180,000 truck engines built, at first we only had perfectly matching data for 7,000 blocks. So, we used that data to build the first model. As you feed in more data every week, the algorithm learns again. You can also start to do your testing to match exact components, which is quite critical for the process: when we make block number 1 or number 20, we know what parameters we should be checking, as opposed to randomly check at regular intervals. Essentially, our testing methods changed.
AG: How does this work in practice?
PDP: There are various types of artificial intelligence and machine learning. There are supervised and unsupervised learning. With unsupervised learning, the answer is not known; you give the machine the raw data and it finds the patterns in there. With supervised learning, we tell the machine whether the outcome was a good or a bad block and provide the process parameters for each; the algorithm uses brute force by calculating all iterations until it gets to an answer (however, we had 185 process variables, so you can imagine the complexity).
AG: Were there problems with people? Did they accept this?
PDP: We did have problems. There were many non-believers, including me. I was very skeptical at the beginning, because I didn’t understand how the specialists could just request data without understanding our process. Some of the engineers feared for their job, and thought AI was going to replace them. I underestimated that, as I thought clever, well-educated people wouldn’t be scared of AI. It took a while for people to understand it and use it, but the results were spectacular.
Using the model, we wanted to predict which block would be scrap in the US and, in the second phase, learn what we had to do to avoid making scrap in the first place. It went from predicting the scrap to prescribing the process. It took process parameters and calculated the region for them all (min 11.), which meant that our process limits were squeezed significantly and some of them were adjusted. The combination of these two things allowed us, in the second half of 2017, to achieve zero defects in three plants for three months in a row. This is unheard of.
I have spoken to some of the guys recently, and that trend is continuing – even though zero defects is not achievable all the time, because process parameters become so tight over time. And that’s why people will always be important in this AI thing: they will have to look at this report and decide what they need to do to the machine to enable it to achieve the desired outcome. You can’t tell a machine, “You can’t do that.” Machines are not that clever. The notion that AI will replace all humans is a fallacy. Maybe in a couple of centuries. Certainly much later than many people think.
AG: What advice do you have for people interested in Industry 4.0?
PDP: I think a lot of people are struggling with what Industry 4.0 really means. They say, “We have data, let’s do something with it.” For me, that approach is wrong. They should instead ask themselves what the biggest problem in their business is and how this additional tool can help them to achieve their goal. At Atlantis Foundries, for example, we wanted to prevent a scrap black in the US or Germany. Once we were able to predict which block would be defective, we wanted to figure out what we had to do to prevent it in the first place. You need a clear goal. Just doing Industry 4.0 for the sake of it is a waste of time.
AG: More and more are talking about going “beyond lean” these days when they discuss technologies like AI. What do you think about that?
PDP: In my mind, lean is about streamlining processes, reducing waste and making the work repeatable and efficient. To me, AI is another tool enabling you to do that. It’s not a silver bullet; it’s just another tool. As I got more involved in it, I quickly realized how far we are from machines doing everything by themselves with no people involvement necessary. We are incredibly far from that. The human aspect is important, because part of the process is human influences. If an operator doesn’t follow the rules, you can have all the AI in the world but you are still going to have a problem. So, for me, AI is not beyond lean… it’s another tool for lean.
Pieter du Plessis is the former CEO of Atlantis Foundries in Cape Town, South Africa.
Anton Grutter is Director of Lean Institute Africa.
INTERVIEW – A couple of weeks ago, our editor caught up with Toyota veteran Sadao Nomura. In this Q&A, he discusses quality improvement and leadership engagement.
Interviewee: Sadao Nomura, Toyota veteran
Interviewer: Roberto Priolo, Editor, Planet Lean
Roberto Priolo: Mr Nomura, thank you for your time. Can you briefly take us through your incredible career?
Sadao Nomura: Of course. I was with Toyota for a total of 37 years. I spent the first 17 at Toyota Motor Sales and another 20 at Toyota Motor Corporation. During my time at TMC, I provided kaizen support to Toyota Indonesia, Toyota Australia and Toyota South Africa.
After leaving Toyota, in 2002, I was President of Technol Eight – a parts supplier to TMC. In 2006, I was invited to join Toyota Material Handling as a Senior Advisor. My role was to lead quality improvement activities. I was at TMHC for 10 years.
RP: Over the course of your career, you have worked on both the OEM and the supplier side of things. What can you tell us about Toyota’s approach to support suppliers?
SN: Toyota organizes special workshops for its suppliers, aimed at engaging with them until they fully understand the Toyota Production System. The company also invites representatives of the suppliers to join operations at a Toyota plant to fully understand the work from the customer’s point of view. This way, they can experience the work first hand and realize how their own work impacts their customer.
RP: In your experience, what makes for successful training?
SN: A trainer should teach and train with passion, and always strive to create a good personal relationship with the trainee. I also believe it’s important for people to learn on the job (dojos are fundamental for that) and understand the problems that can arise from their mistake. This increases their sense of responsibility. It’s also critical that a trainer accompanies his or her trainees all the way, until they master the work.
RP: Can you tell us more about your work to improve quality across Toyota Material Handling?
SN: In my opinion, quality kaizen is the simplest way to approach lean. However, it does call for a deep commitment from senior leaders to continuously teach and guide their people until they become confident in their ability to produce a defect-free product. It’s a constant effort, something I did for 10 years – for example, issuing 300 A3 “Nomura-memos” to teach and guide all Toyota Material Handling plants. It paid off, since in all companies I managed in that decade we managed to reduce quality defects by over 90%. (Healthy competition among the different branches of the organization across the world played an important role.)
It took a while to get there: on the first year, my approach consisted in giving immediate feedback to team leaders responsible for a defect and using a visual system to make problems evident, but that didn’t work. People were too busy and couldn’t follow my teaching. So, I refocused the efforts on the fundamentals of the Toyota Way and on what I called the Dantotsu Quality activity. Dantotsu means to do kaizen consistently, steadily and completely, until the problem is gone forever. To me, a countermeasure is only really a countermeasure when the defect is never repeated.
RP: In your experience, what’s the best way to retain talent?
SN: You have to constantly challenge people! Give them the opportunity to put their skills to different uses and, as soon as they progress, give them another challenge. It’s critical not to keep people in the same position for too long. Send them to a new area or give them a new position. For me it was the same: as a young engineer, I was challenged to work on a variety of things, and I learned a lot in the process. Just knowing is nothing at all. You must do!
RP: It’s not every day that we get to talk to a Toyota veteran like yourself. Would be able to share some reflections on what made Toyota so incredibly successful?
SN: From the moment it started producing cars in 1935, Toyota has competed with General Motors, Ford and Chrysler. At the time, this was almost impossible for a car company with low volumes (when I joined in 1965, Toyota produced 500,000 cars a year) and bad quality. In the decades between the 1950s and 1980s, Toyota understood they would only be able to compete with the Big Three on price by reducing waste and, with it, cost. Being profitable was the problem that led Ohno to create the Toyota Production System.
This struggle forced Toyota to be creative, to find ways to reduce cost, improve quality, and grow. In the 1980s, the company became confident in the quality of its cars and in its ability to take on American carmakers. That’s when it moved overseas: the NUMMI joint-venture was launched and the plant in Kentucky opened. Top managers and engineers from Toyota visited the competitors’ plants, carefully checked their current state, and found a lot of muda. This gave the company the boost in confidence it needed to make the leap.
Sadao Nomura is a Toyota veteran, who worked for the company for 37 years before successfully running a parts supplier and leading quality efforts at Toyota Material Handling.
COLUMN – In her first column, the author reflects on the role of leadership in striking a balance between the enthusiasm for change and the need to involve everyone in a transformation.
Words: Rose Heathcote, CEO, Lean Institute Africa
I had a terrific time this past week with our team at the Lean Institute Africa. There’s nothing better than a little face-time, a catch-up over coffee and just connecting with the team you care for. They are the people delivering value for our customers, so I believe it’s important to give them personal attention and heart-felt appreciation. And the cherry on top is to spend time with them in our beautiful city of Cape Town.
Like everyone, we have our pressure points. We have a number of things we’re trying to get done and, if I’m honest, we have a lot on our plates. Borderline too much. Although we have a large local and international support network, we are a small team with big ideals (check out our vision when you get a chance), and it can be challenging to pick the activities we want to donate our scarce time to. But I can’t help bursting with pride over our team, because each and every one of us is passionate about what we do, and that takes us further than if this were just a job. We are a gang of rebels with a cause, rising in opposition of waste, and our cups run over with a feeling of ‘job’ satisfaction.
I also have to smile and nod at their impatience. Their genuine concern for how quickly we are getting the right things done. I indulge their enthusiasm warmly, because this impatience comes from a good place. It’s an example of how much they care about our work because they want it done yesterday. I feel this is an incredibly strong baseline for change. They sit on a burning platform, vocalize their impatience and look to me to give this change the kick-start it needs to build momentum and ultimately get done.
Truth be told, I also like things done yesterday. Ask my husband and he will confirm it and poor chap… in my home, this is pretty much how things work. But when you’re leading a team, with a vision and strategy in hand, you have to think hard about execution. You have to take your people along for the change, and in my view, this means respecting the personal and individual journeys they are on.
Change can be liberating, exciting and enlightening, and when you have the backing and engagement of those whose support you cannot do without, change takes on a whole other vibe. Instead of “pushing” it onward with tremendous effort on your part, your people “pull” it to align with demand and clear direction. So, if you have a handful of believers, impatient and ready to roll, you nurture that while bringing the others in on the journey. Yes, there are some people in your teams who may never hop on the bus, and perhaps that’s normal, but if you can nurture the believers, convert those still thinking about it, and find a way to deal with the non-believers (if you have any – I don’t feel I do), then you can achieve change and go further, together. This approach has a lasting currency: it outlives you when you move on to the next stage in your life or career.
I worked with a fascinating Managing Director more than 12 years ago (he will know who he is when he reads this). Something about his leadership style stuck with me. He had the challenge of transforming the South African subsidiary of a multinational, listed entity, manufacturing and repairing components for the mining and rail transport sector. We were standing in the boardroom, and he performed a little demonstration of his leadership style. Placing his hands on the chair, he shifted it slightly, almost unnoticeably. Then he did it again. And again. He explained that he needed to shift the chair slowly so that it moved in the right direction, but also where it wasn’t so disruptive that his team got nervous about what was happening. He said that, as long as the motion was consistent and purposeful, the company would achieve its goals whilst taking the team along for the ride. Every company’s journey takes on a different look and feel. If you’re in survival mode, for instance, perhaps chair shifting is not going to cut the mustard and a more considered approach is needed. But this approach is good for certain scenarios, and in my view, this is the bite-size shift we should follow at Lean Institute Africa as we turn our ideals into reality.
We need to ensure the believers don’t lose heart during the chair shifting, but that their hunger for change continues to fuel progress and innovation. I am encouraged by my team – grateful in fact that they are pulling us in the direction we need to go. My challenge is to keep up with them while we do this crazy little thing called change.